Wild Weekly Wrap-Up - August in Retrospect
by Phil - August 29th, 2009 8:28 am
It has been a crazy few weeks!
I went back over our Long Shots list from August 9th, thinking all our picks must be doing great but really only C, with a 67% gain, is really outperforming. Long spreads on UYG and BHI are on target for nice gains but haven’t moved much. Looking at our original picks in Pharmboys Phavorites from the same week, GSK is on track and up nicely already, our AZN cover is up 45% and MRK flew up 19% already. On the riskier Biotech side, ARIA’s stock is up 16% and our spreads are all performing well, ONTY has been flat, OGXI is up 33% and the Jan $17.50s are up a rockin’ 63% with that "cautious" spread up a surprising 75% already.
SPPI had a wild ride (as we predicted with TSCM’s failed assassination attempt) and the buy/write is already up 24%, the Feb vertical is up 50% and the naked Jan put sale is up 27% and our Feb hedge play is right on track so all good there and a fine example of how following Cramer and his lackeys and and doing the opposite of what they say can be very profitable! Congrats to Pharmboy for a very fine set of picks, proving once again that there is room for research and fundamentals - not a single loser in the bunch in a choppy market! It was very timely as I had mentioned just that week in my interview with AOL Finance that XLV was my favorite sector and our IHI pick of 8/10 is up 28% on the naked Feb $45 put sale while the Feb $45 calls have already jumped 16%. It was a great call as IHI outperformed XLV and all our major indexes.
So our energy service pick (BHI) and overall financial pick (UYG) have not done much in 3 weeks and those were our leading sectors into my call to cash out our exposed long calls on Aug 13th, ahead of expirations. The Dow was at 9,400 on that day and now, a bit more than 2 weeks later, we’ve gained another 144 points but to listen to the MSM, you would think you are missing the rally of the century the past couple of weeks. This is one of the reasons I’ve gotten a bit more cynical about the rally - there is so much hype and so little actual progress, something must be wrong.
Back on Thursday, Aug 6th,…
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Weakening Weekly Wrap-Up
by Phil - August 15th, 2009 8:27 am
What was that?
Did we just finish lower on Friday than Monday? We almost forgot such a thing can happen in Obama’s magic market-land but here we are with a week in which the stock market had not one, not two but three (3) red days out of 5. You have to go all the way back to the week of June 22, when the market was finishing a 600-pont down leg from June 15th, to see so much blood on Wall Street. I have, for a month, been drawing parrallels betwen this market top and the market top that ended on June 12th and it’s all about next week as options expire and things begin to get very interesting.
As you can see from David Fry’s chart on the right, we hit the very tippy top of our expected range on the Qs and then could not close the deal above our $40 line. It didn’t seem too much too ask - just a teeny, tiny little breakout and we would have been happy to buy some GOOG and get back into SPWRA and find some other 4-letter stocks to play with, even some semiconductors if the SOX had finally taken out our 308 mark but nooooooooooooo - the Nasdaq couldn’t hold 2,000, let alone our 2,017 target, which they teased us with two weeks ago but never came back to.
And don’t even get me started on yesterday’s close. For those of you who have ever doubted the power of the stick, David and I say HA!, as there has never been a more bogus end to a trading session than the despicable display of market manipulation that went on yesterday, just before the close. The only good thing I have to say about this very sad state of unregulated market affairs is that at least we called it practically to the penny and played it perfectly because, as I often say to members: "We don’t care IF the markets are rigged as long as we know HOW they are rigged so we can place our bets accordingly."
As shamefully despicable as these "stick saves" are at least they fall into a pattern that we have learned to recognize and profit from in Member Chat. I was, of course, very bearish in the morning post as we expected a minimum 1.25% correction (1.27 on the SPY chart) by Monday, on the way to a 3% dip, minimum, so we can properly let some…
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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...
Ilene is editor and affiliate program
coordinator for PSW. She manages the Favorites backup site
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