5.9 C
New York
Friday, March 29, 2024

Finally Friday

Yeah, let’s bury this week and move on!

It hasn’t been that bad, just a 100 point Dow drop – Jan 12-22 we had a 500 point drop so things could certainly have been worse…

It’s more that we had such high hopes in February and this was a very sad downturn but realistically, if we hold 11,000 on the Dow we are still in very good shape.

Asia is mixed but strong and Europe looks weak, probably waiting for our jobs report…

Unless something very odd happens, I will be pretty much 100% cash at the end of the day. The global situation is way too uncertain and I really don’t think I will be missing much by waiting out the weekend. We need a goldilocks number in the jobs report at 8:30, perhaps 185-220 with no less than 4.7% unemployment (no more than 4.9%) and, most importantly, wages no more than .3% up. This will be tough since the economy is hot (no, really, it is), hiring is robust and layoffs have been tame but the data doesn’t always reflect reality so we will have to see.

Oil may look calm today but I’m hard pressed to think of a Monday where I said “Gee I wish I had shorted oil on Friday” but I think the reverse happens at least once a month.

Same goes for gold, this can be a huge play in the next two weeks as people may fly to it if the Euro goes crazy and the dollar collapses (or, on the other hand, money may start flowing into Euros and out of other commodities). We don’t tend to think of the dollar as a commodity but it is (or was) as the inherent stability and controlled supply made it something you would want to have in your safe. My grandpa Max in England always had dollars in the safe. He was born in 1906 and was a savvy businessman who had seen it all and he preferred dollars to gold. Imagine the chaos if 100M people (1.5%) around the world decide they don’t want just 10,000 of their dollars laying around in their safes anymore…

Remember the M3 and why it is being eliminated. This is the measure of global dollar float!

First sign of economic apocalypse could be an Arab state canceling a Boeing order in retaliation for the Port debacle. If this happens, run for the hills because it can get very ugly very quickly and we have no actual diplomats in this White House to smooth things over. Keep BA on your screen as a leading trouble indicator as there is no logical reason for this stock to go down.

Donald Rumsfeld’s plan in the event of a civil war is to let the Iraqi forces “deal with it, to the extent that they are able to.” I could not make this stuff up if I tried!

=====================================

Disney has a shareholder conference today which should be upbeat unless someone asks Eiger why the heck the stock is still lower than last year. I made my money on them already so I’m not looking to buy back in $6 up but I do love this company.

The Wall Street Journal very correctly pointed out that the Google excuse of the month, the “Law of Large Numbers” is properly known as the “Law of Diminishing Returns” until it is whitewashed by the corporate pr department (Ebay went to the same well). Just another example of how “1984” relates to everyday life…

=====================================

Google made a great purchase (assuming the product is good) of an on-line word processor which you will likely find yourself using in the next 18 months (much sooner if I can blog with it!). Microsoft has already announced that Office will become a web app but Google is slamming them by offering a freebie (maybe Google is trying to get MSFT to buy them out).

This good news will likely be buried by Brazil’s inquiry into Google facilitation kiddie porn via its chat rooms (international law is very tricky). It may turn out that Google has made a mistake opening offices all over the world where foreign governments can get their hooks into them.

http://www.forbes.com/2006/03/09/google-yahoo-microsoft_cx_mar_0310googleword.html?partner=yahootix

There are now 75,000 (7.5M shares) in the money puts (50K > $20) on Google vs. 6,000 in the money calls. This is like a giant rubberband that is ready to snap as there are virtually no April calls in the money vs. 20,000 puts in the money.

Someone placed a huge bet on GOOG Apr $300 puts yesterday at $7.90 – 1,165 contracts! That’s a lot of faith in a $47 drop ($1M worth). Another gauge of sentiment is what you can buy for $10.80 in June – you can get the $410 call ($70 up) or the $290 put (down $50). This is like looking at the the spread in Vegas to figure out the favorite, pretty reliable but anything can happen during the actual game!

“THEY” have done an amazing job of jamming all the short-term technicals down to oversold on GOOG so it will either bounce up or fall off a cliff.

======================================

I’m cashing out toady with the possible exceptions of:

LVS Apr $55 puts, which are now well in the money at $3.20 (up 33%)
BBI Jul $5s at .30
INTC Oct $22.50s at .75
MCD Apr $35s at .80
BIIB Apr $45s at $3.80 (up 35%) sale rumors will start soon
PLAY May $27.50s at $1.20 (down 8%)
THQI Jan ’08 20s for $7.60 (waiting to sell calls)
UNH Apr $55s at $3
PGIC if I can pick it up for under $7.60
DIA $109 puts at $1.30 to cover 1/3 of my open call positions over the weekend (at least)

=====================================

In no way am I endorsing this stock but I happened to notice that WMG (who I believe is the only publicly traded record label) has a market cap of just $3Bn while Apple has just celebrated their Billionth downloaded song on ITunes. Apple is worth $54Bn and makes enough money each month to pay a full year’s payments on an amortized 30 year loan of $3Bn.

A merger would add 25% to Apple’s top line and I’m sure Steve can figure out how to make some money from rock and roll. Factor in the 50% or so split with the content provider that Apple currently pays and it may actually be net profitable for Apple to buy WMG.

=====================================

ANN had a blowout quarter giving them a 29% increase in income for the year. They are nowhere near where they should be in value after this great year but rather than trade them, I will be looking at the reaction the market gives them to see if there is any hope in this sector.

ARO also had great earnings so that’s 2 we can track today.

SNE, TM and HMC are all interesting spreads to look at going into dollar uncertainty.

Big pullbacks in the defense sector if the Dems make runaway spending an election issue. The republicans made a big mistake by letting HAL get away with less than a slap on the wrist, there is a whole congressional audit’s worth of documents to exploit!

I’m kicking myself for not leaving 1/2 my FMD position on the table!
http://finance.yahoo.com/q/bc?s=FMD&t=5d

CAT looks like it is about to have a great fall. Again with our eye on BA for direction but Apr $70 puts are $1.75 and I do need some puts for balance… This is momentum only as I would be happy to sleep on a pillow stuffed with these shares for the next 20 years!

Did NVDA suddenly become that much better than ATYT or are they just way overbought?
http://finance.yahoo.com/q/bc?s=NVDA&t=6m&l=on&z=m&q=l&c=atyt

There’s no way I would try to guess ATYT’s bottom but if we assume NVDA is topping then the Apr $50s seem reasonable at $3.20. It is possible the one’s fortune is the other one’s loss but ATYT is mostly down on a purchase no one seems to like.

Subscribe
Notify of
0 Comments
Inline Feedbacks
View all comments

Stay Connected

157,450FansLike
396,312FollowersFollow
2,280SubscribersSubscribe

Latest Articles

0
Would love your thoughts, please comment.x
()
x