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Thrilling Thursday Wrap-Up

Wow!  Another huge day.

Dow 12,305, this is almost sub-orbital.  The S&P was slightly more subdued at 1,399 and that extra point might be a tough one.

The NYSE held firm at 8,894 – a little disturbing but understandable in a commodity sell-off.  The Nasdaq also hit a wall at 2,449 but, on the bright side, we won’t have a hard time guaging direction tomorrow!

The Russell also flatlined but held 790 and the SOX closed right in the middle at 485.   Only the transports jointed the Dow in their certainty that $56 oil was “a good thing.”

Oil was indeed a good thing today with a well lubricated slide all the way down to $56.26 blowing trough my target for the week.  Was this a genuine sell-off or did it realate to the IPO of the NYMEX tomorrow as the easily manipulated market may have been taken down to free up some of the oversubscribed shares?

No matter what it was it certainly panicked the roaches!  At 10:40, while we waited for a delayed gas inventory report, I mentioned that we got a good, clear short signal from our Valero Group – the first one since last week!

As I predicted, the return of volume heralded a big sell-off in Exxon.  In comments, I calculated that 400M shares of XOM changed hands above $70 since 10/15.  If 22M shares a day are trying to get out before they go red, these guys could be living in a 20-story Tower of Pain!

Even if there is more selling tomorrow, it may be just the expiration of the December contract coupled with a lack of cheap storage that is driving the sell-off.  Tune in Monday to see where the week will take us!

Don’t blame the dollar, it moved up .18% – not enough to move crude or gold which closed at $625.

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

Earnings were a mixed bag today but the market really perked up as commodities sold off but the irrational exhuberance seems to be over as poor performances are not being given a free pass.

ANF Dec 75s jumped back to $74 after lunch but then pulled back to stop us out at $2.05 (up 41%).

We need those huge profits because BEAS is a wipe-out so far!

COST Dec $55s came in at .75 on a morning sell-off and finished up 25% at $1.

I’m glad we took CY and not SPWR, who dropped 2% on news they were buying PowerLight in a stock deal.  CY took it pretty well and our Jan $17.50s held .95.

We hit the dead bottom on DELL and picked up the Dec $25s for .90 as it just wasn’t going lower than $24.50.  HPQ had great earnings but got little out of it in the AH with weak guidance.

Holy cow!  GMCR jumped up 6% despite so-so earnings but it seems everyone is as excited about the MCD deal as I am!

In anticipation of a big IPO for the NYMEX, we picked up the ICE Dec $85s for $12.30 in the hopes that a rising tide would lift all exchanges.

We took the SBUX Dec $40s off the table at $1.55 as a 55% gain was not worth risking into earnings (and they missed!).  I feel terrible about my caller, who bought the 37.50s from me for $1.50 just 2 days ago butit’s good to be on the other side of these once in a while!

Someone was trying to buy thousands of SNDK Apr $42.50s that we wanted so we aborted the trade.

TIF had a good day with the Jan $35s running up to $3.20 (up 35%).

WSM got dragged down by the Pottery Barn and I dumped my remaining calls at .35 (down 50%) which eats slightly into yesterday’s bulk sale at 107%.


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  1. Geee everyone in bed already or what…??
    Anyhow jus saw Cramerclown pump SHLD… he almost convinced to jump in phil your thoughts?
    Also is NMX goingto trade option?


  2. Geee everyone in bed already or what…??
    Anyhow just saw Cramerclown pump SHLD… he almost convinced me to jump in phil your thoughts?
    Also is NMX goingto trade option?
    One more question is Zman still buying oil calls (so that we can short LOL)


  3. Phil,

    Did you do anything with the OIH spread today?


  4. This is just hilarious http://www.wallstrip.com/theshow/


  5. Arnie,

    I’m so short oil it took me going long a bit of XOM to set everything straight. Man, you know how to hurt a guy though. ;->


  6. SHLD will be the next Berkshire Hathaway and will be worth $100K a share in 20 years if Eddie doens’t massively screw something up.

    Cramer is right, it’s not about a retail store, that was just this HOLDING company’s first major purchase.

    The guy took KMart in 2003 (do you remember what a train wreck of a company KMart was) and put in just $1B of his own money, took them out of Bankruptcy and bought Sears, turned that company around in 18 months and took the combined market cap to $24B.

    This quarter he made $95M from Sears operationas and an extra $101M, which represents a 10% profit on cash. The stock is going down as analysts are “worried” he is going to make another acquisition.

    Worried??? Oooh Eddie – Buy me! Buy me! That’s like being worried Warren Buffet is going to buy something…

    Anyway, all that being said, I soild mine because this price is no longer a bargain (even Berkshire has dips and we bought that one on last year’s) and I can’t wait until he does buy something and drops the stock back to the $140s so I can Buy Buy Buy!

    The difference between me and Cramer is that I buy for a specific movement in a specific time frame while he is happy to mention a stock that goees up 5 points this month, down 30 porints for the next 3 months, back up 35 points 2 months later and then he does a show telling you how he made you 10 points.

    Also, I realize that $180 (or the options on such) is a lot of money to tie up on a position so I would never suggest it unless there was an immediate and compelling reason to do so.

    Before you ask, I would not short this stock as it has an Apple-like ability to go up and at any moment Eddie could be working on a deal to get $30Bn for it!

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

    OIH spread – no it went too fast and never gave me a good price but it is what it is, which is even at the moment as the Jan $135 puts are $6.40 and the Dec $135 puts we sold are $4.40. The $4.40 premium on the Dec $135 puts is our profits as things move forward. If we flatline through next month then we can assume our Jan $135 puts will be worth $4.40 against our $2 basis.


  7. Phil
    I recall you said once (weeks ago) DOW will / could go sky rocket (I paraphrase)
    I keep playing with the jan 45 calls buying .15 selling .35 but don’t you think it’s time to get serious with DOW as oil is collapsing?
    If so -of course- question is how?


  8. We are talking DOW Chemicals right?

    The Jan $45s are still a fun play at .15, the move was confirmed days ago when it crossed the 200 dma. I would have liked a pullback but you’re right – with oil crashing they could take off any minute.

    They have poor growth prospects but a p/e of 10 so it’s really a matter of market mood but I like the fact that they license the new canola seeds.

    So I guess the best trade is take the $45s while they’re cheap and the Mar $40s for $2.90 as long as you are willing to DD if they test the rising 50 dma at $40.


  9. Finally briefing.com platinum paid for itself just now. 20 contracts of 30 buck puts about 10 minutes ago. I can’t believe these rumormilles somedays. At least this time I think I got the right side of it.

    15:26 TIE Titanium Metals drops $0.75 in past five minutes following headline reporting that AL has no plans to bid for a titanium co… see 15:23 comment (30.11 +1.86) -Update-

    15:23 AL Alcan says has no plans to bid anytime soon for a titanium company – Reuters (48.77 +0.22)