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Which Way Wednesday?

The BOJ raised rates (doubled them in fact)!

Wow, I love it when the world makes sense…  I was starting to think I was crazy as not one person in CNBC agreed with my call for a rate hike and it was causing me to rethink my World view but, as the BOJ said in their statement: "??????????????????????????????? ??????????????????"

This is exactly what I've been talking about!  More telling was their very positive statement regarding our economy: "Uncertainties over the future course of overseas economies, including that of the United States, are abating, and this is likely to reinforce the prospects of continued increase in corporate profits and business fixed investment."  That first statement, "a virtuous circle of production, income, and spending" speaks volumes for the bank's confidence in their own economy as well.

So, on the bright side, the world economy is chugging along and, although this hike, by necessity, puts the Fed back on the table, it's doing so for all the right reasons.  As I said yesterday (and for months) the only industries hurt by this are the bubble commodity industries, which simply aren't worth what they are being paid and will come down hard when money is no longer free.

Asian stocks were mixed overall as Japanese stocks took their rate hike pretty well in stride.  Tokyo Steel announced price hikes and jumped 8%.  Nissan just said no to Chrysler in what I predict to be the first of many rejections for DCX, who paid $36Bn for the company in 1998.  DCX plans on cutting 13,000 North American jobs this year and it remains to be seen where they book those costs but I'm thinking this 15% rally in a company that will be lucky to get $10Bn back on their investment (after losing Billions operating it) is just a bit overdoneApril $70 puts are $2.35 and we can set a stop at $1.90 as any upward movement here means I'm wrong so we can get out quick.

Speaking of overbought auto companies – how did we forget to short GM at $36.50?  I don't like the June pricing so I'll take my chances with the March $35 puts for .80 and will roll to April, May, June and July if I have to wait that long for someone to realize how ridiculous it is to keep plowing money into this catastrophe.

Europe is waiting for us to do something this morning, very dull over there other than Blair setting a timetable to pull at least half the British troops out of Iraq.  It will be interesting to hear how our administration spins this as a positive thing!

As to US levels – up is good, down is bad.  Rather than do our usual numbers today I'm going to refer to the charts of our major indices and give you an idea of what I'm looking for when I come up with these seemingly random numbers in the morning:

US Markets

We can see a VERY synchronous pattern forming with the Dow, the S&P and the NYSE while the Nasdaq suffered from an early (and failed) attempt at leadership coming out of the gate in January.  Like a horse throwing a shoe, the SOX fell off the table and the Nasdaq quickly fell behind the rest of the pack.

Are we toppy here or are we heading higher?  Today will be very telling and I'll update this after the CPI (6:30 now) but from a charting standpoint, we've done our test (the little spike at the bottom of each candle) and today is a day to confirm direction.  What we don't want to see is anything more than a 50% retracement of yesterday's gains, you can see in prior sessions how that can quickly lead to trouble.  Ideally, we'd like to see a floor established at yesterday's highs – that would be a huge breakout signal but it would take some pretty low CPI numbers for that to happen.

If this is a genuine Meatball rally then the BOJ, the CPI, oil inventories, HPQ's outlook…  Just won't matter and these charts should tell the tale.  For more information on interpreting candlestick charts (which I highly recommend using) click HERE.  The short story on today's charts is, other than the briefest of spikes, we don't want to spend any time in the lower half of yesterday's candles – if we do, you need to consider lightening up on calls as we are likely in for another round of consolidation as we attempt to grind these markets higher.

Oil has no reason to go higher so perhaps it won't,  I'm don't think we are getting inventories today (holiday), which means I could have held my puts another day but, since I won't be around this afternoon, I still feel safer in cash!  We are going to maintain $58.50 as our pivot point on the new April contract and, if it is unable to crack that, we may be on our way down to a test of $57.  If I were an evil manipulative oil roach, I'd be pulling out all the stops this week to pump that contract over $60 before gravity gets hold of it as starting the month with 336M open barrels doesn't give you a whole lot of room to play.

Zman is on his game today with an excellent overview of the NYMEX situation, pointing out that longs have been paring their positions, hitting an 8-month low in interest (45%) after the sell-off I pointed out last night.  I will be putting up a post on the members site to highlight some additional energy plays we should be watching.

 

Gold SEEMS safe at $660, as it should provide some support, so let's take it very seriously if it breaks down.  As we discussed yesterday, the Yen carry trade can unwind in mysterious ways as I think a lot of Yens have been pouring into Euros and commodities, not so much into Dollars.  The dollar looks beaten, defeated by the 200 dma we've been testing since mid-January and it will take a Rocky-like comeback for it to get back off the mat at 84.  We would all do well to remember Rocky's battle cry – Yo Adri-YEN!

 

 

8:30 Update:  The CPI came in a little bit hot, that makes today a good test of the market's true conviction, now we can expect a dip so let's keep an eye on yesterday's lows but a tiny bit of inflation is no reason for a big sell-off, if we get a big drop then it's more about nervous investors taking an excuse to lighten up than a sudden concern for inflation.

 HPQ's earnings were pretty good but outlook was tepid at best amid pricing concerns but I'm not too concerned and we will be looking for a buy opportunity on the dip. 

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

Who says it's not worth making campaign contributions?  Philip Morris dodged another bullet yesterday with a 5-4 Supreme court victory reversing a $79M award in Oregon.  This is, of course, chump change compared to the $10Bn the court threw out in November as the Supremes upheld the right of the Illinois Supreme court to toss a lower court's ruling that tobacco companies my have misled consumers since "light" cigarettes are actully worse than regular ones.

The Chicago Tribune reports that Philip Morris' lawyers "contributed $16,800 to help elect a judge who cast a deciding vote" in the case. Judge Lloyd Karmeier "also received $1.2 million in campaign money from a group that filed an amicus brief supporting the cigarette-maker."  The Illinois Chamber of Commerce, "which also filed an amicus brief in support of Philip Morris, contributed $269,338" to Karmeier's campaign. Yet Karmeier did not recuse himself.  The court's press secretary said Karmeier "has tried to insulate himself from knowing the identities of campaign contributors and would not allow campaign contributions to have any effect on his ruling in this or any other case."

Also last November, a US appeals court issued a stay against a pending class-action suit by "light" cigarette smokers, overriding a Federal Judge, in what may have been a $200Bn industry lawsuit.  The Florida supreme court did their part for democracy last summer by tossing out a $145Bn award against tobacco companies as "excessive".

How much does it cost to buy that kind of justice?  Surprisingly little, Congress received "just" $33M in the past 10 years – talk about bang for your buck!

 


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  1. Hmm, our builder plays are finally starting to pay off!

    CTX puts exploding out the gate!


  2. HBs are down a bit, finally !


  3. Our monthly IWM put seller has made his initial sale of MARCH puts with 155,000 contracts sold. These were the 80′s. I would not bet against this guy….followed for over 6 months and he wins every time!
    Anyone willing to offer me suggestion on how to player this consecutive winner?


  4. Karl, on ABT did you make that play jack_of_hearts recommended ?


  5. “Blair setting a timetable to pull at least half the British troops out of Iraq”, According to Bush, its show that his policy in Iraq is working. Talking about making lemonade out of lemons.
    Back to the market…


  6. Phil, what is the play on CTX ?


  7. CTX : Sorry I didnt look in the portfolio before


  8. I agree with Mr. IWM, this spike down may be as far down as we go. If we turn positive today, that may be the end for the bears. If you trust this guy then take the Sept $80 puts for $3.20 and sell the $80 puts for .80, that’s a nice return and you’ve got loads of time to roll. You need to manage this if it goes too far by laddering your putter but ask me anytime there’s a 50% change in the March contract.


  9. CTX – we had the March $50 puts at .70, yesterday I tried to buy more at .75 but couldn’t get my price but I just dumped these at $1.20 on the turn – I will get back in later…


  10. Sakiko- NO, did not follow the suggested ABT trade of jack_of_hearts. I am not experienced enough to determine HOW to play based on historic information I have collected. Example is the FEB ABT calls- I have years of data on their calls and WRONGLY assumed the play week of EX was the 50s WRONG it was the 52.50! So, i just observe until i learn.

    Phil, I will take your rec. on the IWM put. THANKS


  11. AGIX – bought Mar 25 at .90 and sold Apr 35s at 1.85. It looks like they go in opposite directions that indicates me the FDA news is trumping earnings big time and I am losing money on both legs.

    Should I be looking at breakeven and loss scenarios right now or stay tight until earnings?


  12. JBX rockin today! I know my tacos!

    K


  13. By the way, I’m heading to the city at noon, won’t be back until late but I’m setting stops if we break the levels I set yesterday on the 3 canary rule (3 of our tracks break down). As I always say, when in doubt, sell half! I don’t mind being half right and I can stand being half wrong but I really hate to be all wrong…

    AAPL perking up nicely!

    Must sell FXI $108s if Dow finished more than 50 points down.

    GME doing well

    MRO and MUR having some kind of party.

    Taking out TSO $80 putter for .55

    Want to DD on VLO Mar $55 puts at .60 or less.


  14. Aug and Jan HPQ 45′s are getting crushed! But I’m sure they’ll be back. Will probably buy more at some point.


  15. AGIX – that’s why I voided the trade and just took the $1.25 and got out (although I do have a few naked $20s at .95 which I am offering for $1.20). Aprils will retain strength but it all comes down to tomorrow’s CC and what indications are given. If management says something bad, including a pushback of timeframe, the Aprils will go down hard.

    I’m looking at more $20s right now at .80 as a nice day trade but I won’t be around to watch it so I probably won’t as I’d be dipping too far into my profits to go back to this well.


  16. Selling any GME Calls in this little rally here or keep holding?


  17. Karl,

    Those X week pin plays can always be danged interesting (as you saw from that GOOG stuff on Friday!), especially on a larger priced stock with 2.50 strike increments. Wrong strike guessing is hazardous!

    Obviously, Phil’s play is somewhat safer and you can get 20%-25% per month betting with that put seller.


  18. VIP- bought some July calls after selling at $90.25 yesterday
    JOYG- Happy Trading it is moving again


  19. QQQQ up .34?!


  20. Buying HPQ Apr $40s for $2.2.70, selling $40s for $2.10 if it drops below $40.50 but not otherwise


  21. JOYG
    BillBigD, bought it back this morning and sold it above 52, but, perhaps too soon! It’s ramping up fast; but, it’s toppy. I’ll wait for re-entry opportunities. It’s caught the upper BB on the daily chart.

    RIMM
    Back in.

    APPL
    Bought in this morning. It’s caught the upper BB and should start climbing. This will give Nasdaq additional boost.

    USG
    Got back in as well.

    ATI/X
    Looks like they are going to charge today. looking to either jump in to ATI or buy more X.


  22. GME – I’m holding, the 50 dma is $55.11, it’s what I expected to break over and we are also challenging to 5% rule from the median base of $53 around the time we bought it so $55.65 is the real breakout point. As long as we are between those two lines, we are in pretty good shape with up being good and down being bad but a consolidation there is a great sign.

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

    QQQQ, like I said about the RUT, that was hardly a sell-off, this looks like a rally to me!


  23. ICE
    just incredible…

    SINA
    making a surprising move!


  24. Okay, thanks Phil, you’re the greatest. I’m not sure how we forgot NYX yesterday.


  25. Nasdaq
    If it turns green and closes green, then, I think techs are trying to get it going, which would probably send us into the “it doesn’t matter” space, as Phil calls it!! =)

    GOOG
    trying to join in

    UNH
    Might be starting to make a run.

    MA
    making a move.

    RIMM
    Looking good! Starting to pick up speed. Heading towards your target of 145, BillBigD!


  26. kustomz- eating crow on AAPL congrats
    Phil- ever since your comments last week on NMX been going straight up. Thanks LOL
    ICE – nothing needs to be said


  27. DD on VLO $55 puts at .75


  28. BIG you noticed! My my you have me blushing!


  29. GLW
    has been surprisingly weak in this bullish environment. BBs are narrowing in on the daily chart now. Hopefully, it’ll start charging for the next leg up soon.


  30. XOM: half out at $1.45.


  31. HPQ – Phil, did you mean buy Apr 40 at 2.7 and sell $40 if it falls below 41.5?


  32. happytrading your usg trade , calls i assume thanks


  33. Someone decided that was a top on GME! I sitll like them…

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

    My sell triggered on HPQ, will buy that guy out for a buck or less.

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

    MSFT NOT going down – significant?

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

    GOOG sneaking up on us… weak though.


  34. HPQ – sorry, typo.. Bought April $40s for $2.50 (cheaper than I thought) and I have not gotten $2 for the Mar $40s I was looking to sell but I will wait a bit as I think HPQ just fell with the market on that drop, not over additional specific sentiment.

    I will decide within the hour as I have to leave and it either improves or I’ll be safe!


  35. That HPQ play was stupid and greedy by the way as I was looking for a .70 spread and then passed by a .50 spread that was offered to me as I had that $41.50 line on my brain but I should have realized I would be 35% ahead of plan already by just taking the damn $2, now I’m .15 behind and hoping I get another good chance to sell (kick, kick).


  36. GOOG
    Getting it going!! Don’t stand in its way!

    JOYG
    Yikes!! Left .3 on the table; not too bad… But, this thing could get much higher in the days to come. 52-wk high is 72.23; Still got 20 points to catch up to.

    AAPL
    Getting toppy; taking some profits

    ATI
    just got in!


  37. JOYG
    WOW! Is there a merger somewhere in the sector? I was hoping this would break 50, but, 6 points in 2 days!! LOL!!


  38. All this XOM flatlining has made the Apr $72.50 puts very attractive at $1.05, I’m going to start buying them for $1 to offset my April $80 calls, which I still have too many of.


  39. USG
    likewoods, yes, calls; got lots of room to go up; there are mergers in this sector and Buffett seems to like this one.


  40. ATI
    105+!!


  41. Trying for second round of VLO $55 puts at .50, that will bring my avg down to what I originally wanted – should have been more patient…


  42. something blow up somewhere, my CNBC is offline?


  43. 1/2 out of GM $35 puts for $1, applying to basis with .75 stop on the rest.


  44. LOL – just a local nuke Z – my CNBC is still running…


  45. zzz – any thoughts of CRZO and their gulf coast play? any rumors


  46. buying 1000 ATI common, selling 10 MAR 105 calls @ 3.80, buying 2 MAR 95 puts @ .75 for insurance


  47. sorry – wrong window. meant that to go elsewhere


  48. Phil – is it ok to go for VLO Mar 55 puts as new entry, ala naked ?


  49. Phil or anyone,

    an investment rag i look at from time to time is pushing the IWM SEP Q3 77′s with a buy at 8.65 ….looking at daily volume shows only 3 blocks of 1000 contracts in last 4 mos? I wonder if theyu are making this trade a hot call, only to sell their calls obtained at $4-6. Smells like shite to me…anyone else encounter something like this in the past?


  50. VLO, I like it here but it’s a very risky play on tomorrow’s inventory – just be aware of that.

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

    Karm – happens all the time. If I can buy those contracts at $8 and lay them off on you for $8.65 a few days later, nice return right?

    OK guys – I’m outta here, make sure oil closes red for me!

    Have a good day,

    - Phil


  51. AAPL – What a nice move today! Sold Mar 90′s @ 2.00 against Jul 85′s, which were up 20%.


  52. Does anyone else see this in OPXS –

    “Starting In January 2007, optionsXpress no longer offers reduced spread margin treatment for VIX calendar spreads.”


  53. UNH? Anybody playing this? Might be a good time to get on the dip. Most likely down in general from a Healthcare standpoint due to MDT missing.


  54. kavi, maybe because the spread is on nothing but a guess of sentiment strength i.e. volatility? I have wondered how assignment works with the vix calls and puts??


  55. Nasdaq
    Going green!!

    ATI/X
    Both picking up speed!

    RIMM
    Time to run!!

    AAPL
    Very nice!

    GOOG
    More to come!


  56. John, can’t get a feel for UNH, spiked up big on 2-15…looks almost like a cup and handle formation, whiich would mean you are right….if so could break out to around 56, imo


  57. man, I think GME is going to break 56. . .intraday chart looking nice. .


  58. BA 92
    JB


  59. Pitch 78 – I spoke with a guy last week who attended the IPAA small cap conference and he got me interested in the CRZO story. I looked through the slides and I’m impressed with their Barnett and other shale acreage. On an Acres/$ of mkt cap they’re at the top of the pack for shale players. They’re trying to be earlier in the door in newer shale plays including the Fayetteville (just gotten off the ground) and the Floyd (about to).

    As far as the gulf coast goes drilling looks flattish with last year in terms of scope but some of those wells could be significant, especially in S. Tx. Other than that I don’t know any rumors, just what’s in the playbook for the gulf coast.


  60. Does anyone know of a way I can stream CNBC on my computer?


  61. Karmcon,

    Only reason why I had mentioned UNH was Phil had noted it.


  62. Kwan only asian CNBC http://www.chooseandwatch.com


  63. I decided to DD on ORCL Mar 18s. It s a speculative all or nothing position, since time is running short for this target… ORCL needs to have a big UP day, upgrade or bullish news, to break above the MAs.

    I wasn t able to figure out if earnings will come in prior to contract expiration, but I bet on a runup prior to earnings. Last quarter earnings disappointed a bit.

    ORCL has broken out of a longterm consolidation area, and the current pullback is healthy check within a bullish chart, as I see it. The integration of their acquisitions has been going well, and probably this stock will see 20 bucks quite easily.


  64. Thanks kustomz – you just reminded me of something else I stumbled across a couple of months back. Maybe they’ve worked out the kinks since last I visited.


  65. zzz – CRZO – thanks. the article said:

    Carrizo also could benefit if its exploration efforts along the Gulf Coast of Texas and Louisiana are successful. The company is set to test a 20,000-foot-plus exploration well in the coming weeks that could lead to the discovery of a natural gas field with more than 500 billion cubic feet of natural gas reserves. While the well is high-risk, the majority of the costs have been paid by Carrizo’s partner, Petrobras (PBR – Cramer’s Take – Stockpickr – Rating). Look for results from this well in early March. If successful, it could be significant for Carrizo shares. A disappointment may cause a temporary — but minor — setback.

    Also SWN was one of the first in the Fayetteville shale, and CHK is ramping up there too.

    also what was the name of that small company you mentioned getting in the barnett shale play.


  66. Well, I should have known better. . Bought some common shares afterhours last night on HPQ when it was at $42.50. . Thought it was just a headfake and the MM’s playing games. . I took the bait. . Long-term might as well hold as guess. Any thoughts on where support should be? I’m guessing 40 should hold?


  67. first NEW, then NFI, who’s up enxt, LEND?

    realy big money to be made here I’m surprised no one is taking a stand with mortgages.


  68. USG
    ramping up!

    RIMM
    feeling a bit weak; but, I think it’ll be ok. If the environment stays bullish, it should break out again, soon.


  69. ATI
    106+!!

    X
    going for 93!!

    Got orders in for profits!


  70. Finally got the wirleess working and see NMX making highs since IPO day.
    ATI moving higher, added on breakout of $105


  71. AMGN one to watch

    BA needs to break 92

    AAPL, surprised CNBC hasn’t mentioned anything about options today.


  72. ATI
    cashed out!! That’s a quick 1.1!! Might go higher though!


  73. X
    93+!!


  74. Phil,
    Your thoughts on metals going higher. PCU ATI RTI CHAP all making new highs.


  75. CELG got an upgrade from Prudential to $75 and the stock can’t move. Is that a bad sign? Thanks.

    j


  76. In on ONXX Mar 30C @ $1.05

    X is pretty crazy; I might go back there for calls on a the next pullback. I hope that Cap didn’t short this one.


  77. biodiesel

    I assume you are looking at P’s…..any thoughts on LEND?

    Finally got my GM Mar 35 P’s filled at .85….like watching grass grow, though :cool:


  78. BillBigD

    Phil has left the building…..


  79. GLW
    Finally seeing some positive action!


  80. SHLD
    Climbing back to green!!


  81. Pitch

    Those half Tcf type prospects in the GC are generally a pipe dream. In the capex summary that would be listed under “rank wildcat”. I’d give it 1/30 to 1/50 odds. SFY used to talk those up all the time and then dismiss them one after another but they had cool prospect names: tiger, panther, jaguar, cheetah. I got skinned by a couple of those cats!

    PTSG – went from $0.90 to $1.50 and is back around $1.25. They’ve got 15,000 acres in the Barnett with XOM and the position could grow given XOM’s right of way around those parts. It’s sexy and non toxic fundamentally like a lot of single digit midget E&Ps but it can burn you too so buy it right.


  82. RIMM MAR calls continue to decay.
    JB


  83. b.d.chris,

    how about FED puts? (business is concentrated in Cali.)

    have a look.


  84. JOYG
    just popeed another .3! closing in on 54!! Unbelievable!


  85. Karcom,
    Thanks I forgot.


  86. zzz – I know one of the servie companies that work in the barnett shale. I will ask around.


  87. Karmcon – VIX options are cash settled. For example, the settlement price for the Febs was $9.95. They are also European style (can only be exercised on the Expiration Date.

    http://www.cboe.com/Products/indexopts/vixoptions_spec.aspx


  88. Thanks Lars


  89. np billbd


  90. AGIX – hello phil what is your recommended earning play if I have not taken position so far. Thanks !


  91. Prof, buying some of those FED P’s you start out 25% in the hole…….too much for me


  92. JOYG
    Is it being bought!??!?!?!?!?!? up 8+% and still going fast! The buyout price will be above 60!


  93. Will FED notes be released at 2.15 pm?


  94. HOLX- anyone follow this company. Newsletter i get said to buy.


  95. JOYG
    Going back in just in case!


  96. angar,

    Phil won’t be here most of the day. However, he answered your question yesterday:
    http://www.philstockworld.com/members/?p=302#comment-15173

    Also, read a few posts up from that once you get to that page.


  97. A few days ago Phil mentioned FAF (44.62). Considering the Jan ’09 30 puts are 1.10, FED’s (63.52) seem expensive:

    50′s: 4.80/5.70
    40′s: 2.65/3.50


  98. USG
    Approaching 57, still lots of room! 52-wk high is 121.7!!


  99. Any opinions on OC — Owens Corning? Pretty good news today, P/E is about 8. I’m hoping for an even bigger jump when analysts finally start covering it and institutions jump in.


  100. Is there any reason why gold is up today?

    j


  101. SNDK – I gues that the GS upgrade just gave them a chance to get out. Yikes. You may be selling the 35s after all…


  102. happyTrading. Did you read somewhere that joyg is a buyout candidate?
    Thanks


  103. j

    Would speculate with the UK talking pullout from Iraq and going against U.S. the dollar is down and all run to the safe commodity.


  104. juliet, – on Gold – that BoJ rate hike that Phil talked about in today’s post may well have to with it.


  105. something just killed the markets. anything in particular?


  106. SPWR
    FSLR

    Anybody else notice/care that the solar sector has been on a recent tear?


  107. I have ESLR in retirement — so I’m missing out on the tear!

    FSLR — wow!


  108. biodieselchris,

    Oil (CLJ07) just traded $60.55 (+1.70) – May be more than the pump. I see that the Fed minutes were released as well.


  109. FOMC minutes were just released.


  110. GS
    just turned green!


  111. GS=green


  112. Okay thank you all.

    j


  113. I have had ESLR in my retirement for while, just like biodieselchris . Looks like I have to wait :)


  114. happytrading can’t find any news of joyg ? whats up


  115. JOYG
    likewoods, not sure; but, very suspicious. if a buyout comes, I think the bid would be above 60. I made good profits with March 50s for the past few days; now, I just bought some thing small in the March 55s, just in case.

    GS
    Got back in.

    ATI
    107+!! Dang! Another .5 left on the table.

    RIMM
    coming back!!


  116. thanks in for small also


  117. if VLO March 55 puts are a good risk at .50, aren’t the Mar 57.50′s a better deal at 1.25 ?
    TIA


  118. biodieselchris do you think there is any down side left in new or nfi ? maybe cfc or lend, bin looking at them cant seem to pull the triger.


  119. Poole says no need for rate hike


  120. Telecoms
    are weak today keeping the SOX in red; if we can get a EOD rally in the telecoms, that would help the market; might even see SOX green.


  121. sakiko – Thanks for sending link !! wish me good luck on AIGX. what is the most favorite aigx play on this board ?


  122. TW,

    VLO 57.5P – Better deal, yes I would step in, but I’m not taking that Put until I see what happens with inventory tomorrow. Closing above $60 a barrel today was a pretty big deal. We can see they think over in Nymex when they open ahead of the Market Thursday.


  123. ZZZ – Did you pull the trigger yet on BRNC april 15′s in light of today’s action? Also, does oil breaking 60 change your position on oil puts – are you still in any March puts?


  124. Anybody here playing ANF earnings tonight?

    j


  125. Sakiko

    Check out Zman’s blog vis-a-vis “oil closing over $60″

    Traders are apparently (according to Phil) gullible enough to be suckered every month at expiration. The difference between front month (March) and new front month (April) is not taken into account by CNBC and the like. So for a day or two oil is artificially higher. Because of this today’s close is more like just over $59 instead of just over $60 for purposes of TA.

    Still agree with you about waiting for inventory tomorrow. Also still agree that $60 matters (to whatever degree traders take stock in it, which could be considerable. . .)

    N


  126. Interesting, quite the little reversal on ICE.


  127. Phil is going to be mad at us that we didn’t close oil lower. . Sorry, Phil, that’s what you get for bailing on us : ) just kidding.


  128. nltd,

    Hehehe – fooled me today, too ! and Thanks for the pointer.


  129. RIMM
    So close to green; C’mon!

    GS
    staying above 220 is good, but, lots of room for a new high!

    X
    Cashed out at around 93.46. Metals are still strong though…


  130. JOYG
    Going up again; going for a new day high! There’s gotta be some good news coming!


  131. Did anybody mention that VLO — Valero rule — staged a breakout today?

    If the rule holds… oil cos should all move up… I will ignore that rule at my own risk, keeping my oil puts.


  132. ATI- bailed at the close on 1/3 of calls


  133. pantarei,

    I had noticed earlier this morning that everything else was red, except VLO. To think that I had an order to sell my PTR Mar 120Ps at the HOD, but no fill. Now I might need to roll them.


  134. Sakiko, sorry to hear it, but maybe zman will comment on VLO and gives the exception that confirms the rule. :) I certainly hope so for my ST puts as well.

    I continue to find professional financial advisors saying that one should buy oil calls--which baffles me. Today I found one recommendation saying one should buy calls on 45$ oil for 2010. The guy thinks oil will sooner or later hit 80 dollars in that time frame, and then this leap call will be itm.


  135. Sakiko – Thanks. Do you have an inventory target, or just going to wait to see market reaction when it comes out at 10:30?


  136. well here is the news of the day, re oil ZZZ

    A key fuel pipeline supplying the U.S. Northeast with gasoline and diesel was shut down due to a spill in Indiana, the line’s operator, TEPPCO (NYSE:TPP – News), said on Wednesday, pushing up fuel prices in the region.

    Meanwhile, a fire over the weekend at Valero Energy Corp.’s (NYSE:VLO – News) oil refinery on the Texas panhandle was expected to leave the plant shut for several weeks, cutting back fuel production roughly 170,000 barrels per day, the company said

    The outage comes amid a raft of other refinery problems in North America, including a recent fire at Imperial Oil’s (Toronto:IMP.TO – News) plant in Nanticoke, Ontario, which have raised worries of a crunch when driving demand picks up this spring.

    Adding support to prices, oil major BP (LSE:BP.L – News) said it shut its Northstar oil field in the Beaufort Sea off Alaska for unplanned repairs that could keep it out of service until next week. The field has a capacity to produce nearly 50,000 barrels of oil per day.

    why does VLO trade up when it shuts down operations big time? insurance?


  137. TW,

    No inventory target; not nearly smart enough about this as zman. (not even 30% close, actually!) However, I will probably chose a direction based on the first half hour of CLJ07 on Nymex, and stay with it until it turns, or 10:30, whichever comes first. At the 10:30:12 market reaction, I’m going with the momo direction until it turns. This one morning of OilMomo usually gives me enough cushion to allow me to mess up the rest of the week !

    pantarei,

    Six months ago, I used to get email all the time about $75 oil. Then Labor Day (here in the US) came, and by Christmas, those emails disappeared. I have a close friend who used to build oil refineries, and he doesn’t understand oil at these levels at all.


  138. UNH – stil waiting

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

    Good timing on ORCL Pantari!

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

    VLO – you have got to love this stuff! TX refinery “shut down for weeks,” the US CSB is investigating them and the stock still goes up 4%!

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

    PCU ATI RTI CHAP – remind me in tonight’s post!

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

    CELG – I like that one.

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

    AGIX – my final decision (other than the $20s I have as a craps roll) is to play the upside momentum if it happens on approval news. The options are way to expensive to play otherwise.

    Oh, thanks Sakiko!

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

    OC – damn, I forgot to play them – we talked about it last week! One of the most undervalued companies in America.

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

    Oil – if I hadn’t decided to go with VLO for a new put, I would have been pleased on the whole. I said this morning they would kill themselves to get to $60 and that’s what they did but now it’s up to inventories and the weather.

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

    Ignoring the Valero rule has generally proven to be a bad idea but let’s see if we are really getting group confirmation.

    They are looking for a pretty good drawdown tomorrow, a couple of million barrels and I think they’re wrong – the warm weather this week isn’t going to give them a good outlook either no matter how many plants Valero sets fire to!

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

    WFMI merging with OATS! LOL – John did you just luck out!


  139. THRX
    Interesting… Went up 5+% today. Has a new drug approval from the Food & Drug Admin. Daily chart looks like it has found a new bottom and lots of room for upwards movements.

    NICE
    Big breakout on heavy volume today; might have a follow-through.

    CHE
    Up nearly 20% today!! Seems to have a resistance at 50, which it hit today, intraday. I think it might re-test 50 tomorrow.

    VCLK
    Might see 30+ tomorrow!!

    USG
    Did someone buy some shares at 60 AH?! COOL!!


  140. Sakiko; thanks for the thoughts on X … no I wasn’t short it. Thankfully got out early Tuesday morning. I saw the $93 + chart after hours today; may look for a short or put opporunity soon. No position at present.

    I did get off some small ICE short and covers today. Also covered an AMZN short from 41.50; still holding more short w/ covered puts sold.

    X, ICE truly amazing / nuts. AAPL today was incredible also.


  141. Hey, Phil, you’re back! Nasdaq did well today!

    WFMI
    Interesting AH reaction. This may be what they needed to get them out of the slump! Should be intersting tomorrow and many days to come.


  142. Added to AMGN today.

    NYX new buy, this one has a great looking 2 day channel. Yesterdays bounce off 89.30 was a buy signal.

    AAPL, always sell this one too soon, hard not to take money when your up 10%!

    MOT looks like Icahn needs to step in and rattle the cage before this one gets a short term pop again. Longer term is an uphill battle.

    SNDK i wouldn’t fall for this one, much better stories out there. Cant see how the space getting better anytime soon.

    HPQ, going to be tough for this to get over 45, i say DELL has more to gain here short term. If DELL shows some signs of a turn around there’s 15% upside just waiting. HPQ has shown its hand, not much to get anyone excited about here.


  143. I don’t understand why WFMI is buying OATS. WFMI is a superior retailer compare to OATS, I don’t see how OATS is going to help WFMI growth since WFMI is a better place to shop if they are close to each other. All supermarkets are jumping into the organic food wagon and buying (or eliminating) your inferior competitor is not going to help. It feels like SBUX buying KKD…


  144. WFMI, gives them a larger foot print, and it beats others to the punch. They now go from 191 stores to over 300 for 500+ million, not a bad deal.



  145. Well, now I am in unchartered terrority with WFMI. . I had sold 1 March 45 covered call at $3.05. My original cost of the common shares is $45.61. I hate to keep on using WFMI as an example, but want to make sure I understand the next steps that could happen.

    1) I do nothing and if the stock continues to climb, the week after March Exp. I get called out and exercised at 45 bucks, but still keep the $3.05 from the premium sale.
    2) I buy to close the March 45 Calls for a loss tomorrow, then continue to own common shares hoping it will continue to head north.
    3) I do nothing and the stock closes at March Exp less then 45 bucks and they expire worthless, still keeping my common shares.

    Am I missing any other scenarios? Guess I made a bad move by selling the March 45 (in the money) calls, but wanted to have some downside protection. Live and learn. .

    Thoughts? Just my luck, I sell covered calls and it goes higher, lol


  146. I would leave the covered call on; you have a guaranteed $48 sale; or if it trades back down you are ok. If you have any uncovered stock, maybe sell more calls at $50 for Mar or Apr.


  147. Thanks Cap. Don’t have any more uncovered stock, just the 100 shares..


  148. WFMI – how was it a bad move, if stock holds 5% AH gain, that’s just $48, you sold for $48.10 – if you get called away and you like it so much, just buy more stock – no one is stopping you.

    Cap is righ – I don’t see why you’d want to pay a premium to your caller, seriously, just buy more shares for yourself (he gave you $3 so you can buy 1/15th of your position with his money) but again – I remember when you were crying in your pillow and you should be thrilled to get called away for $48 compared to where you were last month (hoping to break even by May).

    Ask me in the morning and we’ll take a look at this once the numbers post.

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

    New post is up, feel free to copy comments there if you have a question.

    Thanks,

    - Phil

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


  149. John,

    1) I can’t remember, but: Didn’t you want to be rescued from this stock two months ago (with some profit) ?
    2) If you do sell more (otm) calls, do it immediately in the initial excitement of the open, when they’re still carrying the volatility premium. Remember what happened to you the last few times you were a buyer of the excitement ?
    3) You have 7% profit when called away. Your CCW did it’s job.

    You’re really not having a good time the last few weeks ! Smile anyway.


  150. Ha! I need to type faster. This is why juliet gets her GOOG sell filled at 65 cents and me at 50 cents.