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GDP Friday!

Microsoft who?

It’s all about the GDP today and the whisper number is a miss of what now seems to be a 1.9% average estimate (down from 2.5% last Q).  I’m not quite sure how we get a GDP miss with 68% of the S&P 500 beating estimates but it sure is spooking foreign investors this morning.

[8:30 update:  It's a big miss!  1.3% and inflation is up - Stagflation Rules!]

Asia dropped 1% today, finishing down a point for the week after 2 really nice days.  They were down 2% on Wednesday so it’s not awful but there was a lot of nervous profit taking ahead of China’s week-long market holiday.  The BOJ held rates steady but warned of future increases, sending chills up the spines of carry traders.  Japan’s 2.1% GDP growth is up from zero, so that’s pretty impressive and the Japanese are worried about the lack of inflation after their decade-long deflationary cycle.  "The economy is likely to continue its sustained expansion with a virtuous circle of production, income, and spending in place," the central bank said in the report.

Mazda earnings jumped 24%, led by strong North American sales in SUV and compact cars and I mentioned Matsushita’s 41% gain yesterdayPC sales are booming at Acer, the world’s #3 computer company, which bodes well for our HPQ calls.  The dark spot on Asian earnings was NTT DoCoMo as Japan’s biggest cell phone carrier posted a 25% drop in income as they fight to keep market share.

European markets were weak ahead of our GDP and the numbers I’m seeing are unlikely to help but watch what happens next week when there is nowhere else for money to go.  Japan is closed Monday, Thursday and Friday and China is only open on Monday and there are fears that Chinese officials may take advantage of the holiday to announce Central Bank tightening while the markets have time to digest it.

Commodity prices are coming under pressure in Europe as regulators there are beginning to fine de facto commodity cartels for price fixing.  This is coming at the same time as Democrats here are calling for excess profit taxes, well timed in the face of another round of record oil company earnings.

We will be THRILLED to hold 13,000 today – as I said, next week there really won’t be anywhere else for Europeans to put their money so we stand to do well by default but first we have to get there without looking too undesirable:

 

Day’s

Must

Comfort

Break

Next

Index

Current

Move

Hold

Zone

Out

Goal

Dow 13,105 15 12,468 12,600 13,000 13,500
Transports 2,923 -35 2,825 2,900 3,000 3,250
S&P 1,494 -1 1,430 1,460 1,500 1,550
NYSE 9,715 -31 9,218 9,465 9,600 10,000
Nasdaq 2,554 6 2,454 2,500 2,600 2,750
SOX 506 3 477 490 500 560
Russell 833 1 803 820 850 900
Hang Seng 20,526 -140 20,200 20,600 21,000 22,000
Nikkei 17,400 -28 17,400 17,500 18,300 18,500
BSE (India) 13,908 -320 13,200 14,000 14,725 15,000
DAX 7,377 -9 6,900 7,000 7,400 8,000
CAC 40 5,938 -6 5,650 5,800 6,000 7,000
FTSE 6,440 -29 6,325 6,450 6,600 7,000

Well you didn’t think we were just going to blow through the right side of this chart did you?  On the whole we’re in pretty good shape as long as we assume the pullback in Asia is really just pre-holiday profit taking.  Europe is our main concern and if they hold up it tells us two very important thing:

  1. The Global economy is very strong
  2. We don’t really matter anymore.

Remember how the Russian or Italian economy could collapse and you wouldn’t think twice about going long on retail or manufacturing?  That’s how the Europeans are starting to view us!  In a way it’s a relief, there was a lot of pressure in being a Global leader and we should thank this administration for all the hard work they’ve done to ease us back down the ladder in World stature – they said you couldn’t spend 220 years of global respect building in 8 years but they managed to do it in less than 7 – kudos to all!

The one industry that’s growing and growing in this country for the past 6 years is getting a little tired looking as this latest GDP report indicates the energy industry may be killing the goose that lays the golden eggs.  On the whole I didn’t think the GDP report was that bad so we’re not going to panic at the open as we have our mattress plays in place and we need to watch some key indicators before we start to worry.

Let’s watch that $65 line in oil but in a down market I don’t think anyone is going to want to go long on oil into the weekend, it would be a real tragedy if nobody dies or – even worse – if peace were to break out somewhere so let’s join our oil speculating friends in prayer that something truly awful will happen somewhere that will cause the suffering of as many people as possible so they can drive prices even higher and suck more of the disposable income away from the bottom 90% of society before they waste it on food or shcoolbooks.  Amen!

 


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  1. Awesome calls on BIDU KUDOS!


  2. BIDU- congrats to all in the $10k soon to be renamed $20k !!!!!! I sold my play yesterday up 6 points LOSER
    CCJ- Phil with the understanding that you are no longer in the trade. I bought the CCJ 09 50′s (1/2 play) and sold the May’s 50′s at .75. Was thinking of selling another set at .45 to .50 setting up a 2×1 ratio. Thoughts


  3. BIDU – it’s very frustrating waiting for the trading to start isn’t it?


  4. What is the plan for MSFT today?


  5. BIDU – what a Jackpot – $23 for the June $105s and just $22 for the May $105s – I was worried we’d get 0 on the spread. If you are still in the $105s, rather than sell the ones you have you can sell the $115s, which carry a pretty good premium and should give you a good cushion but I’m happy to take the cash.


  6. rally on expected weak data?


  7. MSFT – I’m pretty disappointed with the double but we’ll take it! Selling the $30s for no less than .80 (hoping for a bounce here) is a good idea over the weekend and I’ll buy them back for $1 on mo. XXX


  8. phil-BRCM getting some buyers here. was the selloff an overreaction?


  9. AMZN puts as a mo play?


  10. Rally on expected Fed easing – economy is down but not out and housing was 85% of the problem with the other big hit coming from less governement spending, not really a bad thing!

    SNDK moving up on the loss. I’m holding off on buying out my caller for now.


  11. steel taking an across the board hit. Time to scalp X, STLD, BOOM


  12. Hey Phil! Do you think QCOM is going to come back? Where do you see YHOO going?


  13. EBAY showing strength


  14. out of EBAY. I think the window is closed for now


  15. BRCM – no, it was pretty bad! The buying so far seemed to be one guy who thought he was getting a bargain, not a trend.

    AMZN – still playing with fire although I picked a good exit yesterday! July $55/65 spread might be interesting as you may get paid on both ends. Let’s do that as a wiggle play, which is buying the mo on each side so my goal is to buy the July $65 calls for under $2 and the July $55 puts for under $2 (right now) so I’ll be starting with 2 contracts and add 1 or 2 contracts each time it gets .50 cheaper but never letting 1 side have more than a 2 contract discrepancy so I’m trying to wiggle into about $1.25 on each side where a 10% move will make a ton of money.

    Consumer sentiment is Up!!! Now the GDP can be spun in a much better light.


  16. BRCM – sold the puts for $0.85. Now waiting for Jun calls to come back.
    BIDU – Wow! That was intense. Really had to resist selling at the open. Ended up selling 2/3 Jun105s holdings for $27.3 and sold 115s against (thanks for idea, Phil).
    AMZN – finally! Phil, I think I’m going to go with your roll caller to May60s suggestion, though hopefully the premium is still there with stock dropping.

    Thanks again to all who contributed to the BIDU trade.


  17. Gm all, am on double secret probation at OpEx so no margin…..limits intra day trading so didnt catch the BIDU train

    ORCL finally busting loose now


  18. GDP, looks like Gonmt spening was to blame!!!!


  19. Playing a lil coal co. called Puda Coal Inc. (PUDC) which supposedly is going to dectuple SOON! (Their words not mine so disclaimer in full force)


  20. Steel – don’t chase and never short BOOM – that stock can kill you!

    QCOM is an accumulate here, sell-off for them seems unwarranted. I’m willing to go with the current $45s at .95, the May $95s are $1.70 so you’re getting you money’s worth with 3 weeks to go.

    CME suddenly woke up! $530s as a dangerous momentum play for $12


  21. Nice bump on stodgy old GE.


  22. VSEA- sweet 150% gain on big earnings.
    WFR- good news bad news $3.70 gain on May 65′s (Thanks Phil) Leaps getting smoked
    VIP- took 1/2 off on gain. Jesus I hope that 103 quote was bad as I totally missed it. LOL
    JWN- bought back May 55 for .40 gain. July 60′s are free! (THANKS AGAIN PHIL)
    VLO- bought some calls on this Terror threat


  23. I gotta say the PUDC is like a cramerite stock, volume already 5M! Fortunately I was one of the lead sheep lol (in at 2.10)


  24. CME seems to be following pattern from last August


  25. QCOM – what if I already have the Jan130s (still doesn’t look like right time to sell calls)?
    WFR – leaps pretty toasty; thank goodness for the May65 covers
    JWN – great job BillBigD; how many times did you sell/resell those May55s for the July60s to be free?!


  26. CME – will be selling the $540s for $8 if it crosses down below $526 against $530s, that will put time on my side for the weekend.

    BRCM is on the 5% rule, until they break $33.50 this is not a bounce. If they can’t crack that they are likely to head to a new LOD

    AMZN – there’s no earnings so we’re playing them for a 5% correction by this expiration otherwise we are either going to have to quit or sell against but we may have some fun selling Mays into expiration week if we’re still channeled. This is meant to be a light, fun position, not life and death.

    Double Secret Probation?!? – Oh you’ll get yours Mr!

    There’s still a very strong bullish undercurrent to this market. What’s key for us is will the buying dry up when Europe closes. The dollar is down again (I need a macro key for that statement)

    PUDC – watch the 200 dma at $2.25

    CMI – what is up with this market? We knew days ago they were going to beat and look at the gain today! That’s just too much, I’m going with the $100 puts as a mo play XXX CDMQT at $2.75 max – out at $2.25 (.50 tstop).


  27. GE movin some


  28. WFR – we do buy out our caller into the initial excitement, now .62 as we will sell $60s if things get worse!


  29. LOL Flounder !!!


  30. Morning all, sold another round of DNDN May 17.5′s this morning after picking up some more common. I am short May 15′s, 17.5′s, and 20′s now – my break-even is 12.15. If we’re at $15 in 22 days I’ll net 25% and be free to sell Junes…love the risk/reward on this one.

    Amazing, the IVs on these are off the chart – 275 to almost 300!


  31. WFR – the Jan $70s are $5, we bought them for $7 on the 20th (pocketing huge gains from the earlier leaps I will remind you). We sold the $65 calls for $2.40 and just took the guy out for .50 so we are net even(ish) and in position to sell at least 7 more calls against our $5 basis leaps. June $60s are $3.30, that could be a nice pickup if it stays flat but I’m willing to let them go to $2.50 before I sell those as WFR’s earnings were up 100% on 29% revenue growth. I think this is partly the Cramer effect – if they have earnings and don’t go up 20% everybody bails…


  32. CNA any thoughts prior to earnings on May 1 (uno de mayo = 1 case cerveza de corona to prep for the 5th) Projected earn almost dbl same prior period…


  33. great timing call on CMI short, market looks weak


  34. BRCM – I assume we should also be buying back the May 35s (now .30) on the initial excitement?b


  35. KC
    JWN- 4 times total on playing the 55′s. First Apr’s and now twice with the May’s . Actual cost now on July’s 60 -.65
    but I am not smart enough how to figure that return out. (Phil can you help)
    DRIV- always beat


  36. BillBigD:

    Any thoughts on ATI?


  37. WDC 09 leaps are $2 – seems they are down a little too much


  38. BillBigD,

    I take (gain) loss/contract per transaction and subtract (for gain) and add (for loss) from/to basis per contract I now hold…..if you give me the numbers I will calc.


  39. NTGR-gone
    ALBO- I am actually ripping money off the table as I am heading to Europe on Monday for 10 days and with the time change it is very hard to trade. Last May while in the mountains of PERU that downturn was very painful. So to answer your question I am not buying ATI or anything really today unless there is something I think is a give away.
    NOV- still pissed I forgot earnings were today.


  40. Morning fellas, pretty quiet in the oil patch today.

    Taking some SWN for earnings Monday. I’m listening to their presentation from earlier this week and, although I already like the story a lot, there are some allussions in the CEO’s language that promise great things Monday. Also, their progression in the Fayetteville Shale looks very similar albeit slower from a production ramp than NFX in the neighboring , and apparently higher rate Woodford Shale. If SWN scores monday it will drag NFX up. I’ll post a comp analysis of the two on my site this afternoon but when you look at them both on a reserves to mkt cap basis, I think NFX is about to catch the same wave that SWN caught three years ago.

    Opus: I haven’t forgotten about HK, I’ve not been able to see the analyst presentation but have requested a zipped copy be emailed from the company. I’ll let you know.


  41. I give up, I bought some AMZN 65 calls few min back.


  42. Have a great trip.


  43. BillBigD:

    Bring lotsa dollars ! ! !


  44. fresh from talking to myself on the old post…
    phil, xom 80 puts- thoughts?


  45. okay zman still holding HK so you would buy SWN here buy the way SU moving up today on the buyout by STAToil of northamerican oil sands (all cash) do you like SU here (I know Phil doesn’nt) D Gartman pounded the table yesterday on it (of course he has for at least 2 years and the stock hasn’t hit a new high in over a year


  46. My wife just sent me this – very funny (in a tragic sort of way if you’re a parent): http://www.minorityspace.com/view_video.php?id=21

    BRCM – The June/May $35 spread? Of course, that’s a win right, in at .25, now .54 – getting a double on a spread is awsome! You can wait a bit but don’t go lower than .75 on the Junes, that would be a tragic waste of money. If you really want to go for it you can DD on the Junes at .82 for a $1.15 basis and sell 50% of your new total against the May $32.50s for $1.30 putting your total basis down to .50 with 2 months to go just $2 out of the money and it’s the same deal, take the new shares now, set a .75 stop and look to sell for $1.50 or better.


  47. video – a guy did that in college standing next to me. I ripped off my shirt and smothered the fire, the guy ended up in the burn ward, but damage was limited – pretty scary stuff


  48. BIDU

    The next time you guys line up a big hitter like that will you post it in BIG LETTERS so I can see it ! : )

    Congrats to all that had that one !

    T


  49. Phil,

    What price target do you have on those CMI 100 Puts to sell? I bought at 4.1 and have an order in at 6.5 but I’m just being greedy at the moment.


  50. what happened on the crdn cc?


  51. And just as I say that, it rally’s back over 100….figures


  52. ALBO
    I know I was in London in March. It kind of sucks paying DOUBLE for everything.
    Karcom
    JWN- bought july 60′s at 1.60. With a series of trades on the 55′s I have made $2.55. So my cost is now -.95 (just re-figured) So how do you figure the amount of -.95 to 0. Kind of fun!
    WFR- Phil hope your comment were not at me. I am WAY up on this stockeven with pullback so no worries. INfact I showed no willpower I bought some July 70′s for a quick trade.


  53. RIYADH, Saudi Arabia (AP) — Police have arrested 172 Islamic militants, some of whom were being trained abroad as pilots so they could fly aircraft in attacks on Saudi Arabia’s oil fields, the Interior Ministry said Friday.

    The ministry issued a statement saying the detainees were planning to carry out suicide atttacks against “public figures, oil facilities, refineries … and military zones” — some of which were outside the kingdom.

    “They had reached an advance stage of readiness and what remained only was to set the zero hour for their attacks,” Interior Ministry spokesman Brig. Mansour al-Turki told The Associated Press in a phone call. “They had the personnel, the money, the arms. Almost all the elements for terror attacks were complete except for setting the zero hour for the attacks.”

    The ministry did not say the militants would fly aircraft into oil refineries, as the September 11, 2001 hijackers flew planes into buildings in New York and Washington, but it said in a statement that some detainees had been “sent to other countries to study flying in preparation for using them to carry out terrorist attacks inside the kingdom.”

    The militants also planned to storm Saudi prisons to free the inmates, the statement said.


  54. Phil! Ive had my hands on NFX Jun 50′s. With today’s news, would you dump them?


  55. Phil – Hung in there with GE. A very big Thank You! Was sweating it out hoping to just get my money back – Just absolved myself with cash on a little better than 2 1/2 times what I was in for…. No sense in being greedy. Thanks!


  56. Phil – can you advise on port insurance over the weekend? thx


  57. WFR

    I’m a WFR junkie – picked up June 65′s


  58. CNA – I see 4/30 but I’ll take the tequilla anyway! I don’t trust them up here although business is probably good but the sector’s been kind of disappointing while they’ve taken off.

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

    JWN (5/17) – look how strong they came back from Tuesday’s dip. Wouldn’t want to sell calls against them but I’m not sure what the question is?

    WDC – I like STX better

    AMZN July puts got down to $1.70 on last spike. Will buy more at $1.50 but no fill on July $65s, sentiment still very positiive so I will buy 2 June $65s for $2 for now to balance the 4 (assuming I get them) July $55 puts at avg. $1.75

    Welcome back Greed! I didn’t think much of XOM’s report but unless we get a real drop in oil it’s kind of hopeless. XOM May $80s are pretty cheap at $1.33 but the damn company is still buying back 10% of the shares traded on any given day and analysts are applauding them for it and they’ve certainly got the money to keep doing it… The tax issue may sink them a a billion here and a billion there can really start to add up – even to Exxon!

    BillBig – Europe? I’m going to Italy in the Summer, I’m already choking at the hotel prices!

    CME doing nicely – for future reference, gaining $1.20 on a $3.50 move on the $530s while the $540s (didn’t trigger yet) have gone up just .85. No longer any point to selling them as risk/reward profile has changed (I have a $1.20 profit) so I’m just out here.


  59. BillBigP,

    Typically, only losses are deferred and increase the next cost basis. Gain/Profit/Income deferred sometimes by profitable Co’s or an entity with an ulterior motive re: stock price who then push into the next period/qtr/year for a safety net (TZOO maybe?)


  60. CME found its’ feet, well played Phil…


  61. FXI Status???


  62. CTRP & MA acting well on LOW volume.
    HOTEL prices are insane! If a NEW YORKER thinks they are $$ you can only image.


  63. MA moving big-looking at may115 or 120, buying SHLD May195 calls, keeping an eye on GS. The market likes the GDP otherwise we would be alot lower.
    Cramer’s cycle says buy high tech, retail and financials


  64. Phil – WFR: you said “June $60s are $3.30, that could be a nice pickup if it stays flat but I’m willing to let them go to $2.50 before I sell those as WFR’s earnings were up 100% on 29% revenue growth”.

    Why wait for the June $60′s to drop to $2.50 to sell if you are bullish? New to the board .. thanks


  65. Welcome Jeddah, cuz Phil knew stock was sinking to 58+ :wink: not really but sometimes I wonder……


  66. So testing for a bottom? .. thanks much


  67. EQIX
    new high!!

    BillBigD, have a nice vacation!!


  68. Turtle, you need those magnifying glasses they sell at the pharmacy! One of these days I want to get some kind of automated comment puller so we can sort by symbol and most discussed…

    CMI – I only got a couple (and I cheated as I paid $3) but this is the 5% rule off the $104.75 non-spike top but is also right about a 20% pullback from the run that started at $74 ($30) so $98.75 is the line to watch for a breakdown or support. Very likely it will be support so I’m getting half out at $6 regardless but right now my stop is $4 on a .50 trail as 33% is pretty good money on a day trade.

    BillBig – don’t be sensitive! You said they were getting smoked so I just wanted to make sure people understand my long-term prerspective on those…

    Terrorists – let’s follow that money and see which oil company has a “$32M misc. mayhem” on their 10Q! Watch how they’ll tell you it’s impossible to figure out where $32M came from. You have to cash $100,000 320 times to give someone that much…

    NFX – I don’t have it myself but they’re sure not going to make an ath on that report so assuming you’re in at $1, now .45 I’d say punt back to Sept $50s for $1.65, sell the May $45s for $1.30 and use you $50s as a buffer. You can’t owe your caller more than $3 (-$3.35) and a $5 move should raise your September calls by about $3 and you’d still have June, July and August to sell in the money. If it drops $5, you won’t be much worse off than you are now with 3 months to sell (of course you can ladder down your caller).

    SPF is talking turnaround in CA – odddly their stock is going down…

    XAL – is there an ETF for this thing – they are flying down today.

    Insurance play is still my beloved DIA $131s, doggedly holding onto $1.30 and providing you about .40 per $100 drop in the Dow (but the nice thing is your returns accellerate the worse the Dow does). You can work out what you need pretty easily because the Dow was at 13K on Weds am and 12.9K on Tues am so you just have to look at how the calls you are looking to protect were doing on those days.


  69. Phil, am long TLT puts for June, seems to have so legs. Any more thoughts after GDP?


  70. Is MA selling Ipods now?


  71. Phil, there’s no ETF for XAL. I played XAL index options long last october. Very expensive, huge spread. The nearest ETF is IYT. Again the spread is enormous. Airlines downgraded today.


  72. BillBigD,

    JWN – sold 4 times? Wow, clearly I need to get more aggressive ;-)

    Have a great vacation, but tell us all your picks so we can play them for you while you’re gone :-)


  73. SIRI looking good Phil


  74. Boy Phil, you pegged the support of 98.75 with CMI. . bids were cluttered all around it.


  75. Phil

    Its not thick glasses that are my problem…..its my thick head…..

    T


  76. Phil- NEVER SENSITIVE LOL. I was in WFR before PSW bought the WFR 50′s
    RIG- Those August 85′s are working up great! Up $3 on 1/2 and 2.5 on the other. EARNING next week MAY 2nd


  77. FXI get’s a Muhaha from me (that’s my evil laugh when I destroy some poor callers hopes and dreams) – the $110s sold are down to $2.15 but, since I rolled losses, my basis is -$1. It’s not worth shifting them and I don’t think Asia will move much on a holiday week next week so we’ll just let the premium eat away at the poor little bugger for a while!

    MA, SHLD – very brave ahead of the weekend but fortune favors the bold. It does my heart good to see a market for the SHLD $195s but I’m still not willing to sell them unless we get a real spike into earnings. My problem with MA is the EU is on a rampage and they will likely find their fees curtailed in 30% of the planet. The worst thing is that AXP is over there saying they agree with the EU (because they’re not really a credit card and it sticks it to MA and Visa).

    Welcome Jeddah – yes, it’s kind of a “sell stop”. Much like a stop you set on your regular positions, I’m setting a minimum amount I want to collect to protect my longer calls. USUALLY I do these on momentum or when I feel some specific event is happening but, when asked, you will often get the more wishy-washy contingent answer from me as I’m just letting people know what I’m thinking at the moment.

    When I recommend a trade, I usually (assuming I remember) put an XXX next to it. Trades without an XXX are either ones we are just discussing or ones I make (like mo plays) that only crazy people who can afford to gamble should do. While they often do well, they also often don’t and it’s best you paper trade those unitl you get a comfort zone.


  78. FMCN
    greedpeace’s idea this morning is working out great!! Thanks greedpeace!
    Turtle, if you missed BIDU, consider this one!


  79. TLT – I don’t really think that the GDP takes the Fed off the table. I think you’re safe until Bernanke speaks so just watch out for Fed news because they are likely to reiterate a tightening bias as Europe and Japan and China are raising rates and we simply can’t afford not to.

    CMI – now you have to see if we get a 20% bounce off the 5% drop that we have now clearly established as a correct turning point. A bounce of less than 20% ($1.05 to $99.80) would be a bad sign and could lead to a breach of the 5% mark so look for that range ($98.75 to $99.80) to form some kind of consolidation for a while and then we see which way this goes.

    Wow RIG going nuts – that was a fortunate cover play!


  80. i mentioned sohu and sina this morning too but didn’t buy those. sohu up 5%


  81. GSF/RIG/OIH
    RIG is on fire! GSF is starting to move also! OIH 160+!!


  82. SOHU/SINA/SNDA/NTES/FMCN
    SOHU reporting 5/1!! Anyone know when the others report? Thanks!
    greedpeace, did you mention that FMCN is report 5/9? Thanks!


  83. KC
    HWCC running remember earnings on the MAY 2nd. I am out at $32 or before earnings


  84. I like SINA better but they already had a big jump ahead of BIDU.

    RIG – $7.80 is good for me, I’m going to reposition closer to earnings. XXX


  85. Phil – what is the whole trade on RIG? Thanx


  86. still holding xom puts… don’t want them into this w/e


  87. RIG – too bad I’m still holding the May85 covers (don’t remember you saying to lift it). With $1.5 in premium left, doesn’t it make sense to keep the spread (Aug85/85) position for now?


  88. BillBigD,

    HWCC – I’m looking to sell May30s against my Sep25s (ala BIDU suggestion this morning) as I’d like to see what happens with earnings. I don’t have a large position anymore (wish I’d hung on to the ones sold earlier), so this is just playing for fun.


  89. I say there is no way that the Transports are at Tuesday’s low and the Dow is up 150 points. Somethings got to give and I bet it’s not the Transports with $65+ oil and nat gas back at $7.78

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

    NOV breaking out.

    BHI on a tear.

    OXY a real bargain compared to XOM – am considering for a cover. Would have taken them if they had $52.50s to spread…


  90. ZZZ
    Which calls did you buy on SWN?
    OIL at $65.88 ouch.
    RIG- great trade PHIL I am holding a little longer off NOV big numbers.


  91. I guess you can say NO one has the BALLS on CNBC LOL


  92. Anybody thinking S&P might want to try and test 1500 today?. . TICK around 300. TRIN a little high at 1.15 .


  93. RIG – I’m just out of the Aug $85s. Seemed too risky to sell calls into earnings and the gain was 85%. If I can’t figure out how to protect 50% gains, I take them off the table, especailly into a weekend.

    As to the covers – those were from way back on the $13th at $2.25 and went all the way down to $1. It is very important that we follow rules and taking a 50% profit off the table if it falls back to a 40% profit is a real big one. When I have a hedge fund I will hopefull automate a system to track and alert but usually I post violtions of the rules – following the rules and posting specific stops on 200 positions would pretty much leave me time for nothing else.

    Now DO breaking out – something is up in Driller land

    E must have reported after the Europe bell, they are going up since noon.


  94. Somebody decided to buy, my screens are lighting up!


  95. CROX
    made a sudden jump!!


  96. HAL coming on strong. $32.50s still .50 XXX

    IGW $65s have very small premium at $1.35 if the S&P breaks 1,495 again I’m going to give them a spin.

    SLB now coming alive June $80s for $1.60 XXX


  97. PBR $105s for $1.88 XXX (by the way, I have a ton of oil puts so these are covers!)


  98. Phil,
    NVDA earnings are next week, any plays in mind?


  99. did we break some resistance with program buying knocking out the buy stops? hopefully this isn’t a damn headfake, lol.


  100. SPY almost going green. .


  101. NVDA – not liking them here. Already have HPQ so not diversified enough if both.

    LOL – not the best exit on RIG… but that’s why I turned and bought more oil calls…


  102. NIKE is just froze needs to thaw out


  103. Big question of the day. Can big Softie Microsoft close over 30 bucks. . .


  104. Hello,

    I posted this in the Thursday wrap-up instead of here as I meant to…

    A few days ago, someone mentioned that it might be handy to have a sheet to calculate DJIA with one or two components removed. So I made a basic sheet for this for day-to-day change that will allow you to put in 3 symbols and have them removed from the DJIA and then compare an adjusted DJIA on a day-to-day basis. You have to watch the Dow divisor though!

    The sheet updates quotes with MSN-Money excel add-on but there aren’t any macros embedded (if you’re worried about security stuff). Anyhow, if anyone’s interested in it, you can use the links below to download. The first is for DJIA, the second is for the SOX:

    http://www.box.net/shared/ckj1c3h7kl
    http://www.box.net/shared/24h6zjg772


  105. RIG – yup, my bad for not taking out the May85 caller. Actually the return on the spread was pretty good (22.5% after commissions) and it’s the end of the week, I just liquidated it. I promise I’ll be more diligent going forward. ;-)


  106. rig great call!!


  107. happy,

    PTNR – What are your thoughts on this now? Brokeout yesterday and sitting right at top of BB. Thanks.


  108. NTRI
    trying to regain yesterday’s high!


  109. Thanks Phil .. this site is a blast!!!


  110. PTNR
    KC, hey, wow, somebody’s starting to look at those BBs!! Well, you know I like them when they are riding it, although they are way above their estimates! If you’re not in yet, I wouldn’t chase. If you’re in, I’d cash out!


  111. T Holding the 50% fib support at 38.65. Perhaps ready to continue the uptrend.


  112. DNDN news: you guys may have already seen this… http://www.bloomberg.com/apps/news?pid=20601109&sid=acGZw.pUCvBc&refer=home


  113. RIG-I’ll join ya taking 1/2 off at $8.1


  114. BillBigD,

    COH – I took the dip to reposition from Jan08 55s to Jan09 52.5s. I’m sure you still have leaps. Could you share your target to sell calls? This stock will slowly meander upwards, but will likely miss the May window by the time it gets past $52. Since you’re the master at sell/buyback/re-sell (as evidenced with JWN), I’d appreciate for your thoughts. Thanks.
    HWCC – sold May30s near $31. Hoping it’ll beat earnings (26% over Mar’06 doesn’t seem difficult). Your $32 exit point should give you a very nice return, esp. since you’re going on vaca.


  115. AMZN back in the grove – continuing the parabolic route. Plan to flip my 65 calls and buy those Jan 09 Leap puts with the proceeds.


  116. john…
    im personally hoping to see msft give us a little more over mon-tues


  117. PTNR – Thanks happy. I wish I had it. I guess I should leave it alone.


  118. Usually on a spread like RIG, I’ll take out one side or the other on momentum and then set tight stops on the remaining leg – that way I don’t have to overthink it.

    Speaking of overthinking – there goes AMZN! That was a good flip to the Jun $65s, now up from $2.20 to $3.10 while the July $55 puts are $1.50 (target) so I’m now going to take those off the table at a .50 loss on 2 and offer $2 for the June $60 puts but get them before they hit $2.40 if they start to go the other way.


  119. CTSH back into the 90s. INFY, SAY, WIT could be in trouble because of the dollar weakness.


  120. Phil my sleeper for next week is BWLD. Have you ever eaten there? Playing a strangle with may70calls and may60 puts! Its a very volatile one. 7million float and 2 million shares short!!!!
    Watching and playing GS, SHLD, BWLD, AMZN


  121. Aaaggghhh. Missed CRZO again.

    Bot a smitdge more NFX, the Cannacord analyst is a dope.

    BillBig D – SWN tiny into June $45, and some Jun 50s on a lark!


  122. Some economic numbers on monday, seems nobody wants to be short into those, nor merger monday.


  123. T has been a huge disappointment but I like the ’09 $40s for $3.95 as an accumulate XXX

    DNDN – yeah good luck on that! I’m still trying to get the $15 calls for $4 so I can sell the $17.50s when they bounce to $4 although I now have a fallback of selling the June $17.50s for $4 if I don’t get it on the Mays because I have a $2.50 advantage over my caller and, after the decision I imagine enough of his $6.25 premium will evaporate to make me at least even. XXX

    Last time they foiled some terror plot, oil plunged – it will be interesting to see what happens on Monday.


  124. KC
    Since I can not really watch things I am hoping for one more Spike and sell the May 55′s against Leaps and Stock. I don’t want to worry about things with the 52′s. Maybe you sell on a spike but the May 52.5′s.
    I’m starting think you are bad luck! hee hee I was trading NMX almost everyday and now since you are in nothing. You jump in COH it goes down 7%. HEE HEE Now I know why RIG keeps going higher.
    Big VOL on those COH 09 55′s


  125. AMZN – Man, I just got to the station (after rolling my May45 caller) and the trains leaving again ?! LOL
    T – Phil, you read my mind; I was just going to ask about the May40s


  126. GSF
    either it’s playing catch-up or something is happening this weekend! volume is high!


  127. AMED massively overpaying for Dyna Care – AMED crashing. Too late though…
    ROCM – same group, had awful earnings, down 20%. On the whole makes UNH look pretty good!

    YUM – remember when they sold off 15%? Up 20% since then (45 days).

    BBY (6/19) – I’m calling a maybe bottom here. Buying Jan $50s for $3.85 XXX


  128. CTSH – its chart tends to correlate well with INFY’s historically(http://finance.yahoo.com/charts#chart2:symbol=infy;range=1y;compare=ctsh;indicator=volume;charttype=candlestick;crosshair=on;logscale=off;source=undefined). INFY reported earnings on 4/13 and CTSH has essentially the same challenges as INFY but expectations are usually higher for CTSH. Post-earnings, INFY has been on a gradual retreat but they are a pure Indian company whereas CTSH is headquartered in the US and there are significant inflation, tax and currency differences.


  129. Phil,

    I have some XOM 75 ’08 puts, current price is 2.6 does it make sense to roll these up to the 80 puts for 4.3 and wait for XOM to pull back to sell shorter term puts?


  130. Sure was thinking that YHOO was going to make some kind of a solid move today.


  131. I noticed that those AMZN Jan 07 and Jan 08 leap puts have moved higher and remained higher even on the last spike when AMZN was +$1 for the day. Could it be increased IV or is the end near and the big boys do not want to sell those leap puts.


  132. BillBigD,

    COH – That’s fine. Go ahead and blame me; everyone else does… LOL. I rolled to the 52.5 leaps as that should keep margin requirements down (based on my last trade selling May52.5s). Seems it should give me more flexibility to sell on spikes between say $51 and $53 as well (again from margin standpoint), but this is all fairly new to me, so let’s see how that works out.
    NMX – I may regret this later but I sold May130s yesterday. You can blame me for this one too!


  133. Taking off CME calls from yesterday…..


  134. AMZN – I think it’s all done squeezing the shorts and the next move is down. Legging in to a bear credit spread


  135. Phil, I still like your call on short R2K, hedge with SPY….Any more thoughts on that trade?


  136. WIT et al – Rupees not that strong and US labor is going up faster than Indian labor.

    BWLD – that was one of our biggies last Summer but we gave up on them in November with some massive gain – hard to get excited now. I’ve never eaten at one but I love wings – I used to actually go to Buffalo when my friend went to school there so I’ve had the originals!

    CRZO – LOL again is right. I love the way they all just shrug off their downgrades! I would wait on this one, been crazy volatile.

    Wherefore art thou Google?

    The CAC and DAX finished up strong, that’s the Key to this rally. I’m telling you, next week there is nothing to buy in Asia but that doesn’t mean the money’s going to sit for 5 days doing nothing. EU stocks are high, ours are low – that’s my theory for next week.

    MSFT and GE are huge lifts today but we still need to get those SOX back over 500 as we can’t afford to lose them and transports.

    AMZN – I am starting to love this stock! Ended up at $2.20 on the June $60 puts so now I have 2 and 2 $65 call and they’re both up! Now the trick is to buy 1 every time it hits the opposite channel so I have onle a 1 share discrepancy between puts and calls and then cash in on a big breakout.

    GSF is the best of the bunch for the last 6 months so anytime they go up I get bullish on the others:

    http://finance.yahoo.com/charts#chart14:symbol=gsf;range=6m;compare=bhi+hal+slb;indicator=volumema+macd+rsi;charttype=candlestick;crosshair=on;logscale=off;source=undefined

    SU – lower taxes (and they’re not lower they’re just not being raised) don’t mean much if you’re not making profits. The $80 puts are being given away at .95 XXX but VERY risky over a weekend.


  137. Fund still pour into US equity/bond funds

    AMG: Equity Fund Inflows $6.1 Bil; Taxable Bond Fund Inflows $2.4 Bil in the week ended 4/25/07
    http://www.amgdata.com/newsline.php?id=1524



  138. Phil its hard to keep up with you on the AMZN trade , i have the july 55 puts @ 1.70 I havn’t got the calls yet . you only took 2 of your july puts off the table so should i wait for the june or july calls to fill. sorry for the ? thanks


  139. The euro climbed to an all-time high against the dollar today. Ouch.

    We planned a European vacation for this summer. Yeah, I know, my timing is slightly off :)

    ——————-

    Phil, time for one of those “why is oil still $50″ article that gets picked up by Yahoo — seems like those bullish hedgies need a reminder again. Really, why is oil even over $40?


  140. I’m flying to Buffalo on Sunday. Can’t wait for some suicide wings. Usually I have to make them at home in my turkey fryer.


  141. phil, iwm puts over the weekend?


  142. Phil,

    What does it mean when you say XXX at the end of your message? Not familiar with this shorthand.

    Thanks,

    Jordan


  143. I was reading XOM’s earnings release and noticed that their share buyback for Q1 was only $1.8 billion (vs $6-8 billion in prior quarters).

    Anyone know why the change?


  144. Greed, IWM shorts this weekend run this risk of some M&A and some firndly economic numbers pre-open.


  145. Europe Travel – tell me about it, I am visiting London & Amsterdam next week. Talk about feeling the pinch :-)


  146. Oops, never mind – XOM bought back $7 billion worth of shares in Q1 (or 1.7% of outstanding shares)


  147. SOX
    I think SOX will be fine; they need some consolidation anyway. A little rest is healthy.


  148. XOM – I’ve been moving mine to the Jan ’09 $75 puts. I don’t have a margin spread issue, that’s a consideration but I can sell the same puts, for 12 more months, from there as I can with the ’08 $80s.

    Right now I am 1/2 and 1/2 on the ’08/09s but I am considering moving 1/2 to the $80s and agressively selling $80 puts for a few months, then moving the ’08 $80s back. I’m $2.80 down right now so it will only take 3 sales to catch up (hopefully).

    AMZN leaps – a little of both I think, what a kooky stock. I still haven’t figured out how they got away from being considered a retailer all of a sudden unless WMT is going to buy them or something. Now both my positions are $2.62 with a $2.10 avg entry – I should probably quit while I’m ahead but I’ll be buying 1 more of either side at $2.

    COH may take a long time to resolve itself. They are making a smart but painful move to protect their brand and I’m looking to buy them for $47.50.

    NMX – looks like good timing to me! Anyway we had 3 or 4 day trades that made 20% today while that just sat there, better to put money to work – it’s not like we only ever have one idea!

    CME – I think I nailed the top for today.

    Russell/Spy – I don’t even remember it but it was brilliant last week, check out this chart:

    http://finance.yahoo.com/charts#chart21:symbol=^gspc;range=5d;compare=^rut;indicator=volumema+macd+rsi;charttype=candlestick;crosshair=on;logscale=off;source=undefined

    I’m still on the DIAs but it costs me .30 per 100 point Dow gain to have the insurance

    XAL down at the 5% rule – tragic!

    COST $55s for for .70 – they’re moving and have been on my list PRQEK XXX


  149. i was just reading something that made me even more confident re: dndn. why haven’t they announced financing with the stock at 25? 15? they definitely need the money. they must be confident enough to wait for a row deal and considering the hell they’ve been through with their stock, it’s gotta be more than a hunch. why would they risk precious dollars when they were unable to get any money for so long with the stock at 3-4 bucks?


  150. hey, i own those xom puts you’re selling!


  151. Phil,

    Love your site. Im still trying to learn options, and am paper trading along with many of your plays so I apologize for any silly questions.

    Im trying to build somewhat of a LTP (even though I only have $10K). Last week, you recommended that you still liked the SHLD play for Sept 195, while selling May 190 call. The stock has risen past $190 today. Would you still recommend this play?

    Also, what are your thoughts on INTC or GE? Would you recommend any long term plays since I know you like GE?

    Thanks!


  152. GG perking up, this is a good time to DD on the July $25s at $1.65 XXX

    AMZN – that’s why I don’t usually discuss those as it’s a real day-trade mess to do these. What happened is I didn’t like the price on the July $65s so I swiched to the June $65s which did well, then the June $60 puts came down to $2 so I traded the July $55 puts at $1.50 for the June $60 puts at $2, which was a good trade. Now that the volatility has gone up both Junes are up in value so not a good roll for you at $1.72 but the puts should not give you any trouble into the weekend as you just have the 2 and can DD or roll next week. On my end, I have to shut the trade down at $3.25 because anyone who doesn’t take a one-day 50% profit is a fool, even if it is just 4 contracts!

    Oil article – I honestly don’t know if I have the energy anymore. It’s just so ridiculous that the people who control the supply get to hold you hostage because “supply may be interrupted.” When it’s not interrupted you sure don’t get a refund! All I can do at this point is wear my Hillary ’08 button!

    XXX – means a trade I generally recommend. Since we talk about a million possibilities, we decided to differentiate ones I’m actually picking for the portfolio.

    IWM will go strong if we rally up, dangerous short. The Dow can drop 300 points in 2 days and the 10 point out of the money 131 puts are $1.22. By the way, they cost .66 to roll to to June so if I lose .30 5 times (2 times so far) rolling it up and another .60 to move it to June I would be holding DIA June $134 puts for a net of $3.30, which is the price of the current $134s. Meanwhile the Dow would be at 13,400 and I don’t think I’d be too upset about my 50% loss on my protectors.

    XOM – that 1.7% is a very sneaky number because they actually bought 8% of all the value of shares that were traded. If you figure half the money goes to buy and half the money goes to sell then 16% of the buying was done by XOM and, since they effectively destroy the shares when they buy them, they create an artificial vacuum where 15% of the buyers never become sellers as shares that were previously available disappear. It’s interesting as they are doing the same thing with fuel – remove the supply causing an artificial demand, drive up price and remove more supply – BRILLIANT!


  153. Did anyone hear the CRDN conf call? What was said that crushed the stock?


  154. GSF-bought on your thoughts Phil


  155. Phil,

    NMX – thanks for the vote of confidence on selling the May130s
    COH – my interpretation of what you said is that I should sell calls now as well and not wait for a big spike.
    AAPL – Jul95/May95 now that IV has dropped, May95 has significantly higher delta vs Jul95, so my profit on the spread is evaporating. Well, you live and learn. There’s still $0.7 premium left though so all is not lost LOL.
    LTP – hopefully you’ll have time to address the proper picks.

    Have a great weekend all.


  156. Phil… what happened to SLB?


  157. DNDN – good point greed!

    SHLD – ask me again next week, I do have the leaps and can’t bring myself to sell so far. With a small portfolio you may run into margin issues on diagonal spreads as your broker may want to charge you the $5 gap between the calls. If you have a non-option account, the best is to have it linked so you can utilize the total margins.

    GE is my favorite company and I’ve been saying so since the low $20s. It’s a tedious way to double up but that’s my retirement account. We just took new positions and your timing on them is awful as it’s very rare they make a $1 move in a day (or a week for that matter!).

    INTC is still way low but may test $21 again before really taking off – remind me to look for a nice spread next week as their volatility is about as good as it gets right now.

    BRCM recovering in AH


  158. Phil,

    WFR – one last question, you said earlier “the Jan $70s are $5, we bought them for $7 on the 20th (pocketing huge gains from the earlier leaps I will remind you). We sold the $65 calls for $2.40 and just took the guy out for .50 so we are net even(ish) and in position to sell at least 7 more calls against our $5 basis leaps. June $60s are $3.30, that could be a nice pickup if it stays flat but I’m willing to let them go to $2.50 before I sell those as WFR’s earnings were up 100% on 29% revenue growth”.

    What is your rationale for waiting until $2.50? Giving the stock time to rebound, so there’s no/less headache to deal with later? Thanks.


  159. GSF – actually I meant more that the others need to catch up, not that I would play the leader. If they go down I like them but I’m not much of a front runner.

    COH – sorry, I assumed you know the story. They pulled distribution deals from people who couldn’t guarantee product security in order to tighten up on brand control (no discounting etc.). This effectively shut down 3.5% of their total sales and I am 100% behind this move (control supply, raise price – see XOM) but since retail is a free market, those analysts don’t like this kind of activity. It will take maybe a quarter for them to see it working, then they will get back on board.

    AAPL – it’s the always part of ALWAYS sell into the initial excitement that seems to baffle people. I guess I need to come up with another word that means “all the time without exception.” 8-)

    SLB – I would have taken profits – I think oil’s going to tank next week unless they can cook up some major crisis.


  160. Will remind you next week Phil! Thanks!


  161. Yeah, those buybacks really prop up the share prices. Last year, S&P 500 companies spent a record $437 billion on share buybacks, 25% more than in 2005 and more than double 2004’s total and are running at quarterly average of $110 billion.


  162. $2.50 – I’m in for $5, I’d love to get a 50% gain and that seems like the probable price of the option at the point where I would feel the underlying is breaking down. There are dozens of factors in those picks, it’s not a formula. Effecively I’m willing to gamble .70 on the chance of picking up a rebound this month but a month later I might make a very different decision. If this thing goes down much more I’ll probably add more leaps, this stock is way better than this.


  163. $110 per quarter – think about XOM’s share of that total!

    Last note before I go be a Dad – I’ll be writing about this this weekend, think about the implications of CVX (and they are not the only ones) buying tankers to store millions of barrels of oils offshore while they claim we have a shortage on land:

    SINGAPORE, April 27 (Reuters) – Chevron Corp. has made a booking for a super tanker to load crude from Mexico, adding an option to use it as storage for surplus imports, or to gain from higher forward oil prices, industry sources said on Friday.

    The U.S. refiner has made a prompt provisional booking for the Birdie, a 270,000 deadweight tonne, double-hulled Very Large Crude Carrier (VLCC), to load on May 5 from the east coast of Mexico.

    The cargo is scheduled to be discharged at the U.S. Gulf Coast, but the crude could also be stored on the tanker for 30 days, the sources said.

    Reuters Pictures

    Editors Choice: Best pictures
    from the last 24 hours.
    View Slideshow

    “Based on how it has been reported, it looks like there is an option to use the vessel for storage in the U.S. Gulf,” a Singapore-based shipbroker said.

    Traders said the option to use the VLCC as floating storage could be due to tight onshore tank space in the United States. Chevron (CVX.N: Quote, Profile , Research), the second-largest oil company in the United States, has a refining capacity of 932,000 barrels per day (bpd).

    “They could be having a situation where they have to clear some supply first before moving in the cargo,” a Singapore-based crude oil trader with a European trading house said.

    The current contangoed market would also allow the refiner to make a profit by keeping its crude in storage for about a month, they added.

    Front-month June West Texas Intermediate (WTI) crude lags the July contract by $1.34 a barrel, while the cost of storing crude on a VLCC in the U.S. Gulf Coast is around 65 cents a barrel.

    “Current contango economics of WTI crude allows for traders, or refiners to explore the floating storage option,” a Singapore-based trader with a U.S. refiner said.

    U.S. crude stocks for the week ended April 20, rose 2.1 million barrels as refiners run at lower rates — much below the five-year average — following maintenance or due to outages, while imports rose by 116,000 barrels per day (bpd) to 10.04 million bpd, government data showed. [EIA/S]

    One trader with a U.S. refiner said there could be a few more cases of VLCCs being booked for use as floating storage under the current conditions.

    Reuters Pictures

    Editors Choice: Best pictures
    from the last 24 hours.
    View Slideshow

    But another trader at a U.S. major noted: “These decisions are isolated, situational and case-specific, it is very hard to say what is the exact situation in the U.S. Gulf Coast from here.”

    Another U.S. refiner, Valero Energy Corp. (VLO.N: Quote, Profile , Research), was seen making a booking for a prompt-loading supertanker from the East Coast of Mexico, but without a storage option.

    The 260,000 deadweight tonne Front Force was booked for $1.3 million, and was scheduled to load on Saturday. The double-hulled supertanker is scheduled to discharge in Aruba, in the Caribbean.

    Valero operates a 275,000-bpd refinery in Aruba, which mainly manufactures distillates and feedstocks. The plant has limited gasoline-making capacity as it does not have a catalytic cracker.


  164. GSF/RIG
    not if you compare GSF with RIG. RIG has been pretty hot! GSF couldn’t get past 64 for a long time. And, now that it finally does, I think it will start picking up more momentum! But, I do think that the drillers are getting more and more attention as a sector, as indicated in my posts on Wang’s World.


  165. Great comments and help , have good weekend thank you for the help


  166. Thanks Phil. That’s why I’m here…. to learn from you and all the others.


  167. Great news on the 10k portfolio, congrats to those that made the trade.

    I have been in and out of LMT recently, the volatility in the stock this week has made for some fantastic gains. If this news holds any water LMT sees a new 52 week high.
    http://english.chosun.com/w21data/html/news/200704/200704270012.html


  168. Phil / others,

    what do you think about WIRE, a copper wire company which has been beaten down from 40s to 25 has a PE of 6. Same market cap as HWCC which trades at ~20 PE. Am I the only one who sees a deal here ?


  169. Need some math assistance on this one (Hate to admit that being a CPA too!!) Thinking of a debit sprd on AAPL May 95 100. Debit sprd is 3.6 (5.7-2.1) but calcs loss of 1.1 if price at 97.5 on May 18 (expiration)? I am looking at it this way: 100 call sold expires worthless to your caller= +2.1 for me……95 call is the question…..what would the norm price of a call still ITM a week prior to expiration? The program is saying the May 95s would be priced at .40 (7% of initial Buy price)…Is there a secret recipe with 11 herbs and spices I need to locate to do this calc?

    Beside the math quandry, if AAPL hits and stays at 100 until May 18 the spread would return almost 40% (1.4/contract) for a 20 day hold (472% annual rate of return)….assuming I am bullish on the Granny is there any other factor I need to consider (besides commissions)??

    TIA

    -=but says you lose 1.10 if price is at 97.50 at May 18 (expiration).


  170. WIRE/HWCC

    I think the view is that WIRE is levered to the home builders while HWCC is not. Also, HWCC is a relatively recent IPO so it has benefited maybe from demand for IPOs.


  171. Motorola changed CEOs, but its culture lives on
    Posted by John Caddell April 27, 2007 09:02AM
    Categories: Culture
    Motorola is in trouble again. Despite forcing out the founding Galvin family and bringing in a highly-regarded outsider, Ed Zander, Motorola finds itself where it’s been numerous times in its history--suffering because it couldn’t follow up a hit product. In this case, where to go after the RAZR?

    In a front-page article in today’s Wall Street Journal (link – $$), writers Christopher Rhoads and Li Yuan review what got Motorola into its latest crisis--and find that it’s a movie that Motorola-watchers have seen before. Rhoads and Yuan write:

    As the Razr grew hot, some former designers and engineers say Motorola repeated mistakes it had made a decade earlier with another big hit, the compact flip-top phone known as the StarTAC. That phone was a huge seller, but it also was an analog phone, and its popularity blinded the company to an industry shift to digital technology. Similarly, while Motorola was selling countless Razrs, competitors were hard at work on more sophisticated products for 3G networks.
    Zander was brought in to change “a culture he saw as inward and bureaucratic,” yet he encountered a power struggle between the handset division president and an underling right away and seemed unable to defuse it. A year later, the division president left and his rival, Ron Garriques, replaced him. Garriques scrapped much of the ongoing development work his predecessor had authorized, and started afresh. Whatever the personal, business or technical reasons for the change, it had a nasty side effect--Motorola fell dangerously behind in developing 3G-capable handsets.
    And now Zander is on the ropes, fighting for survival. Whether he stays or goes, the CEO of Motorola will have to confront how to harness its technical brilliance in service of great products that customers need, instead of ones that executives favor.


  172. Wang’s World
    new posts up!! HappyTrading! ™


  173. Category: Irony

    Read a report this weekend put out by Bernstein Research entitled “Will the recent acceleration of Summer Arctic ice melting create a boom for [oil] exploration”

    Apparently, in 2000 the Army Corp. of Engineers identified that the Polar Ice Cap region holds 25% of the world’s oil reserves. Since ice up there is melting, due to (insert your political party affiliation here) warming, as ice melts up there, it is expected that more oil/hydro-carbon fuel (more than the 25% estimate) will be found, and more importantly, shipping channels will be freed up for access to fields that can be developed. The greatest opportunities are north of Russia and Alaska.

    Not a basis for short term trades, but interesting to keep an eye on.

    Can’t link it – its a pdf file.--includes interesting maps of temperature changes.


  174. Not to mention all the new beachfront property!