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Take Off Tuesday???

Wow – we made it through the weekend!

Yet another day where I wake up and almost regret my insurance but then I realize I don't have that attitude about my life insurance not cashing in every day, so I shouldn't cry over my virtual portfolio insurance not being triggered either.

While I'm not surprised to wake up every day (I'm not that old yet!), I am surprised to wake up to find the markets up 3 out of 4 days since mid-March.  We've had 14 down days since March 14th vs. 38 up days and 4 of those down days came last week otherwise it would be a 4:1 trend.  As I said last week, I expect consolidation into the June 15th expiration at this point so we will check in on my predicted range between 13,400 and 13,600.

What we didn't have much of last week was market data but we will be making that up in spades this week as the Briefing.com calendar looks very active:

Date ET Release For Actual Briefing.com Consensus Prior
May 29 10:00 Consumer Confidence May   105.0 104.5 104.0
May 30 10:30 Crude Inventories 05/25   NA NA 1969K
May 30 14:00 FOMC Minutes May 9        
May 31 08:30 GDP-Prel. Q1   0.7% 0.7% 1.3%
May 31 08:30 Chain Deflator-Prel. Q1   4.0% 4.0% 4.0%
May 31 08:30 Initial Claims 05/26   315K NA 311K
May 31 09:45 Chicago PMI May   54.5 54.3 52.9
May 31 10:00 Construction Spending Apr   -0.2% 0.0% 0.2%
May 31 10:00 Help-Wanted Index Apr     30 30
Jun 01 08:30 Nonfarm Payrolls May   130K 140K 88K
Jun 01 08:30 Unemployment Rate May   4.5% 4.5% 4.5%
Jun 01 08:30 Hourly Earnings May   0.4% 0.3% 0.2%
Jun 01 08:30 Average Workweek May   33.8 33.8 33.8
Jun 01 08:30 Personal Income Apr   0.5% 0.4% 0.7%
Jun 01 08:30 Personal Spending Apr   0.3% 0.4% 0.3%
Jun 01 08:30 Core PCE Inflation Apr   0.2% 0.2% 0.0%
Jun 01 10:00 ISM Index May   53.5 54.0 54.7
Jun 01 10:00 Mich Sentiment-Rev. May   88.7 88.5 88.7
Jun 01 10:00 Pending Home Sales Apr     0.0% -4.9%
Jun 01 17:00 Auto Sales May   5.1M 5.2M 5.0M
Jun 01 17:00 Truck Sales May   7.6M 7.4M 7.5M

The big data last week was not so much the drop in existing home sales to an annual pace of 6M but the 10% decrease in prices it took to sell them At an average of $250,000 per home (and that's not true as very old, low value homes trade less often), that's a 10% loss of $1.5T in sales or $150,000,000,000 LESS in the hands of homeowners who are selling this year.  For existing homeowners, if they get similar values that's $2.3T less equity value to borrow against this year, not a trend you want to see continuing…

We get consumer confidence this morning and I don't see us hitting 104.5 but it's entirely possible that people still expect the stock market to trickle down on them and we have good job growth is good, which is a big help, but they'd better not be talking to people who have sold or are trying to sell their homes (the good thing about these polls is people who recently sell are no longer there to be polled and too new at their new address to be called).

Looking down the road to expiration week (June 15th) we have the Treasury Budget, Retail Sales, the Beige Book, CPI, PPI, Net Foreign Purchases, Cap Utilization and Industrial Production.  Holy Cow - if it doesn't hit the fan by then it never will!

Let's try to get through this week first, of course but we do need to keep this in mind as we establish new positions, which is why I have been shy about picking up July positions so far.  We also have some significant earnings reports this week from:

  • ALKS, BGP, HNZ and STP today
  • CHS, DBRN, JOYG, NOVL, RL, TIVO and WSM on Wednesday
  • BIG, COST, DELL, DG, HOV, MOV, RSTO, SHLD and TTWO on Thursday
  • Nothing big on Friday

So we should come out of the week with a pretty good picture of retail and I see lots of possible plays here but let's try to get through our day first!.  TSO and POT are splitting today and we will be watching TSO with great interest.  Oil is indeed falling as nothing blew up over the weekend so hopefully that gamble will pay off for us as well.

The Asian markets were pretty strong today but Hong Kong slipped 60 points on Bubble talk.  My favorite story of the day is that the former head of China's FDA was sentanced to DEATH for taking bribes to speed the approval process – now that's enforcement!  The court justified the death sentence by the "huge amount of bribes involved ($850,00) and the great damage inflicted on the country and the public by Zheng's dereliction of duty," according to the Xinhua report.  This will prove interesting as China expands their influence around the globe.

Shanghai B shares gave back half of Friday's bounce this morning, coupled with the move in the Hang Seng we can conclude that the irrational exuberance on the part of foreign investors is waning in China but the nation celebrated the opening of thier 100 millionth brokerage account today so there should be enough local interest to keep the markets afloat for quite some time barring any major disaster.  362,719 new accounts were opened on Thursday alone with 20.9M new accounts opened this year and we still haven't put a dent in the People's $2.5T in cash savings.  My prediction for the year is that the top growth performing brokerages will be the ones with the highest percentage of Chinese speakers on staff.

Over in Europe, the ABN offer is now up to 95.6Bn as RBS "makes it happen."  RTP may be making a $27Bn bid for A and what's amazing about this is how little press a $27Bn deal gets these days.  Our European indices look good this morning (7am) but the FTSE is still below 6,600 and will continue to bother me until it gets back over that mark.

Back in the states, LEH and Tishman-Speyer Properties went apartment hunting together and found a lovely 430,000 room multiplex with views of most major cities for just over $12.3Bn at they take over ASN.  The 86,000 unit  apartment company has a pipeline of $1.8 billion worth of new apartments under construction, with an additional $2.6 billion worth in the planning stages. It recently has begun to operate abroad, something that could appeal to Tishman Speyer, which is active internationally. Last year Archstone acquired German apartment owner DeWAG, enlarging Archstone's German virtual portfolio to more than 7,600 units.  CDWC also looks to be in play.

We'll be looking for a positive open and anything down will send a strong warning sign but let's just try to get through these last few days of May without seeing too much money going away:

 

 

Day's

Must

Comfort

Break

Next

Index

Current

Move

Hold

Zone

Out

Goal

Dow

13,507

66

12,468

12,600

13,000

13,500

Transports

2,880

5

2,825

2,900

3,000

3,250

S&P

1,515

8

1,430

1,460

1,500

1,550

NYSE

9,876

63

9,218

9,465

9,600

10,000

Nasdaq

2,557

19

2,454

2,500

2,600

2,750

SOX

480

1

477

490

500

560

Russell

829

6

803

820

850

900

Hang Seng 20,469 -60 20,200 20,600 21,000 22,000
Nikkei 17,672 84 17,400 17,500 18,300 18,500
BSE (India) 14,508 35 13,200 14,000 14,725 15,000
DAX 7,771 32 6,900 7,000 7,400 8,000
CAC 40 6,067 -4 5,650 5,800 6,000 7,000
FTSE 6,593

22

6,325 6,450 6,600 7,000

Hopefully the Transports will get a boost this morning as oil backs off both here and in Europe but it's the SOX we will worry about, as they are perilously close to disaster at 477, where it bounced off last Thursday.  Notice that 477 is not the 200 dma, not the 50 dma and not a recent high or a recent low but it is the point I predicted to hold over a month ago when we broke out this chart.  The Hang Seng already gave us a test of 20,200 at the end of April and let's just hope the other indices can remain in our comfort zones…

It's all about the data this week, especially the demand data and the crude inventory reports so we'll keep a close eye on that sector and especially the $65 mark, which we need to stay under to get the Transports back on their feet.  Keep in mind that the house-selling consumer has $150Bn less dollars to waste on fuel this year and increased demand sensitivity can send oil tumbling faster than a Nigerian Rebel's motor boat can get to an oil platform. (note the "Texas" bandana)

The dollar has the potential to chip in with a move over 82.50 and a 20% drop in Shanghai B shares in the past 7 days makes me think at least some of that money may convert to dollars.  Gold is holding the $650 line and we will be judging it based on the strength of the bounce it takes from here.  Anything less than $666 (why do we keep coming back to that level?) will be a failure and the real test will come at the 50 dma at $675 with needs to be covered by mid-June or we will be shorting gold for the summer.

Looks like another exciting week ahead!

 


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  1. Looks like GENZ finally got some good news, am I the only one here still holding calls???


  2. EYE down 6, any more plays for puts!!


  3. Phil
    you suggested previously to cover my DELL C Aug 27.50 position which was volatile with selling the June 25.- Calls which really worked well thanks for that. I covered a possition of + 20 calls with -5 What is under normal circumstances the appropriate cover for protection? Or is it better to simply take puts? I know that earnings is coming up but am quiet bullish about dell as GS has given it some blessing and Aug is still far away. I noticed that when APC failed in their earnings they had them back up in no time to their 47.50 initial target. Thanks for the info!


  4. looks like eye starting to rebound


  5. any thoughts about buying USO or UNG options?


  6. FWLT screaming


  7. Z – your thoughts on BTU puts and CHK calls both in July – thanx

    Phil – thoughts on DIS calls?


  8. GENZ – I still have some $67.50s left but I sure wasn’t expecting to get my nickel back at this point.

    FWLT $10KP- in 3 at $8.20 on the Jan $95 puts, sold 3 June $100 puts for $2.25, will roll to the $95 puts if it backs off from here.

    DELL – ask me after market and I’ll take a look.

    USO options are so thinly traded I won’t touch them. I tried some and did not like them. Haven’t looked at USG but would be surprised if they are not the same. If gas rallies I will certainly take long puts though.


  9. POT up $4. done for now or ?


  10. Phil:

    Joined you in DIS Jul 37.50 calls @ .45


  11. JPL – I’m shying away from shorting the coals right now with some trasportation disruptions of late they could see some higher prices. also, if n gas spikes they spike

    CHK – I like it. Phil I think is short it though. That’s what makes a market. lol.


  12. BBD – just saw your ? re XTO. I don’t have anything against them, good gas guys, good operators etc, just don’t see a catalyst for an option trade this week. you know anything there?

    if you like gas and a turnaround story, APC just picked up a BofA upgrade this morning. Once again, a highly paid analyst is a week late and $4 short changing his mind!


  13. Hope everyone had a great long weekend!!!
    FCX- All time highs


  14. DIS DISturbing but I still believe.


  15. Consume confidence — 108


  16. Holy cow – consumer confidence a blow-out at 108!

    Was DIS a $10KP play?

    CHK – yes short but not much.


  17. Phil,
    it’s the 2nd day AMZN moves down while market goes up. is it time to buy put?


  18. Phil,
    Did we fill any ARMHY for the 10KP today?


  19. out of DIA June puts, added FCX, VCLK, OVTI June calls looking for a scalp


  20. ARMHY – I didn’t.

    FWLT – might have been too early selling June puts but should be ok if the market stays strong.

    SBUX moving.

    ICE up again.


  21. GOOG fighting 490


  22. Just got done scalping MA
    MA got a upgrade to outperform and a $184 target

    Mastercard rated new Outperform at Bear
    7:28 AM EDT
    MA was initiated with an Outperform rating, Bear Stearns said. $184 price target. Stock remains undervalued, based on attractive growth trends in the electronic payment business.

    GOOG looks real good now, MA, RIMM, BIDU, ICE, FWLT, MLM


  23. GOOG
    out of june calls at +31%
    out of july calls at +18%, or +$3


  24. Phil, PAY has earnings today, RL earnings tomorrow morning, SHLD Friday, JOYG earnings tomorrow.
    Thinking about gap trading RL, PAY, JOYG after knowing the numbers. WDYT?


  25. Happy, are you just booking your profits on GOOG, or is it good to get out here?


  26. GOOG – Time to sell Puts against old Jun $440 that I am still holding. Which ones for not risky a play? Jun 480s are currently $5.00…


  27. AMZN – might be but I see much better stocks to bet down than them.

    AMHY is no trade because the premiums aren’t coming in. Unless I see a sale for $2 or more on the July $7.50s I have no reason to own this stock at $8.23 XXX

    DIS – made offer of .40 on 20 July $37.50s for the $10KP XXX Intent is to sell half at .55 or .60, possible DD if it drops but that would have to be a nasty drop I think.

    FIZ – offering to sell 4 July $15s at $2 in $10KP XXX


  28. BIDU up 1.91


  29. BIIB
    bought OCT 55 calls!


  30. Gov of wisconsin proposing a 2.5% gross receipt tax on gasoline and a penalty to prevent oil cos from passing it along.

    Phil Flynn expects a 2 mm barrel draw in gaso this week due to holiday damand. Kind of faulty logic unless everyone filled up on friday as that’s the last date this week’s report would cover.


  31. MA up 2.19 volume declining


  32. RL et al, I like it once we see a few numbers come in, we should get a pretty good sense of the market but I think consumer confiddence just gave us a good hint.

    GOOG – $490 was my expected run-up this morning so don’t get too excited. If the market doesn’t hold up then Google won’t either so we execute the second leg of the trade up here as we have no issue rolling to the upside but big problems if it drops out on us. XXX


  33. Happy – went short MRO last wednesday, looks tooppy, had a big recent run, pricey to peers etc. How’s that chart look to you?


  34. GOOG
    I took profits at 488 for the Junes and 490 for the Julys. Will look for re-entry later.


  35. RIMM
    green again, amazing!


  36. AMZN positive, could run if it gets past 70.

    FLWT bought the Aug 95 puts at 4.5 in the initial excitement, will sell June 95 puts soon.


  37. So much for shorting AMZN!

    MU giving us a good entry.


  38. UNH – Sell Jun 55 Calls for $0.85 against long stock position before their 11am EST board meeting?

    Reasoning being – If some from current board thrown out, it may drop till new ones figure things out. At best, they are distracted fending upset shareholders – especially ones like CALPERS.


  39. Good play MJ! I’m deciding now that I am stuck with the $100 puts. Most likely I will just wait and roll to July $95 puts if it keeps going down (might bounce off $100) but I’ll keep them in a good market.

    Oil down $1.57 to $63.62. Don’t forget TSO splits tonight.


  40. Tanker companies having a good day. tk, topt, fro, tbsi you name it. many of these ship finished products as well and foreign refiners are scrambling to get gasoline here.


  41. MRO/TSO
    charts do look toppy. I wonder what will happen tomorrow when TSO splits. These guys are not playing by the rules, so, it’s hard to say…

    GOOG
    putting on a show!


  42. UNH if you already own it and you’re worried, .85 is not much protection.

    GOOG – blasted through $490 so we can afford to wait a little longer but I will sel if it crosses back under.

    Wow, did someone actually think twice before paying $167 for RIMM???


  43. Oil down, VLO down, only the split after close today is keeping TSO up.

    GOOG!!!!!!!!!!!!!


  44. VIP- grabbed some when down $3
    FCX-took some off. Happy you still playing this one?
    MA- saw the upgrade also made a $1.
    COH- scalped .5 on calls bought Friday. KC maybe we see $50 this week


  45. Don’t blame the dollar for hurting oil – it’s down.


  46. MA 150 soon!!!!


  47. Gasoline on CNBC shows up but it’s isolated to June. july and aug are down more.


  48. AVB
    looks interesting in the next few days now that ASN is bought.


  49. FCX
    no, but, maybe I should be? =) Haven’t played metals for a while.


  50. MSFT on the move.

    TSO madness never ends!

    AXP finally moving.


  51. Happy
    Chart looks very nice. Two trading services I use had buys on Friday


  52. june RBOB expires on Thursday. something’s gotta give if the out months keep falling and June keeps trying to rally.


  53. Phil

    I have a few TSO Aug 105s. Should I roll them up to the 110 or 115′s today ?


  54. FCX
    yeah, looks like they’ll hit 77+ soon!


  55. GLD/metals
    I haven’t played metals for a while because GLD’s been under 65 and I thought that the metals are going up and up because of the mergers. GLD is now above 65. I’m waiting to see if it starts going up from here. Metals are high, but, for some reason, I keep on feeling that the big boys won’t let the commodities go until SP500 has hit a new all-time high.


  56. MRVL having a good day.

    FIZ July $15s just sold (4 at $2) on the spikette. I don’t think I’ll sell more unless they fail $16.


  57. phil,
    did you execute the long call leg (Jan 09 $410 Calls) of the GOOG calandar strangle? i do not see any trade activity on this option today????


  58. Does anyone know where there is free Max Pain data, the Iquato site has not worked for days. Thanks.


  59. EXM up 8% the tankers are flying

    DRYS announces after hours so be careful

    MTOX up 7% don’t know whats going on there

    GSK keeps sliding

    CCJ cmon lets break 52.00


  60. TSO – Whatever you have today will be 1/2 price tomorrow and the $105s will be $52.50 with the stock at $60.50, and you will possibly have less than $1.50 per split contact premium you have now. The real chance you are taking is that the shareholders who are up 50% this year won’t take anything off the table on the split.


  61. BillBigD,

    COH – yes, would be nice; maybe I can then sell calls against leaps
    NMX – If NMX doesn’t hold $125, I’m going to sell 125s against leaps. What do you think?


  62. GOOG – no as I already have the stock as well as Sept $510s so no point in adding that for myself but I am doing the second leg against those stock positions (executing soon if we don’t kick $492. I can’t believe not one person took that trade! I’m going to track it but it’s hard to guage an entry if no one bought it…

    MDR making a tempting put at $75.

    WFMI moving for some reason.


  63. PAY – I’m long calls; took out caller last week. Hope I don’t regret it; expecting them to do well.


  64. 30-year at 5.012

    10-year closing on 5 too

    Oil down $1.73 now, TSO still in fantasy land (rooming with BTU).

    VZ taking off.

    ADBE climbing all day.

    TIE – still a disaster.


  65. BBY – with better than expected consumer confidence, isn’t it time to take out the caller and pocket the profit, or wait longer since there’s still about $0.65 premium?


  66. TIE
    needs a buyout!


  67. MDR one of my favorite companies, hold some shares in my long term account.

    ICE stuck at 148.

    Closed my June USO options

    GOOG having difficulty holding 490 :-(


  68. Phil
    just fyi, i just got a strange refresh (msft ie) on this page. all of a sudden the format was slightly different and the comments were each numbered. after the next refresh everything was back to normal???


  69. NMX- I sold the some June 120 & 125 already. But you have been doing better than me. I missedmost of the big drop from 129 to 119 thinking it would recover.
    NTGR- coming on strong


  70. Highlander – I had the same issues – I have had this before though.


  71. SHLD
    what do people think about the earnings this week?


  72. Me too Highlander, no pattern to it, out of the blue.


  73. DRYS

    earnings after close 50% short 9-45 52 week range..

    http://biz.yahoo.com/seekingalpha/070528/36657_id.html?.v=1

    company to surprise upward


  74. ONXX falling off a cliff again, no news.


  75. DRYS – any play here?


  76. Adam Feuerstein
    Pfizr moving Sutent into phase III liver cancer trial
    5/29/2007 11:54 AM EDT

    Pfizer says it is moving Sutent into phase III liver cancer trials. Onyx (ONXX) tanks on the news.

    Why is there so much fear about Pfizer?


  77. ramana
    DRYS
    looking to buy some calls only..


  78. Something doesn’t ‘feel right’ about today’s rally – May be one of those afternoon sell off days?

    e.g. Many stocks I track (non-Energy) like EWZ, Indian ETFs etc. started day very strong but seem to be fading now…


  79. TIE – I’ve read alot about the CEO, Harold Simmons, and it’s doubtful he would accept a buyout of the company. He and his wife have been aggressively buying more shares over time. Just some more info.


  80. AV/CDWC – Hello Phil – do you like AV or CDWC based on rumor mill this morning. Thanks in advance


  81. DRYS – me too coolkid…they carry steel…it would be nice to know how much of it come from shipping steel …that caught my interest, because of an FT article alluding to higher shipping rates…lets see :-)


  82. ONXX – PFE announced that they’ve expanded Phase III trials for Sutent in several types of cancers


  83. Windywheel,
    I agree with your thoughts. I saw this guy speak in Dallas and he really thinks this is just the beginning for this company.


  84. DAKT…good move on stock today.


  85. Sutent is considered through early Phase II trials as the most effective cancer drug. In the trials it has shown some really eye popping data, more than avastin and Nexavar. Once it completes the Phase III trials we should have a new defacto cancer drug.


  86. Phil,

    I have 40 TIE July 40 calls that I paid 1.15 for. I’m thinking of doubling down now, should I or should I wait?

    Bryan


  87. Wow, this is the market you can never turn your back on! I step out for 30 minutes and it drops 40 points?


  88. CTSH – How about a slight bearish call spread? The aggressive July 75/80 Calls for net credit of $2.3 or July 80/85 for net credit $1.30

    Or better to buy July 75/80 calls and sell June calls against it? This with my assuming CTSH will meander between $73-$78 with the 73-side more likely.


  89. Should have held on to those DIA puts this morning.. Got filled at .40 on DIS Jul 37.50s.


  90. Happy, any insigt into the DOW chart with the May 24 reversal and todays’ lacklustre showing?


  91. Back into DIA 134 puts. This should guarantee the market recovers here.


  92. energy sector – very light trading and not down much for $2 oil drop. that tells me managers don’t see things getting out of hand to the downside in the commodities.


  93. Thanks Bill. Now, would you buy some AAPL puts please.


  94. DOW/Nasdaq
    is staying above its 10-day MA, still with a bullish bias. It may be hanging around 13500 for June. I’m looking for Nasdaq to take leadership if the bull run continues.


  95. I am tempted to jump into a calendar spread here on GOOG as it buts into resistance. Anyone else??


  96. phil.

    re: calendar strangle – goog play

    sorry to keep bothering you on this but in your post (**) in response to my post (*) you say that you already have both the stock and sep $510′s to buy put protection against.

    however, i do not see either positions in the portfolios. when did you purchase these positions, what qty and @ what price?

    by the way, jan 09 $410′ still show no activity yet today. jan $480 puts only show 7 contracts traded? have bought the puts yet.

    thanks for the help.

    (**) Posted May 29, 2007 at 11:33 am | Permalink
    GOOG – no as I already have the stock as well as Sept $510s so no point in adding that for myself but I am doing the second leg against those stock positions (executing soon if we don’t kick $492. I can’t believe not one person took that trade! I’m going to track it but it’s hard to guage an entry if no one bought it…

    (*) Highlander
    Posted May 29, 2007 at 11:15 am | Permalink
    phil,
    did you execute the long call leg (Jan 09 $410 Calls) of the GOOG calandar strangle? i do not see any trade activity on this option today????

    *


  97. how effective is negative wsj story on JSDA??


  98. JSDA
    it is barrons.. from the previous post


  99. Phil, could you explain again if you have a moment why you like MU, is it a chart pattern, buy out speculation, strength of the sector? Thanks!


  100. Hi all,

    I’m new and have been here for 2 weeks.
    I wonder what kind of return you guys get here ?
    I know Phil’s return is great, but I guess not every one can do as well as phil.
    I’m trying to figure out how I can best use this service.
    with a day time job, I can only come here several times a day, which make me miss many recommendation Phil makes. I wonder how you guys hadnle this?
    thanks


  101. Phil,

    What is it about RIMM that you do not like? Since the last earnings, RIMM has been good to me. Are there intermediate term issues that you anticipate?


  102. (CH) CHINA TO RAISE STOCK TRADING STAMP DUTY TO 0.3% FROM 0.1% – WIRE HEADLINE
    - seen as a move to clamp down on overheated market


  103. That was 9 minutes ago on the wires, by the way -explaining this leg down


  104. tso now in super la la land as june gasoline is finally giving up the ghost and is down $0.05. Like I said earlier, the out months are getting creamed already so something had to give. pretty funny unless your name is flynn.lol.


  105. SU still in dreamland, with crude down $2. It is still above 85.


  106. Phil,

    TSO

    any thoughts on buying oct 110 puts? dont have any position


  107. ONXX – maybe just a flush?

    Oh no! They’re taking away my trans fat at Popeye’s!

    Good call Msquare. Weak oil makes for a tough market any time but sad rejections for Nas and S&P. Rising rates aren’t helping either – all this M&A uses up a lot of capital and supply and demand kick in. 2 year notes went off at 4.886% with pretty light demand on $18Bn, tomorrow is the 5 year which might break 4.95% and spook the market.

    Oil now down $2!

    TIE – I’d keep the company too, still undervalued. The lower they go, the more I want but the July $40s are getting far away. Our move last week was to buy the July $35s for $2.40 and sell the June $35s at no less than $1.20 (triggered today) to make up for the loss on the $40s. If I still had just the July $40s, now .75 I would spend $1 and roll to September and sell some other sucker the July $40s for .75.

    CDWC – I liked them last week but that train has left the station.

    CTSH – too risky. I called for a flatline to finish off the month but we could explode up after expirations.

    DIA – they must be rolled very soon. DIS – got mine too, hope I’m not sorry – makes for a heavy concentration with TWX.

    Energy – it tells me these people are clueless! If the data comes in bad this week they could be in for a hell of a fall. Tell me you wouldn’t lighten up on TSO’s split tomorrow, even if you were bullish?

    Look at DJ tumble with a $60 offer on the table…

    GOOG – I’ll be very surprised if they break $500 by the 15th so selling $490s for $9.30 is a pretty good bet if you have reasonable coverage but this is one dangerous stock!

    As to positions. GOOG is in my retirement account, those aren’t in my active portfolio but the 10 Sept $510s are in the STP now that I’ve closed out what was a seperate Google tab to keep track of the last bunch of trades. I’ve had protects on my stock since the last time they ran to $490 after almost throwing up when it dropped to $440 in Feb so the only question for me was how much could I get for the $490s and $10 was plenty for me today.

    JDSA got hammered today, don’t think they deserved it but not going to risk it. I was worried it would hurt Fiz but not so far…

    MU – I’m sure I did that on Friday.. Good unit growth in general and very low expectations as everyone thinks DRAM pricing is off a cliff an not coming back but I’m not buying the perma-glut theory. Even if there is a glut, Micron is a top-notch producer and can squeeze their suppliers but none of that is the point. I like MU BECAUSE it’s flat and will likely remain flat for a while while I sell very expensive calls against it month after month without getting called away.

    Welcome Yiwu!

    The easiest portfolio to follow is the Long-Term portfolio, which trades very infrequently and there is generally little damage if you miss a window. If you go back a month or two (use keyword search) you will find long-term portfolio reviews – one is coming up by the end of next week and we will highlight ones that still serve as good entries.


  108. RIMM – I just think they’re overbought and due for a correction. Good company in general.

    Stamp duty – LOL, killing poor FXI again! $109 puts for $2.55 as a mo play with a .30 tstop. XXX


  109. WNR-exploding higher, ZZZ you still holding?


  110. Sometimes you wonder…..had the BRCM Jun 37.5′s for sale for the 3 weeks after earnings for .10 and somebody just scooped them up.


  111. FWLT nice gravity pull


  112. Phil, CY June 22.5s? Wait further or close out the trade?


  113. WNR? not in quite some time. much prefer shorts in mro and tso. see today’s post it lays out research analysts current thoughts and how they don’t stack up with the future.


  114. INSP takeover rumors. I was looking at buying the shares for $24.xx and selling the June $25 Calls against for $5.20 each. However, I’m not certain that those June 25 calls are pure infospace or they have some other security tied in them as well.

    What’s the easiest way to see what is specifically tied in the option – all infospace, or part infospace and part other company?

    I generally use Yahoo Finance but that site really SUCKS for timely and accurate information. Any suggestions?


  115. SU – my Sept $75 puts are still just $1.35. XXX

    TSO – tough call with a split tonight. Had you asked me $2 ago, earlier, I would have said yes to a new entry but inventory could turn it around tomorrow and this can all be just a flush (and that’s coming from a guy who REALLY believes these prices are BS).

    WNR, for some reason, is thrilled with today’s oil move.

    MDR Aug $75 puts for $4.50 if I can get it, selling the Jun $75 puts for $2 (if oil recovers to -$2, now -$2.50). 2 for the $10KP XXX


  116. It is pleasing to see all the stocks on my energy watchlist in red :-)

    Hope there is a repeat in the crude downfall tomorrow again. Lots of room to fall in these energy stocks. Still waiting to sell puts against my XOM Jan 09 80 puts.

    FWLT could not take the earlier LOD. Still waiting to sell the June 95 puts.


  117. Oil Inventory-I thought I heard it was Thursday because of the Holiday?


  118. Phil:

    If you were sittin’ with 115 puts
    would get out now or hold a couple of weeks and maybe dd?

    thx


  119. Regarding Infospace options, I just checked Google Finance and they have it broken down into 2 separate sets of options for each strike price, with significant price differences??? But it’s not clear how they are different – at least not on Google Finance.

    IOUFE – June $25′s @$1.10
    UBTFE – June $25′s @$5.20

    Buying INSP and selling the UBTFE’s looks like a great short term return, but I don’t understand the distinction between IOUFE and UBTFE.


  120. Phil:

    TSO puts that is 115′s
    thx


  121. CY – sorry, closed 5/1. Are those calls you sold or own? If sold, I see no reason to give him .20.

    INSP – I’m pretty sure the $5.30 calls you hsee carry a serious obligation. BOT I think has info on their site as to contract conditions as do most brokers.

    FDX flying.

    Eric Bolling crying hurricane on CNBC and his voice is sore from screaming sell all morning! Both their bull and their “bear” end up strongly endorsing buying refiners.

    XOM down 1.5% is a huge weight on the Dow and the S&P


  122. JOSB-picking up some volume!


  123. WNR is thrilled with dismissal of the order holding up its merger with giant. I worte this somewhere last week that wnr would find a way to compromise with the ftc and get this deal done and here you have it. Now they just look really over-valued here


  124. egseattle:

    INSP – the contract adjustment ruling can be found at:

    http://www.cboe.com/publish/TTStockSM/07-396.pdf

    The Jun 25c contract (UBTFE) calls for 100 sh stock plus $630 cash


  125. XOM ’09 puts – I could never bring myself to sell against them, just refused to accept $80

    FWLT – now I’m hoping they hold $99…

    Inventory might be Thursday, they are very poor with notifications of changes.

    Dan – it would depend what stock I think… 8-) Oh, TSO. Well I’m just holding my June $115s and the Aug $110 puts are a no brainer but I will sell the $60 puts on momentum (post split) if the thing goes up but if oil closes down at $63, it would take some very not subtle manipulation to goose it back up and I don’t think they can risk that right now.


  126. ZZZ
    WNR-Sometimes You should put some money on your thoughts. LOL


  127. BRCM flying, rumor settlement with QCOM. July $32.50s at .95 XXX just in case it happens.


  128. Possible next leg down for oil after NYMEX close if they can’t close over $63.


  129. INSP – Thank you Lars for the link.

    It’s still not entirely clear though.

    A buyer of UBTFE (June 25 INSP, plus $630) pays $5.20 for the contract today. Then if INSP is >25 at the June expiration, he can buy the shares at $25. But who pays the $630, and at what time? Does the seller of the contract have to pay the dividend? Regardless of where the stock is at the June expiration?


  130. WNR – yeah, I hate it when that happens. blew out of my puts on th name back in May for a 60%loss just under $40. ahould have gone long then, huh.


  131. Phil/All

    UNH

    Any thoughts on initiating a bull spread on a dip to the $54.50 range?

    Long June $55
    Short June $60

    Target $57

    It’s a potential ~5.6 multiple at $57


  132. Please disregard my UNH post — my math on the multiple was wrong. Sorry all.


  133. So the only thing going for TSO stock right now is a split tonight and the hype they got from selling 1/2 $B in senior notes today? RBOB looks less than bullish of a sudden . It may get a reflex bounce from here and you don’t get inventories until Thursday this week. So maybe they bounce gaso along with oil tomorrow and then the numbers hit. Any build at all would be a great disaapointment for the bulls.


  134. FXI – would youbuy puts on the china ishares based on the tax on trading going from 0.1% to 0.3%??


  135. left my desk for 5 minutes and aapl jumped back big in green, yay


  136. CTSH – Sold Jun $75 Puts – bit risky but banking on INFY leading price action for CTSH (currently down to $49.50 in spite of Indian Indexes near ATH)


  137. FDX?


  138. Phil FDX Jun 110 calls look tempting at $1.15


  139. CCJ-bought back June 50′s Gain .65


  140. egseattle:

    INSP – the seller of the contract is only obligated to deliver 100 sh of stock plus $630 for $25/sh if he is assigned (remember that the contract can be assigned at any time). This obligation exists until the contract expires or he buys back the contract (buy to close). Generally, in option land, if you see what appears to be free money laying in the street, just walk on by ’cause it’s gonna have a string attached.


  141. FDX moving on Consumer Confidence possibly. Fed mins tomorrow- probably say economy strong and they are worried about inflation.

    MA on the move again! Cramer says MUCH higher.


  142. My first attempt at an option spread. Bought LNG Jan ’08 $35 puts, sold Jan ’08 $30 puts.

    Zman, any thoughts on this trade?

    Greg


  143. Phil….. EICU-care to comment on small cap firm with options that began trading I believe earlier this year.
    They are to have a bullish segment devoted to their firm on CNBC tonite and their is a rumored patent problem that has kept their stock low recently for which they will be cleared on. Options are very thinly traded but JUN $10′s have huge open interest…..with little activity.


  144. CNBC- boy does Maria look like she partied hard this weekend


  145. FXI – we did buy puts. Have to give up if it breaks $110.75 I think as the momentum is lost but I’m hoping this was just a bounce.

    FDX – very dependent on oil’s move next 2 days (or RBOB really).

    CCJ – nicely volatile!

    X on the march again.

    EICU – remind me later.


  146. Phil, you said last week that you normally use day orders. Is it safe to assume that the BRCM July 32.5s and MDR Aug 75 puts will not stay open (i.e. GTC)?


  147. AAPL
    still going up!!


  148. CNBC/Maria
    BillBigD wishes he were there! =D


  149. Check out the delayed action on DWA a week after Shreck. I expect the same from DIS.


  150. BRCM/MDR – right, not chasing them, too risky.

    YRCW on the move, June $40s are still cheaper than my original .95 entry at .90, were $1.20 on Fri so that’s a good 1/2 out spot. XXX


  151. CME
    moving up on high volume. Looks like there might be a gap up tomorrow!


  152. Don’t forget when you watch oil experts on CNBC that this is the same station that paraded realor “experts” on every day during the housing bubble to tell you there was no bubble and homes were still selling like hotcakes.

    Oil got REALLY popular at $62.60 at 1:50pm when suddenly everyone had to have some for 25 minutes so it could finish at $63.30.
    http://futures.tradingcharts.com/intraday/CLN7


  153. Wow – checked in for first hour and last 15 min. what a day. Looks like I sold a small position in RAIL junes for a small profit, but glad to be out. I’m glad I’ve got a dayjob!


  154. LOL – yes, could be a good time to have a steady income if the markets tank!


  155. Anybody else seeing a hanging man on the AAPL daily chart?


  156. DIS

    6 hurt on rapids ride at Disney world. I closed my position. Probably paranoia.


  157. DRYS – First Quarter Results 2007
    http://tinyurl.com/ytxkqm

    Financial Highlights
    ———————-
    The Company reported Net Income of $66.4 million or $1.87 per share,
    for the first quarter of 2007. Included in the first quarter results is a
    capital gain on the sale of three vessels of $30.5 million or $0.86 per
    share. Excluding this gain Net Income would amount to $35.9 million or
    $1.01 per share.


  158. ramana, DRYS up 0.5 after hours


  159. Now would be a great time to discuss things we didn’t get to earlier as I’ve got some time…


  160. AAPL – yeah that man was short on Apple so he hung himself!

    DIS – doesn’t seem like it was very serious:

    “Deputy Fire Chief Bo Jones said the injured guests were a family of four and a teenager. He said they
    suffered neck and back pain and other bumps and bruises, but no serious injuries. Disney spokeswoman Jacquee Polak said a sensor on the Kali River Rapids ride tripped, forcing it to stop and riders to exit suddenly. She said the injuries happened while people were evacuating, but it was not immediately clear what went wrong.”

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

    DRYS – nice little business. CFO resigned, replaced by CEO but market is taking it well.


  161. Phil, can you explain the rationale for the FWLT trade? Why the Jan 95 puts to hold and sell the current 100s against?


  162. Phil,
    What is the startegy when you Buy and Sell PUTS? Like today, you asked for MDR Aug $75 puts for $4.50, and a sell for the Jun $75 puts for $2 for the $10KP. If one of then fail, how do you handle it?


  163. Phil, a question about rolling. I bought some AAPL Jan ’08 $140 calls at around $2, that are now 5.
    I want to roll them so that I am essentially in the same position as when I bought them. So is the way to do this to just look up whatever call is selling for $2 (the Jan ’08 $170 for example, and buy that, pocketing the $3 difference?) How do you select that bracket to roll to? Thanks!


  164. Phil – did you get my email?


  165. Took a look at DIS historical prices after last year’s Pirates movie – a record breaker at the time and stayed number one for 3 weeks. Attaching the Yahoo page with the data. Looks pretty flat for that time period after a small jump the Monday following opening weekend. Hope this doesn’t repeat. I think DIS is a great long term hold, but short term bets may not pay in this stock. Stock did lousy after a decent earnings report also.

    http://finance.yahoo.com/q/hp?s=DIS&a=06&b=7&c=2006&d=06&e=30&f=2006&g=d


  166. FWLT – I had orginally intended to sell the $95 puts against but the stock ran away after I bought the Jan $95s for $8.20 and I got nervous and sold the June puts at the bottom and cost myself $1 for not waiting. No real harm, just my pride as I have 6 more sales to make it up in.

    As the $95 puts had gone down to $1.30 I decided to go for the extra $1 with the $100s. There really is no harm as I will roll over to July $100 puts, now $5.50 or the July $95 puts, now $3.30, effectively I will most likely be able to trade my Jun $100 puts for July $95 puts at any time but I’m not trying to justify it, it was a dumb entry on the $100 puts and I lost $1 by not being more patient.

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

    MDR failed to trigger as the Aug $75s didn’t come in but the idea was that I expect to hold more than $2.50 in value at the end of June regardless of which way the stock goes. As with the FWLT play, I have time to roll – but in this case only a month.

    Best way to learn these is to paper trade and ask questions along the way as you can hypothesize all you want but these are very fluid strategies that develop with the markets.

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

    This is a good time for me to restate something I had to say last time we started the $10KP – I refuse to let it dominate the conversations as it is grossly unfair to people playing other positions (including me!). Patience is the most important thing to learn. I have no expectations of showing much profit until June 15th when some of the closer calls expire.

    The $10KP is meant to be fairly conservative as my goal is not to lose money so we generally don’t day trade or gamble in it (of course it’s all gambling really). Hedged plays are, by necessity, annoying to hold but they will save us from a mistake on DIS or TWX (or both).

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

    AAPL – I can’t answer questions where I don’t like the premise – sorry… You are already $25 out of the money so your net premium is $30 as Apple has to get to $145 by Jan for you to get even with where you are now. You’re asking me about moving to the Jan $160s (the $170s are a no way) for $2.30 so Apple will have to get to $162.30 for you to get your money back. I don’t like that.

    On the other hand, I commend you for knowing to take your profits off the table but why sacrifice $2.30 at the Altar? Those calls were at $1.30 just 2 weeks ago and $1.80 last week…

    If I had 4 $5 contracts (up 1,200), I would take $1,530 and buy 2 Jan 130s for $7.65 and sell 2 Oct $130s for $940 at $4.70 each, risking a net of $590 and pocketing $1,410 on your $800 investment. If all goes well, Appl floats around $115-135 between now and October and you should get a nice little bonus on your Jan calls (about 2/3 of what Octobers near the money are fetching). At worst, you can reference the July $130s which still get $1.45 just 40 days and $15 out of the money.

    If I just had the single contract I would take the money and run, a 150% profit is not the kind of thing you want to blow if the money matters to you!

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

    Z – yes but having a crazy evening. Will send in am.

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

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


  167. Wang’s World
    new post up!


  168. Shanghai is getting its butt kicked, down 3% already. . Ouch. . I would say we gap down tomorrow morning might be an understatement. .


  169. oh oh!! Shanghai now down 6%. Most of the other asian markets down close to 1%.


  170. Phil, what is your opinion on a TXN call spread: sell July 35′s for 1.5 and Buy OCT 37.5 for 1.5. I know you have the leaps, but i bet “the train has left” on those. thanks in advance.


  171. Shanghai now down 6%…
    Those B shares don’t appear to be faring any better either.



  172. Shanghai – how much are we going to be loving those FXI puts?

    TXN – probably not the best day for initiating a trade but that’s a good spread as you are risking $1 on the gap but you have 2 months and the June $35 (.04 off the money) is .82 so you have an excellent chance of coming out ahead BUT I prefer to time these trades at the top of a trading range where the long-term outlook is better than the short term and you may be selling the $35s at a short-term bottom as the rising 50 dma is at $33.29 and it just came down from $37.23. If they hold $35 this week, I would expect them to go higher short-term so remind me and perhaps it will be a good idea for us to take the naked leaps on momentum.


  173. Asian Markets : Wednesday, May 30, 2007

    Japan*

    17588.26
    -84.30
    -0.48%

    Hong Kong*

    20293.76
    -175.83
    -0.86%

    DJ Shanghai*

    423.72
    -32.98
    -7.22%

    S.Korea*

    1662.72
    0.92
    0.06%

    India

    14449.21
    -59.00
    -0.41%

    * at close

    Sources: Dow Jones, Reuters


  174. China – Chinese Shares Plunge 6.5 Percent
    http://tinyurl.com/2wpal8

    Chinese stocks plunged Wednesday after the government raised a tax on share trades, trying to cool a market boom amid growing concerns about a possible bubble.

    The main Shanghai Composite Index tumbled 6.5 percent at 4,071.27 after hitting a record high on Tuesday. The Shenzhen Composite Index for China’s smaller second market fell even more, closing down 7.2 percent at 1,199.45.

    The declines came after the Finance Ministry tripled the “stamp tax” on stock trades from 0.1 percent to 0.3 percent, effective Wednesday. The ministry was trying to “cool (the) stock market,” the official Xinhua News Agency said.