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June Jumble – The Plot Thickens!

Wow, what a crazy finish that was!

I said last weekend that we needed to practice James Bond Investing, trusting no stock and no direction, being ready to kiss or kill at a moment's notice as it seemed that virtually every position was out to get us at some point during the week.

Out of 68 closed positions this week, 13 were trades on the DIA, 6 puts and 7 calls – talk about being a double agent!  We flipped flopped and flied through the week, taking 3 different positions on the DIA on Friday alone which yielded a double and a triple in intraday trading.  It wasn't just the index funds we had a treacherous relationship with, we made money buying and selling GOOG and RIMM and ZMan and I were even forced to align ourselves with our arch nemesis, Big Oil, as we took bullish positions on XOM, VLO, EOG and (gasp!) TSO during Wednesday's oil report.  As I said in that wrap-up: "We don’t care if the game is rigged, as long as we know which way it’s rigged!

Speaking of RIG, I did hold those $100 puts into the weekend (even at .80), but that's something we can talk about on Monday as the latest on oil is they are ramming flaming cars into British airports now.

We survived a heavy data week in pretty good shape, although it baffles me how as most of the data was negative but we literally are so far in cash now that it's hard to be concerned.  The week had a finish straight out of a Bond film as well with the release of the IPhone, a gadget so advanced you can almost imagine Q saying to James Bond: "It stores 8 Gigabytes of audio and video files, it's a portable computer with keyless entry, it's a camera, it has internet access and mapping capabilities – oh and it also makes phone calls."  Personally I'm waiting for the model that includes a taser - then I'm ready to go on a mission!

The Fed continued it's mission this week to pretend that inflation is something that doesn't touch the average consumer as we all drive cars that consume no fuel and eat at the government commissary.  Perhaps if we forced these guys to live in the suburbs they would wake up and smell the non-core numbers…   As is typical in bond films, suspect organizations go through henchmen faster than the White House goes through District Attorneys and this weekend BSC terminated fund manager, Richard Marin and BZH tossed their Chief Accounting Officer under the bus as the Feds closed in because he didn't destroy documents fast enough tried to destroy documents.  While all this turmoil is going on some evil organization takes over the airwaves and tries to convince the people that there is no subprime spillover effect.  Cut across the pond and terrorists are attacking multiple targets around England and our energy future is being held hostage by other terrorists while a Venezuelan Strongman is taking over billions of dollars of US oil interestsOn top of all this some supervillain has put his people into top governement positions and is systematically attempting to destroy our planet – Oh my! 

Quick, we don't have time to wait for James Bond.  Just give me an IPhone and if the taser function isn't ready I'll just throw it at the bad guys, apparently the IPhones are strong enough to take it!

Fortunately our virtual portfolios were strong enough to take it this month and, in fact, we simply thrived on the chaos thanks to some pretty good market timing calls by yours truly (see just about anything I wrote this month!) made possible by the more and more transparent market games that are being played as Big Oil, Big Brokers, Big Government, Big Banking and Big Money (the 1,000) fight over the last of the easy money that stands to be made.  The first party guest to lose this multi-trillion dollar game of musical chairs is Big Builders, who were left to die on the table as Big Brokers cut and ran on them as they, along with Big Banking and Big Money are each very nervous about not finding a seat the next time the music stops.

Since we made a nice pile of cash to sit on over the past few weeks and were smart enough to get out early and watch from the sidelines, this holds more of an academic interest for us at this point but we can't wait for all the running around to end as we are well rested and anxious to jump in for the next round.  We continued to move to cash this week and are up to 80% cash in the Short-Term Virtual Portfolio, where we closed 68 positions for a 101% average gain.  We took very few new positions this week (other than day trades) and our remaining 51 open positions have turned a bit more bullish, hoping for a little boost from earnings season with a 151% year-to-date advance overall.

The Long-Term Virtual Portfolio was little touched but once we see which way the wind is blowing next week I intend to do a full review.  There's not much to complain about there with a 135% gain to date on 32 open positions.  Our notable uncovered calls are all chips: SNDK, TXN and WFR because if we are going to have a rally, it better be SOX-led!  Open puts there are on XOM (of course) and GM, who simply went up too far to be ignored but just an entry position so far on the Jan $35 puts.

I made no progress with the $10KP but it was nice not to lose any ground there too, still down 30% in 10 positions and there were just no plays jumping out at me that I wanted to take as the last thing we want to do is lose more money there!  Our Complex Spreads Virtual Portfolio is up 45% across 18 spots despite the beating we took on that RIMM condor so I'm thrilled with that, hopefully things will settle down after earnings and we can make some more plays for both of these folders.

Our boring old Stocks Virtual Portfolio was so dull we didn't touch it this week and our 8 positions held up well at 33%, up a point for the week.  None of our covered positions are behind on the call side, which indicates to me that there's still a lot of underlying weakness in the broader market.  I did and extensive write up of the Free Picks Virtual Portfolio, which is outperforming the rest of our book with a 183% gain in just 2 months with just 9 positions left.  Unfortunately, one of those positions is naked GOOG Sept $550 calls for $32K as I removed the covers on a run up (smart) but them forgot to recover into the weekend (dumb) as I committed two cardinal sins of investing – I forgot why I was in the trade (to sell shorter calls) and I mis-sized the position for the virtual portfolio once I left it naked.  We do have the Google condor there, which offers some downside protection but no enough to protect 20 open calls – hopefully I will be able to fix this on Monday morning with no damage. 

On the whole it was a very exciting week, which flew by.  We have a holiday right in the middle of this week and light data throughout but with the quarter ending and the Hamptons calling, we can expect a lot of fund managers to do some serious positioning next week and it will give us a chance to feel the currents as they form:

 

Description

  Basis

Open

 Sale Price

Close

 Gain/Loss

%

5 JUL 830.00 $RUT CALL (RUZGF)  $    7,635 6/22  $  10,540 6/27  $   2,905 38%
5 AUG 840.00 $RUT CALL (RUZHH)  $   12,160 6/22  $  13,850 6/29  $   1,690 14%
30 JUL 125.00 AAPL CALL (APVGE)  $    9,310 6/20  $  15,290 6/26  $   5,980 64%
10 JUL 45.00 BBY CALL (BBYGI)  $    1,410 6/20  $    1,290 6/27  $     (120) -9%
20 JUL 140.00 BSC PUT (BSCSH)  $    6,010 6/29  $    9,990 6/29  $   3,980 66%
100 JUL 50.00 C PUT (CSJ)  $    3,010 6/29  $    5,990 6/29  $   2,980 99%
10 JUL 50.00 CCJ CALL (CCJGJ)  $    1,310 6/26  $    2,490 6/27  $   1,180 90%
50 JUL 80.00 CVX PUT (CVXSP)  $    1,260 6/26  $    3,240 6/27  $   1,980 157%
25 JUL 27.50 DELL PUT (DLQSY)  $       260 6/6  $       990 6/27  $      730 281%
150 JUL 135.00 DIA CALL (DAWGE)  $   24,910 6/22  $  27,740 6/25  $   2,830 11%
50 JUL 136.00 DIA PUT (DAZSF)  $   12,260 6/25  $  16,490 6/26  $   4,230 35%
100 JUL 134.00 DIA PUT (DAWSD)  $   20,010 6/25  $  20,990 6/27  $      980 5%
200 JUL 135.00 DIA PUT (DAWSE)  $   25,010 6/22  $  56,990 6/27  $  31,980 128%
200 JUN 134.00 DIA CALL (HLKFD)  $    7,010 6/27  $  14,990 6/28  $   7,980 114%
100 JUL 135.00 DIA CALL (DAWGE)  $   16,610 6/22  $  17,490 6/29  $      880 5%
50 JUN 134.00 DIA PUT (HLKRD)  $    1,510 6/29  $    4,240 6/29  $   2,730 181%
50 JUN 136.00 DIA PUT (HLKRF)  $    5,510 6/29  $    8,990 6/29  $   3,480 63%
50 AUG 138.00 DIA CALL (DAZHH)  $       260 6/8  $    5,090 6/29  $   4,830 1858%
100 JUN 134.00 DIA CALL (HLKFD)  $       510 6/25  $  13,490 6/29  $  12,980 2545%
40 JUL 136.00 DIA CALL (DAZGF)  $    2,810 6/21  $    6,790 6/29  $   3,980 142%
350 JUL 136.00 DIA CALL (DAZGF)  $   24,510 6/21  $  59,490 6/29  $  34,980 143%
200 JUL 135.00 DIA PUT (DAWSE)  $   37,010 6/27  $  49,990 6/30  $  12,980 35%
120 JUL 35.00 DIS CALL (DISGG)  $    2,770 6/6  $    4,190 6/29  $   1,420 51%
20 JUL 7.50 DNDN CALL (UKOGU)  $       510 6/20  $       890 6/27  $      380 75%
10 OCT 12.50 FIZ CALL (FIZJV)  $    1,310 5/2  $       890 6/27  $     (420) -32%
10 JUL 45.00 FTO PUT (FTOSI)  $    1,860 6/26  $    3,290 6/27  $   1,430 77%
8 JUL 130.00 FXI PUT (FAHSZ)  $    4,170 6/19  $    4,710 6/27  $      540 13%
40 JUL 129.00 FXI CALL (FAHGY)  $   14,010 6/15  $  19,990 6/27  $   5,980 43%
10 JUL 129.00 FXI CALL (FAHGY)   $    4,010 6/15  $    4,990 6/29  $      980 24%
20 JUL 25.00 GLW CALL (GLWGE)  $    1,710 6/20  $    3,190 6/27  $   1,480 87%
10 SEP 510.00 GOOG CALL (GOPIU)  $   13,010 4/18  $  43,990 6/25  $  30,980 238%
15 JUL 530.00 GOOG CALL (GOPGW)  $   18,010 6/25  $  18,065 6/27  $        55 0%
20 JUL 520.00 GOOG CALL (GOPGV)  $   32,010 6/20  $  31,990 6/27  $       (20) 0%
10 JAN 80.00 LVS PUT (LKNMP)   $    2,060 2/2  $  10,490 6/25  $   8,430 409%
10 JUL 75.00 LVS PUT (LVSSO)  $    2,960 6/20  $    2,340 6/25  $     (620) -21%
120 JUL 30.00 MSFT CALL (MSQGK)  $    6,010 6/20  $    7,430 6/27  $   1,420 24%
20 JUL 20.00 NFLX CALL (QNQGD)  $    2,010 6/15  $    2,290 6/27  $      280 14%
20 SEP 25.00 NFLX CALL (QNQIE)  $    1,110 6/6  $       990 6/29  $     (120) -11%
20 JUL 170.00 OIH PUT (OIHSZ)  $    3,010 6/28  $    4,990 6/28  $   1,980 66%
10 JUL 42.50 QCOM CALL (AAOGV)  $    1,510 6/18  $    1,490 6/27  $       (20) -1%
200 JUL 47.00 QQQQ PUT (QQQSU)  $   13,410 6/22  $  11,990 6/25  $  (1,420) -11%
200 JUN 47.00 QQQQ PUT (UQQRU)  $    2,810 6/27  $         -   6/30  $  (2,810) -100%
30 JUL 100.00 RIG PUT (RIGST)  $    1,810 6/28  $    3,140 6/28  $   1,330 74%
10 JUL 165.00 RIMM PUT (RFYSM)  $    3,460 5/4  $    8,690 6/27  $   5,230 151%
5 AUG 155.00 RIMM PUT (RFYTK)  $    2,260 6/28  $       190 6/29  $  (2,070) -92%
5 JUL 165.00 RIMM PUT (RFYSM)  $       135 6/28  $    3,290 6/29  $   3,155 2337%
5 JUL 165.00 RIMM CALL (RFYGM)  $   14,010 6/28  $    3,740 6/29  $ (10,270) -73%
5 AUG 175.00 RIMM CALL (RFYHO)  $    2,760 6/28  $  13,990 6/29  $  11,230 407%
10 JUL 47.50 SNDK CALL (SWFGW)  $    1,510 6/3  $       490 6/27  $  (1,020) -68%
20 JUL 90.00 SU PUT (SUSR)  $    5,210 5/17  $    9,190 6/26  $   3,980 76%
10 JUL 40.00 T CALL (TGH)  $       510 6/20  $       490 6/26  $       (20) -4%
40 JUL 40.00 T CALL (TGH)  $    2,410 6/22  $    5,790 6/29  $   3,380 140%
4 JUL 62.50 TSO PUT (TSOSU)  $    1,770 6/20  $    1,270 6/26  $     (500) -28%
15 JUL 62.50 TSO PUT (TSOSU)  $    1,135 5/17  $    9,440 6/27  $   8,305 732%
20 JUL 55.00 TSO PUT (TSOSK)  $    2,010 6/28  $    2,799 6/28  $      789 39%
20 JUL 37.50 TXN CALL (TXNGU)  $    1,610 6/15  $    1,790 6/27  $      180 11%
50 JUL 75.00 VLO CALL (ZPYGO)  $    5,010 6/27  $    7,490 6/27  $   2,480 50%
10 JUL 75.00 VLO PUT (ZPYSO)  $    2,010 6/28  $    2,490 6/28  $      480 24%
10 JUL 60.00 WFR CALL (WFRGL)  $    1,510 6/7  $    2,600 6/27  $   1,090 72%
10 JUL 60.00 WFR CALL (WFRGL)  $    1,510 6/1  $    4,390 6/27  $   2,880 191%
10 JUL 60.00 WFR CALL (WFRGL)  $    1,510 6/20  $    1,790 6/27  $      280 19%
5 JUL 95.00 WYNN CALL (UWYGS)  $       360 6/18  $    1,940 6/26  $   1,580 439%
20 JUL 69.00 XLE PUT (XBTSQ)  $    2,470 6/25  $    4,090 6/26  $   1,620 66%
50 JUL 80.00 XOM PUT (XOMSP)  $       260 6/21  $    4,240 6/25  $   3,980 1531%
80 JUL 80.00 XOM PUT (XOMSP)  $    5,210 6/25  $    8,390 6/26  $   3,180 61%
100 JUL 85.00 XOM CALL (XOMGQ)  $    6,510 6/27  $  10,990 6/27  $   4,480 69%
100 JUL 85.00 XOM PUT (XOMSQ)  $   21,510 6/27  $  24,990 6/28  $   3,480 16%
100 JUL 85.00 XOM PUT (XOMSQ)  $   15,810 6/29  $  24,990 6/29  $   9,180 58%

 


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  1. Guys, Thought you might like to see a copy of an interview with Jobs re corporate email. Sounds great”

    “Q: What about corporate e-mail? I understand that’s an issue for many consumers who may not be able to tap company networks.

    Jobs: You’ll be hearing more about this in the coming weeks. We have some pilots going with companies with names you’ll recognize. This won’t be a big issue.

    Q: When will the iPhone go on sale overseas?

    Jobs: We have no announcement to make now.

    Q: Many tech analysts have suggested that with the expected success of the iPhone, Apple is about to be transformed.

    Jobs: I hope it doesn’t change Apple too much. We like it the way it is. We’ve got two strong legs on our chair: the Mac business, which is a $10 billion business, and music – our iPod and iTunes business – which is $10 billion. We hope the iPhone is the third leg on our chair. And maybe one day, Apple TV will be the fourth.

    Stephenson: It helps us complete our change from Cingular to AT&T and has created a halo effect for the rebranding. I’m with Steve, though: I like it the way we are, and I hope it doesn’t change it too much.


  2. Apple TV is rubbish though.
    The iPhone looks a much better product with much better potential.


  3. John Markham has an 18 month price target of $200 on AAPL

    http://articles.moneycentral.msn.com/Investing/SuperModels/AppleHeadedTo$200.aspx


  4. FACTBOX-Components of Apple’s iPhone

    July 1 (Reuters) – Apple Inc.’s (AAPL.O: Quote, Profile , Research) highly anticipated iPhone is finally out, and curious gadget enthusiasts wasted no time in cracking the sleek devices open to find out what makes them tick.

    Following are some of the key components and their makers that have been identified so far:

    -- South Korea’s Samsung Electronics Co. Ltd. (005930.KS: Quote, Profile , Research) makes the main processor as well as the flash memory chips that store music, photos and other user data

    -- Britain’s Wolfson Microelectronics Plc (WLF.L: Quote, Profile , Research) makes the audio processing chip. Wolfson already supplies audio chips for Apple’s popular iPods

    -- U.S.-based Marvell Technology Group Ltd. (MRVL.O: Quote, Profile , Research) makes the Wi-fi chip that gives the iPhone the ability to connect to the Internet wirelessly

    -- Skyworks Solutions Inc. (SWKS.O: Quote, Profile , Research) supplies the cellular network power amplifier

    -- Britain’s CSR Plc (CSR.L: Quote, Profile , Research) makes the Bluetooth chip that supports wireless accessories such as microphones

    Information is from iFixit, a Web site offering parts and self-repair guides for iPods and Macintosh computers. The company, which has conducted similar “tear downs” on other Apple products, posted step-by-step photos of the process on its Web site at: http://www.ifixit.com/Guide/iPhone.


  5. Jack O Hearts you’ve got to stop betting against Apple product – Apple TV is the 4th leg in the chair lol! Btw I checked out that Dylan song on iTunes it’s pretty cool, good lyrics.

    Phil – can I ask you about two puts?

    The PALM Aug 15′s @ .35 and GM Aug 32.5′s @ .50 – I’m too new at the options to know what represents good value. Thanks!


  6. Thanks mj23,

    Need to delete the the period from end of the addy for it to work:

    http://www.ifixit.com/Guide/iPhone

    The breakdown is so clear you feel temped to try it yourself.


  7. Wang’s World
    new post up!


  8. Hi, all:

    Saw a special screening of RATATOUILLE…my biased opinion thinks it’ll make squillions for DIS!

    Best for the next week.


  9. Asia Markets : Monday, July 02, 2007

    Japan*

    18146.30
    7.94
    0.04%

    Hong Kong*

    21772.73
    -165.49
    -0.75%

    DJ Shanghai*

    388.55
    0.93
    0.24%

    S.Korea*

    1771.35
    27.75
    1.59%

    India

    14716.53
    66.02
    0.45%

    * at close
    Sources: Dow Jones, Reuters


  10. AAPL – answered in last post along with T pick. XXX

    PALM – I’d be worried they get bought but, otherwise, they look like a dead company to me. While the Aug $15 puts look “cheap” at .32, you are close to 10% out of the money. This is not an stock I would play.

    GM – similar deal with the Aug $32.50 puts. Your selection criteria seems to be geared towards buying “cheap” options and that is never a good idea. When you go very far out of the money you can get tragic results when you are wrong. GM can maintain idiotic prices a lot longer than you can maintin that position. I took a few Jan $35 puts so I could sell Aug $32.50 puts to suckers who pay a 10% premium for 50 days. Whenever you take naked calls, you’d better be damn sure of the direction AND timing since over 80% of all out of the money contracts expire worthless. I do have a tracer on the July $37.50 puts now that they’ve come down to .90 as a momentum play but I’m waiting to see how they handle the $37.50-$38 range ahead of the holiday.

    DIS – that was one of my reasons for chosing DIS, they had Pirates, which was a sure thing, and this one, which I thought sounded very clever. It was #1 with $43M this weekend and I have a squillion $35s (not to mention my defunct $37.50s) so I’m hoping it does move on this news.


  11. IBD Top 10 for 7-2-07

    IBD Top 10 list for the 4th of July Holiday week.

    1. BOLT TECHNOLOGY CORP (BTJ) Manufactures seismic energy sources and underwater electrical components for seismic exploration of oil and gas.

    2. MEDTOX SCIENTIFIC INC (MTOX) Provides forensic and clinical toxicology services, metal analysis and clinical testing services.

    3. FLOTEK INDUSTRIES INC (FTK) Develops, manufactures and markets specialty chemicals and downhole drilling and production equipment in the u.s.

    4. AMTRUST FINANICAL SVCS (AFSI) Offers specialty property and casualty insurance products including workers’ compensation for small businesses.

    5. HARDINGE INC (HDNG) Manufactures metal cutting lathes, grinding/milling machines and accessories for small/middle-sized job shops

    6. SYNALLOY CORP DEL (SYNL) Manufactures welded pipe/piping systems from corrosion resistant metals for chemical, mining and other markets

    7. BAIDU.COM INC ADS (BIDU) Chinese provider of internet search, targeted online advertising and other internet content services.

    8. C N H GLOBAL NV (CNH) Netherlands-based global manufacturer of backhoe/skid steer loaders and tractors for agricultural/construction markets.

    9. DECKERS OUTDOOR CORP (DECK) Markets sports sandals, luxury sheepskin footwear, and sustainable footwear for men, women, and children.

    10. POTASH CORP SASKATCHEWAN (POT) Manufactures fertilizers and related feed products sold in the u.s., canada and trinidad.


  12. Pre market open analyst calls for 7-2-07:

    ADM raised to Buy at B of A.
    AMB raised to Buy at UBS.
    AFR raised to Buy at UBS.
    ALO started as Buy at B of A.
    ATVI started at Equal Weight at Lehman.
    BRE cut to Neutral at UBS.
    COV started as Hold at Deutsche Bank.
    CPT cut to Neutral at UBS.
    ERTS started as Overweight at Lehman.
    HPY cut to Mkt Perform at Piper Jaffray.
    IP cut to Neutral at Credit Suisse.
    MMPI cut to Neutral at UBS.
    MNI raised to Outperform at Wachovia.
    PKTR cut to Mkt Perform at Piper Jaffray.
    PVTB started as Overweight at JPMorgan.
    PWAV cut to Equal Weight at Lehman.
    RRR started as Outperform at CIBC; started as Outperform at Baird; started as Equal Weight at Lehman.
    SIRT started as Outperform at R&R; started as Outperform at CIBC; started as Outperform at JMP Securities.
    SNDK cut to Sector Perform at CIBC.
    SNTS raised to Neutral at Susquehanna.
    TEL started as Neutral at JPMorgan.
    TRB raised to Buy at Deutsche Bank.
    THQI started as Equal Weight at Lehman.
    TTWO started as Underweight at Lehman.


  13. New post up, better late than never!