That’s a good thing, they will likely report a disappointment. My only concern is that that’s a shakeout move and it will be followed up by a series of Nigerian attacks or something. I’m going to up the XOM Aug $85 calls as protection on the way down but I’m taking the July puts off the table with whatever profits the mo stops them at. XXX
SU is a good short in the slow lane. I’ve got the Jul $95 puts but the $90 puts will make a nice mo play if oil falls down. XXX
CHAP – I doubt there will be a counter offer, selling into the excitement myself – sometimes enough is enough…
DIA status:
300 Aug $138 calls
100 Aug $137 puts
200 Aug $136 puts
150 Aug $135 puts
The Aug $137s are up 33% and will stop out up 25%, the $135s would stop out even at $1.90 and the $136s ould be my new base for a DD or roll. These are soft stops, I will ignore spikes or rallies I’m not buying into.
I also have 200 Aug $135s that I sold July $135s against, that trade is about even at the moment but if Dow starts falling again I need to stop out the Julys I sold.
XOM and integrated majors just got an upgrade from someone with raised targets. That someone is wrong but I do like the XOM Aug $90s as a 50% offset to puts as they are the laggard of the oil patch, up about half of what OIH or the refiners are over the past few months.
CHAP – half covered going into earnings, I lost a buck on the Aug $75s so I’ll give them some time to calm down before I buy them out but I got $10 for my other half so I’m thrilled.
Fortune favors the bold (and insane) with COP $85 puts at $1.35. XXX for the unbalanced.
T – still an accumulation for me.. DNA – light gamble but 1/2 naked.
OIH – sector got a downgrade so if this is as low as they get then great but if they crash $175 we could see the 5% correction I predicted yesterday. The Aug $185s are $3.10 and are OK if you can quickly sell the July $175s, now $4.30 on a rejection off $178 (depending on inventories of course). It’s a great play but you need good day trading skills and a strong stomach to navigate it.
Remember, with any stock or index 20% is EXPECTED as a day-after bounce. It is not in any way bullish. 38% is where you can start to think something is happening and until it crosses a 50% retracement you’ve really got nothing but a hope chest.
YUM – I liked them yesterday but now they are up a buck (3%) at the open. Expectations are now higher for them as UBS upgraded them and they announced some good comps. I like the Jan ‘09 $35s at $4.45 as I’d be happy to DD or roll should they miss since I think the company is on the right track and due for a breakout. If they shoot up today though, I might want to take a buck for selling the July $35s. If I were just gambling, the Aug $35s are just .95. XXX
DNA – I like 2 Aug $80s, now .78 and selling 1 July $75 for $1.50 or better – I am waiting to see un uptrend back over $75 to make this play.
MRO Aug $65s are $2.02 and make a nice upside play if Inventories come in bullish (for oil).
XOM Aug $90s and VLO July $80s make upside mo plays and XLE $71 calls are the slow mover to take AFTER inventories (as the premium will leech out)
COP $85 puts just getting cheaper and cheaper if things go the other way.
CVX $90s to the downside.
XLE $72 puts are the slow downside play, now $1.15.
These are mo plays – making .25 on a dollar is a lot of money for one day!!!!
Radio time.
OIH – that was not a positive oil report. I’m not jumping either way but I won’t be surprised to see some capitulation as it certainly was nothing to be bullish about. As I said last week, I never go wrong selling the OIH $180 calls when it touches that level.
FTO – that’s a good one, we want to short the ones that have been overdone and boy is FTO overdone. Aug $45 puts are just .95. XXX
BSC – isn’t it fortunate that they are the only broker who made a mistake with sub-prime? By the way, if GE, who is one of the nation’s biggest lenders, gets hurt in that sector we could go 5 levels down on mattress plays in one day.
Holy cow rates are falling off the table! At least that’s a legitimate reason for a rally. The 10-year is at 5.04% and the 30-year dropped to 5.09% as realtors forecast a prolonged housing slump which is somehow taken as great news by traders who think this will convince the Fed to loosen (not going to happen).
http://money.cnn.com/2007/07/11/real_estate/housing_forecast/index.htm ?source=yahoo_quote
How bad is it for oil that a 1.4Mb draw in crude can’t get it positive?
OIH – no hurry either way. Watch SLB, GSF and BHI for turn signals. DO has been the star of the group, if they can’t recover $105 we should get an afternoon leg down.
I’m very disappointed that I didn’t have to take out my GOOG caller.
Oil creeps – mega bull sentiment persists, fundies are huddled in rooms right now deciding how to read that report but wearing my fund manager hat I have to say I’m very concerned that the majors are hardly up on raised guidance so I’m probably going to want to see XOM make $11Bn on the 26th before I commit more to a sector I’m already heavy in.
OII – good catch, I’m in on the $55 puts for .60 in case sanity takes hold.
VOLV still going.
FXI is killing me – nothing makes it go down. Shanghai dropped 5% last week and they went up. Hong Kong dropped 1% today and they are holding up again. I sold the $139s and I’m a little nervous.
Fed Plosser said he sees no spillover from housing, sees growth 2-3% this year. Rallied brokers and the markets. Any Fed BS is good fertilizer I guess.
T – Jan ‘09 $45s, yes but I’ve been taking Oct $42.50s at .80 as a DD from my $1.05 position. These I will roll to $40s for +$1 if it keeps going down but I’m doing this naked into earnings as I expect good numbers and my understanding of the IPhone deal is that it is exclusive so any rumor of an IPhone nano (or any cheaper IPhone) can only lead to millions of more customers for T.
NMX – I’m in the Aug $140s at $3.20 and, if I were behind on the July $140s I’d drop back to the Augs and sell the $135s for $1.65 or, if you can afford to be more aggressive, the $130s at $3 but you have to set a stop there at $4.50 and hope the mo continues your way.
$10KP – GSK has 7/25 earnings with high expectations. I’m very concerned about a miss and their p/e is high. I don’t want to give up my protection yet but I’m looking to roll to the Aug $50s at about $3, picking up .75 in additional premium against my $2.15 net basis. XXX
TSO – hasn’t posted 4 consectutive positive days since major jump on 4/25 (split announcement). All $5 runs have been followed by $2+ dips within a week and they are still valued 100% more than they were in January despite the fact that Q1 income was 26% below Q4 which was 42% below Q3 which was 16% below Q2. I detest this company on principal but I gave up being heavy short even though I can’t for the life of me come up with a supporting argument for this valuation compared to VLO, which is a totally superior company.
UNH (7/19) is now or never and this money machine has very low expectations so I’d go Sept $50s at $3.30 with the Aug $50 puts at .95 as protection and remove the wrong one after earnings. I’m holding the Jan $55s against which I sold the Jul $50s and I’ll probably keep them into earnings.
COF (7/19) – That’s a nice sell-off. I rolled my July $80 callers to July $75s at $2 as it was always my intention to pocket the earnings premium and now I’m getting 2 against my Jan $75s and more interested in protection than profits. I will stop out some of my callers even if it perks back up but MA, AXP and COF all look like they don’t understand this recovery either.
