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Wednesday Virtual Portfolio Moves

Posted July 25, 2007 at 9:30 am | Permalink (Edit)

GSK – we have to see where they go in the morning but naked selling into the excitement is the way to go. Right now it’s AMZN time!

Posted July 25, 2007 at 9:32 am | Permalink (Edit)

This is a good time to take stuff off the table that was killing you yesterday. Nothing has really changed other than a few companies that were supposed to have great earnings having great earnings so be realistic. STM and GLW were disappointing but no one seems to care…

Posted July 25, 2007 at 9:43 am | Permalink (Edit)

I’m surprised they expect a 1.9Mb draw in crude – that’s a number that can disappoint but they really took Aug NYMEX barrels off at the last minute so perhaps they are creating an artificial shortage in Cushing.

AMZN – took 40 $90s for $1.45 and will sell 20 $85s, now $3.50 and am holding Oct $80s, now $8.60 so I’m now in with 40 Oct $90s, sold 20 $75s, now 9.75 and the 20 Oct $80s. Once I am sure there is no short squeeze, I will cash at least 1/2 my Octobers and sell 10 more Augs. xxx

Posted July 25, 2007 at 9:47 am | Permalink (Edit)

AMZN – another nice way to get out of the Oct $80, Aug $75 play is to roll yourself to 2X the Oct $90s and roll your caller to 2X the $85s – this is a near even roll and puts you in much better margin position. XXX

Posted July 25, 2007 at 10:01 am | Permalink (Edit)

COP calls flying, that was a good choice and SUN calls still available if you need cover ahead of inventory. I’m very disappointed with the lack of returns from my DIA and QQQ calls so I’d have to say sentiment is still VERY bearish. So the way we play covers like COP is we sell them into the initial excitement and then use that gain (.30) to augment the stops on the now naked puts we’re protecting. In other words, I’m up .60 on my OII puts so rather than a .15 tstop, I’ll go .30…

New Home sales were terrible back to the mattresses!!!! XXX

Posted July 25, 2007 at 10:03 am | Permalink (Edit)

Oh this is my top call for AMZN by the way!

Posted July 25, 2007 at 10:22 am | Permalink (Edit)

If you want to play oil down PTR is still flying high and COP $80 puts are a fun bet at $1 and XOM $90 puts are always a challenge at $1.80 but I’m just riding what’s left of my puts from yesterday with normal stops, happy to get to cash in energy if the report comes in bullish but I still think there’s a chance one of those offshore storage tankers dumped their cargo while they could get $75 which could give us a huge build but I’m not counting on it.

FWLT is turning into quite a little cash machine for me (selling $120s when it rallies), reminds me of TSO and RIMM when they were trying to sustain unsustainable highs…

Posted July 25, 2007 at 10:46 am | Permalink (Edit)

XLE $70 puts at $1.33 still the slow mover if you want to paly oil down. Woo hoo on XOM and COP!

Posted July 25, 2007 at 10:49 am | Permalink (Edit)

AMZN – yes 2X each, sorry crazy at the moment but I’m playing for a meltdown right now.

FXI in a massive drop after a very silly gap up too expensive to play but very bad news if they fall below $138.

PTR coming down nicely already.

Posted July 25, 2007 at 10:50 am | Permalink (Edit)

Chrysler – I said when the M&As start to unwind it is time to be all cash or short the market – this is that time!!! XXX

Posted July 25, 2007 at 10:55 am | Permalink (Edit)

Transports off a cliff even with declining oil prices. I’m letting the rules dictate what I get out of with Aug and Sept stopping out on 20% of the profit pullbacks (which is most of them). The DIA puts are in great shape again but at this point I’d rather take a fresh look at things in a couple of more day sthan try to “save” things now.

When you are up 100% and then go down 20%, it is crazy to try to use the 80% to get the 20% back by taking additional risk!

Posted July 25, 2007 at 11:16 am | Permalink (Edit)

So this is why I work off stops, as soon as I started setting them, the market stopped dropping but I am raising them with every tick up and will be getting the hell out if we fall again. XXX

BA and MRK are most of the Dows gain.

CIT is not a good income producer due to high volatility and low(ish) premiums but the ‘09 $50s are just $4.95 and you can sell Sept $50s for .65 which won’t make you rich but does make a nice play on the actual stock making a comeback. XXX

Weclome Rs23! As you can see, I’m not big on adding Aug anything right now, despite this little rebound but INTC is one of the best and will be in good shape if they hold $24.50 but I’d rather see them get through the weekend first. Oct $27.50s are .42 and you can sell $25s, now .42 on a downturn but I want to emphasize that there is nothing good about a recovery in the oil sector leading a market rebound today and there is no data to support the last half hour’s move in oil anyway.

13,700 has been hanging tough – will 3rd time be a charm?

Done with oil puts on that turnaround of course. XXX

Posted July 25, 2007 at 11:27 am | Permalink (Edit)

BIIB rumored offer from PFE. They are partners with ELN on a couple of drugs and I’m going to take a few ELN Aug $20s at $1.10 just for fun.

Posted July 25, 2007 at 11:50 am | Permalink (Edit)

DCX – it may be possible that they just can’t get financing for Chrysler since it is, in fact, an American car company and this is not a trend but it’s nothing I want to take a chance on.

The VIX is calming down now pretty consistently going down when the markets go up, indicating up is still the right direction but things seem pretty out of control to me if XOM can go up and down $5Bn in value 3 times in 2 hours.

Posted July 25, 2007 at 12:16 pm | Permalink (Edit)

XOM – I am adding back puts into earnings. If they miss then $1.75 for the $90 puts will be a real bargain. There is what I consider to be an irrational expectation that they will earn 14% more money despite tha fact that sales are down 1.5% (at least). Now these guys can make their numbers say anything they want them to as they take in $100Bn a quarter in revenues but politically I think they wouldn’t mind a miss this Q as it will carry them all the way through the Summer able to tell Congress how they are just a poor struggling energy company that’s just trying to make a nice return for all the widows and orphans who own the stock. They do have 5% less shares than last year but I think costs are way up. If they miss, it will be a Dow disaster.

Posted July 25, 2007 at 1:06 pm | Permalink (Edit)

AAPL picking up nicely.

CMG – they are still up $30 for the year so it’s hard for me to imagine that they are still being underestimated by the markets. Mid-range dining has been a mixed bag and they are losing their novelty appeal with 35% growth expected – not for me.

ELN – I hope I don’t have to mention that taking a 50% profit off the table in 60 minutes is a good idea on at least 1/2 the position! XXX

XLE – the $72 puts are the best right now at $1.50, I’ve been offering $1 on the $71 puts but no takers. This run up in oil has me interested in the COP $80 puts again as it seems that everyone forgot what a huge nat gas play they are. Once again the NYMEX is being manipulated on the energy report as the front month contract amazingly goes up .89 while they trim 11M barrels off the total open interest and the longer contracts, even as close as Jan, continue to fall:

Posted July 25, 2007 at 1:17 pm | Permalink (Edit)

AMZN – on the sold $85s I expect a correction, there is nothing here that makes me think AMZN is underpriced at $85 in a cold market. My guess is this is a short squeeze that will be followed by profit taking as their p/e approaches 150.

Posted July 25, 2007 at 1:49 pm | Permalink (Edit)

DIA – I’m scaling into DIA $137s ahead of the BB and I expect to get a signal THE SECOND it comes out, well before any human being could possibly read it. If THEY are going to take the markets up, they don’t give a damn what the book actually says, it’s just the excuse of the moment. I’m already well layered to the short side and will be able to ease out of those once I’m covered. XXX

Posted July 25, 2007 at 1:52 pm | Permalink (Edit)

VIX is still up on every down Dow move, still indicating sellers are wrong.

I’m actually watching the 1 min chart on DIA – very exciting! 8-)

Posted July 25, 2007 at 1:54 pm | Permalink (Edit)

$10KP turned positive thanks to FWLT! Can’t be greedy, need to keep tight stops (.50 tstop) on the Aug $115 puts and $9 stop on the Nov $110 puts as that position has been a nightmare we’ll be glad to be rid of. XXX

Posted July 25, 2007 at 2:02 pm | Permalink (Edit)

NOW its going 2.5% growth. Consumer spending light due to high gas prices. CapEx on upswing. Residential construction down, lending down, wages under control…

NY says job gains.

That’s it guys, this is very mediocre and no one is buying so we’re off for another test of 13,700 but I’d say we’re going down…

Posted July 25, 2007 at 2:19 pm | Permalink (Edit)
Keep in mind that the Beige book is the Fed’s positive spin on the economy. Still 13,700 is proving very tough!
Posted July 25, 2007 at 2:25 pm | Permalink (Edit)

Well I might be wrong, I think people are looking at the BB as not so bad and that’s good enough for them… DIA $138s at $2 so I’m buying them as a cover while I sort this out. XXX

Posted July 25, 2007 at 2:29 pm | Permalink (Edit)

TOT $80s at $2 are a nice upside mo play if that sector is coming back. XXX

BP $70s at $2.77 have very low premium for a good mover but I’d like to see them break $72.50 so I’m pre rolling to the $75s for .35 XX

Posted July 25, 2007 at 2:33 pm | Permalink (Edit)

BP – I meant they need to break $72.50 first!

Posted July 25, 2007 at 2:40 pm | Permalink (Edit)

LOL – that 1 min chart really does make you panic! I’m getting back to my first instinct which is get to cash (other than Oct+ plays) and wait a few days to see what happens. XXX

Posted July 25, 2007 at 3:00 pm | Permalink (Edit)
CCJ – I settled on 40 open Jan $42.50s and 40 Sept $50s at $1.20 which I sold Aug $50s against for $1.75. I’m hoping to claw back some of my losses while I wait to it to pop and, if it pops early, I’m half covered.
Posted July 25, 2007 at 3:07 pm | Permalink (Edit)

TXT $120s for $3.30 make a nice mo play..

Posted July 25, 2007 at 3:08 pm | Permalink (Edit)

And the VIX is dropping off fast as the Dow flies up.

Posted July 25, 2007 at 3:38 pm | Permalink (Edit)

AAPL – I have the $135 puts – I figure if it goes down, it goes down hard.

S&P needs 1,520 to make this thing real. Dow needs to get back to 13,850 to make up 1/2 its losses for the week. Nasdaq needs to retake 2,675 to catch Friday’s low or yesterday’s open but still way below Monday’s high of 2,705, which itself was pretty far down from the 2,720 close on the 19th.

I hate to be the grouch but I really don’t think much of this movement and everyone else seems to be buying like crazy so I’ll take the contrary position for the day…

Apple might still save the markets with spectacular numbers that put them well over $150 as it’s a great consumer story. BUD just released great numbers but I’m not sure if it’s good that people are drinking heavily.

Posted July 25, 2007 at 4:00 pm | Permalink (Edit)

BSEG – I’m still holding: http://biz.yahoo.com/bw/070719/20070719005240.html?.v=1

 

 


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