Wild Wednesday Wrap-Up

Wheee, what a day!

We broke 500 comments on the member site for the first time so you know a lot was going on.

The trades were flying fast and furious but I considered it very lucky that we had gone long DIA and QQQQ right at the end yesterday and I decided today was a good day to go further into cash.  Right at 9:32 I said: "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."

The timing was great for cashing out our oil puts just after the inventory as that sector turned around sharply (for no good reason) and the energy sector made up much of the afternoon rally.  We messed around with some new oil positions on both sides but, other than XOM $90 puts at $1.40 ahead of earnings, much lighter than we have been in a long time, as I said in the morning post: "We picked up so much downside action in oil yesterday I’m more concerned about a negative surprise."

We got that negative surprise today as oil flew up $2.32 (only in the front months of course as the farce continues) but it's all up to XOM tomorrow who will have to justify what is now a $522Bn market cap.  XOM has gained over $50Bn in market cap since June 27th, more than the entire value of VLO ($38Bn), SU ($43Bn), OXY ($50Bn), the newly combined RIG ($33Bn) & GSF ($17.5Bn), or the total combination of SUN ($8.5Bn) + TSO (7Bn) + CHK ($16Bn) + GSF ($17.5Bn) so it will be very interesting to see how they manage to justify this runaway valuation.

The Dow was up and down 100 points four times today but ended up nowhere in particular, closing under 13,800, but at least 13,700 seemed to form some sort of a floor.  We will be watching the S&P closely tomorrow as Happy Trading and I were disappointed we couldn't close above 1,520:

Our AMZN bear call spread is working out nicely so far as the $85s went off at $6 on the morning jump and have already calmed down to $4.35 and I now wish we had taken the money and ran there as Apple's earnings were so spectacular they may give Amazon and every other tech a little extra boost.  We were on top of that one all day though and at 3:38 I said: "Apple might still save the markets with spectacular numbers that put them well over $150 as it’s a great consumer story."  It's at exactly $150 in after hours trading (pat, pat).  We detailed our AAPL positions in the weekend wrap-up and we made a few adjustments since so now we have this mix:

We killed the $135 straddle play and, in the Long-Term Virtual Portfolio we added 20 Jan '09 $140s and sold 15 current $140s against them as we became more bullish on Apple yesterday, when my morning call was: "Apple will be sharply lower in the morning on T’s numbers as "only" 140,000 IPhones were activated but the Quarter ended on Saturday and the Phones were available at midnight on Friday so that number actually constitutes the number of IPhones that were taken home and activated within 24 hours of the phone’s release so our play of the day is to take the money and run on our puts, buy some $140s as a momentum play and rebuy the puts (as we still want protection into earnings) as the stock recovers (assuming it does!)."

Needless to say we are all very excited to see how this will work out tomorrow but it's looking pretty darned good already! 

Google finished the day down another $4 today but got a little boost in the post-market as BIDU posted fantastic results, doubling profits from last year.  That stock shot up 20% after hours after gaining 5% on the day.  ETrade had a good report, as did QCOM, who raised guidance on strong 3G chip demand that I would wager will be going into IPhones very soon!  WFR (a big holding for us) not only came through with strong results but will be added to the S&P.