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Weekly Wrap-Up

What a wild week that was!

For the second week in a row the rewards of being bearish were very rich indeed despite our move to a substantially cash position.

I think I really nailed the market's direction in Monday's wrap-up when I posted this picture and said "That was the least exciting 90 points we ever gained."  It was a tired and pathetic attempt to get to 14,000 and, if anything, made us even more bearish on Monday as we loaded up on mattress plays, the index puts we use to cover our virtual portfolio.

That led to a huge lucky (some would call it skill but I'm not that delusional) break on Tuesday as the market began a 700-point, 4 day decline that generated incredible returns on what were originally intended to be covers on our remaining calls.  The nature of the drop was such that we had a scare on Tuesday, a chance to get our calls off the table on a rebound on Wednesday (that caused us to buy even more puts, including XOM et al!) followed by 500 additional points of decline on Thursday and Friday when we were pretty much all bearish.

How could we not have had a great week?!?

As Bryan E said in Tuesday's comments: "Today reminds me of that Barrons commercial…”The market goes up you make money, the market goes down you make money….but this time it’s because of PHIL, HAPPY, and ZMAN."

We were so hot predicting this week's action that we even nailed the titles for the day with "Whip around Wednesday,"  "Thursday Thump" and "Freaky Friday" so I won't even bother going into detail on what we said as there are no highlights – the whole week was a highlght!  Option Sage got the week started  with his excellent title "The Four Horsemen (of the Apocalypse?" which warned us that Apocalypse isn't traditionally a BUYBUYBUY celebration.

Far be it for us to fight the markets, we just like to go with the flow and enjoy the ride and what a ride it was this week!  Fundamentals really did start to matter in the market and even the mighty XOM corporation felt the pull of gravity as the company shed $50Bn worth of market cap in just 2 days.

Exxon is one of the most discussed (?disgust?) stocks in all of PSW with 310 mentions in various posts so you certainly can't say we didn't tell you it was overvalued.  We actually started targeting the shorter-term puts earlier in the month and had a very painful time staying on top of them as the stock crawled from $84 to $94 but it was all worth is on Friday as the stock plunged all the way back to $85, erasing a month's worth of ill-gotten gains in just 48 hours.

XOM was just one of our many virtual portfolio stars in what is now clearly our best week ever, topping last week's best week ever by quite a lot!  We stayed on our toes, we had fun, we made some money – it was a very good week indeed!

I finally achieved 2 personal goals I had set for the month:  The Short-Term Virtual Portfolio (up 393%) has finally surpassed the Free Picks Virtual Portfolio (up 380%) and the $10,000 Virtual Portfolio is finally worth more than $10,000 ($12,856) thanks almost entirely to a pretty big risk on FWLT, which finally went our way, as well as our CROX spread, which paid huge dividends for us on both the rise and subsequent fall of the stock on their spectacular earnings.

The Short-Term Virtual Portfolio owed it's spectacular gains to DIA calls and then DIA puts that both paid off spectacular dividends as well as an earlier than expected jackpot on the oil puts we had planned on pressing all the way through hurricane season.  Enough was certainly enough there and we made a very timely (or so it seems) cash call that left us with 73 well-hedged open positions that have an average gain of 52%.

Our Free Picks Virtual Portfolio has slipped into second place in it's last official week as our promotional look at PSW had "just" a 3% gain on the week for our 11 remaining positions, as our Google play took a big hit as well as our poor COP calls.

I mentioned that we finally wrestled the $10KP into positive territory as our long-suffering spreads finally began to bear some fruit.  I had said that a recovery here would require an exercise in patience but mine was worn a little thin too, as we had some very frustrating performances when my conservative bearish attitude early on did little to get things off on the right foot.  Now that we have a little cash we can have some fun as the remaining 8 positions are up 28% and are 75% ($9,361) in cash.

The Long-Term Virtual Portfolio, of course, had a great week with 37 open positions adding 10%, bringing our total value up 160% to date.  Aside from having an opportunity to take out our callers on the cheap, we will also have a chance to roll our leaps into better positions, add to our strong positions and finally pick up a few bargains

Our Stock Virtual Portfolio took a 4% hit on our 6 remaining positions, now up 32% with nothing exciting to report.

The Complex Spreads Virtual Portfolio jumped 19% for the week and our 26 remaining positions are now up 143%.  This virtual portfolio has the potential to explode as we've cashed our of our risky open Apple calls but still hold a lot of deflated GOOG Sept $570s and Aug $540s as well as the ever exciting DNDN and DNA plays.

As we closed out a huge number of positions this week and have moved substantially to cash, I ran  a special virtual portfolio review for the member site that will be available for download and on-line viewing on Monday.  It's been a very exciting finish to the first half of the year (plus 1 month!) and I'll be taking off on my vacation on August 4th, leaving the bulk of the postings in the capable hands of Happy Trading, Zman and Options Sage.  While they may be taking new positions, the virtual portfolio will follow through on the article Sage posted back on July 2nd, "Vacation Proof Your Virtual Portfolio" and it will be fun to see how I do after 2 weeks away!

We closed 98 positions on the week as we pared down our holdings and they gained an average of 43%, as is typical when big money index puts pay off (high dollar value, low percentage).   The Apple plays we've been detailng on the free site were a spectacular success as were the oil puts Zman and I have been playing for weeks, especially our refiner group! 

Description

  Basis

Open

 Sale Price

Sold

 Gain/Loss

%

30 OCT 140.00 AAPL CALL (APVJH)  $  14,110 7/2  $  49,490 7/27  $      35,380 251%
10 AUG 135.00 AAPL CALL (APVHG)  $    5,260 7/11  $   4,390 7/26  $         (870) -17%
25 AUG 140.00 AAPL CALL (APVHH)  $  11,885 7/13  $  24,365 7/26  $      12,480 105%
50 AUG 135.00 AAPL PUT (APVTG)  $  25,760 7/24  $  12,490 7/26  $     (13,270) -52%
10 AUG 140.00 AAPL CALL (APVHH)  $    6,610 7/24  $   8,240 7/24  $       1,630 25%
40 AUG 135.00 AAPL PUT (APVTG)  $  18,810 7/20  $  24,990 7/24  $       6,180 33%
10 AUG 135.00 AAPL PUT (APVTG)  $    5,260 7/11  $   6,390 7/24  $       1,130 22%
40 AUG 90.00 AMZN CALL (ZQNHR)  $    5,810 7/25  $   5,990 7/26  $          180 3%
20 AUG 90.00 AMZN CALL (ZQNHR)  $    2,900 7/25  $   4,990 7/26  $       2,090 72%
40 AUG 85.00 AMZN CALL (ZQNHQ)  $  12,010 7/25  $  23,990 7/26  $      11,980 100%
20 OCT 80.00 AMZN CALL (ZQNJP)  $    8,910 7/13  $  23,990 7/25  $      15,080 169%
20 AUG 75.00 AMZN CALL (ZQNHO)  $  22,010 7/13  $   9,490 7/25  $     (12,520) -57%
5 OCT 40.00 AU CALL (AUJH)  $    1,160 7/6  $   2,440 7/25  $       1,280 110%
10 SEP 260.00 BIDU CALL (BDUIV)  $    5,030 7/26  $   4,390 7/27  $         (640) -13%
10 AUG 220.00 BIDU CALL (BDUHD)  $    5,510 7/26  $  10,440 7/27  $       4,930 90%
20 AUG 260.00 BIDU CALL (BDUHV)  $    2,710 7/26  $   2,090 7/27  $         (620) -23%
20 AUG 85.00 CLF CALL (CLFHQ)  $    8,710 7/6  $   6,990 7/23  $      (1,720) -20%
25 AUG 80.00 COP PUT (COPTP)  $    1,520 7/25  $   5,865 7/26  $       4,345 286%
150 AUG 85.00 COP CALL (COPHQ)  $  22,510 7/24  $  26,990 7/25  $       4,480 20%
10 AUG 85.00 COP PUT (COPTQ)  $    2,210 7/20  $   2,790 7/23  $          580 26%
40 AUG 90.00 CVX PUT (CVXTR)  $    6,010 7/23  $  10,790 7/25  $       4,780 80%
20 AUG 90.00 CVX PUT (CVXTR)  $    3,010 7/20  $   3,990 7/23  $          980 33%
150 AUG 135.00 DIA PUT (DAWTE)  $  35,720 7/26  $  52,490 7/27  $      16,770 47%
200 AUG 136.00 DIA PUT (DAZTF)  $  40,010 7/26  $  71,990 7/27  $      31,980 80%
100 SEP 136.00 DIA PUT (DAZUF)  $  32,010 7/26  $  45,990 7/27  $      13,980 44%
80 SEP 139.00 DIA PUT (DAZUI)  $  22,030 7/19  $  49,590 7/27  $      27,560 125%
50 AUG 137.00 DIA CALL (DAZHG)  $  11,760 7/25  $  13,990 7/26  $       2,230 19%
100 AUG 138.00 DIA PUT (DAZTH)  $  21,010 7/25  $  44,990 7/26  $      23,980 114%
100 AUG 139.00 DIA PUT (DAZTI)  $  21,010 7/24  $  49,990 7/26  $      28,980 138%
100 AUG 136.00 DIA PUT (DAZTF)  $  20,010 7/26  $  34,990 7/26  $      14,980 75%
200 AUG 138.00 DIA CALL (DAZHH)  $  42,410 7/25  $  43,990 7/26  $       1,580 4%
100 AUG 135.00 DIA PUT (DAWTE)  $  20,010 7/26  $  29,990 7/26  $       9,980 50%
200 AUG 139.00 DIA PUT (DAZTI)  $  44,010 7/24  $  59,990 7/25  $      15,980 36%
300 AUG 140.00 DIA CALL (DAZHJ)  $  30,010 7/24  $  35,990 7/25  $       5,980 20%
200 AUG 138.00 DIA PUT (DAZTH)  $  41,010 7/24  $  51,990 7/25  $      10,980 27%
200 AUG 139.00 DIA CALL (DAZHI)  $  39,010 7/12  $  39,990 7/24  $          980 3%
400 AUG 140.00 DIA PUT (DAZTJ)  $  90,810 7/18  $135,990 7/24  $      45,180 50%
30 SEP 142.00 DIA CALL (DAZIL)  $    6,910 7/16  $   5,990 7/24  $         (920) -13%
250 AUG 137.00 DIA PUT (DAZTG)  $  32,510 7/3  $  32,490 7/23  $           (20) 0%
50 AUG 80.00 DNA CALL (DWNHP)  $       260 7/2  $   1,740 7/24  $       1,480 569%
40 AUG 10.00 DNDN CALL (UKOHB)  $       530 5/31  $      590 7/24  $            60 11%
30 AUG 110.00 DO PUT (DOTB)  $  13,210 7/2  $  13,790 7/25  $          580 4%
10 JAN 65.00 EDU CALL (EDUAM)  $    5,400 7/13  $   2,890 7/27  $      (2,510) -47%
10 AUG 50.00 FAF PUT (FAFTJ)  $    1,160 7/9  $   2,990 7/23  $       1,830 158%
20 AUG 120.00 FWLT CALL (UFBHD)  $    6,010 7/25  $  10,890 7/25  $       4,880 81%
3 NOV 110.00 FWLT PUT (UFBWB)  $    2,779 5/29  $   2,885 7/25  $          106 4%
4 AUG 115.00 FWLT PUT (UFBTC)  $    1,470 7/13  $   2,630 7/25  $       1,160 79%
20 SEP 38.00 GDX CALL (GDXIL)  $    5,410 7/5  $   8,390 7/25  $       2,980 55%
25 AUG 35.00 GM PUT (GMTG)  $    2,135 7/10  $   3,990 7/23  $       1,855 87%
15 AUG 520.00 GOOG CALL (GOPHV)  $  13,510 7/23  $  19,865 7/24  $       6,355 47%
10 AUG 520.00 GOOG CALL (GOPHV)  $    9,510 7/23  $  12,990 7/24  $       3,480 37%
10 AUG 520.00 GOOG CALL (GOPHV)  $    9,010 7/23  $   9,990 7/24  $          980 11%
10 AUG 520.00 GOOG CALL (GOPHV)  $    9,510 7/23  $   9,990 7/24  $          480 5%
80 AUG 60.00 HES PUT (IGGTL)  $    4,170 7/11  $   3,190 7/25  $         (980) -24%
20 AUG 75.00 HOC PUT (HOCTO)  $    4,810 7/19  $  17,990 7/26  $      13,180 274%
15 NOV 47.50 HPQ CALL (HPQKW)  $    3,010 7/9  $   4,340 7/27  $       1,330 44%
17 AUG 20.00 KNOT CALL (BQCHD)  $       945 6/19  $   1,265 7/27  $          320 34%
10 JAN 50.00 KO CALL (VKOAJ)  $    3,060 1/16  $   7,890 7/23  $       4,830 158%
20 SEP 52.50 MCD CALL (MCDIX)  $    2,610 7/12  $   2,390 7/25  $         (220) -8%
25 AUG 50.00 MRK CALL (MRKHJ)  $    3,260 7/18  $   8,740 7/23  $       5,480 168%
60 OCT 32.50 MSFT CALL (MSQJZ)  $       790 5/18  $   2,270 7/27  $       1,480 187%
5 JAN 50.00 NFX CALL (NFXAJ)  $    1,910 7/9  $   2,940 7/26  $       1,030 54%
20 AUG 140.00 NMX CALL (NMXHH)  $    6,310 7/6  $  11,190 7/23  $       4,880 77%
8 AUG 80.00 NYX CALL (NYXHP)  $    1,210 7/23  $   1,190 7/27  $           (20) -2%
20 AUG 180.00 OIH CALL (ODLHP)  $    4,610 6/22  $  22,990 7/23  $      18,380 399%
20 AUG 55.00 OII PUT (OIITK)  $    2,910 7/12  $   4,890 7/25  $       1,980 68%
10 JAN 15.00 OVTI CALL (VYVAC)  $    3,060 4/23  $   5,970 7/25  $       2,910 95%
50 SEP 25.00 PFE CALL (PFEIE)  $    2,760 7/23  $   3,240 7/25  $          480 17%
20 OCT 65.00 PG CALL (PGJM)  $    2,610 5/10  $   2,690 7/25  $            80 3%
10 AUG 150.00 PTR PUT (PTRTJ)  $    2,760 7/25  $   4,990 7/26  $       2,230 81%
200 AUG 49.00 QQQQ CALL (QQQHW)  $  18,410 7/26  $  18,990 7/27  $          580 3%
200 AUG 49.00 QQQQ CALL (QQQHW)  $  18,410 7/26  $  18,990 7/26  $          580 3%
300 AUG 50.00 QQQQ CALL (QQQHX)  $  18,010 7/24  $  21,590 7/25  $       3,580 20%
45 AUG 115.00 RIG PUT (RIGTC)  $  16,120 6/27  $  17,990 7/25  $       1,870 12%
50 AUG 3.00 SIRI CALL (QXOHG)  $       510 7/24  $   1,240 7/27  $          730 143%
10 AUG 75.00 SPWR CALL (QSUHO)  $       410 7/13  $   1,440 7/24  $       1,030 251%
20 AUG 90.00 SU PUT (SUTR)  $       810 7/23  $   4,990 7/26  $       4,180 516%
20 AUG 75.00 SUN CALL (SUNHO)  $    3,410 7/25  $   2,190 7/26  $      (1,220) -36%
20 SEP 35.00 TIE CALL (TIEIG)  $    3,610 7/18  $   4,390 7/24  $          780 22%
60 AUG 55.00 TSO PUT (TSOTK)  $  12,610 7/19  $  34,190 7/25  $      21,580 171%
30 AUG 55.00 TSO PUT (TSOTK)  $    6,010 7/19  $   9,290 7/23  $       3,280 55%
20 AUG 57.50 TSO PUT (TSOTZ)  $    3,910 5/2  $   7,590 7/23  $       3,680 94%
400 Tesoro Petroleum Corp. (TSO)  $  21,710 10/30  $  21,738 7/23  $            28 0%
20 JUL 22.50 TWX CALL (TWXGX)  $       470 5/25  $        -   7/23  $         (470) -100%
20 AUG 50.00 WNR PUT (WNRTJ)  $    2,110 7/24  $   4,790 7/25  $       2,680 127%
20 AUG 50.00 WNR PUT (WNRTJ)  $    2,110 7/24  $   4,190 7/24  $       2,080 99%
20 AUG 110.00 X CALL (XHB)  $    6,010 7/20  $   5,990 7/24  $           (20) 0%
30 AUG 72.00 XLE PUT (XBTTT)  $    4,060 7/25  $  11,090 7/27  $       7,030 173%
20 AUG 70.00 XLE PUT (XBTTR)  $    1,610 7/2  $   2,390 7/25  $          780 48%
50 AUG 72.00 XLE PUT (XBTTT)  $    5,010 7/23  $   8,490 7/25  $       3,480 70%
50 SEP 90.00 XOM PUT (XOMUR)  $  17,510 7/26  $  27,490 7/27  $       9,980 57%
100 AUG 90.00 XOM PUT (XOMTR)  $  14,020 7/25  $  29,990 7/26  $      15,970 114%
100 AUG 90.00 XOM PUT (XOMTR)  $  14,020 7/25  $  23,990 7/26  $       9,970 71%
100 AUG 95.00 XOM PUT (XOMTS)  $  33,010 7/2  $  44,990 7/25  $      11,980 36%
100 AUG 95.00 XOM PUT (XOMTS)  $  33,010 7/2  $  49,990 7/24  $      16,980 51%
100 AUG 90.00 XOM PUT (XOMTR)  $  19,000 7/2  $  12,990 7/23  $      (6,010) -32%
200 AUG 95.00 XOM PUT (XOMTS)  $  70,010 7/23  $  69,990 7/23  $           (20) 0%
50 AUG 35.00 YUM CALL (YUMHG)  $       260 7/11  $   3,240 7/24  $       2,980 1146%

 


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  1. Asia Markets : Monday, July 30, 2007

    Japan*

    17289.30
    5.49
    0.03%

    Hong Kong*

    22739.90
    169.49
    0.75%

    DJ Shanghai*

    455.87
    9.65
    2.16%

    S.Korea*

    1906.71
    23.49
    1.25%

    India

    15437.90
    203.33
    1.33%

    * at close
    Sources: Dow Jones, Reuters


  2. Morning, all….

    Hope this translates into good fortune for us….

    Press Release Source: Cameco Corporation

    Cameco Reports Record Quarterly Revenue and Earnings
    Monday July 30, 8:00 am ET

    SASKATOON, SASKATCHEWAN--(MARKET WIRE)--Jul 30, 2007 — Cameco Corporation (Toronto:CCO.TO – News) (NYSE:CCJ – News) today reported record net earnings in the second quarter of 2007 due to higher realized prices and deliveries in the uranium business, offset somewhat by decreased electricity profits due to lower generation resulting from planned and unplanned outages.
    “Cameco achieved the highest quarterly revenue and earnings ever recorded in the company’s history reflecting the company’s core strength in the uranium business,” said Jerry Grandey, Cameco’s president and CEO. “We will continue to build on this strong financial performance in the future.”

    http://biz.yahoo.com/iw/070730/0283834.html


  3. if anyone cares to comment, I would appreciate it

    I’m long AAPL Oct 120 calls with a nice gain (I picked these up back in June.)

    I think AAPL still has of room to run in Sept/Oct, but is vulnerable to a pullback in Aug and I’m thinking about different strategies since I don’t want to close out my postion yet and would like to protect it some. I’ve seen comments about selling Aug OTM calls against Oct ITM calls, but I was wondering if it would make sense to use the proceeds from the calls to buy puts.

    For example, you could sell Aug 155 calls @ 2.05 and buy Aug 135 puts at 2.05. The prices are from Friday’s close and I would probably try to sell the calls on a surge into the upper 140s and possibly pickup enough premium to get the 140 puts intead of the 135 puts.

    Thanks in advance for your thoughts. I’ve already learned so much from reading the daily comments and I’m ready to start trying some of the new LTP calendar spreads.


  4. chix0r – You could roll your oct 120′s into jan 150′s.. you’d take about 12 off the table (probably all of your cost and then some) and the 150′s will have a lower delta (so they won’t drop as much if apple dives..) You’d also be buying yourself more time, possibly including dec earnings.. (though maybe not)

    plus, if youre up for the calendar spreads, the jan150 will give you more room to do so with this position.. though perhaps sell the 160′s, just in case apple gaps up one of these days..

    -Peter


  5. Zman Monday post up! XOM has it’s rally hat on with an AG Edwards upgrade in hand and 1.5 million shares traded before the bell.


  6. Thanks foto! That’s a good idea. I haven’t really learned when its a good time to roll forward.