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Monday Mourning?

Is it time for bottom fishing?

Not on a non-merger Monday!

Oh sure VZ bought someone for $757M and South Korea’s Doosan is buying Bobcat from IR for $5Bn but come on – what is that?  After the $100Bn we discussed last Monday (which gave us a whole 90 point, one day boost) we are pretty much at zero one week later.  The market likes BIG deals and we can not lie and the other bourses can’t deny when a deal comes in with an itty bitty premium then investors won’t be buying in (I can keep going but at this point you either get it or you don’t!  Click Pebbles for clues).

So the BOTTOM LINE is that the thrill is gone and without someone to show us the money, either in blockbuster earnings or on the M&A front, this is no time to be diving back into the market.  If you are ahead then this is a good time to count cash, watch sectors for signs of strength and select a second half strategy (see this week’s newsletter for our first sector pick), if you are behind, it’s a good time to be thankful for what cash you have, reviewing the behavior that got you here and looking over your losers for possible hidden gems.

Some of our biggest misses of the year are likely to be the second half’s biggest gainers.  That’s because I’m generally a fundamentals player so when a company we’re betting on misses, we don’t tear up our tickets and go home – we reanalyze, reposition and redeploy our capital looking for a better opportunity down the road.  As option traders, we are acutely aware of the fact that timing is everything and we don’t blame a good stock for going down nor do we get too excited about a poor stock going up – we just like go get a little ahead of the game and then go with the flow.

So this week we are going to shake it, shake it, shake our virtual portfolio and decide which of our babies are coming back (this song is going to be stuck in my head all day!).

Asia’s got back today with the Nikkei making a spectacular end of day recovery from an early 170-point drop and Hong Kong also got a nice, non-suspicious boost at the close much like our Dow is getting pre-market.  HBC, who started this whole sub-prime mess last year, came in with a strong quarter on very strong growth in Asia and, of course, investment banking as they took their share of this year’s $2T in deals.  After writing down close to $3Bn worth of loans last year, one could say HBC had nowhere to go but up and this will be another shining example of our theme for this earnings period: A celebration of mediocrity!

A small rebound is to be expected this week but I’m still looking for 13,600 (now pretty far away) before I can declare the market to be on the mend.  After the markets closed, China announced additional reserve requirements, now 12% ""to strengthen management of liquidity in the banking system and inhibit the excessively fast growth of credit."  So let’s take those Asian market gains with at least a small grain of salt.

The World’s economic leader, the EU, is trading decidedly down through their lunch session and it’s very hard to manipulate their markets (not that anyone would manipulate the markets but…. if they did try, it would be harder in Europe).  Something is going wrong with the $95Bn ABN bid, as the board has withdrawn its recommendation for both offers.  This seems exceedingly strange to me but does explain last week’s drop off, which must be a coincidence as no one would have traded this buyout target down 7% based on inside information – because that would be wrong!

We won’t know until this afternoon whether the futures action this morning is wrong or not but prepare for a fantastic celebration of mediocrity if the Dow breaks 13,400, which would constitute a weak bounce at best.  At times like this, I defer to our beloved Commander in Chief, who offers the sage market advice "Fool me once, shame on you, fool me — you can’t get fooled again!"  As with many Bushisms, there’s a grain of truth in the statement and I often caution the members that it is NOT our job to save the markets – nor are we going to miss anything by sitting out the first 100 points of a supposed 700 point recovery if it’s truly in the making.

Analysts are split as to whether or not the bull market has peaked and we are split in our virtual portfolio but looking for a nice pump today with the number (but NOT the value) of our calls exceeding our puts by 3:1.  Sadly our chart is not as pretty as used to be but all is not lost yet:

 

Day’s

Must

Comfort

Break

Next

Index

Current

Move

Hold

Zone

Out

Goal

Dow

13,265

-208

13,000

13,300

13,500

14,000

Transports

2,849

-27

2,800

2,900

3,000

3,250

S&P

1,458

-23

1,470

1,505

1,530

1,550

NYSE

9,508

-32

9,400

9,800

10,000

10,250

Nasdaq

2,562

-37

2,525

2,550

2,600

2,750

SOX

502

-10

480

490

500

560

Russell

777

-13

810

830

850

900

Hang Seng

22,739

169

20,250

20,750

21,000

22,000

Nikkei

17,289

5

17,400

17,700

18,300

18,500

BSE (India)

15,260

26

13,500

14,100

14,725

15,000

DAX

7,447

-4

7,300

7,600

8,000

8,200

CAC 40

5,640

-3

5,750

6,000

6,100

6,300

FTSE

6,211

-3

6,400

6,550

6,600

7,000

Let’s watch those "must hold" levels VERY closely but of course we’re going to bounce off them – that’s why I predicted months ago that those levels MUST HOLD!  If the S&P can’t retake 1,470 or Nasdaq and SOX slip out of our DIScomfort zone, then it will be time for a new chart – and you aren’t going to like the direction one bit so feel free to join the lemmings as CNBC et al tells you to BUYBUYBUY but I’ll be sitting on the sidelines for now, keeping tabs on where the money flows so we can position for the real action later.

Happy Trading drew up this Nasdaq chart and that’s going to be our focus for the day, I will be pleasantly surprised if the S&P gains 10 points but I’m certainly not counting on that:

nasdaq_7_27_07_weekly.jpg

Oil is still hanging around $77 and I’m still saying we are not going to get a market recovery with $3+ gasoline but ZMan and I have a cautious outlook in energy and are not playing it either way, with the exception of our Hurricane Lottery Plays, which will be out shortly in this week’s newsletter.

The dollar continues to squeeze higher and I will consider the market movements to be much more significant when that music stops and gold breaking back over $666 will be the first sign of a dollar turn back down.

Let’s be very careful out there today, if we turn down and lose our levels it will be Monday mourning indeed!

 


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  1. Phil, let the 55 CCJ September calls go all the down to .25 on the bid. Sell on the bounce, if we get one, or try to roll them to a later expiration date?

    Also, Phil, you ought to have Pfizer put a better looking woman in the Viagra ad. No incentive to ask your doctor for a prescription.

    Jazz


  2. OKLAHOMA CITY, July 30 /PRNewswire-FirstCall/ — Devon Energy Corporation (NYSE: DVN – News) announced today the commencement of production from its Polvo oil field in Brazil. Polvo was discovered in 2004. It is located on block BM-C-8 in the Campos Basin offshore Rio de Janeiro in approximately 300 feet of water. Gross production is expected to peak by the end of 2008 at approximately 50,000 barrels of oil per day.


  3. Surprised to see CROX gapping up 2% this morning with an acquistion. . I thought the acquirer normally trades down after a purchase. .


  4. Matrix,
    they only spend 1.75 mln… that is nothing compared to 4.4b market cap


  5. is anybody out there??


  6. Phil
    great peace on microwave oven theory.very educational. thanks.


  7. taxsniper, it’s a tender moment….market going lower?


  8. Buying and holding LDK earnings Aug1.


  9. Buying CFC 27.50 puts AUG. If AHM goes to zero, CFC could lose a couple more points.


  10. Back from vacation. I hope everyone did good last week. I did not get the chance to connect to PSW, but it was an amazing week: huge profits on CCJ and DIA puts mainly. I am out of CCJ for now, did not want to play earnings, bought some AMZN puts this morning following the Barron’s story.


  11. tender moments are precisely the time we need the collective minds of the people on this board. Those of us will a lot of cash left would like to see if anyone else sees any plays out there (other than pure gambles). I don’t right now, but I only follow about 25 stocks closely. But perhaps Phil, Happy, or any of 100 others have some NEW plays to put on today (long OR short). It would be nice to hear about them BEFORE we hear how well the trade went later. That’s all.


  12. Good morning!

    I had a super busy weekend so I’m way behind in comments, I’ll catch up by the day’s end but please post anything urgent back up.

    CCJ – Sept $55s? Depends what you paid for them. I’m rolled out to the Sept $50s with a 50% loss (my net is $1.20) and I sold the Aug $45s against them for $1.75 but I’m buffered to the upside by my Jan $42.50s which are down about 20% for me so far. Using the same logic I had then I would roll the $55s down to the $45s for $1 and sell the Aug $40s for $2.10 adding the Jan $42.50s at $4.35 but I’m in this stock for the very long haul so I don’t care if it goes down more as I’m building it into a significant position (maybe RTP decides they want to expand into uranium…)

    CROX – right, not when it’s a $1.75M acquisition! Crocs is going to apply their process to an existing shoe line which opens up some wild speculative possibilities for the stock.


  13. Taxsniper

    Your suggestion – out up 103%.

    I agree. I just bought a little more PFE sept 25 calls. FCX is moving up, but i am not there yet. NFI just did a 4 for 1 reverse (never a good sign) and MTEX just announced late friday eve 2-3c vs 32c and they are being investigated.


  14. GRMN time? Not sure got burned friday. earnings should be stellar but I think NVT is the first one up tomorrow so GRMN will move to NVT numbers on a tell.


  15. Phil can you give me another longer term play on LDK. TIA.


  16. where is the newsletter posted?


  17. Taxsniper con’t

    I am also looking to add more GME (XBOX 360 Sony price cuts) and Halo 3/GTA4 coming.
    Oil is up gas is down and the refiners are nuts.
    I am also very suspicious of WM (not that different from CFC) and they have opened up many branches in the past couple of years.


  18. Taxsniper,

    No new trades for me today so far, except for AMZN puts. I am keeping AAPL, ILMN, CELG, TASR calls. I have DIA, Qs, TSO, UAUA, PALM, BBY, MATK, and C puts. But these are not new plays.


  19. also, is the portfolio review available Phil?


  20. you would think there would be some short covering pushing the index’s up….?


  21. Lithium Rocketbottle
    GME- has really held up well


  22. Taxsniper,

    The only “newish” play that I am in is Happy’s NE August $105 calls from Friday. The cost basis is now less than what he paid ($3 vs $4), but he hasn’t sold yet. NE is up this morning, but I think that expectation is for a run if the market bounces. (Correct Happy?) So far, no bounce yet…


  23. Thanks Lithium, Optrader, and Optiondragon. I was thinking you all were still sleeping. :)


  24. I m new to option trade, but followed some advices here. Bought some Amzn, Bidu and Symb AUG calls what do you think ? Thx


  25. I am stuck in neutral in the STP, which is good but I’m going to have a very tricky time playing my vacation, especially with expiration day coming while I have a day at sea!

    New plays – not today. Of course I always say that before I see a bunch of good trades but so far there’s nothing to get excited about.

    XOM with crazy moves already!

    I’m adding SPY Sept $150s at $2.80 as they had good movement last week so they will make a good momentum cover. XXX


  26. Dragon,

    How did you get burned with GRMN on Friday? Did I miss something on one side of a strangle?


  27. Can someone give me a good NYX call?


  28. XOM getting hit (along with HAL) over Kazahk prime ministers ominous comments on the Kashagan development. Saying things like “breach of contract”, “appropriate measures”…

    XOM has an 18.5% interest in the Kashagan development in the Caspian Sea. Kazahkstan says due to cost over runs and delays it wants to boost it’s share of the production sharing agreement from 10 to 40%! This Putin, Chavez, Morales things is catching on.

    All of that is battling an AG Edwards upgrade this morning and more company buying.


  29. Erin disappointed with Jim’s outlook


  30. Sparkle- Got stopped out on the calls before i could buy the puts. the best was to buy the strangle at the same time and sell the puts on the big drop while still holding the calls for a free ride.


  31. For those with HK calls, JP Morgan upgraded to buy this morning. Gutsy move in front of earnings next week.


  32. I want to buy stock in a company that rents out holes in the sand for people to put heir heads in. Any ideas. Cramer all morning is not a bullish sign. He actually tried to pump the whole market Friday afternoon.


  33. where is the weekly newsletter posted?


  34. Rocketbottle – OSTRCH – I think that’s the ticker you want.


  35. VCLK getting killed


  36. LDK – you can’t go too far and the long calls are very pricey but, since you can sell the Aug $45s for $3.17 against the March $50s for $7.30 it’s not so bad.

    WB Optrader!

    Newsletter should be up tonight and I’d rather have us wait a bit before jumping on the oil group Z selected, especially as we are going to be spreading anyway.

    YRCW at 52-week low gear, GOOG searching for $520, XOM totally out of gas, AAPL’s movement bites, YUM getting tasty down here, BBY may be a buy (yes, it’s going to be one of those days!).

    JOYG may be signaling a bottom for our miners but that’s a stretch if gold can’t break back up.

    Phil – first I think you need to change your handle or it’ll be too confusing! 2nd, I REALLY don’t like you having a lot of unhedged August calls that expire in 15 trading days, very dangerous so unless it’s play money, you should possibly reconsider this very big bet on a Nasdaq recovery. I don’t know what SYMB Aug calls are – SYMC? Are you diversified? No.


  37. X is making a move, we never took the X and NUE trades from last week but they make nice recovery plays down here with the X Jan $105s at $9, selling 3/4 Aug $100s at $3.80 and NUE Jan $57.50s at $3.85, selling the Aug $55s for $1.32 XXX


  38. ICE- second nice day!


  39. NYX – I’m in the Jan ’09 $85s at 11.90, now $13.60 and I sold the Aug $75s for $4.30, now against half. You can still take the leap but I’d like to see it test $77.50 before I sold Augs if I were going in fresh but I wouldn’t let the $75s slip below $3.50 – If you are lucky, you’ll get $3+ for the $80s in a nice spike. XXX

    XOM – good time to buy those Sept $90s for $2. You can sell the Aug $85s, now $2.60 either immediately against half or as a downward momentum play if you are good at that stuff.

    Brokers coming back a bit.

    TASR zooming again!


  40. Notice SU not participating with the other oils. My comments from today’s post:

    Canada Watch: Here’s a fly in the ointment… The National Energy Board (NEB), Canada’s version of the EIA reports a Canadian oil pipeline bottleneck is looming. NEB says spare oil pipeline capacity will be exhausted in the fourth quarter and no new capacity will be ready for at least 18 months (that’s 2009 kids).

    ….And It’s Probably Not Good For (SU). T Boone is hardly back from China and what does he have to hear but that his favorite stock (at least if his money talks) is facing constrained capacity.

    * They’re scheduled to add about 85,000 bopd, or 32% to their production capacity in mid 2008 but NEB indicates that shippers will be forced to share capacity which translates into curtailment.

    * Their last presentation doesn’t really address capacity other than showing a map of pipelines coming down from the Fort McHenry area I assume to demonstrate just how much access they have to the the oil thirsty U.S. market. Unless they plan on trucking it about a million miles which I really doubt or figure out a way to stick it in all those half empty natural gas pipelines I don’t see away around them missing the capacity bump that all analysts must have in their numbers right now. No doubt this will impact all Canadian crude producers but I can think of now one more dependent on growing oil volumes that Suncor.

    * To be fair (SU) is a complex company with reaches in wind and ethanol and natural gas. But the market isn’t always fair and a pinch on pipeline capacity could very like put a pinch on profits.

    Cheap natural gas costs won’t matter if you can’t get the new capacity to market until 2009.


  41. Hello Everyone,

    Is SYMC going to recover? Any insight is appreciated!


  42. P – if you were going to take SU puts, which would you look at. I was thinking the Aug 90s if you can scoop them for around $3. These guys are going to have to address this capacity issue and there’s nothing they can do quickly. It’s like saying we need more gasoline production…nice idea but you’ve got to build the infrastructure which takes a long time. Here you need a big fat very long pipe. No way they get it added before 2009.


  43. IMB like a freight train. Tempting to take a last ditch gamble on these guys with earnings tomorrow. Anyone else think a good time right now to jump in (although I can’t imagine I make a penny on the Aug 30s I still own)


  44. Hi everyone!

    GSK – Buying back 4 of the 52.5′s didn’t fill last week but can be filled easily today (I’d expect on FDA expert calling for Avandia to be pulled). I’m not too sure GSK can recover by expiration. nor am I too sure of where your thoughts are on this today.

    The question is, do we fill or do we wait?


  45. Phil (Sr. ?),

    VIX options.. it would appear that one could buy may8 22.5 puts for 5.3, and sell sept 20 puts for 2.5. That seems like a lot of premium relative to the long term cost. I’m aware that VIX options trade differently (though not sure on the specifics). what am I missing? Sounds too easy.. -Peter


  46. Hey guys i had to be somewhere this morning

    I am holding 3 AHMTB’s I think i should be happy but are showing no value in myaccount

    I assume it will have to start trading sooner or later they can’t just close their doors and leave us out to dry can they??


  47. AAPL- just got hit


  48. UA- strong today


  49. 13236 is the June low’s. . if we take out that, sell orders will most likely kick in, won’t they??


  50. Portfolio review – I sent Jared a very large sheet yesterday with a folder by folder, position by position breakdown which is up if you click the July link under the portfolio tab. I imagine the format was too much to fit in our little on-line spreadsheet tool so I’ll also send him the regular sheet when I get some free time (maybe January!).

    Sadly there was not much gas in this rally’s tank- be VERY careful here. I am watching and waiting. If OIH is going down with spectacular sector-wide earnings, what’s the real hope for the rest? If I were not very heavily hedged with index puts I would be stopping out of things, even IBM and AAPL as this market is about as unattractive as I’ve seen it since Q2 ’06 when bad news was a disaster, good news caused a sell-off and great news would give a stock a 2 hour pop before turning back down. That was a 1,000 point drip but we’re 40% higher now so that would be 1,400 for a similar correction, right to my 12,500 target coincidentally!

    Not chasing those SPYs or X or NUE but I will leave my entries open to keep tabs on them.

    Hole company – I think the product is called Xanex! 8-)


  51. AAPL – Must have been a hit on the main engine, just failed 140.


  52. What is the short future of AMZN ? down to 80 ?


  53. CRYP – Anyone holding this on-line gaming micro-cap company, or perhaps interested?

    They got hit big last Oct with the US anti-gaming laws as expected, moved their HQ to Europe where they get 70%+ sales and say going to expand in EU & Asia. Earnings announce 8/7 and I think they have good potential to double in a year or so – sooner if they say nice things about their China partnership(s) & expansion there.

    See http://www.cryptologic.com/


  54. taxsniper

    I would like to go one step further and vote that you should only post your get out gains if you post your initial buy or at least suggestion. I think Karm wrote a very nice example of self evaluation this weekend, which is much more helpful than gloating (which we are all guilty of). Along with that, I see almost no losses posted except by newbies. That might because we all DD or roll until profit, but I doubt it. I had 5 worthless expirations that I can guarantee were mostly losses (occasionally, I let a small profit ride for free).

    I am up the past week but I would have been up more if I hadn’t been chasing index options up and down all week. I have stopped, and I have learned to avoid these for Mo purposes (not matress), until we get a clear signal or the word of Phil.

    This site is about leaning to fish as well as pooling information gathering resources.
    Just my 2c.


  55. It’s quiet. Too quiet.


  56. imho, kinda intellectually dishonest to only post winners or losers as you take them, as the portfoli NET P&L is what reflects your abilities. I could say I’ve made money every month trading just as easily as saying I’ve lost. The all-in NET is all that matters or that you should care about.


  57. Just sold 1/2 FAF Aug 50 puts. Hold the the rest for uber free ride through earnings. Thanks again Phil.


  58. Oh, I also Sold BSC and BZH Aug puts this am holding other HB’s and Brokers with longer durations.


  59. WFR – gettin’ a little jiggy and about time


  60. WFR- nice break thru $62. Can it hold? I am in!


  61. I agree, that is what makes Phil so credible, he lets it all hang out, the good and the bad trades, and we can judge for ourselves. These “let me tell you what a great trade I made” posts don’t serve any useful purpose, at least not to me.


  62. phil,
    i’m holding HBC Jan ’08, 85 puts, at a current loss of about 30%, and the underlying is up some today
    what can i sell against this position?
    thanks very much in advance.


  63. Phil -

    I’ve noticed in your LTP spreadsheets that the investments do not have transaction dates on them. I’m looking go invest more with that portfolio in mind, but am not certain which of these are really old or new positions that you would continue to recommend at these prices or not. Is there any easy way to help me out understand as a LT investor today which of these you would still recommend going into today, or more easily which you would not?


  64. is this the end of the world?

    The almighty RSH down big (> 10%).


  65. PHIL…. any thoughts on a near or long term bounce in VCLK?


  66. codydog

    The point is not to display your performance, but to give others ideas for trades and give a slight indication of “why the hell anyone should listen”, based on your public track record. For example BBD constantly post oil trade opposite to mine so I know how he is doing (which is invariably better than me). So, I should listen to him, I don’t care how he does his overall portfolio. although, I always hope well.


  67. PHIL and Optionsdragon

    Phil in the earnings rund down on Friday regarding NMX you stated
    “NMX (should be huge, $135s are $2.80), “——--

    Between the record volume, ICE post earnings recent performance and the buy out rumor this position is screaming buy at me —--when it screams like that I of course get nervous—

    I am assuming from your comments that your bullish on the stock into earnings—

    What am I missing when I look at this and see a quick run to the 140 level—--

    Please let me know what your expectation is post earnings and the tepid action today in the stock—

    Thank you in advance


  68. SU – my problem is I already have the Sept $85 puts at $2.55 and they went down so hard I sold half and never bought more because I didn’t want to chase. Going on the premise that they have long-term structural issues that will hamper their growth (projected at 25% by ’08) and allowing for the damage that a hurricane and high nat gas prices could do to their operation, I do like the Dec $80 puts at $3.50, hopefully selling the current $80 puts for around $1.50 on a nice down move.

    IMB – what a tragedy! This is what I get for listening to a company officer. At least it’s a $5K lesson I won’t forget… I’m almost tempted to take some more but they need a 50% gain to put me back in the money at this point. This is why I am usually skeptical of EVERYTHING, the CFO could not have painted a rosier picture and the stock is off 50% this month.

    GSK – I’m in the same boat – filling a little too easy, makes me think I want the .40! I’m following through though as this explains the sell-off. Never think that you are hearing news first, now we know why GSK got hammered last week and they are already down 10% which is a major overreaction to the pulling of a $3Bn drug (that is already off 22% in sales from last year on this “news”) from a company with $45Bn in sales. I’m actually inclined to roll my caller to the $50s but I’m following through by taking 4 off the table and waiting to see which direction we go. We have November at a $1.20 basis so if the $52.50s expire worthless we are in good shape if we just hold $50 but I’m not too keen on selling more calls if the stock is holding up as the company is going to bat on this one and evidence does not look compelling ENOUGH to warrant more than a black box warning.

    VIX – like shooting fish in a barrel sometimes. Sustaining a V of 20 through September would require an average of 100 points a day up and down (and they would have to alternate), surely we would be very dizzy by then! What’s different about VIX options is you are not optioning anything, there is no underlying to give you. You are betting on the score of a game and you either win or you lose. I’m sitting on the Nov $13s at $2.40, now $6.30 and I wish I had loaded up the truck when it was down there. I’ll be selling the Aug $22.50s myself for $1.40 as I’m not worried about losing too much on my leap and I’ll feel VERY safe selling the $22.50s 3 weeks out (and if I lose there I’ll probably make a million off my index puts and calls anyway!). That was my original premise in buying the VIX – I was considering using it as insurance against my DIA strangle at the time NOT making any money so the closer VIX calls I sold would offset the potential LACK of movement in the markets.

    AHM – nice call Lib! They should be up now.

    Sell orders may have been revised down a touch but we can’t afford much more damage here for sure.


  69. RIG- going out of business today? I am getting very interested


  70. TIE –

    Plays into earnings??


  71. Case in point i just sold half my WNR sept 55 puts, because BBD is in.


  72. Sorry Lithium. I certainly was NOT gloating. Lost on most plays as I am the eternal bull and my bears usually don’t play as well (CC and GM both bit me before finally going down). In fact in the last 2 weeks, lost on almost everything, except AAPL and new POT, both of which I have tiny positions in. As I am a momo player (I do NOT do long calendar spreads but DO occasionally do short term vertical spreads), I got burned on many new or DD positions. Many. CCJ, GS, NMX, etc. In many cases, DDing and turning nice gains into big losses, finally taking lumps and getting out. Can’t guess the end. Should have gone on vacation. Point is, I LOST but am still looking for new entries. I look for long plays, that’s my weakness. I USUALLY manage positions extremely well. My entries are actually my biggest weakness. That’s what I am hoping to get guidance from others here. Unlike many here, though, I do not want to invest in most of these companies, so long calls are NOT for me. Taking the real estate analogy from Phil, I made my money mostly as a real estate developer, even though I still have a tax practice. I occasionally held real estate as rentals. While all that makes sense, there is INCREDIBLE risk with holding real estate and I vowed I would NEVER own rental real estate again (although I have since modified that to residential rentals). Point is, I really don’t trust ANY company well enough to hold their stuff longer than a couple of weeks at a time, so the calendar spreads just don’t work for me, against my judgment. So I am stuck with momo plays and that does work for me. I just like catching entries as early as possible, so I look to intelligent message boards for entry clues. To repeat, I LOST $$ on almost everything the last 2 weeks, sold out (I don’t use real stops, but watch them closely), pretty much lost all my account gains back to early June, which was a LOT of money (I let my position sizes get too large on the DDs), and now am looking to start over. I feel like my house burned down, got the insurance money, lost/paid my deductible. Not quite whole financially, but hurt emotionally (having let myself lose a lot of gains). Ready to rebuild now. That’s all.


  73. mj23 I sold my RSH Aug 30 puts on Fri 7/20 (for a small loss) along with my XLF Aug puts and FTO Aug puts, because I was out of the office for a big work event most of last week and didn’t want to leave any Aug options naked while I was not able to monitor the markets. I am a PUTZ.

    Jobs can be so darn inconvenient!!!

    Greg


  74. COH up nice. Earnings today after the bell.

    No dead cat bounce in sight, endless selling continues.

    IMB, CFC, BKUNA, PMI nice.

    I think AMZN could get to 100 now faster than expected after the confirmation from Barron’s recommending sell. Thinking of nibbling some calls.


  75. taxsniper

    I didn’t think you were gloating I only used you tag to maintain continuity other the thread. I fully support your original suggestion.

    I just bought some more AAPL Aug 140 calls before a further plunge. Trying to catch a falling knife only works if you are willing to DD and roll.

    I am obviously trading to much today.


  76. Dow sitting on the fence right at 13250


  77. RIG
    BBD, you’re funny!! I think we’re almost there!


  78. Phil
    I am new to trading the vix (I tend to stay away from bets where the house gets to tell me if I win :) but I really like the logic behind your trade. looking at the contracts, however, I am confused. The vix is quoted on my screen (through interactive brokers — symbol vix) as 22.73, but the Aug 20 calls are priced 2.05 bid / 2.10 offer. This must be wrong unless without an underlying to hedge against the options can trade below their in the money value. Or, am i looking at the wrong index? Thanks in advance for the help.


  79. Greg, I have a very small position in RSH Jan 08 25 puts from 3-4 months back. I try not to buy near month options on stocks with BS fundamentals.

    ———————————————————

    If they are so confident about oil prices, why the heck do they not sell like Jan 09 or Jan 2010 options on USO.


  80. PII the gift that keeps on giving …. stops raised

    still waitin for that AHM


  81. slowhand -

    The VIX options are the european kind, they only exercise on expiration which explains for their price being indirectly connected to the underlying. They get closer to the real value as expiration nears.


  82. Lithium--I couldnt disagree more with you. If someone has a great track record because they used leverage in a bull mkt, their performance sparkles now. But the same trader is decimated in a down mkt. Thats why ALL trades on a mark 2 mkt count at the end of the day, not just the closed out ones.


  83. Dow coming close to 13236. . . could open the floodgates to technical selling in my opinion. .


  84. FFIV
    is getting interesting also!


  85. mj23
    COH- earnings tomorrow before the bell Just and FYI. Yes I am long shares and NOV calls. Full disclosure for people with the scorecard


  86. Phil,

    I have the XOM ’09 80′s that I sold the Aug 90 puts for $2.5 last week but I was thinking I should roll these down to the Sept 85′s to pick up a lot more premium as the IV is very high for XOM right now and may drop off. Your thoughts?


  87. I don’t mean to be harsh here, but following someone advice about entries without having a plan is a sure way to lose money. Following someone because of his/her track record is not much better, as you don’t know when they will exit, what is their position etc. In fact I believe that posting entries/ suggestions here is useless for the most part. If you are looking for tips, what will you do when this site is not available anymore? Look somewhere else?
    It’s great to look at different ideas, but you need to have your own plan to succeed in trading.


  88. thanks BBD. I thought I heard on CNBC that COH earnings today after the bell, but you are correct, even yahoo finance says it is tomorrow before the bell.

    ==========================================

    Recently I learnt about COT, some of you might already be familiar with this. Here’s couple of blogs which closely follow the weekly COT reports.

    http://garyscommonsense.blogspot.com/
    http://cotstimer.blogspot.com/


  89. Happy--you’re bullish on FFIV?


  90. XOM looking like a flush – I’m DD on Aug $90s at .55 but half out at .80 (my new basis).

    AMZN – We have a specataculr bear call spread off earnings that should net 100% on the Aug $85s we sold and that’s the only play I made as I just don’t like them with a p/e of 113 (was 125) in a less than enthusiastic market. If they go back to $50, I’ll take some leaps but between here and there I wouldn’t want to guess them either way. If it weren’t for Cramer pumping them for all he’s worth (as he can’t have one of his horsemen make him look like a horse’s ass) I would just be short on these guys but his people will buy anything so I’d rather avoid the middle ground.

    Good point Lith – index plays on the mo side are way too dangerous for most and ridiculously dangerous for people who can’t afford to spend extravagantly to roll into a strangle when they are wrong. I meant to get to that over the weekend but we need to differentiate protection from playing. What happens to me is I take sensible protection but then it goes so far in the money I allocate a % (usually about 25%) to riskier index momentum plays. The way things have been flying it’s been wildly successful but that is LUCK, not skill and the next turn of the market roulette wheel could cost me $50K as easily as make it for me if I continue to take those risks (which I’m not as I’m now at 300 DIA $134s, which I will NOT roll for .60 (.30 yes, .60 no way) against 100 $134 puts, 150 $135 puts and 125 Sept $138 puts that are all way ahead. The calls are essentially a cover and I will take the Aug puts off the table if the markets really show me something but with AAPL, IBM, OIH, SNDK and XOM down – I’m not really feeling a recovery just yet. You are very welcome on FAF by the way!

    WFR – 4th attempt in 4 days at $62 – not what I’d call an entry point unless we get a break over!!!

    HBC – I’d wait for this sell off, maybe add a few while they’re cheap and then look to sell the $85 puts for .50, putting you back to even but scale into the sell as you may luck out as they retest $90 as there are still real concerns with the increasing line of foreclosure write offs. What if China sneezes, that’s where ALL their good numbers are from. We already know M&A may not last forever so now we’ve knocked out 2 legs of their chair (let’s hope it’s not a stool!).

    LTP – my bad, I erase the Age column because it’s broken and I erased the wrong one last week. I will fix that by weds and upload new sheets but you can also go back a month and pick them up now if you need. The best entries are the ones we DD or add to. I just reviewed half of the LTP 2 weeks ago and I was going to finish but the market went nuts and I had no idea what I wanted to do with the other half. Being frozen to inaction and having no clue netted me 10% in the LTP last week so I’m thinking of adopting it as a new strategy… 8-)

    VCLK – missed earnings, lowered gudance 5%, hits the stock for 25% – this is a VERY unforgiving market. It’s almost time to short anyone who is about to report! Waiting is fulfillment and if you have to go read “Stranger in a Strange Land” to understand that statement then take the time to do that before you go jumping in on ANY stock that is selling off right now.

    Selling GOOG $500s for $23.20 as mo plays against 1/2 my current open GOOGs. Stop at $25, hoping for $3+ but very tight .50 stops after $2.50. XXX


  91. codydog

    That is why I I would only follow that trader when they are in their milieu. I follow Phil when I am bearish oil and BBD when I am bullish. I rely on good mo stock pickers (Happy) during a melt up and defensive players like libertarianwackjob during this kind of plunge. His puts will cook me during a bounce back. Others I follow for specific picks (Karm, Dragon, Juliet is prescient, Opttrader, Cap, Dom on macro, Msquare for Indian stocks, Z for enegy and many others. I agree with you in terms of the CNBC money game but it doesn’t help me here, because everybody has different base account values and starting positions. Ask anyone trying to follow Phil’s picks from a fresh start. Again this i just my 2c being shared to try and help everyone not decide who is the best trader/investor/gambler.


  92. FFIV
    should go higher, but, let’s make sure that the market does bounce.

    ISRG
    really wants to go up today!!


  93. GSK – Covered the Aug 52.5′s @ 0.35, still have 5 of the Aug 50′s sold against the Nov 52.5′s.


  94. hey guys im pretty new at options. can i get some help? i just put about 2080 bucks in my trading account right now. im looking for a limited risk limited reward strategy. can you guys point me in the right direction. you guys know all kinds of stocks and have knowledge on what stock would best suit what i am looking for at the moment. i have been checking PSW for the past week but i havent really had time to get into options yet. what is something relatively cheap (commision wise) and simple that i could do. would something like a bull put spread or bear call spread be good. i like the idea of getting a credit for initiating the spread. thanks


  95. NMX – it’s a stock so we don’t like it today but they are on track for 50% y/y gains and projected for 50% next year with fairly low expectations considering. There are 11 holds and 2 buys on them as no one is backing the high flyers anymore but a p/e of 60 with that growth isn’t too bad of a LONG-term investment. Someone will pay you $3.80 for the $130s and you can buy the Mar $140s for $10.55 with 6 months to roll high premium calls. If you do a 10:7 ratio you should have enough per contract ($2.66) to be able to roll down to the Mar $135s and possibly to the $130s for a small additional charge (which you would offset by selling more calls). So would you like to either buy the March $130 calls for $9 or possible end up with the $140s at $20 (after paying your caller $10) with the stock at $145 after gaining 20% on an earnigns jump? If both of those scenarios sound pretty good then it’s a BUYBUYBUY! XXX

    RIG – I have got to be MORE relentless in my DD and rolls! I let go of RIG and FWLT WAYYYY to early. I like to say take things off the table and don’t look back by COME ON! – These things would have made a fortune!!!

    TIE – I have my Sept $35s, even at $1.50 and I’ll take my chances.

    Speaking of OIH, I’m back in the $185s at $2.35 as a mo play. XXX


  96. Lithium--are you familiar with what a Sharpe ratio is?


  97. Did anyone else switch to longer term charts per Phil’s advice from a while back? Used to look at 5 min charts and get cross eyed from all the zig zags, now the 1 hour is my friend. Far fewer headfakes.

    3 longs for earnings from super smart people here: COH, TIE and SIRI. Good index put protection, of course! Still loving the oil puts I got left! Will add some more puts assuming we ever get this dead cat bounce.


  98. sahaida,

    Let me throw out this warning. You will most likely lose that $2080. This is what I tell people to do who are starting in options. CONSIDER THAT MONEY GONE. If you are able through skill or luck to get up to $4160, then pay yourself back your $2080, then do it again. If you have the knack, you will, but trading options is very difficult, and usually requires some stiff tuition in the form of sudden losses that you later regret taking.

    So, my advice is to make your first purchase for about $1000 in something in Jan-08 or later and try not to lose the other $1000. Other than that. I say buy Happy’s picks. That guy has been on a tear.

    Oh yeah, and AAPL is the best bet in the market. And it should peak at or near October earnings.

    Which reminds me. Don’t hold through earnings. Make money between earnings is the most reliable way to make AND KEEP gains.


  99. QCOM having a great day


  100. codydog

    Yes, and I use it to determine what goes into retirement and estate planning. I just don’t use it for trading options. I am not sure what you are suggesting for this site. Everyone post 10 year annualized gains and decide who to listen to based on that? I agree with you 100% for asset management and mutual fund selection, but how do we apply it here and for what purpose?

    Optrader

    I also agree with you 100%. But I can’t expect anyone but Phil to post that info. You have to have you own methodology based on risk aversion and resources to determine exits, stop (hard or soft) hedges etc.

    We are here lo learn from others not simply follow ev


  101. NFI

    anybody know if theres a way to open a new put position?

    They just completed a 1-4 reverse stock split giving everybody a new chance to dog the stock
    can’t get any standard quotes Thxs


  102. phil,
    thanks for the HBC perspective, i really appreciate it.

    sahaida,
    flimflam’s advice is great! i’ve both made and lost a LOT of $$ and still feeling my way around after alot of time, energy, and money invested. and this is the most uncertain of times.


  103. NFI – the only options i can pull up are jan ’10. strange.


  104. libertarianwackjob

    I would love to know, I had a position that I would like to add to but can’t get a quote on because of the split. This is a free lunch. My exit strategy is to sell when the are bankrupt. I had 10 NFIMU before the split now it looks like 10 NJKMU but the numbers are FUBAR.


  105. Happy I love ISRG too but trying to watch the premiums, watching BIDU too. The new IBD 100 list is really interesting.
    TOP ten
    BIDU
    BTJ
    VDSI
    FTK
    RIMM
    HDNG
    AAPL
    POT
    VSEA
    ISRG
    PCU
    NOV
    #13- ACH

    I would avoid shorting high growth tech companies like BIDU. Fund managers value growth even more now that there are less of them around. So the companies that have double digit growth left flatline and could go higher esp with skewed floats/short ratio after the correction. They’ll pullback less and be bought first.


  106. Phil Thank you for OIH! Your the man!!!!Great buy point.


  107. sahaida,

    I’ll second flimflam’s advice as well.. plus, given you’re 2k starting capital, you’re limited to either making wild bets (very low chance of payoff) or a single $1-2k investment in something longer term. Anything beyond that, and commissions will eat you alive..

    also.. the folks on the board, including phil, aren’t in the business of telling anyone what to trade.. We’re just sharing ideas, exposing possible opportunities, and trading for ourselves. The decisions are all yours, and given what you’ve said you may not be ready. Please be careful!


  108. WFR

    Phil, any thoughts about entering into a Jan 65/Aug 65 ($6.9/1.2) spread with breakeven @ $60/72. I would like more premium for downside but it’s held up very nicely the last week.

    thanks .. Brian


  109. Taxsniper – other than close verticals where I’m playing for a volatility crush, I do not like getting in and out of spreads short term. You give up too much on the entries, sacrificing the bid/ask spread plus commissions on your leaps AND the calls you sell. I warned people of this when we first set up the $10KP for this round as the spread nature of the portfoilio guaranteed us a bad first month. It was way worse than I thought but sticking with it has allowed us to overcome the devestating hits we took on DIS, MO and TWX but it’s all about patience! Imagine you are a landlord and you rent out your space but ever few weeks you kick out your tennants, give them a full refund and their deposit (premium) back and then leave it empty for a few days while you try to get a better deal. I’m pretty sure you know the result of that strategy!

    Damn another British PM that makes Bush sound like an idiot by comparison! He’s organized, on message, he’s got a point when he talks… it’s amazing…

    VIX – there is NO (NONE, NADA, ZIP) “value” to the VIX, that’s why you’re not getting your full value. You are simply placing a bet with a bookie on what number the VIX will hit on Aug 18th and the bookie is taking his cut off the top. What you’re saying is kind of like being surprised that taking both sides of a football bet will not guarantee you an even payout (in fact it guarantees you a loss). What get’s me is how this is legal but not other forms of gambling becuase that is all this is, you are wagering on the line on a chart hitting a certain point on a certain day so all you can do is place your bet and shout “come on 20″ whenever the VIX comes around the clubhouse turn.

    Bull/Bear – that’s why I generally post our 1 week performance. What good does it do someone to see how we did all year when they weren’t around? I think you’re only as good as your last trade because the strategy that worked last week (long integrated oil) may be fatally flawed this week due to the weekend’s changes. The only constant in the market is you have to be quick on your feet and the danger of these long bull runs is that even the most sensible traders tend to get sucked into more length than is prudent as no one wants to miss a big party. That’s why I wrote that James Bond investing article a few weeks back, we’ve been acting like Buffett since March but the time had come to start assasinating our positions, not to form lasting relationships.

    XOM – ’09 $80 puts I take it. Yes, if you can afford it, absolutely push your caller $5 away from the money for another $1.50 in premium. I’ll be selling those myself if XOM gives us a good bottom but I covered with the Aug $90 calls and Sept $95 calls instead so I could let my leps run if it turns lower here.

    COH – very important they do well because if people think the rich are cutting back it could really hit the fan.

    Speaking of fresh starts – what do you guys think of me starting portfolios from scratch when I get back from Vaca? I’m thinking $200K, $100K, $25K and $10K along with the LTP and stocks. I’m not going to redeploy that cash back into the market anytime soon and I’ll just wind down or move the other positions depending on if I like them or not.

    Speaking of the LTP – untouched and up 5% today – totally out of control!

    Welcom Sahaida! I would recommend you NOT trade anything for a while and just paper trade some of these spreads in a virtual account. You will be shocked at how long $2,000 will (or won’t as the case may be) last you. Most credit spreads are far too risky for a small account and also require a level of margin you are unlikely to have. If the $2,000 has value to you, then take a month to read through our last month’s worth of posts and comments as well as the Education and Strategy section of our site. After that, any question you still have is likely to be a great one but I’m scared to trade with $2M sitting in cash, I can’t even imagine what I would want to buy with just $2K. Practice, practice, practice and then, when you are ready to trade, practice again – then you are ready to lose your first $1K! (I wish I were joking but that’s pretty much how it goes in the beginning).


  110. libertarianwackjob

    i forgot to thank you for MTEX. I bought a bunch of puts when you pointed out the investigation. Did you see the earnings?


  111. Hi Alfamike:

    I am trying not to look at anything less then the 15 min chart now on any short term trades I am in (none right now).

    I am mostly cash now and looking for new longer term trade opportunities so I am spending a lot of time looking at longer term charts, two year daily and 5 year weekly. I am looking at previous corrections and they all take weeks to months to play out, often in an ABC type of wave pattern. It appears (to me) that if this is a correction and not just a dip, then we are still in the A wave, with a B wave rally to come before the bigger C wave down (possibly in Oct).

    I am looking for a few shorter term long and short plays if the B wave starts or if the A wave continues, then some longer term short plays for the C wave, and finally some long LEAP plays (new leaders) for when (if) the long term bull trend continues.

    Greg


  112. China and the multi nationals definitely leading the charge to the upside today…

    TEX LFC EDU CHL ACH etc


  113. AHM still not trading


  114. Can anyone with knowledge lend support to my gut feeling that today is the perfect day to rally as people (like me) stumbled into pattern day trader status and have to wait until tomorrow to chase and IRA’s are waiting for settlement and 401K reallocations have their own delay? That was a monster of a run-on sentence, but you get my drift.

    Also, since I am an AAPL perma-bull and just sold my Oct 160s for security and to have cash (that I cannot deploy until tomorrow), I figure that has to be a bottom for AAPL.

    Thx


  115. Phil

    LTP how much would yo say is IV spike?


  116. Phil –
    Re: British Prime Ministers that make Shrub look like an idiot.

    That’s the norm given they have to survive that PM Q&A thing they do once or twice a week. Can you imagine Shrub in the well of the House taking general questions from any congressman for 90 minutes…on live TV. Anyway, back to our regularly scheduled programming.

    AAPL – Hold a couple handful of OCT150′s…looks like a good time to roll them down to OCT 145s and pick up 5$ in position for 2$. Make sense ?

    Thanks


  117. Phil, I think that starting a few new portfolios would help some of us newer folks who are trying to select the best stuff to start with out of the 10KP, LTP, etc. I’ve been here for about a month or so, mostly reading and learning. Only using 2% of my portfolio on options now. It may be several months until I want to expand into more, but the path would be easier to follow if you were to start up a fresh portfolio or 2. :)


  118. I would love to see a 50K and 100K portfolio.


  119. NFI – great logic Windy but they already got whacked down to $13.64 from about $16. It might take a day for the options to be reset on these guys.

    OIH – it’s amazing what you can do with a 10 min chart!

    WFR – If you have the margins for it I’d rather see 1/2 as many Jan ’09 $70s at 12.45 selling either the Aug $65s for $1.25 or the Sept $70s for $70, which you can always roll down on weakness (again, assuming you can swing the $5 margin spread). I would buy and wait a bit as I really think this is a bottom for WFR unless the market drops another 500 and even then I’ll buy/roll them at every stop on the way down.


  120. Phil, The Aug VIX expire on Aug 22.. Seems to be the wed following standard expiry.. or more accurately the wed 30 days before the next expiry..

    https://www.cboeoptionsinstitute.com/micro/vix/VIXoptionsFAQ.aspx

    I’m still wondering if calendar’s would work with them.. buy may sell sept.. but given the underlying doesn’t exist, I’m probably not allowed to use the long term ones to sell against..


  121. ISRG
    flying!!


  122. There’s the AAPL gettin’ saucy. Even looks good on a 60-min chart. Would be thrilled to buy it when it dips to 141.40


  123. LLL, BA, LMT, defence sector running…GD about to breakout


  124. Phil

    NFI – So if I want to book some profit on my puts I am SOL for several days.


  125. Phil – I’d also like to see the addition of a 50k and 100k portfolio.
    MICC – waking up


  126. Phil --

    Very interested in seeing a new 10K and 25K portfolio. Thanks.


  127. Sahaida, if I can add a follow-up: Since you can only play with one or two positions. Find one that you know. If you understand the business, can see what other people can’t see, that will give you the faith to buy when it is selling off, because if you are always buying options on breakouts, you will not be successful.

    For me, that is AAPL. I have been trading it options since before the iPod and I have been trading it successfully only for the last 18 months. (What can I say, trading options is hard). What I know is that when you are the number one manufacturing-design, marketing, and GUI-design company before a hardware upgrade cycle, you are going to do well. For me, the next out point is when people figure out that pretty soon, buying a mac to run vista will be a very easy and obvious solution. I lose money on nearly every other position I hold, but luckily, I overweight AAPL.

    If you can’t find one stock (or index for that matter) that you can’t pick the bottoms for, you are only going to make money on lucky guesses. Sorry.


  128. Greg – yes I’m playing same game with that long term view – a bounce right now (good for closing out Aug calls etc) followed by more bearishness – I like your technical analysis.

    I’ve got QQQQ Aug 50 calls that I’d love to sell this afternoon on a pop.


  129. Phil, Need some advice regarding KO : I have Jan 50 calls and sold Aug 52.5 calls as cover. Now I’m up $1 on the sold calls. Should I buy them back and resell the Aug 52.5 calls once they go back up or just let them ride till the August expiry? Thanks


  130. Flim – your pattern day trading idea is very interesting BUT, since this effects people with less than $25K in their account, Fidelity investing or divesting 1/80,000th of their fund in any sector would wipe out the individual decisions of 1M of you guys (sorry about the perspective but we are all ants on a football field in this game).

    Mission accomplished on my XOM calls! Very relieved to be dumping 1/2 of them, totally out if they hit .60 again. XXX

    LTP – Pretty much all of it is IV spike – not today per se, but the 10% move last week in general. If the VIX cracks 21 I better sell close calls while I can on remaining open positions because it will also mean my index puts will need to come off the table assuming my VIX theory is holding up (that down is the wrong, hence volatile direction for the market).

    New Ports – I’m leaning towards it because I never intended to have such a big portfolio, it’s just an accident of a really good year. Somebody sold some Dec 2014 oil for $67.07 last week and I must say I’m tempted to hedge a little over there at that price and nat gas is starting to look attractive down here so I have reasons to diversify a bit. Hopefully in the fall we’ll be able to add the club portfolio to the watch list…


  131. Phil

    DIA/QQQQ etc.

    It would be great if you could distinguish between mattress an Mo plays, especially on volatile days. I had been buying protection on every 100 point DOW move in either direction, but for a while you were doing the opposite. I then would sell of the position because I was a little panicky and didn’t stick to my plan, but you are the master. I am not sure how to reconcile. Maybe a new set of letters (ie xxx) for mattress plays.

    Do you have a technical level we need to hold before adding more puts ala yesterday afternoon.


  132. MICC-k e y M-O-N-E-Y

    (gonna have to be over 50 yrs old to get that one!)


  133. phil,
    i would love brand new portfolio’s, as i’ve had great difficulty in entering existing ones, and very few new positions were initiated.
    thanks very much!


  134. Phil, My account is 100K and they are still holding “over-night holds” that are sold until the following day.

    I thought this was BS, but they said that if you do the 4 trades in 5 days, that you have to be a PDT and that they always hold sales until the following day. This is E-Trade, btw. Is that a load of BS?


  135. Chiming in for the new ports as well. I think a bunch of us realized last week that we need to follow an LTP strategy, and it’s hard to pick out the long-term plays from the comments. Having the new ports to study will give us (me at least) a chance to pick a new position or two to manage.


  136. Taking advantage of the bounce on AAPL to buy protective puts against my Leaps.


  137. new porfolios would always be helpful – thanks phil

    sahaida – i’ve been trading options for about two years now – am self taught and would agree
    that practice, practice, practice (paper and with the real thing) is really important. for me, being completely at ease in front of the computer makes all the difference in “the heat of the moment!”


  138. Selling 2/5 IMB Aug 30 puts for 80% gain and mostly a free ride into earnings.


  139. Sahaida – I’ve found a “papermoney” account on ThinkorSwim very helpful. Trade all you like, make a buncha mistakes, and don’t lose your own dough. They only take a couple minutes to set up, download the software, and get to it.


  140. VIX – I did not know that, I always roll them on expiration day… Thanks Foto! I’ve only gotten burned one month but a week later I was good (probably would have done better if I knew I had extra days) but, again, I entered at 12 or 13, not 20!

    Go SPY!!!

    NFI – SOL – probably. You can call your broker and see if they are trading but if he can answer that question without consulting a specialist I’d be impressed.

    Defense sector – yes, should have caught that one, happy days as Bush and his new pal Browne stick to the “endless war” script that keeps those companies humming.

    $50K, $100K portfolios – not ADDITIONS, that will be the new set up. No way can I run more that 6 portfolios!

    KO – I dumped them the day that heart disease story came out. Up over 50% means you should set a stop if you lose 20% of your profits, or about .20, which would be a 25% move on the option – pretty significant. $1.05 would be the high for the day but they were down to .60 earlier so a more conservative trader would have stopped out at .85 (20% retrace from .60). When in doubt, sell (or buy back) half would seem to apply here – funny how that works isn’t it? My overall take on KO and PEP is they are still soda comanies and they will take a hit this Q because I’ve seen a pretty good cross section of people who are influencers (event planners, communtiy leaders, school board people) who were very concerned about this and I’m already seeing my community change the menu away from soda at functions – will it last? I don’t know but it was enough to put me off a long-term play here.

    FIZZ also got whipped so hard on this news I don’t know if it will come back, despite excellent fundamentatls. JSDA also being killed. PEP is more of a snack company than KO and they’ve been holding up better but I’ve heard nothing contrary from the soda cos so I think this may have long-range damage.


  141. Phil
    I too would like you to start new LTP portfolios. I have been with you for just about three weeks. I have learnt more here on this board in that time than the two years I have been trading. Your education section is excellent. I have learnt to hedge in a way I never knew. I am reading OptionSage’s ebook so that I can learn some advanced strategies and would recommend everyone to read it.


  142. Phil, we don’t want you spreading yourself too thin focus on less if you’d like and then add the club portfolio.


  143. Phil,
    I love the idea of new portfolio as I am new comer and hard to follow existing one that have already been established a while back.
    Also, is it possible to keep a more accurate record of the portfolio spreadsheet? I found a number of misses and some of the current price is not updated as well.


  144. Cool thanks Raffy!

    Mattress plays (we need a permanent post for this): My initial goal is to protect 1/3 of what I think I will lose if the market drops 200 points overnight. This requires you assess your own portfoilo but an easy (and not 100% reliable) way to do this is to simply write down your value and log the Dow value. Then every 50 point change, write down your portfolio’s new value and log the Dow value (or whichever index you are going to use to cover). Once you see what you are going to lose (say $30K) then you need to figure out which current DIA (for example) position has the best movement. Right now that is the $132 puts, which gain .40 on a $1 DIA move up and lose .30 on a $1 DIA move down (looking at the surrounding brackets). On a $2 drop they should gain at least .60 so that means I need 16,666 contracts or 160 DIA $132 puts to cover the downside on 1/3 of my exposed portfolio.

    Step 2 is that I may see that but I will, of course offer $1.90 for 40 contracts and wait a bit to see if I get it – every nickel is critical here. I will also, of course, try to time my entry for a top (pretty much right here) and then pick up 1/2 of my target amount before it gets too far from the LOD so, as I’m writing this, I would have just pulled the trigger at $2. Don’t forget I KNOW I have upside protection on this position, so there is no harm to buying these at any time, other than sacrificing a % of additional upside profits. Once I’m in at $2 I would fill the other half at no more than $2.30 as that would be less than 10% (aggregate) more than I intended to pay in my initial calculation for the full 160.

    From that point forward my goal is to STRANGLE the Dow by rolling up a notch and even adding more contracts on any run up as well as our standard mattress strategies on the way down. If you keep in mind that this is INSURANCE and you act pleased and surprised to be able to take 20% profits off the table then you may end up with a whole lot of free insurance and, if you are not greedy on the upside, you may find yourself with an accidental windfall when disaster strikes and you collect on your policy.


  145. phil do you buying puts in cfc is the way to go looking at ahm or is it to late


  146. ZZZ-any thoughts on SWN?


  147. Phil,

    I have a different take on your portfolios. Different dollar figures ($10K, $100K, etc.) mean different things to different people. To some, a $10K options portfolio is a minuscule fraction of their entire investment portfolio, so they may want to be very aggressive in it. But to someone with $10K total, if they’re putting it all in options, they should be much more conservative.

    I’d be much more interested in portfolios aimed at specific levels of aggressiveness or trading strategies. For example, perhaps a few portfolios something like this:

    1) Long-Term-Conservative: With holdings like LEAPs against which near-term calls are repeatedly written, a few stocks, and an occasional naked LEAP or spread. Such a portfolio would require minimal maintenance.

    2) Moderately-Aggressive: LEAPs that you frequently write calls against but also go naked frequently, more aggressive bull and bear spreads, regular use of index calls/puts to adjust overall exposure, etc..

    3) Short-Term-Trading: Options intended to be held only for a day or week. Mainly naked options or aggressive spreads.

    I threw these descriptions together quickly, and I’m sure you could come up with better portfolios. But I hope I’m getting my idea across that the portfolio’s purpose is more important than the starting dollar value. Of course you’d still have to decide on how much money to start each portfolio at :)

    Regarding the issue of readers not knowing which positions you currently favor the most, perhaps you could add a column to the spreadsheet and put in some stars or other notes to indicate your favorites.


  148. Phil what are you looking for with OIH? Hold for a couple days? Looks good as a short term hold.


  149. Phil,

    Just got online. Any ideas on Mastercard earnings play this week.

    Thanks


  150. Buying MSFT Sep 30 calls @.75 to sell tomorrow – assuming that Co. won’t be down 6 days straight.


  151. SID- acting very strong.
    KC- glad to see MICC coming back for you


  152. OIH turning green!!!


  153. To amend my earlier remarks, I’d rather have a club portfolio than the 10K and 25K I previously requested. Thank you.


  154. craig – like your idea. too…


  155. TIE- look at her go!


  156. UTHR – still bullish into earnings?


  157. MICC – Thanks BillBigD. Nice bounce, but still a ways to go to completely recover (my caller only provided finite protection). I think the market over reacted to what was pretty good earnings, so I’m hanging tight for now and watching closely (but keeping in mind what folks like karmcom have said about accepting mistakes and not fighting the market).
    TIE – does anyone have an actually date for their earnings? Best I can tell is they will file with SEC by Aug 9th so their announcement might be anytime between now and then.


  158. Happy, FSLR


  159. KC

    TIE- this afternoon


  160. Phill
    thanks for OIH mo play. just made .60 for a quick trade.


  161. WFR – Muchos Gracias Phil !!!


  162. Hi all, Lawrence McMillen is coming to NYC on Dec. 1st for an intermediate-to-advanced options seminar. There’s group rates available for 3 or more. I plan on attending. If anyone else would like to go and get a group discount, please email me doc@cityfootcare.com and I’ll get a price quote. Here’s the link for more information: http://www.optionstrategist.com/products/seminars/live/intensive0510.htm. Please let me know by the end of the ‘early bird special’ 9/15 or ASAP.

    Phil, hope you don’t mind me posting here but figured you’d encourage more education. Lawrence


  163. GSK – It’s amusing, I have GSK and JOSB charts side by side… they have been pretty much 100% inversely correlated (even though entirely unrelated) today: JOSB keeps going up, GSK keeps going down.

    Which brings me to wishing I had sold only GSK Aug 50′s against the Nov 52.5s’… And I’m begining to wonder whether it might be interesting to start rolling those down to or adding some Nov 50′s

    Thoughts Phil?


  164. TIE – thanks Nadir.


  165. FSLR
    watching it!

    Metals are joining the rally! PCU, FCX, PKX, RTP!


  166. Phil, regarding the TM play you ran for me last week : 2x Aug 125 against 1x Aug 120 calls as cover. What stops do I set for the 120s. Currently, in on Aug 125 at 1.4 and sold 120s for 3.5. Thanks


  167. The Nov GSK 50′s being with the idea of selling more Aug 50′s or the 47.5′s


  168. I also would like to throw my support behind the portfolios based on methodology rather than size.


  169. TIE – Don’t count on earnings today.
    I might happen, but in the 2 years I have followed them, they always announce late.
    Could be today or anytime form now until Aug.9.
    They also usually announce after RTI which is 7/31.


  170. Phil and others,
    several questions
    1. does the newsletter come by email because if so then i don’t get it; can someone just clarify for me if i’m supposed to get anything through email
    2.the MRVL 09 that you recommended last friday somebody just bought over 10k of them at the ask according to what i see on oxps; that seems like a ton to me would love to hear people’s thoughts on this
    3.heard that IMB interested or looking into buying AHM; how to play an event like this if it were to happen? options on AHM seem very expensive, is it best to just buy AHM stock if i think they get bought


  171. LDK should fly with FSLR, SPWR
    Watching ACH my fav steel play.


  172. LVS seems to be taking off. Thoughts?


  173. Phil,


  174. I like the idea of portfolios based on risk levels rather then size too.

    Greg


  175. Phil,
    New to the site. I am long BWLD, with healthy gains. Would you recommend that I buy puts to protect myself ahead of earnings tomorrow? Or, would a strangle work better?

    In general, I assume strangles will work when there is not as much IV baked into the options price already, and you expect extreme volatility after an event. Is that the case here?

    Thanks! This site is a terrific educational tool!! I think what I’ve learned about using spreads alone makes this site worth it.

    Buzz


  176. optiondragon

    CROX short shares decrease 50% from 40m to 20m in july as per yahoo finance…


  177. XOM is moving almost tick for tick with the Dow, leading slightly I think:

    http://finance.yahoo.com/charts#chart6:symbol=xom;range=5d;compare=^dji;indicator=volumema+macd;charttype=candlestick;crosshair=on;logscale=off;source=undefined

    Windy – very few positions initiated when the market sucks – sorry but forcing trades is one of the best ways to lose money – very similar to forcing a hand in poker, you can’t bluff the market because they will call you every time!

    Etrade, as far as I know, has the harshest interpretation of those rules of any major trading house. It would be best to ask others who have similar capital limitations about their experiences but I’ve tried Etrade and I can tell you that they pretty much suck.

    K1 – it’s not hard to pick out LTP plays in the comments, we just haven’t had one in ages! I enter LTP plays when I see a nice bargain but almost always the play is “auditioned” in the STP. The best way to identify a potential LTP candidate is to look for positions I take that have the date Jan ’09 or Jan ’10, that is what we in the biz call “a tip off” that I may have a long-term interest. 8-) I do think it would be good to just clean house and get a fresh start as we’ve made silly amounts of money and I don’t like the way that prior gains cloud the performance of new investments. We ALL need to get real this quarter, we can’t expect a repeat of the past year and, to whatever extent we get it, there’s no reason we can’t all get a little closer to the same page as having 500 pairs of eyes on 100 positions is a very powerful market tool!

    Sahaida/All paper traders – here’s a good tip for paper trading. Take 10 $5 bills and put them in a jar. Paper trade a $10K account and, any time you lose $1,000 you must burn one $5 bill. If you don’t lose after a month, go get a steak and add however many $5s you gained and try another month with the same rules! That is the life of a trader and you can paper trade all you want but until you feel the consequences it won’t reflect your regular trading.

    SVPoon – more accurate? It’s not live updated, the sheet is as current as I can get it after working on it for about 4 or 5 hours on the weekend and, with a couple of hundred positons to organize I like to think it’s a pretty good job. Rather than striving for perfection and spending double the time proofreading, I’m happy to check any “miss” you may see if you let me know but perfection is going to be an abstract, at least in the immediate future.

    CFC, AHM – I’m not chasing. Look at the market now, peoplle are still wanting to buy things – either one of those could be taken out and spark a massive rally in the sector.

    Craig – good points BUT I kind of try to win and winning means balance for me so it’s kind of hard for me to differentiate the risk. The current $10KP started out too conservative and we traded ourselves into a corner and the Complex Spread portfolio was so hedged it was killing me so I “uncapped” it and it flew, I can’t see labeling plays like that as what was risky last week (CROX leaps) may be safe this week and there is no way I’m going to shuffle things in and out all day! If you check out Sage’s series on Portfolio Management we laid out strategies by dollar levels so effectively, the more aggressive plays will only be in the $200K portfolio while the LTP is what it is and will always be my main portfolio. That portfolio is up 165% without a single day trade or condor or butterfly or any long position of less than about 6 months – frankly I never understand why people would rather risk everything just to get another 50% or so… I guess it boils down to that, I’ve got to run portfolios I believe in otherwise, much like Taxsniper was saying, he doesn’t trust the companies he’s buying so he gets out after 2 weeks and the only way he can make money is to be right in a very small window of time. My biggest gains come from sticking to my guns when the market moves against me, not by following the herd. I know it’s hard but, just like the XOM play before, if you don’t believe in the premise you invested in, then you will be chased out whenever the wind changes and churning your own portfolio is an unforgiveable sin.

    On the whole – I think my early life as a Met fan may have “You Gotta Believe” burned into my brain but I am a believer – until I see FACTS to the contrary, and I don’t consider the BS that’s thown at us by the MSM 24/7 to be all that factual…

    OIH – sure hold. Of course half out on a good run but holding the rest is fine. My premise on this one is there’s still quite a few left to report and I doubt we’ll get much bad news so they may become the favorite target as energy money sloshes around within the sector.

    Club portfolio will be up to the club members of course but I don’t see any reason not to track the results of the trading.

    MA – I had the Aug $155 puts but they just stopped me out on that run from $10.50 on Fri to $8.75 today, now $7.50. I’m almost tempted to buy them back but AXP is doing well (my pick from Friday) so I’m happy to have pulled a reversal off without too much damage and I’ll leave well enough alone.

    MSFT – tough call on whether I would pay a p/e of 20 for that lethargy.


  178. Anyone here likes BYI? I like their idea to bring Pong and other skill games to casinos. could change the whole market.


  179. LVS
    just cashed out some with +33.3%

    GOOG
    partially out with +21.2%

    WYNN
    wonder if it will start going up today! In again!


  180. MA moving!!!!!! Too expensive.


  181. MA
    picking up steam!


  182. Phil, watch my LDK.


  183. LULU

    Lululemon started trading today in the US, no options yet……looking really good so far on the TSE


  184. Phil – GM

    Running today, perhaps on this post on MarketWatch. I’m long the LEAP puts but haven’t covered them. Any thoughts going into earnings tomorrow?

    MarketWatch – General Motors Corp. is expected to follow up rival Ford Motor Co.’s surprising profit with bullish second-quarter results of its own Tuesday, riding strong sales of its lucrative truck lineup and market-share gains overseas.

    Just as with Ford, a stellar report could prove counterproductive for GM as it sits down at the bargaining table with the United Auto Workers in an effort to wring out significant health-care and pension concessions.

    Analysts polled by Thomson Financial are looking for the GM to hand in earnings of $1.13 a share on sales of $44.5 billion. That would represent a massive shift from the second quarter a year earlier, when the Detroit giant took $4.3 billion in one-time restructuring related costs on its way to a whopping $3.4 billion loss.


  185. thats the third time erin threw that motorcycle fact out, based on the other guy’s word. I hope she fact checked that, if she’s going to keep mentioning it.


  186. SPWR p/e 314
    FSLR p/e 506

    But trades in par with JASO and TSL.


  187. Nadir

    I hear 3rd best after 1st and 2nd best years, I think deceleration and sell. But i am crazy that way.


  188. phil,
    i completely understand why you haven’t been adding to the LTP, and was just pointing it out as an additional reason to support your inquiry about beginning new portfolios. was not intending you to think that i was interested in forcing any trades.
    you have earned my trust and respect.
    thanks very mcuh,
    windy


  189. LVS still outperforming WYNN:

    http://finance.yahoo.com/charts#chart12:symbol=lvs;range=5d;compare=wynn;indicator=volumema+macd;charttype=candlestick;crosshair=on;logscale=off;source=undefined

    UTHR – was I bullish? I don’t see why I would have been?

    McMillen – Wow! How many people come to those things? I’ll feed you guys lunch for $300 a day! 8-)

    GSK – suffering from lack of buyers but I’m not chasing it down. As long as we can sell the Sept $50s for more than $1.20 we’re safe enough here (although it’s a boring hold).

    TM – if you are in doubt, you can nibble off one or two of the calls you sold but you would be buying into the excitement and, in a real move up, you should start out gaining your pal, who still carries $2 of premium that you REALLY don’t want to pay.

    Newsletter gets posted on the side as a pdf, hopefully tonight but I was supposed to finish my part today and I haven’t had a second free since the market opened.

    Welcome Buzz and thanks! BWLD is expected to gain 50% on earnings with a 30% increase in sales but I don’t see why they’d miss. If you have gains, roll them to a higher level, take 1/2 off the table and either buy some close puts to protect or sell maybe 1/2 your position in Aug $40s, which are fetching a stunning $3.20 and can be sold against the Dec $42.50s in a 4:3 ratio. XXX I’m pretty sure earnings are after the bell so you may want to scale in rather than sell all covers at once because my expectations are for quite a bit higher (but that’s no reason I’m not going to let some idiot pay me and 8% for 15 days).

    BYI – sounds like fun but I can’t see the returns justifying the floor space as I don’t see how it can suck up quarters fast enough to compete with slots. Also, anything that allows you to win based on some skill is immediately banned from any self respecting casino so this just seems wrong somehow.

    LDK – good story but I can’t get to the bottom of the ADR #s to justify a $4.5Bn valuation on $100M in sales, even if they are going to double in 2 yrs. That doesn’t make it a bad trade, just not the kind of thing I like to hold.

    GM – Yawnnnn. Are they up again – wake me at $34 so I can DD.


  190. I dunno if anyone was following my quest for an ‘IV bucket’.

    I decided to go with IWM and opposing bull put and bear call (credit) spreads. With a 10 point spread between the strikes it gave a great deal of negative vega.

    Alas, Etrade let my put the bull put side on, but wouldnt let me do the bear call half. Im currently sitting with a put credit spread with teh Jan08 ATM calls written. ALthough this is up nicely today I dont like the downside risk with just this half on.

    Etrade is worried about me getting assigned on an ITM LEAP. Im worried about only hvaing half of my volatility bucket in place.
    So, I asked them how I could buy VIX puts. I cant buy VIX puts through etrade.

    Yawwn. Cant get there from here…

    Ive liquidated a couple of index positions to help cut my vega risk down. I suppose I couild write some vertical spreads — what I dont like abotu those is that if price goes against you, vega risk also flips over.

    The SPY bounced nicely off its 200-SMA, and itd be real nice if itd just advance a couple percent from here as my portfolio is like a catchers mitt at 1480-1500 SPX.

    Picked up some DIA puts up here. Id rather not have em, but tomorrow I might regret not having em.

    Maria is gettin outa hand – when Erin gets outa hand she seems like an intelligent girl outa hand. When Maria gets outa hand she just seems goofy.


  191. Happy thanks for FCX, great call bro!


  192. Phil- I sent you and Jared an email about a guy in Dallas that does an Option Class. He brings in about 500k per weekend. But you never got back to me.
    CROX- up 7% today! But will not post gain per new rule. LOL But was mentioned earlier today.


  193. Phil,

    I’ve been building an app to track my portfolio.. It currently takes a list of trades, and calculates a list of positions, closed out trades, and summary by underlier with greeks. Given some more development time, and mental thought, it’ll support multiple portfolios, position groupings, and improved underlying views.. I’m not sure which apps you’re using, but I may be able to make it integrate with your data feeds (bloomberg?).. If it’s of any interest, let me know and we can discuss off line.. -Peter


  194. FCX
    quick trade +16.7%!


  195. Phil – GM – LOL

    Your confidence in one of the stalwarts of our industrial base is stunning….


  196. Looks like CCJ Earnings just came out. I have a Aug 40 cover. Should I close it out?


  197. MA
    smokin’!

    POT
    too! =D


  198. Took CCJ 40 cover off, it’s going up too fast.


  199. GS
    pumping!!


  200. Happy – I think you noted AMAT’s relative strength last Wednesday – it’s on fire today. I got some o that. Thank you sir!


  201. Phil, that last software bit was intended to help keep the site up to date with your previous mention of having multiple portfolios, and various requests for entry dates, and the like.. Outputting to a format to put on the web would be one of the easier functions of the app.. -Peter


  202. CELG
    62+!!

    CME
    570+! cashed out with +10% (not listed in Happy Trades!!; a bit too risky)


  203. AMAT
    you’re welcome!!

    FCX
    94!! AHHHHH!!!


  204. OIL- what is it doing today anyone?


  205. Oil 76.83 -0.19


  206. OIH – 179.45
    NOV – 120.00


  207. CCJ – they beat by .13 (30%) but they guided slightly down for the year – I think we can put as much stock in that as we do in Jobs’ guidance or it might be a conversion issue, hard to say. Since this year was projected to be 3x last year and now they are saying 2.8x last year, it’s going to be hard to quibble but the CC will center on WHEN they get those mines producing. Still, we could be looking at a nice squeeze here so you may not want your $40 caller there. With a $1.50 premium, I’d be slow to buy him out though. I’m still here for the long haul but that certainly doesn’t mean they will break $42.50.


  208. KC-Thanks


  209. AHM hasn’t traded yet maybe that makes me a creditor!


  210. BAY
    up 5% today. Maybe it’s time to go in! Let’s see what the market does tomorrow.


  211. POT- adding on the breakout


  212. BBD – SWN – went long Friday. Earnings tomorrow night. Not chasing but am holding September $45 calls.

    Holding my Friday VLO calls into earnings tonight

    Added to NFX 50 calls earlier (small)

    EOG flying up, remain in calls.

    SU very tempting to put here.


  213. BillBigD -you’re welcome. Are you going into COH earnings long w/o covers? EPS expectation is +41% over last year. With the exception of last quarter (+50), their EPS growth has been in high 20′s to mid 30s, so I’m covering half my position.


  214. BBD – oil flattish, RBOB off a couple of pennies. Refiners get that DCB!


  215. IV Bucket – I’ve noticed a lot of you guys would rather do a Bear/Bull call credit spread or a short diagaonal spread rather than a longer calendar spread and I’ve got to point out that the time you buy is the one thing they can’t take away from you – so it’s a GOOD investment! You get exponentially more possible outs, less volatility on your position and the chance to benefit without tight caps or getting flipped around as DJ says. I urge you to buy 30 days more than you think you need as a rule of thumb, try it for a while and see if you are sorry…

    BBD – I didn’t see it, sorry but $500K a weekend sounds good, even if I do have to go to Dallas!

    Wow – backwardation reasches $5 per barrel between Sept ’07 and Nov ’08 – that is nasty!

    http://futures.tradingcharts.com/marketquotes/index.php3?market=CL

    Portfolio tracking – I’ve just gotten comfortable with the one I have so the next iteration will have to wait until I have my funds set up – there is, surprisingly, a limit to how many things I tackle at one time.

    We got our S&P level and a SOX turn – Transports are the weakest sector (not surprising).


  216. MU $12.07 Short Call Strike 12 $0.85 September

    Risk: $11.22
    Reward: $0.78
    % Return on Risk 6.9% in 53 days…..(way to stay conservative in this market!)

    The year low is around $11.


  217. Phil (or anyone else who knows),

    Am a newbie (been lurking for a week or so) … I see the LTP on the site, but I am at a loss for how to get started with it. How would you suggest that I start building my own (scaled appropriately) portfolio to mimic/track it?

    Thanks for the BWLD advice … fingers crossed!


  218. CCJ – Intending to sell Aug 40 Puts for $2-ish with intention of buying the stock. Long term hold but hope to sell pricy calls against stock to reduce basis further later…Had bought Aug 35 Puts on the cheap as protection earlier today just in case…


  219. Option Classes- His guy is now doing them in other markets. I mentioned it because you are much better than he is and He is Making HUGE $$$$. And don’t knock Dallas it is a great city. LOL


  220. cmon, close the bell,, at this rate we will be lucky to stay green, lol . .


  221. Phil, Happy --

    NMX – Through various convolutions over the past few weeks, I happen to be long the Aug 150s @ (2.25). Any advice before earnings tomorrow?

    Sorry, I wanted to ask earlier but had to leave for a bit.


  222. not a bad day overall, but would have like to see more volume on the markets.. hopefully tomorrow we have a confirmation and follow-through. .


  223. MU – I always like that play, good company too.

    LTP – best to be patient. When we add, then it would be good as a new position or, if you see a loser you personally like, ask me what I think – getting in cheaper than we did is a great way to get started! The fact that the position is open means I still have faith in the target, like CHK Jan $37.50s at $1.60, which is donw 24% from 7/9 or MRVL Jan ’09 $25s, which we just bought on Friday for $1.35 or our UTX Jan ’09 $80s, flat at $7.30…

    MY VOLV making a nice, quiet comeback.

    PLEASE look at this chart before making any statements concerning the words rally, comeback or buy:

    http://finance.yahoo.com/charts#chart15:symbol=^dji;range=5d;indicator=volumema+macd;charttype=candlestick;crosshair=on;logscale=off;source=undefined

    Thank you – the Perspective Police


  224. SUNW finally did something right!


  225. I defy you to figure out from reading this article whether or not TMF liked SUNW this morning:

    http://www.fool.com/investing/general/2007/07/30/foolish-forecast-let-the-sun-shine-in.aspx


  226. I just bought a few QQQQ Aug 49 puts for tomorrow. Todays close did not inspire confidence in a rally tomorrow.

    Greg


  227. TMF- I receive one of their newsletters and like their service generally, but the CAPS thing really escapes me. Other than sifting through the database looking for stocks to go contrarian with, I don’t really get the “popularity contest” thing. And the fact that the organization milks the popularity contest to produce content for their site is doubly bizarre.


  228. GSK

    Phil, the premium (~0.30) on my Jan ’09 50/Aug 52.5 is nearly gone an it looks like GSK took a big hit with a little bounce today. Do you recommend buying out my caller and selling the Aug 50′s for $1.05 or sell out to the Sep $ 52.5 for ~0.80?

    tnx – Brian


  229. AHM “shocks” investors???

    How, exactly, could a lender going down in flames POSSIBLY SURPRISE ANYONE ANYMORE?? It’s no wonder the bulk of my gains this year have been in lender/homebuilder puts. People are in total denial.

    If anyone is shocked when a lendor pulls a dividend or goes BK at this point I really don’t know what to say. Are these people investing in a vacuum? Maybe they only read Forbes articles which are almost criminal in their perma-bullishness…


  230. GSK – forgot to mention, they are under pressure because the FDA is recommending taking Avandia off the market. Can’t be good.

    http://www.forbes.com/feeds/ap/2007/07/27/ap3960766.html


  231. GSK – see my 11:08 comment, very appropos as we were talking about the value of sticking to your fundamental guns today. Notice I had a plan, I stuck to my plan (even though it seemed to be failing) and at 3:01 I had a fallback plan (the sale of the Sept $50s) as I was reluctant to give up ground in August due to my fundamental belief that the sell-off was ovedone based on the facts, not based on the chart, which is always, in the short run, just a reflection of the panic of the “average” investor. It’s our mission to be ABOVE average!


  232. GSK – Thanks again!!


  233. Phil
    As your trading system is new to me, I made my first trade based on what you said below to see how this works. I bought 2 Sept contracts for $1.80 and sold 1 aug 85 for $2.15. My question now is what should I do next ?
    I have learned so much thus far and I appreciate the patience. I traded options years ago and made several hundred thousand $’s in them, but my trading system didn’t handle the losses properly and I ended up losing it all, but I learned quite a lot. I have stayed away from options for several years and I am now ready to learn a “proper” cash management system that will protect my portfolio and limit the losses. For the first time in a long time, I am really excited about the future with your system and I am ready to learn.
    Thanks
    Don

    Posted July 30, 2007 at 10:24 am | Permalink

    XOM – good time to buy those Sept $90s for $2. You can sell the Aug $85s, now $2.60 either immediately against half or as a downward momentum play if you are good at that stuff.


  234. Any thoughts of JSDA anyone with earnings on Thursdays? There is a lot of bleeding on the streets with this one. . If it doesn’t make a lower lower tomorrow, could be worth a mini rally before Thursdays earnings??


  235. Away at meetings all day except for the open; just catching up now.

    Lithium …. thanks for the compliment from this morning, although lately my specific stock recommendations have basically stunk up the joint due to market conditions trumping good

    Still think MCO and AHR in particular have been hit waaaay too hard (but will reserve some judgement on both pending earnings which are soon). Barring a real financial crisis or some f-up by AHR that I cannot determine, I still see AHR at 12+ in Sept. w/ a 1.20 annual dividend. Sub $10 is borderline ridiculous, but you can thank BSC, AHM and Countrywide for that.

    MCO, a bit less certain at the moment (funny how this market can shake your conviction, but also points out how you need to reevaluate your positions), want to see what they say at earnings, and somewhat hostage to the trials and tribulations of the I-banks. Also, the costs related to their HQ move (going on right now) may impact their numbers but is entirely unrelated to their earnings power. Finally, I believe that they are being aggressive buyers of their own stock at current prices as they continue to shrink the shareholder base (pushing Buffet close to 20%).

    Picked up some interesting tidbits from some real estate investors regarding hedge fund blowups leading to them liquidating all sorts of assets cheap to meet capital calls and/or margin calls. Like selling good real estate assets at big losses just to raise cash. Also, widening spreads on low rated CMBS deals, which are good for buyers of such assets (they get much better yields). However, not seeing or sensing any material credit crunch for real estate deals … debt money still available, just tighter on underwriting. So, no sense of panic, but perhaps the feeling that this won’t be such a banner year for the I banks, which will impact bonuses, which will impact condo prices in NYC, etc.

    One small trade I made today was to sell some GS 185 puts at $4 ! (analagous to putting in a buy order at 181). Otherwise a bit too shell shocked from last week to even want to trade today, which I suspect is a sentiment that others can relate to.

    Phil, I hope to be in touch w/ you b4 your trip … also need some advice on my XOM long/short 85/90 put position which will work out great if XOM retakes 90; but will require a suitable strategy in case it goes the other way, which at the moment seems more likely.


  236. Anybody…what does this mean ? Flush and DD ?
    Thanks
    Phil
    Posted July 30, 2007 at 11:44 am | Permalink

    XOM looking like a flush – I’m DD on Aug $90s at .55 but half out at .80 (my new basis).


  237. Flush …. selling something down hard to clear out weak hands prior to rebounding.

    DD … Double Down.


  238. Thanks cap


  239. I was looking at the 50 MA on the Nasdaq Compositive, and it is starting to roll over. . Most likely added selling pressure will be coming the next couple of days with this happening. Volume today wasn’t the greatest either. . Could be a rough week, but hopefully the Bulls gain back control. .


  240. Phil,

    any thoughts on VMware ipo on aug 14 and emc holding 10% after it goes public…
    can we play emc like CY/SPWR

    article from street.com:

    EMC’s (EMC – Cramer’s Take – Stockpickr – Rating) partial spinoff of its VMware division will go public in two weeks, according to MorningNotes.

    The initial public offering of 33 million shares in the virtualization software maker will come down Aug. 14 at a range of $23 to $25 each, according to the company.

    “I expect it to price higher,” said Scott Sweet, managing director at IPO Boutique. “I’d be very shocked, considering the demand for this deal, if it comes at $25.” The pricing range is fairly priced, he added.

    “I’ve not heard any more chatter on an IPO since 1999 and 2000″ than the buzz that has accompanied VMware, Sweet said.

    Helping to drive the interest is the recent news that Intel (INTC – Cramer’s Take – Stockpickr – Rating) and Cisco (CSCO – Cramer’s Take – Stockpickr – Rating) have both taken stakes in the company.

    “Not only do we have venture capitalists here, but two of the most solid names that can benefit in what VMware offers, wanting to be included in the early stages,” Sweet said.

    “We feel that this August has the potential to be a hit month” for IPOs, IPO analyst Ben Holmes, of MorningNotes, wrote Monday to clients, noting that “strong deals” such as VMware tend to focus investors on the IPO market. “VMware is, in our opinion, one of the strongest IPOs in registration.”

    EMC will retain a nearly 90% stake in VMWare. EMC shares closed Monday up 47 cents, or 2.6%, to $18.82


  241. correction:
    ny thoughts on VMware ipo on aug 14 and emc holding 90% after it goes public…


  242. Wang’s World
    new posts up!!


  243. Asia Markets : Tuesday, July 31, 2007

    Japan*

    17248.89
    -40.41
    -0.23%

    Hong Kong*

    23184.94
    445.04
    1.96%

    DJ Shanghai*

    460.94
    5.07
    1.11%

    S.Korea*

    1933.27
    26.56
    1.39%

    India

    15456.61
    195.70
    1.28%

    * at close
    Sources: Dow Jones, Reuters

    Asia Markets : Tuesday, July 31, 2007

    Japan*

    17248.89
    -40.41
    -0.23%

    Hong Kong*

    23184.94
    445.04
    1.96%

    DJ Shanghai*

    460.94
    5.07
    1.11%

    S.Korea*

    1933.27
    26.56
    1.39%

    India

    15456.61
    195.70
    1.28%

    * at close
    Sources: Dow Jones, Reuters


  244. Asia Markets – Sorry i messed up i accidentally posted the same info twice.


  245. From CNBC …

    Markets Update – http://www.cnbc.com/id/20042481

    Japan Unemployment – Lowest in nine years – http://www.cnbc.com/id/20027078

    Sowood Capital – Suffers 50% losses, plans to close down – http://www.cnbc.com/id/20027080

    China & India – Living Standards lagging – http://www.cnbc.com/id/20046352/for/cnbc/


  246. Futures up nicely early. Dow + 100 S&P +11 Naz + 12

    Indymac … earnings down YOY, but no blowup either. They look ok. Phil, what do you make of it. Probably no way to recover on the 30 calls.


  247. europe up big, HSI up big also

    Sowood, too bad for them, but Citadel stepped up and bought everything. That is not insignificant.