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Friday, March 29, 2024

Wednesday Virtual Portfolio Moves

Posted August 1, 2007 at 9:43 am | Permalink (Edit)

XOM making a break for it, the Dow needs them above $93 to make real progress. AAPL failing in its comeback (very bad sign as it just got an upgrade). BIG WARNING – despite the “rally” my index puts are UP and my DIA calls are down – that indicates tremendous negative sentiment!!!

Posted August 1, 2007 at 9:49 am | Permalink (Edit)

Shorting – I was looking to short the DIA but then I ran into that very strange option behavior. CME may make a fun mo play with the $550 puts at $9.50 XXX

AAPL – answer – a lot! This is a roll down play as an upside hedge against a bearish virtual portfolio. If we are going to recover Apple should be a leader. I already moved to the $140s and now the $135s are getting interesting at $10.05. It’s costing about $2 per roll to gain $5 in position but I can still get $6 for the Aug $130s if I decide it’s hopeless.

Posted August 1, 2007 at 10:43 am | Permalink (Edit)

Go Google! Go Apple! Go markets!

NAK – I would hope for a pullback as a new entry, they’ve had a great run and it’s still a long time until they get production out of Alaska. That’s not in a current virtual portfolio, just my retirement account along with GE, OLED (not for long), EBAY, T, INTC and TASR. Those are essentially the stocks I expect to be up consistently for the next 25 years. I sell calls against the slow ones but usually 5% out of the money for roughly an 8% annual bonus to the movement of the stocks.

ISM was fine – exports were strong per my restaurant example this morning. And yes, Chris, there is a small shakedown operation going on but once we are under new management I think a lot of that will repair itself, assuming we can stay in business that long!

GRMN/MA/EVERYTHING – Rule #1 – I’m not even going to say it again!

WFR around $60 is a buy from me too! XXX

Inventory play – XOM can give back that $1.20 gain in 30 secs

Posted August 1, 2007 at 10:58 am | Permalink (Edit)

Sorry, radio messed me up and I forgot to hit the post button on that XOM run but it was really too fast to do anything about.

I called XLE up on the radio and VLO as I think this is a bottom but we’re still looking weak so small scales only.

CELG – I wish! Actually I’m willing to DD if they hold $60, perhaps at $1.25 for the Sept $65s so I’ll put in an offer for them at that price, bringing the basis to $1.48 and I’ll stop out at $1.10 from there (half out at $1.50 if it goes up of course).

Punishment – this is just Wall Street following my instructions to get to cash, that means selling into strength and that’s a good sign as it means no one is panicking – YET!

UA – nice sell on that one, premiums way down already. The options only go to Jan so not too exciting but the simple play is the Jan $65s for $6.65, selling the current $65s for $1.25.

Builders are falling apart – FAF CRUSHED ahead of earnings tomorrow. FNF, LFG (who actually reported) also beyond bad – so now we are looking like a crisis! I’m going to sell the DIA Sept $138 puts into this downturn as they are not moving enough anymore and I will also get out of the Sept $135 puts and flip to Sept $130 puts at $3, which I REALLY hope do not do well! XXX

Posted August 1, 2007 at 11:10 am | Permalink (Edit)

Accidental release – I’ll bet they just couldn’t wait to spring that on the market! The fact that oil co’s are selling off into this shows what utter BS this all is.

BZH – holy cow! I wonder how much of this (sector in general, Beezer actually does suck) is Cramer induced panic?

SBUX – BUYBUYBUY. I just wrote a whole article about it for the newsletter which hopefully will be up later but the short story is I’m taking the Jan ‘09 $25s, which unfortunately shot up to $5.75 (from $5.25) and the Jan ‘10 $30s if they go below $4.50. This is a sticking to my guns fundamental play on the company’s long range outlook but it could be a bumpy ride…. XXX

XOM is the leg holding up the XLE – that is very scary!

Posted August 1, 2007 at 12:08 pm | Permalink (Edit)

GM – wow, I think we have to make rule #4: ALWAYS short GM at $35! F just put out some scary July numbers, DCX too… waiting for GM.

C is on a crazy sale! I flipped my pathetic Aug $52.50s to a bear call on the $47.50s and I’m killing that now about even but I’m willing to throw $5K at the Jan ‘09 $55s at $2.60 and forget them for a while. XXX

Posted August 1, 2007 at 12:16 pm | Permalink (Edit)
APPL exit – I’m going for $145 but if we have trouble at $140 I’ll lighten up. All exits will have rolls though as I am loving this stock for $200 in Jan ‘09.
Posted August 1, 2007 at 12:22 pm | Permalink (Edit)

Oh sorry, to be clear, just because I’m holding Octobers, doesn’t mean I won’t sell Augs against overnight or even if $135 looks toppy here. I can sell 1/2 my position against current $140s for $3.50 so hard to imagine regreting that too much on my $9 entries. I now have a 3 layer Apple mattress in October with the $135s already up 35% on the day so I’m either out or protecting those by the day’s end. XXX Actually, while I’m writing this I’m thinking it’s silly not to sell 1/3 of my position in $135s at $5.15 so I’m selling that into the initial excitement.

Posted August 1, 2007 at 12:47 pm | Permalink (Edit)

Oil down and market up is our best recovery scenario – let’s hope it sticks! We pretty much got the tests Happy and I were looking for on the S&P and the Nasdaq so even if we finish flat, I’ll be a little more positive at the close although far from ready to go on a shopping frenzy. Retaking S&P 1,470 under this cloud of negative news would be impressive but guy on CNBC is right – the Fed is NOT going to lower rates to fund $80 oil – it’s just not going to happen and a cut is 100% priced in right now. Unlike China, our traders do not respond favorably to CB tightening!

I need a cut and past for this but NOW is the time to start working back into the mattress plays if you are bullish. While it was BRILLIANT dumping out of those puts, I feel very exposed without them so it’s more Sept $131 puts and reloading the Aug $133 puts at $2.25 if I can or the $132s at $2.25 if I have to. After that, back to the normal rolling pattern. XXX

Posted August 1, 2007 at 1:28 pm | Permalink (Edit)

Check out the oil patch – they don’t like it when oil goes up, they don’t like it when oil goes down… Sounds like a mass exodus in the making. SU back on track and could fall hard European oil cos, BP, RDS.A and TOT all turning ugly.. Let’s keep an eye on this one and see if XLE can hold $68.50 and if XOM can stay green at $85 and a bit – very bad if not…

Sorry. forgot to mention, the idea of switching brackets can allow restricted accounts to go in and out of mattress plays by shifting brackets or using both the SPY and the DIA as they are fairly interchangeable (but the DIA is more prone to exciting pops you can cash out on or buy into) but make sure you check with your broker to make sure that is a valid premise under their rules.

Welcome Darren! UTX – looks like it would love to go up but the market won’t let it. Blood pooling on the streets now but hopefully we hold our bottoms again. Energy stocks taking us down sharply – need to pay more attention to those Euro oil cos…

OIH – I’d be adding on the dip here. They have real value in this sector and the only way big oil gets out of the hole they are going to be in is to ramp up production (although that will drive prices down so there will be winnners and losers).

Posted August 1, 2007 at 1:35 pm | Permalink (Edit)

Wow, a 6M barrel draw and oil drops $1.64 – I couldn’t possibly ask for more validation of what absolute BS this all is!

I called ACI on the radio and it sold off but the Oct $30s are still $3.35 XXX

VLO – Oil funds must park money in a safe haven. VLO is safest Sept $65s at $3.60 were $6.50 yesterday XXX

Posted August 1, 2007 at 1:40 pm | Permalink (Edit)

DIS running up into earnings but I just can’t take them anymore!

OATS trading down, possible rumor of FTC meeting not going well – wouldn’t touch it though…

XOM – I am sick of having the opportunity to pick up the $90s for .50 and not pulling the trigger so I’m DD on those. XXX

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

Added DIA Oct $133s at $5.10 to start a long cover – setting up for vaca, not trying to win anything.

ACI – Sorry Jan $30s, now $3.40… XXX I originally looked at the Octobers and decided 3 months was worth an extra buck. Am I an oil bull – for a bounce here, yes. Plus I’m not going away for 2 weeks without crisis hedges…

Posted August 1, 2007 at 1:58 pm | Permalink (Edit)

Mattress plays – very important to start moving to Sept and out of Aug by next weds as 2 weeks is not enough time plus you get to start selling Augs against on excitement (but be careful). XXX Ideally, I’m trying to work into a tight strangle as I’m pretty sure we’ll get a pop 300 points one way or the other over the next 6 weeks and, if not, then all my callers and putters will expire worthless and I will be very pleased.

LDK perking back up. DWA has good earnings, surprising. UA cranking.

Posted August 1, 2007 at 2:14 pm | Permalink (Edit)

I still have HOC, PTR, SU, XLE and XOM puts so my oil calls are an upside balance on an equal number of cheaper calls to protect my existing profits and give me a good exit when/if oil turns. The XOM calls are a separate gamble (that is not going well at all!).

RIG/DO/GSF/BHI all going down – this could be it for oil but, if it is, that may finally save the markets. Hopefully caused by my post yesterday!

Posted August 1, 2007 at 2:59 pm | Permalink (Edit)

CELG – if it goes down further I will roll back to Oct $60s at perhaps $3.50 but not yet. That would put me in for $4.80 (about) and down 27%, which I can make up by selling the Sept $65s or 1/2 the Sept $60s depending on how it looks. Once I’m down like that, my goal changes to getting even, unless I think the sell-off is a huge opportunity like AAPL.

Posted August 1, 2007 at 3:18 pm | Permalink (Edit)

D’oh, DO at $99!

There is so much money trapped in this market it could totally collapse (see Roach Motel Theory). There is NO way to take out $4T of commodity gains if people lose confidence there, it could be a biblical catastrophe if that bubble pops and Asia could correct another 1K without even coming close to the sell-off we’ve had the past week and down 4K would be a 20% correction there (Hang Seng, Nikkei) but would be 10 consecutive down 400 point days to us so either hedge or cash but we could see 12,500 from here if we don’t get it in gear.

Posted August 1, 2007 at 3:39 pm | Permalink (Edit)

I think the fate of the market now hangs on Apple staying green…

Nas clinging to our target 2,525.

ALL OPTIONS – Do not forget that when you buy an option right now you are paying some insane VIX premiums so really think twice or more before jumping on something. Sometimes, it’s just not a good time to play. XXX

Posted August 1, 2007 at 3:54 pm | Permalink (Edit)

WTF?

 

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