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Friday Virtual Portfolio Moves

December 14th, 2007 at 9:39 am | Permalink   edit   copy

GM $26!

RTP off a cliff, AGAIN!

KO getting bought, CSCO doing well, VLO getting action, XOM holding up, FCEL still going..

POT getting smoked, IBM not good, DRYS a mess, SBUX NEW LOWS…

APPL is the sign that we’re going to hell, although the Dow down 113 is a hint too! Watch 13,400 of course and 1,475 and 2,650 (already gone) to see which way we’re going.

YHOO may hold $24, that will be very telling if they do in this weather.

December 14th, 2007 at 9:41 am | Permalink   edit   copy

Someone big is buying down here!

Take out Apple callers, I’m willing to stick my neck out on those! XXX

December 14th, 2007 at 9:54 am | Permalink   edit   copy

BUD – sell only executed in one for some reason. Oh well… I still like them as a superbowl play.

We might get that silly oil rally to short into!

December 14th, 2007 at 10:03 am | Permalink   edit   copy

DNDN moving like they mean it now!

LOL Kahn, good trade!

FWLT is acting like a lost sheep again but I barely got out even last time and I’m back on the wagon with them.

C – patience. We will buy them on the way up and sell to cover at the top of the channel. If they break $31 they are good to go to near $32 but there are dividend cut worries and we have to wait for all the income dependent investors to clear out.

December 14th, 2007 at 10:07 am | Permalink   edit   copy

Dollar at 77.25, that’s a squeeze zone for bears!

DELL coming back from the dead. We held up nicely there and now the buying is spreading. We’re being led by energy so let’s watch them for a reversal but let’s also stop out of our callers in accounts where we can day-trade back into them. XXX

December 14th, 2007 at 10:14 am | Permalink   edit   copy

RTP Apr $420 puts at $47.50, selling the $420 puts for $14.20 ($13 premium) and then rolling to Jan $410 puts ($23.50 premium). If the first part wasn’t so expensive I’d put it in the small virtual portfolios but XXX

December 14th, 2007 at 10:19 am | Permalink   edit   copy

OK, I think I see a pattern. Someone is buying up stocks they think are good for inflation cycles. It took me a while to figure it out because I can’t believe big money guys are so behind the curve that they need a .8% CPI report to tell them this but that’s why Ag and food are getting bought along with the usual safey names. We could rally off this as those are pretty beaten up right now so it’s back to GS $220s at $5, POT $130s at $2.85 and BG $115s at $2.80. XXX All mo plays.

December 14th, 2007 at 10:21 am | Permalink   edit   copy

MA $220 puts at $5.45 as dark side balance. XXX

December 14th, 2007 at 10:25 am | Permalink   edit   copy

ETrade – they are by far the worst trading house I have ever dealt with. I don’t even trust their reports and I got the feeling they were messing with the spreads when I traded with them.

LDK back in our sweet spot!

Just lost the OIH, Oil will take the market with it if that sector breaks down. XOM $90 puts again at .55 XXX (Dangerous)

December 14th, 2007 at 10:42 am | Permalink   edit   copy

Government shut-down in January!

FSLR cannot be killed by mortal weapons…

THQI – I wouldn’t as you can roll him to the Jan $26.62s about even so you may as well keep the weekend protection. Even though down 84, isn’t really the time to be running around naked, stops should be set on successful calls you sold or puts you own, especially if you can just day trade them back on later – then you are taking a very small risk. Also, if you are 80% ahead on a caller, you should probably be rolling down if it goes lower anyway so taking him out proactively is great if you even have the inkling that it may be a bottom. XXX

Wow, big buys coming in – hit the C trade!

December 14th, 2007 at 10:52 am | Permalink   edit   copy

Dow diverging from NYSE big time, could be a snap back so watch 13,500, 1,485 and 2,675 very carefully for a top. XXX

December 14th, 2007 at 10:55 am | Permalink   edit   copy

FSLR $240 puts for $5.60 only if we fail and turn back down but what a ride they can be. Also RIMM $106 puts at $5.40 under the same conditions. If GS is rejected at $215, which should not be resistance, that may be a sign.

Najerian just picked DNDN!

December 14th, 2007 at 11:01 am | Permalink   edit   copy

Out of DNDN again on that run, that was fantastic! Can’t wait to buy again.

December 14th, 2007 at 11:05 am | Permalink   edit   copy

Irrational oil run-up – what other kind is there?

BA – traders are such idiots!

C leaps – yes the leaps are a no brainer. (sorry just trying to catch up from 10am)

Possible rejection at 13,500 – not willing to chance naked Apples in $10KP and $25KP so .35 stops on them. XXX

December 14th, 2007 at 11:12 am | Permalink   edit   copy

Index puts – yes I am in Jans but will likely move to Feb next week.

Film you are a wise man! Have a very good weekend…

GE is covered in $25KP so yes. We can’t take a chance over the weekend. Covers do not make you lose money, they only stop you from making more and that’s fine by me in exchange for a good night’s sleep.

Gold should be rallying. Dow and S&P are, right here, exactly 5% off all-time highs, Russell is 10% off ATH – that’s a bad 5% rule signal if they can’t break up here so be really careful (gee I keep saying that don’t I?).

LDK – we butterflied the $60 puts and calls so that’s the close we’re looking for.

C – someone called a top, don’t be greedy, sell the $32.50s to cover at .50 XXX

December 14th, 2007 at 11:27 am | Permalink   edit   copy

DNDN – begging to differ Opt but it’s not about not being scared out of a position if you make 40 and 50% in a day on something this volatile. I am well aware that this could be a 10-bagger but I can pull 50% 10 times while I’m waiting by playing these silly rumor cycles so, when I get a spike like that caused by specifically Najerian, I know he has X amount of followers who jump into a position so when I see a buyer come in and I can get .70 for something I just paid .40 for, I’d just as soon get out and reload later. Worst comes to worse I’ll do the $10s if it keeps going but more often than not, these things get brutally crushed.

RIG – the DO trade worked because it was an obvious top and there was little mathematical upside danger on the spread. The same does not apply to RIG.

By the way – don’t forget my plan at the moment is cash, cash and cash so many of the trades I’m posting have that intent. If you want to stay in the market through the holidays, our strategies will diverge and best of luck to you!

TM – I’m liking TM on the possibility that a collapse in oil/polymer and steel prices will drop a ton to their bottom line but the knee-jerk reaction to that will be some moron analyst telling you now no one will buy a Prius so I’m waiting for $105 to be tested or $112 to be broken before I buy.

An in the money caller can exercise you any time. It is rare for calls, common for puts. Do not let your callers expire in the money unless you have nothing better to do the next week than talk to your broker as you unwind your account!

NVDA – fantastic timing MrN!

NFLX – that’s a winner in the $10KP and $25KP from yesterday, let’s not blow it and get out with a .10 trailing stop here at $1.35 XXX

December 14th, 2007 at 11:52 am | Permalink   edit   copy

BA – not you idiots, MrN, the people who sell it down to $87 with a forward p/e of 15 and a PEG ratio of 1. BA has price to sales of 1, price to book of 10 and trades at just 10x EBITDA and all this is BEFORE they start delivering a new supercycle of planes with their sole competitor on the planet barely solvent in a massively cash intensive business. When BA first started delivering 747s in the mid ’70s, they doubled every year faster than Apple. Now they are servicing a legacy fleet of Jets (you don’t think they are getting scrapped do you – every 747 goes to a small carrier who will run them until long after they should, using literally TONS of BA parts) while new jets roll off the assembly line at a pace that is more than triple their last cycle’s production capacity. Short story – I like them!

ICE – Very cheap spread on the $190 puts and calls for a stock that moves $5 on a dull day. Risky of course if we don’t get a $10 move…

AMGN – it’s only a $2.50 roll so $1.10 isn’t that sexy but we may have to if we need to sell the next caller down.

RIMM sold $103s – I’m glad to be covered for the weekend as they smoked me earlier, too fast to bother rolling. I’m getting them back with those puts now!

SU Mar $105 puts are one of my favorite positions as people go nuts bidding up the current puts whenever they dip and then they all bail for 1/2 as soon as it bounces (which is every time so far). It’s risky to be naked but that is my plan for the weekend but I’m prepared to roll, DD, DD, roll, DD, roll, DD, DD and roll before I give up and I’ve budgeted accordingly.

DNDN – Absolutely it should go to $20 at some point but not on this news which is just political pressure and will have no impact on the current study we need to patiently play out. Once this calms down I’m going to revisit our original leap/sell call plan.

Cash – sorry, not the LTP, which transcends petty market events (we hope). The only major change in the LTP is the July roll to the next year’s leaps if all is going well (which it usually is).

C is a perfect LTP candidate. FCX not as long-term copper may crash.

December 14th, 2007 at 11:52 am | Permalink   edit   copy

BA – not you idiots, MrN, the people who sell it down to $87 with a forward p/e of 15 and a PEG ratio of 1. BA has price to sales of 1, price to book of 10 and trades at just 10x EBITDA and all this is BEFORE they start delivering a new supercycle of planes with their sole competitor on the planet barely solvent in a massively cash intensive business. When BA first started delivering 747s in the mid ’70s, they doubled every year faster than Apple. Now they are servicing a legacy fleet of Jets (you don’t think they are getting scrapped do you – every 747 goes to a small carrier who will run them until long after they should, using literally TONS of BA parts) while new jets roll off the assembly line at a pace that is more than triple their last cycle’s production capacity. Short story – I like them!

ICE – Very cheap spread on the $190 puts and calls for a stock that moves $5 on a dull day. Risky of course if we don’t get a $10 move…

AMGN – it’s only a $2.50 roll so $1.10 isn’t that sexy but we may have to if we need to sell the next caller down.

RIMM sold $103s – I’m glad to be covered for the weekend as they smoked me earlier, too fast to bother rolling. I’m getting them back with those puts now!

SU Mar $105 puts are one of my favorite positions as people go nuts bidding up the current puts whenever they dip and then they all bail for 1/2 as soon as it bounces (which is every time so far). It’s risky to be naked but that is my plan for the weekend but I’m prepared to roll, DD, DD, roll, DD, roll, DD, DD and roll before I give up and I’ve budgeted accordingly.

DNDN – Absolutely it should go to $20 at some point but not on this news which is just political pressure and will have no impact on the current study we need to patiently play out. Once this calms down I’m going to revisit our original leap/sell call plan.

Cash – sorry, not the LTP, which transcends petty market events (we hope). The only major change in the LTP is the July roll to the next year’s leaps if all is going well (which it usually is).

C is a perfect LTP candidate. FCX not as long-term copper may crash.

December 14th, 2007 at 12:11 pm | Permalink   edit   copy

I’m not saying IAB screws you, they are the ones that use the system to give you an advantage. In theory, they match you up with someone in their system when it’s to your mutual advantage (you want to buy at .35 when the ask is .40 and he wants to sell at .40 when the bid is .35 and they match you both up at .375 so you are both 6.6% better off, that is a huge deal if it works. On the other hand, I can modify that same program to screw you for 6.6% on every transaction you make and you would never know it and the regulators wouldn’t understand the code if it bit them. Look how long it took them to figure out options backdating and that was blatant!

RIGL – if that’s the best they can do on good drug news and an LEH upgrade, I’d be a little concerned about a top here. Better to sell 1/2 the $25s at $4.05 which give you better downside protection and the flexibility to sell more on the way down or roll them to 2x the Jan $30s on the way up.

Oh ETrade not IAB – well I can’t say for sure but in my observation of their platform working with very large trades over three months, it seemed like that was the case and I even did a trade for trade match with OXPS with one of my big clients and he decided after just one week to close out the Etrade account he’d had for many years so it’s not exactly science but we were certainly convinced.

NEM – we were looking to take out that caller, mine triggered.

XOM puts – VERY risky if you want to hold for the weekend but also very rewarding. I generally buy 2X what I plan to hold and look to get .20 so I’m left with the other half at .40, which I can live with if I lose it. They should rise up a bit into the NYMEX close from here so you might get .50 as my entry may have been premature and, of course, we need to keep an eye on oil, now down $1.45 at $90.80 – not that it should be there but if they can get back to $92, XOM will move up fast. Of course if they fail to hold $90, this could get really fun.

Also interesting, the way you used to know how much a barrel of oil was in the 80s and 90s was to look at the price of XOM as they would move almost penny for penny with oil as the sum of the operating value of the company was meaningless compared to the reserves they held. Statistically, that relationship should have deteriorated against XOM as they have fallen behind in the replacement cycle and become more operationally dependent which means that a significant drop in oil that impacts their margins could have a very disproportionate effect on XOM.

BA – both Alan and I need to be mindful of what we say… 8-)

Hey, I’m all caught up!

December 14th, 2007 at 12:35 pm | Permalink   edit   copy

RIMM – I sold the $103s yesterday, not sure what I meant to do but that’s where I am against the Jan $105s and Mar $100s.

VixDex – Yes you are right, that is the signal of death for the market. Down is relaxing for the VIX! If this becomes a trend then we need to start treating every up move as an aberration!

That’s it for the plus side I think, we failed at my levels and we’re getting progressively weaker and, like I said, if it’s my Billions I’m taking the weekend off. XXX

December 14th, 2007 at 12:38 pm | Permalink   edit   copy

VLO Rule in effect – coordinated turn down of VLO, CVX, XLE, SUN, OIH, SLB, COP. Waiting for TSO, XOM and SU to confirm but they all make great downside bets until VLO turns back up. XXX

December 14th, 2007 at 12:40 pm | Permalink   edit   copy

XOM $90 puts – best payout was $1 yesterday so you should be thrilled with .90 today as time is tick, tick, ticking to expiration. XXX

December 14th, 2007 at 1:00 pm | Permalink   edit   copy

BSC $100s – I think the only good broker report will be from GS and that is not going to excite anyone as it’s expected so I’m not anxious to hand a BSC caller any money – I’ll just be happy to roll him up to Jan if they do well.

XMSR – absolutely buy back your caller if you haven’t. They seem to hold this level well. Otherwise no, we blew our chance to roll to higher puts cheaply so we need a little luck next week.

CELG bucking the trend! COST still strong. PEP is amazing.

AMZN – that Kindle is on fire and I don’t think they are losing money making them so I actually like the leaps if you keep them covered. The ‘10 $85s have just $13 in premium at $20 and you can sell Jan $95s for $1.67 already but there’s no hurry as you can also sell 1/2 the Jan $90s for $4 if it goes the wrong way. XXX

TIF seems to have found a bottom. BTU putting in new highs, that’s a tough one to figure.

FXI – best approach is to get a time machine and ask me when it broke $195! You’re not too badly off but you gave up a ton of downside premiums you could have sold and now it’s so low that you risk a snap-back if you sell the $175s and your length isn’t there so your best move is to run yourself down to the Jan $173s at $10.10 and sell the Dec $175s at $4.50. You can then roll back once you sell a Jan caller but you can’t risk letting him have an upside delta advantage on you when FXI was at $185 2 days ago. Don’t forget I’m playing that it’s more liklely FXI goes to $150 than $180 but I’m selling puts so I really don’t care either way.

Someone just tried to goose the market and someone else started selling like mad, this is a lot of churn and makes me want to pretty much ignore everything I see and stick to my plan.

December 14th, 2007 at 1:11 pm | Permalink   edit   copy

EBAY – they won’t be safe until they break $35. I’m a big fan but I haven’t like their movement lately and I’m currently Ebayless. That Skype thing is an albatross until they can show some improvement there but their internal business seems to be smokin’ internationally.

DNDN Jan play: Buy the $5 calls at $2.60, sell the $7.50 calls at .80 (net $1.80). Buy the $10 puts for $2.80, sell the $7.50 puts for .85 (net $1.95). That’s $3.75 out of pocket and at $7.50 you get $5 and your caller/putter gets nothing. Your break even is $6.25 and $8.75 which gives you lots of room to play at buying out and reselling your callers and putter but it’s very high, albeit limited, risk.

December 14th, 2007 at 1:12 pm | Permalink   edit   copy

CVX – adding CVX Jan $95 puts for $3.90. XXX

December 14th, 2007 at 1:20 pm | Permalink   edit   copy

BTU – $60 puts for .90 XXX

December 14th, 2007 at 1:38 pm | Permalink   edit   copy

AMZN – No I was looking at some totally other thing. Sorry, all the numbers were wrong. With AMZN you want to take the ‘09 $80s for $25 ($15 premium) and sell the Dec $90s for $2.27 ($1.80 in premium) and roll them to either the $90s or $95s in Jan for another $4 which is more than 1/3 of your premium knocked off in 5 weeks. If you use that $6 to roll to the ‘10 $80s you will be in amazing shape. XXX

MS and TSO are leading this “rally.” BTU still going up so we’re getting the oil spike we wanted to short into as they’ve jacked it back to $92 with one hour to the NYMEX close.

AMZN puts – I’m not sure as that Kindle scares me. The revenue potential for that is better than an IPod as books are $10 each and I know plenty of people who read one a week and they are the most likely to want something that delivers a half-priced book to them within 10 seconds of reading the review in the Sunday times (hell, I’m talking myself into it with that logic). Also, I think the real money in this thing is for college textbooks. You’re talking 10M college students per year buying and average of $300 worth of books each so you sell them for 1/2 price = $1.5Bn of annual revenue with a much bigger cut than Apple gets off the IPod. Not bad for a company with current earnings of $200M!

My plan – Cash and shorting oil into the weekend. Sticking with the puts I played earler but not the calls.

GS calls, no – they were a mo play and lost mo.

FSLR – holding.

Big commodity rally for some reason.

December 14th, 2007 at 2:20 pm | Permalink   edit   copy

DUG FINALLY breaking a channel at $38.50, if they can break $39 things could get interesting, they did that on Tuesday and XOM fell off a cliff.

December 14th, 2007 at 2:25 pm | Permalink   edit   copy

Ron Paul on Cramer tonight, that should be fun!

Damn, they’re holding $90 on the NYMEX with 10 mins to trade.

December 14th, 2007 at 2:31 pm | Permalink   edit   copy

I’m hoping XOM tests yesterday’s low of $91.20, down 2% from multiple top at $93 but then we have to ride out a bounce to $91.60 and if that fails we’re in excellent shape. Obviously, if $91.20 fails we’re in even better shape but we still need oil to at least fail $91 at the close ($91.30 now) although this is a very obviously forced run and shouldn’t give XOM any support. It’s hard to sustain the stock price if you don’t have an endless stream of new suckers coming in to overpay.

December 14th, 2007 at 2:39 pm | Permalink   edit   copy

BSC with an ugly turn. GS not looking like a picnic either, mile above yesterday’s low if anyone wants to play the $210 puts at $7 for momentum.

FIG coming off lows. Mar $17.50s at $2.10 can be very rewarding if the market comes back and, if not, you can get $1 for the Jan $17.50s. XXX

December 14th, 2007 at 2:51 pm | Permalink   edit   copy

Oil $91.26 at the close. 8-(

Cramer made a good point on WM, they cut their dividend but if the stock dives low enough it’s back over 10%!

NUE spread – I like that.

DNDN – the Hype is somewhat deserved, they’ve gotten significant anecdotal results from Provenge, they are just having trouble converting that into verifiable results but from what I’ve read it seems they really have something here and that IS a rarity in Biotech…

As goes XOM, so goes the last support for the market at $92, same as yesterday.

December 14th, 2007 at 2:59 pm | Permalink   edit   copy

RIMM – $105s, they may drop a lot. Monday may be a disaster if we close down here and Asia gaps below the 2.5% rule (and we’ll be below our 5% lines too!)

NEM – In my current mode I’d be cashing out if it goes wrong as I’m grabbing cash at each turn.

MA gathering speed downhill as is the rest of the market as this selling looks very contageous!

December 14th, 2007 at 3:27 pm | Permalink   edit   copy

Boy am I glad we covered yesterday!

BIDU is totallly on drugs at $390. I’m already very short on them but holy cow…

This is not pretty because China will gap below technicals and Europe will think they’ve made a terrible mistake today, we get the very depressing current account deficit before the bell along with poor net foreign purchases and a dubious Empire index looking forward to housing starts on Tuesday?!?

Someone’s making a bottom call here though, just got stopped out of XOM at .65 as whole patch made a big turn. XXX (might regret it but cash is king).

December 14th, 2007 at 3:34 pm | Permalink   edit   copy

NEM – I like rolling down to the $47.50s and waiting for a pop.

Looks like we’re holding here but there’s no way I remove any covers after that performance!

December 14th, 2007 at 3:51 pm | Permalink   edit   copy

Solar companies I’m with are having a devestatingly tough sell as the state-level money is scarce and there is now tremendous competition for what little demand there is. FSLR does a lot of work in Germany, which is THE most subsidized country on the planet for alt energy but if the economy turns down their growth is very limited and it amazes me that analysts think SPWR can’t read a map and find Germany, as will Samung and a ton of guys you’ve never heard of who will soon not be facing a supply shortage.

$90 oil is shocking but unless we get to $120, the projects they have now are pretty much all the projects they’ll be doing if the price per watt doesn’t come down significantly. The key component here is cost of capital and I’ve consulted with some very big players in solar and commercial re. and the numbers were marginal last year but they are flat out undoable with tighter credit and a declining rental market (see BXP, VNO). When I’m building a commercial property my investors say “Do you really need that $20,000 skylight?”, there is no way in hell a $1.5M solar array is going to fly because
it’s going to save $15,000 a month on the electric bill IF all goes well and I push for this sort of thing!

Thanks K1 – you’ve freed up my weekend!

SHLD – I’d roll down here and wait. I would think $100 would attract a lot of buyers.

AAPL and GOOG with very impressive holds here.

AMGN – .75 would be great for a roll, .85 even.

FSLR bear call – no my cup of tea to risk $10 to make .75 but it’s how many people make their whole living.

LOL Film – Give M Dell a chance, he just got back from a decade of self-indulgence to find what a mess they made of his company. Of course he was never a design guy, he just made good computers that worked. The only PC challenger to Apple in design is likely to be SNE, who kind of get that part of things but they are miles behind a rapidly moving target.

December 14th, 2007 at 3:59 pm | Permalink   edit   copy

Thats target for XOM for those of you who were braver than me and stayed in!

 

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