Archive for 2007

Weekly Wrap-Up

What a spectacular week!

It's a good thing Sage told us how to manage a $1M Virtual Portfolio last weekend because if we have another few weeks like that, our $10K Virtual Portfolio could end up at $1M!

This week we closed 61 positions with a crazy average gain of 366% but that includes a few ridiculous gains from BEAV (13,900%), PTR (800%) and TIE (1,525%) as we had sold positions against them and reduced the basis followed by huge gains.  Taking those out lowers the average gain to "just" 109% but the cash gain on these positions was a very healthy 214% so I'm very proud of that.   Our average hold time this week was a healthy 24 days but the remaining positions have been open   days, indicating they are getting a little long in the tooth.

Let's remember that this started out as a week I was trying to get out of.  We tossed 17 positions on Monday alone but, in the end, we finished the week with 80 open positions in our Short-Term Virtual Portfolio as new plays just kept popping up!  Tight stops all week are the reason we closed so many big winners and there are 14 puts and 10 hedges leaving just 24 uncovered Short-Term calls (but, then again, there are 18 Jan '08 and '09 positions auditioning for our LTP).  That means I must be shot-term bearish again but I was last weekend and I was dead wrong so we'll continue to go with the flow as logic has simply gotten us nowhere in this market

The 80 remaining open positions have an average gain of 36% but a cash loss of 6.6% as our DIA $132 put covers are now a net loss against much less gains but it will all work itself out at the month's end.  There are only 16 May positions left, 7 are calls we sold against longer positions and 4 are puts, another indication of my short-term outlook!

The Long-Term Virtual Portfolio picked up 14% in value for the week, now with an average gain of 188% on 44 positions after 77 average days open.  That virtual portfolio would be in much better shape without my huge loss on the XOM '08 and '09 $75 puts and it's my bad for not selling closer puts against them as we would have cleaned up!

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Thursday/Friday Virtual Portfolio Moves

Posted May 3, 2007 at 9:48 am | Permalink (Edit)

TSO spread, I just mentioned in the other comments that selling your puts into the excitement and then waiting to take out your putter on the bounce is the way to go but it’s tricky. I think we get a bounce to at least $120, maybe $121, then we’ll see what really happens.

Nigerian rebels already returned hostages (I think their wives told them they had to break up the poker game).

Sold TSO $120 puts at $5 against 1/2 my puts, looking for $1-$1.50.

Posted May 3, 2007 at 10:02 am | Permalink (Edit)

INTC – oops, that was June! If it were Jan I’d buy a billion! Still an XXX on that..

Posted May 3, 2007 at 10:32 am | Permalink (Edit)

GOOG – I rarely get out of a spread unless something drastic happens. The June $450 puts came in at $6.40 and the May $470 puts were sold at $8.25 and never hit my roll point (to the $480 puts) at $10 (they are now $14.35). If GOOG goes down my caller still paid a $8.25 premium and I can roll him the other way as the lower puts get to $10. I only have to get lucky once, they have to get lucky for 12 more days!

TSO – If we are very lucky we could get a rare long squeeze as there is a lot of hot money on margin in the stock from non-stop CNBC pumping (Eric Bolling’s favorite stock) combined with a ton of people who are in with a double and would be thrilled to get out at $110. If they

Posted May 3, 2007 at 10:32 am | Permalink (Edit)

GOOG – I rarely get out of a spread unless something drastic happens. The June $450 puts came in at $6.40 and the May $470 puts were sold at $8.25 and never hit my roll point (to the $480 puts) at $10 (they are now $14.35). If GOOG goes down my caller still paid a $8.25 premium and I can roll him the other way as the lower puts get to $10. I…
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Yahoo Friday!

Posted by Phil February 14, 2007 at 1:00 pm | Permalink:

"YHOO and GOOG both undervalued. How can you possibly mount a challenge to either one of them? AOL is dead, MSN would need a personality transplant to catch on – no other true rivals, even internationally…  If Google is to ever be seriously challenged, someone must buy or partner with Yahoo, otherwise you are year’s behind from the start."

Posted by Phil March 30, 2007 at 1:40 pm | Permalink:

"YHOO - Take the pretty cheap Jan $35s for $2.35, if they have good earnings you could pick up a buck pretty easy and, if they don’t, you can sell against it with 8 months to recover. If Yahoo goes back to $27, me and Carl Icahn are going to buy them anyway… (my Icahn strategy worked with CSTR last month!)"

Posted by Phil April 26, 2007 at 2:01 pm | Permalink:

"YHOO – can it really get any worse? That’s my logic as YHOO is a cheap proxy for a BIDU/GOOG breakout tomorrow or Monday.  Picking up YHOO June $30s for .45.  (See Google Mania)

Posted by Phil April 26, 2007 at 5:00 pm | Permalink:

"Now we see if my YHOO as a proxy theory works out. Really this just makes Yahoo management look like idiots with Goog and Bidu cleaning their clocks but you can’t deny the overall value of Yahoo’s property and it’s way more than $28.50."

MarketWatch.com May 4th, 2007 at 6:15 AM:

"U.S. stock futures gained Friday as all-important figures on nonfarm payrolls were overshadowed by deal talk, including a report that Microsoft Corp. is planning to launch a takeover bid for Yahoo Inc."

Sometimes I just LOVE the markets!  Nothing is better than getting to the right place at the right time and we've been buyers of Yahoo on every dip so congrats to all on this one but it ain't over 'till its over and putting Yahoo in play could cause quite a stir in tech – just what we need to break the 2,600 mark (how about those QQQQ $46s we picked up on Wednesday!).


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Thursday Wrap-Up

25 points from a new S&P record!

There's nothing sexy about a 1,527 hat but I'll sure wear one as we get close.  Breaking that March 2000 record would mean a lot more than Dow 13,500 but the two will probably come on about the same day.

Today the market seemed invulnerable as even the transports gapped up and held it for the day.  Biotech was market Kryptonite today with CELG disappointing but following our rule that companies with p/e's of 336 really have a hard time beating expectations.  Speaking of not living up to expectations – TSO finally had to show us the money and it was a little short.  Profits at everybody's favorite refiner zoomed up from .61 a share last year to $1.67 a share for Q1 but 20 analysts who follow this stock had expected an average of $1.86 (and I'd love to meet they guys who were on the high side!).  The stock fell $8.88 for the day after failing to break back up from a consolidation at 10:35 when it was, very appropriately, down $6.66.

I said last week that if shorting this stock at $120 didn't work the next thing I would do is try holy water and a stake – luckily the new puts worked, albeit after much (also appropriately) heartacheINTC gave us some heartache this morning but our intra-day decision was to pick up the June $22.50s anyway and they finished the day down .08 at .42.  Even without Intel's help the SOX and the Nasdaq had a good day but the Transports were strong across the board as oil fell for the 4th straight day (down 5% for the week) but was saved at the bell from closing below $63.

 

 


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Thrilling Thursday Morning

I am in a GREAT mood today!

TSO missed!  I knew they would miss (see last 50 posts!) and I knew I would regret being forced out of my $120 puts yesterday but we redeployed the capital to great effect on longer puts and a spread (thanks OPtrader!).  Business Week has a nice article about the refiners which follows up nicely on my theme of "If you make money every time your refinery catches fire do you invest in fire extinguishers or matches.

I'm not going to gloat about TSO until it goes below $110, where I first started saying it was totally out of control but hopefully I'll be gloating at the open!  This one may surpass IBM as our biggest turnaround victory of the year but, as I said yesterday, I will be thrilled to get my money back and we would all do well to remember that this morning…

Productivity was up 1.7% for Q1 and that's a good thing and jobless claims went down.  It's OK for wages to go up if the workers are more productive (attention France!) so I see this as a great thing for the economy and it eases concerns about wage inflation.

The Asian markets that were open as Australia, Singapore, Malaysia, Indonesia and New Zealand rose to records but, to some extent that may be due to the lack of investment opportunity in the much larger Chinese and Japanese markets.  Money never sleeps and it gets very restless when it has nowhere to go!

Europe's E must have drawn the short straw as our predicted Rent-A-Rebel attack that hit just about 3am, just in time for the open of European trading.  This was the second time in a year that workers have been kidnapped from this platform as none of the $8,981,305,000 in profits the company made last year could be spared for a guard (or even a sturdy lock on the door).

Obviously (see picture) no oil platform in the middle of the ocean could fend off an attack from a ferocious rebel attack as their outboard motor putters up to the rig at speeds of up to 17 miles an hour!  If only Luke Skywalker had had such an easy time attacking the Death Star.  How could a company…
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Wednesday Virtual Portfolio Moves

Posted May 2, 2007 at 9:45 am | Permalink (Edit)

GOOG – not yet but I can’t wait!

MA – out of the June puts for .40 and a $1 trailing stop on 1/2 and a $2 ts (of the max sell on the other half of the June calls so that’s $9 minimum but watch the $125 line for a signal to get out fast.

Posted May 2, 2007 at 9:54 am | Permalink (Edit)

TM – looks like a flush to me! I’m buying out the June $125 caller at $1.50 and will shift my May $125s over to those as soon as it finds some sort of bottom. If it keeps going down I can selll the May $120s (currently $2.25) against perhaps 1/2 the position. XXX Earnings are next week and projections are that they will earn 7% LESS than last year and 6% LESS than last quarter. The stock, meanwhile is trading at last year’s open so I continue to accumulate the Octobers – now buying the $135s for $2.85 but hoping they get cheaper (I’m already in on the $140s).

Posted May 2, 2007 at 9:58 am | Permalink (Edit)

TSO – I’m going to load back up AFTER inventories. My basis is $7.20 so I will DD at $3.60 but I’m hoping for a little run-up and a reverse.

I’m calling TM a shake out – I was just running the dollar/yen, which is the only thing I can even imagine hurting their earnings and it’s just not happening. Even if the Yen was strong against the dollar, the benefits of the Euro/Yen differential would make up for it in spades.

Posted May 2, 2007 at 10:06 am | Permalink (Edit)

GOOG buying June $450 puts for $6.40, selling May $470 puts for $8.20 and rolling to a higher put every time they go to $10 (ie. when the $480 gets down to $10 I roll into it). XXX – but tough on margins. Stope your putter at $9

Buying June $480s for $11.25, will sell May later. XXX Stop if naked at $10.

Posted May 2, 2007 at 10:18 am


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Wednesday Wrap-Up

Japan was open today, our markets went up.

Japan will be closed tomorrow but the Hang Seng and the BSE will be open.  The Hang Seng is an international market, the Shanghai Exchange is closed for the week and I think this is a great time to see where our money really comes from

We had a pretty busy day today and after hours we had great news from SYMC and not so great news from LVS, but not as bad as it sounds as this is just another company being punished for making investments that don't pay off in the same quarter.  Carl Icahn is punishing MOT for the same behavior so I guess investors won't be satisfied until US corporations stop doing any R&D or capital investing and simply drain the registers through dividends and buybacks until they implode.  Oh wait, we did that already – but that was 20 years ago so I guess it's time to go again now that we have a whole new generation of suckers to get left holding the bag.

Speaking of suckers, I often complain about ridiculous manipulation of stocks but can you be any more obvious than that pointless spike in SUN at 11:30 yesterday.  I thought I missed it at 11:43 in comments when I said: "Oh man, what was that spike in SUN??? I can’t believe I missed shorting that! Might have been a mega-pump spike prior to a big drop!" but they did it again (along with TSO) and ran the June $75 puts all the way down to $1, which made them a great earnings gamble.  Those contracts were at $4.50 just 10 days ago and there is nothing in XOM or CVX or COP's earnings to indicate that SUN, although refiner heavy, should be an $80 stock.

TSO forced us out of the closer calls on their mega pump and we had to retreat to June and August positions as well as a bear put spread on the May $125/$120s suggested by Optrader.  We'll see in the morning whether they can live up to HIGH expectations but I say NO WAY!!!.  We took a spread on JDSU that went well but, even with 20% trailing stops yesterday, we only managed to close 3 more positions so it must have been a very good day!

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Wednesday Morning

Japan was open yesterday and our markets went up

They are open again today so we'll see how my premise holds up into their 2-day closing tomorrow.  China is already closed (not Hong Kong) for the week and Europe gets back to work this morning and looking strong already (7:30).

Today's market goose will be provided by Monday's intra-day spread candidate, MA, where we picked up the June $120s for $2.50 but we'll be regretting the June $110 puts at $2.90 as they had HUGE (+70%) numbers, beating estimates by 36%.  After consolidating at $110 since November it will be interesting to see where this one ends upIf the American consumer is truly dead, they must have on-line shopping in the casket!

Not a whole lot going on in the international markets the day after May day so it's up to US to lead the way:

 

 

Day's

Must

Comfort

Break

Next

Index

Current

Move

Hold

Zone

Out

Goal

Dow 13,136 73


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Mon/Tues Virtual Portfolio Moves

Posted April 30, 2007 at 9:47 am | Permalink (Edit)

I think we have a buy opportunity on semis if the broader market holds up but meanwhile – 20% of profit stops as we need to lighten up anyway.

Posted April 30, 2007 at 10:02 am | Permalink (Edit)

I’m rolling my WFR Jan $70s to the Jan $65s at $5.10 (+$1.5), well worth it I think. XXX Not selling yet.

Posted April 30, 2007 at 10:21 am | Permalink (Edit)

Our ISE the Jan $45s have no premium (virtually) at $20.15 so the move is to sell the June $60s for $5.85 and buy back the May $50s at $14.50 XXX

BEAV – yeah that was a hell of a run! Out at $7, up 13,900% since I made .95 on the April $30s!

CSCO – too volatile, doesn’t pay enough for LTP but I’ll like the short-term play when they slam into the big uptrending 200 dma, currently at $25. A pullback and hold at around $26 would make me happy but earnings are next Tuesday so we proably need to do something by the weekend. The June $27.50s aren’t bad at .88 to start a spread but you have to take the $25 puts if they fail at $27 (or on any .15 pullback) XXX

UNH is just giving $55s away for .38 – fun trade only but XXX

Posted April 30, 2007 at 10:46 am | Permalink (Edit)

SWN – good for the $10KP but bad to track there (takes up space all year) so consider it an LTP that some $10KP profits should go to: Buy the SWN Jan $50s for $3.10 and sell the Sept $45s for $3.35 as next earnings will be early August and you’ll be able to roll Sept for a nice premium whichever way it goes. This will tie up $2 of margin so 5 contracts cost $1K in buying power but Z is long bullish so you may want to just sell 4 (or 3 if you are a daredevil) ahead of earnings. The 5/4 ratio is what I endorse as it saves us if the thing jumps $10 (doubt it).…
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Tuesday Top Off

This market just keeps going and going and going!

We took a little more of the table today but, on the whole, we didn't trigger too many of our trailing stops, a sign of market strength.

At this point in a rally it is good to maintain trailing stops, especially when you are heavily net bullish as we are.  The stops work both ways though as we also dropped half our DIA $131 puts on the morning dip, which worked out well as we also pared down the number of positions they were protecting.  TSO finally gave us a break and we got half out of that one with a 20% loss – at this point we'll be thrilled to end up even and try again next month!

Our morning selection, ABX, reported the kind of earnings that really confuse people as the company chose to spend 63 cents a share to get out of hedged contracts, leaving them free to sell gold at spot prices.  This caused them to report a loss of .18 a share against a .35 profit expected by analysts.  This is not a reason to sell!  Barrick produced 2M ounces of gold at $313 per ounce but had to sell it at $386 an ounce under the contracts they just cancelled.  "It's great news that they have reduced their hedges, because that was an albatross around their neck," said John Ing, analyst sand president of Maison Placements.  ABX, like NEM will become much more sensitive to the price of gold but anything over $600 an ounce will put more gold in shareholders' accounts.

Speaking of James Bond villains:

"Except for ABC, CBS, NBC, MSNBC, CNN, New York Times, the Washington Post, and about another 100 newspapers, I find little evidence of liberal bias in the media." – Rupert Murdoch

Image:NYPost.jpgThe big news of the day was Rupert Murdoch's further attempts to control the Universe by placing an unsolicited $5Bn bid for DJ, a 67% premium to the opening price.  The bid hit the wires at just after 11 and we tried to jump in but missed it.  Just 30 days ago I mentioned our man Rupert as the featured player in my Corporate Wars articleWe can't wait to see what will happen when
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Phil's Favorites

Overpriced tech IPOs sell grand visions but aren't worth their valuations

 

Overpriced tech IPOs sell grand visions but aren't worth their valuations

rblfmr / Shutterstock.com

Courtesy of John Colley, Warwick Business School, University of Warwick

The year of the tech IPO is 2019. Uber went public on May 10 with a US$82.4 billion valuation. Fellow ride-sharing app Lyft floated in March with a U$24 billion valuation and Pinterest had a US$10 billion IPO in April...



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Zero Hedge

Futures Slides As Trade Tensions Escalate

Courtesy of ZeroHedge. View original post here.

S&P futures were lower on Wednesday as investors sought safety in bonds, the Japanese yen and Swiss franc in muted trade amid renewed worries over the U.S.-China spat after reports Washington is considering cutting off the flow of American technology to as many as five Chinese companies including Hangzhou Hikvision Digital Technology, the world's largest supplier of video surveillance products, expanding the US crackdown on China beyond Huawei to include world leaders in video surveillance. The dollar and 10Y yield were unchanged ahead of today's FOMC Minutes.

...



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Kimble Charting Solutions

Emerging Markets About To Submerge If 3-Year Support Breaks?

Courtesy of Chris Kimble.

Are Emerging Markets about to “Submerge” and head a good deal lower? What they do at (3) will go a long way in answering this question!

Emerging Markets ETF (EEM) has been lagging the broad market for the past 15-months. They hit their 50% retracement level of the last year’s highs and lows and falling resistance at (2) recently. The weakness of last has EEM trading below its 200-MA line.

EEM has spent the majority of the past 3-years inside of rising channel (1), which reflects that this trend remains up. The weakness of late has it testing the bo...



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Insider Scoop

Amgen To Buy Danish Collaborator Nuevolution For $167M

Courtesy of Benzinga.

Amgen, Inc. (NASDAQ: AMGN) took a logical step forward in buying a preclinical biotech it has been collaborating with since 2016. 

What Happened

Amgen announced Wednesday an agreement to buy Copenhagen-based Nuevolution for $167 million.

Th...



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Chart School

Weekly Market Recap May 18, 2019

Courtesy of Blain.

China – U.S. trade talk continued to dominate the week.   A heavy selloff Monday was followed by 3 up days, with Friday moderately down.

On Monday, Chinese officials announced retaliatory tariffs against the U.S., hitting $60 billion in annual exports to China with new or expanded duties that could reach 25%.

Then on Wednesday:

The Trump administration plans to delay a decision on instituting new tariffs on car and auto part imports for up to six months, according to media reports.

...

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Digital Currencies

Cryptocurrencies are finally going mainstream - the battle is on to bring them under global control

 

Cryptocurrencies are finally going mainstream – the battle is on to bring them under global control

The high seas are getting lower. dianemeise

Courtesy of Iwa Salami, University of East London

The 21st-century revolutionaries who have dominated cryptocurrencies are having to move over. Mainstream financial institutions are adopting these assets and the blockchain technology that enables them, in what ...



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Biotech

DNA as you've never seen it before, thanks to a new nanotechnology imaging method

Reminder: We are available to chat with Members, comments are found below each post.

 

DNA as you've never seen it before, thanks to a new nanotechnology imaging method

A map of DNA with the double helix colored blue, the landmarks in green, and the start points for copying the molecule in red. David Gilbert/Kyle Klein, CC BY-ND

Courtesy of David M. Gilbert, Florida State University

...



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ValueWalk

More Examples Of "Typical Tesla "wise-guy scamminess"

By Jacob Wolinsky. Originally published at ValueWalk.

Stanphyl Capital’s letter to investors for the month of March 2019.

rawpixel / Pixabay

Friends and Fellow Investors:

For March 2019 the fund was up approximately 5.5% net of all fees and expenses. By way of comparison, the S&P 500 was up approximately 1.9% while the Russell 2000 was down approximately 2.1%. Year-to-date 2019 the fund is up approximately 12.8% while the S&P 500 is up approximately 13.6% and the ...



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Members' Corner

Despacito - How to Make Money the Old-Fashioned Way - SLOWLY!

Are you ready to retire?  

For most people, the purpose of investing is to build up enough wealth to allow you to retire.  In general, that's usually enough money to reliably generate a year's worth of your average income, each year into your retirement so that that, plus you Social Security, should be enough to pay your bills without having to draw down on your principle.

Unfortunately, as the last decade has shown us, we can't count on bonds to pay us more than 3% and the average return from the stock market over the past 20 years has been erratic - to say the least - with 4 negative years (2000, 2001, 2002 and 2008) and 14 positives, though mostly in the 10% range on the positives.  A string of losses like we had from 2000-02 could easily wipe out a decades worth of gains.

Still, the stock market has been better over the last 10 (7%) an...



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Mapping The Market

It's Not Capitalism, it's Crony Capitalism

A good start from :

It's Not Capitalism, it's Crony Capitalism

Excerpt:

The threat to America is this: we have abandoned our core philosophy. Our first principle of this nation as a meritocracy, a free-market economy, where competition drives economic decision-making. In its place, we have allowed a malignancy to fester, a virulent pus-filled bastardized form of economics so corrosive in nature, so dangerously pestilent, that it presents an extinction-level threat to America – both the actual nation and the “idea” of America.

This all-encompassing mutant corruption saps men’s souls, crushes opportunities, and destroys economic mobility. Its a Smash & Grab system of ill-gotten re...



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OpTrader

Swing trading portfolio - week of September 11th, 2017

Reminder: OpTrader is available to chat with Members, comments are found below each post.

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



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Promotions

Free eBook - "My Top Strategies for 2017"

 

 

Here's a free ebook for you to check out! 

Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

Some other great content in this free eBook includes:

 

·       How 2017 Will Affect Oil, the US Dollar and the European Union

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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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