Archive for 2007

Weekly Wrap-Up

What an interesting week that was!

Despite the drop in the market our bearish attitude about builders and oil companies netted us an average 84% gain on 23 positions closed with an average hold time of 19 days.

Our open short-term virtual portfolio actually improved a little this week, with a 35% average gain on 93 open positions (23 average days old) but the big jump in open positions is due to our new virtual portfolio tracker which now treats our 13 short-term spreads as two transactions.

The long-term virtual portfolio has an average gain of 92% on 42 positions (same spread issue) that have been held for a whopping 47 average days (seems like forever doesn't it?) but, now that we have our new system we're going to start tracking the cash gain, which is $156,091 or 104.27%.  There is a lot of noise in the average position gain since we buy and sell puts and calls against our positions constantly and, as we wear down the basis of plays like TIE (now down to .20) we have nowhere left to credit the money! 

In the short-term virtual portfolio, the balance (up 37%) is meaningless as the holdings change daily so I still prefer to look at the average gain there for a true performance picture.  In a choppy market like this our strategy is to have a diversified mix of puts and calls, keeping the bulk of the virtual portfolio fairly even as we cherry pick the winners and sell them in a nice non-greedy fashion

We only had to close 5 losers this week:

  • BAC Jan $55s were just too tedious to hold and was banished from the LTP at $2.55 (down 12%).
  • BTU Mar $40  puts stopped us out at .75 (down 21%) on Wednesday's run as they were the naked side of the calls we sold last week (too early it seems!).
  • DIA Mar $127 puts were last weekend's insurance play and came off Tuesday at $1.20 (down a nickel) and I WISH I had those back (now $1.60).  This weekend we have the IWM's…
  • GOOG Mar $470 puts (out at $5.50 for a 53% loss) are another one we could have hung on to, I guess I am too much of a Google optimist but


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Weekend Project

Well I spent the whole day messing around with ETrade trying to get it the way I like it.

I’m still using OXPS for my main account but I’m working on a project that’s using ETrade and I liked the way you could configure it.  This "should" save me a ton of time from now on but let me know if the new format bothers you too much.

The biggest downside is that I have to book spreads as two different transactions, which I don’t like from a cash management perspective but that’s about the only thing I really don’t like about it.

On the very bright side, we can now track positions sizes without killing me and I can now include symbols, current stock price, and daily price changes.  I’m not promising I will do it daily but down the road it’s a step!

The other system was burying me as I had way to much entering and formatting but if everyone can get comfortable with this way of virtual portfolio tracking, we’re on the way to a more robust tracking system.

As I want to get much more into talking about postion management, I think it will be good to start talking about the size of positions and how we move in and out of them.  Hopefully this will work well for all and believe me, I can spend a lot more time picking stocks now, rather than tallying results!

- Phil

LOL – I spoke to soon.  For some reason the spreadsheet came out to be 50Mb – not terribly useful… 

We’re going to work on it and hopefully have it up tomorrow but if anyone knows a stupid excel trick to figure out whats eating up all the space – please make a comment here.  All I did was have Etrade create an export spreadsheet which I then cut and pasted into my regular stuff…  Then I reformatted it but it looks normal to me.

[UPDATE] The newly formatted spreadsheet is available on our Virtual Portfolio page. As usual, it is viewable right in your browser but you can also download for offline viewing and sorting. -Jared





Friday Virtual Portfolio Moves

Posted February 23, 2007 at 10:01 am | Permalink (Edit)
  • SU – $70 puts at .45
    • working my premium down to .55 with a sell on half at .60
Posted February 23, 2007 at 10:25 am | Permalink (Edit)
  • TSO Mar $90 puts for $1.55
    • dangerous play but it looks toppy here.
Posted February 23, 2007 at 11:12 am | Permalink (Edit)
  • Took IWM Mar 31st $81 puts for $1.13 as a protective put.




Friday Already?

Wow, this week flew by!

We should always have 4 day weeks – I find I get plenty done in a 4 day week and a lot more done in a 3-day weekend…  What a busy week it was too, but we'll save that for the wrap-up.  Let's see what's going on today.

Sanyo is being investigated by Japan's SEC for some pretty major accounting fraud.  Apparently they booked only $500M of $1.5Bn in losses from subsidiaries and put the rest under a rug that GS walked right over when they became one of the company's largest shareholders.  The stock dropped 21% this morning in Tokyo trading, costing Goldman a cool $200M+ on their Billion dollar holding (this is why we should always be diversified!).

Sanyo's shares also face the risk of being delisted if accounting problems are found, analysts say. "We can't deny the possibility of a share delisting," Credit Suisse analyst Koya Tabata said in a report. In the past, companies such as Livedoor Co. have been delisted by the Tokyo Stock Exchange for inaccurate financial statements.

Despite this Enron-sized scandal the Nikkei climbed to another half a point, possibly because of a deal between the London and Tokyo Stock exchanges to move towards a 24-hour system (one of my predictions for 2007).  If you feel like you're missing something now in overnight trading – wait until your whole virtual portfolio is live 24/7!  Plays I like based on this news are SBUX, Red Bull and No-Doze…

The Hang-Seng pulled back slightly in reaction to poor Dow numbers but we expected that and sold FXI calls yesterday so that's all according to plan!  Australia continues to post new highs as commodities come back but India took a big hit as Pakistan tested some nuclear missiles under their new treaty.

Europe has now gone an entire week doing nothing of note!  Italy's Prime Minister had a temper tantrum and quit but now he says he might come back " if, and only if, he gets guarantees of full support from all coalition parties."  If this works for him, maybe Bush will try it too!

Last night I mentioned that the Paulson's Presidential Working Group surprisingly concluded that
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Thursday Wrap-Up

It was a wishy washy day on the markets but we took the opportunity to lighten up on a few calls while entering some more oil puts (so far, so bad!).

ADI gave a good report and got the SOX in gear which kept the Nasdaq afloat:  TOL had a report that was so bad it actually made their stock go down (and you thought it would never happen!).  The industrials dragged everyone else down as oil climbed back to $61, ruining the party for everyone.

Like I said, if only it weren’t for the Dow:

So we will ignore the Dow for today and move on – the next move is up to Asia and Europe and we’ll see how they respond to weak industrial and rising crude prices.

We had a big drawdown in gasoline (3.1Mb) and distillates (5Mb) that offset a 3.7Mb build in crude and oil touched $61.25 during the day before falling back to $60.85.  Despite the rally, I decided to peg small entry positions off our watch list in several of our target companies, perhaps we’ll get a better entry on our next rounds but I didn’t mind buying April and May puts at these prices.

In the first day of new NYMEX contract trading we’re shaping up like this:

  • April Open: 340K (+5K) $60.85 (+.88)
    • 244K contracts traded today. 
  • May Open: 127K (+18K) $62.05 (+$1.16)
    • 68K contracts traded today.
  • June Open: 103K (-1K) $62.84 (+$1.31)
    • 29K  contracts traded today.
  • July Open: 36K (+1K) $63.48 (-$1.40)

    • 10K  contracts traded today. 

Gold dropped back a touch but held $681 while the dollar actually poked back over the 50 dma at 84.5 for a minute, still teasing us…

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

Lots of things happened today:


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Thursday Virtual Portfolio Moves

Posted February 22, 2007 at 9:58 am | Permalink (Edit)
  • Out of GOOG $470 puts for $5.50

    • will DD on $480 puts before end of day (unless it goes so high I buy the $490 puts).
Posted February 22, 2007 at 10:38 am | Permalink (Edit)
  • Bought more VLO $55 puts for .30

    • I fully intend to roll these to April if it keeps going up – this is risky but I'm not buying that inventory report. 
Posted February 22, 2007 at 12:18 pm | Permalink (Edit)

AAPL – All out of July $85s at $10.90 – I’d rather have the cash available to add to the July $90s if nec.
AAPL – 1/2 Out of Mar $90s at $1.85
ADBE – Out of Apr $37.50s at $4.30
AIR – asking $1.60 for Aug $35s
BEAV Jul $35s – asking $1.60
DOW $45s out at .30
FDX Sold Mar $120 calls for $1.60 against Julys
GLW sold Apr $22.50s for .85 against Mays
GM
GME was out at $1.60 but back in Mar $55s at .60 (too low!)

Posted February 22, 2007 at 1:10 pm | Permalink (Edit)

INTC Mar $22.50s DD at .07
LLY Apr $55s DD at $1 if poss
MRO – will sell Mar $90 puts for $1.40 or better against Apr $85 puts and will buy the Apr $90 puts if the spread goes more than .25 in the red (or if I get my target price)
PBR $90 puts – DD at .60 (looking to roll to Apr)
PEP Apr $65s – DD at .95
SBUX Jan $37.50s – DD at $1.70

Posted February 22, 2007 at 1:42 pm | Permalink (Edit)
  • VLO Apr $57.50 puts at $1.56
Posted February 22, 2007 at 2:26 pm | Permalink (Edit)
  • SLB $65 puts for $1.45
Posted February 22, 2007 at 2:29 pm | Permalink (Edit)
  • Selling FXI $109 calls for $2
Posted February 22, 2007 at 3:17 pm | Permalink (Edit)

SU Mar $70 puts at .90!





Thinking About It Thursday

Whoever brokered the IPhone deal should be flown out to Iraq to work with the Sunnis and Shiites!

See, things can get resolved if we all work at it.  Diplomacy is even working with Iran – not WITH Iran per se, but with the UN, where the administration finally gets to say "I told you so" as it looks like Iran has been naughty and enriching more uranium than previously thoughtIf they can just manage to restrain the urge to go it alone, we should be able to start lining up the International community on this one.  You would think these tensions would throw oil prices through the roof but as long as we don’t start pounding the war drums – diplomacy, even including sanctions, is the last thing that oil traders want to see!

Asia was in a "Don’t Worry, Be Happy" sort of mood this morning with the Nikkei breaking the 18,000 mark and the Hang Seng jumping back to 20,800.  Somehow I don’t think we’d get that kind of response here if the Fed doubled the overnight rates…  India and Pakistan agreed to try not to blow each other up, which was certainly a help as well.  Diplomacy is certainly in the air as even the Doha trade negotiations may be resuming but we’re on a tight schedule there before the whole thing becomes a political football.

As expected MTU did well, up another point overnight, but Hong Kong real estate posted a big comeback, which should be great for our FXIs!  Also we thought, the dollar barely budged against the Yen and lost ground to the Euro, keeping it flat overall but I think people are confused if they thought this would all play out in one day!

Europe generally up with little excitement this morning and the US futures look pretty good.

Today I will consider anything less than retaking our Tuesday levels to be a failure:

That shouldn’t be too hard should it?

Oil is, as usual our wildcard.  We’re ready for a nice pop in the sector and I just posted an extensive list
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Watch List – Oil

I’m posting up some oil stocks I will be watching for possible plays at inventory.

They are looking for about a 1M barrel net draw, which is  a very low estimate so even if it is matched, there may be a sell-off.  We did have a confirmed move up in the Valero Group at 10:40 yesterday but, other than VLO itself (see comments in Weds Wrap for my take on that) and USO (oil pump), there was little real confirmation.

On the one year chart, you can see that Valero is simply bouncing off the zero line, which is to be expected and it makes the timing of the spin job yesterday make real sense as they REALLY don’t want VLO to go negative as it calls the whole scam into question.  Oil is still 15% below last year’s price of $70 (USO shows an exaggerated loss as its a terrible fee-eating ETF) yet XOM and CVX are up over 20% – compare this to SNDK who also had a drop in the price of the commodity they sell!

Bear in mind that all the oil plays are EXTREMELY risky and you need to be prepared to DD AND Roll to the next month (possibly twice) as any single month can really wipe you out (not that the other strategy can’t too!).

Apple is a good example of this:  I rolled losses from losing trades on the Feb $85s and $80s to the April $100s which I then rolled into the July $85s for $8.10 for a $10.55 total basis as a DD against my already losing $11.95 position (the call was $8.10 at the time).  I then sold Feb $85s for $1.15 against them to reduce the basis to $10.75, bought them back for .75 and then sold them again for $1.20 and was lucky to have them expire worthless.

So my intention was to take 3 terrible losses and roll them into a large in-the-money position and then sell premium for 4 months hoping to work my way back to even.  I lucked out on the first two sales and (wisely it turns out) held off on the 3rd sale long enough for yesterday’s pleasant surprise but the trick is to recognize what a lucky bastard I am and get out, not get myself all confused thinking how great a play this is!

That’s the kind of thing you have…
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Wednesday Wrap-Up

That wasn’t so bad!

Oil went to $60 – that’s bad.  The CPI was higher than expected – bad.  The Fed is concerned about inflation – bad.  NFI dropped 42% today, another subprime bites the dust – bad…  And how far down are we?

This is not bad at all!

The Dow wasn’t even that bad.  GM, HPQ, INTC and MRK accounted for most of the damage.  Mainly, there was a lack of big winners that hurt it and, with oil racing up to $60, this is to be expected.

Crude finished at $60.07 and as I said this morning: "If I were an evil manipulative oil roach, I’d be pulling out all the stops this week to pump that contract over $60 before gravity gets hold of it…" and voila – it happens!  Too bad I took some VLO $55 puts at .75 and .50 but that will hopefully teach me not to try to guess the top!

What is truly amazing about the $1.22 move up in oil is that, despite the fact that 236M barrels were traded on today’s April contract, they actually finished the day with 2,000 LESS contracts open than there were yesterday.  I call on energy experts to explain to me what non-fraudulent circumstances can cause demand for contracts to drop and price to rise at the same time…

Gold not only held $660 but it blew through $670 and finished up $23 at $680 today against a flat dollar.  This was great for our GFI leaps and we need to keep an eye on them now for a selling opportunity on March contracts!

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

Not much trading today as I missed the afternoon and, once again, I set stops and they just didn’t trigger!

The morning bounce on CTX was too much to take and we got out of the $50 puts at $1.20 (up 71%).

DCX dropped too fast to pick up but we’re already half out of this morning’s GM $35 puts at $1 (up 33%) but we applied to profits to the basis and let the whole thing ride with a .75 stop as I think we may still have…
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Wednesday Virtual Portfolio Moves

Posted February 21, 2007 at 9:52 am | Permalink (Edit)
  • CTX – out of March $50 puts $1.20
    • Too bouncy - I will get back in later…
Posted February 21, 2007 at 10:04 am | Permalink (Edit)

By the way, I’m heading to the city at noon, won’t be back until late but I’m setting stops if we break the levels I set yesterday on the 3 canary rule (3 of our tracks break down). As I always say, when in doubt, sell half! I don’t mind being half right and I can stand being half wrong but I really hate to be all wrong…

AAPL perking up nicely!

  • Must sell FXI $108s if Dow finished more than 50 points down.

GME doing well

MRO and MUR having some kind of party.

  • Taking out TSO $80 putter for .55
  • Want to DD on VLO Mar $55 puts at .60 or less.
Posted February 21, 2007 at 10:14 am | Permalink (Edit)
  • Buying HPQ Apr $40s for $2.2.70
    • selling $40s for $2.10 if it drops below $40.50 but not otherwise
Posted February 21, 2007 at 10:40 am | Permalink (Edit)
  • DD on VLO $55 puts at .75
Posted February 21, 2007 at 11:08 am | Permalink (Edit)

All this XOM flatlining has made the Apr $72.50 puts very attractive at $1.05, I’m going to start buying them for $1 to offset my April $80 calls, which I still have too many of.

Posted February 21, 2007 at 11:23 am | Permalink (Edit)
  • Trying for second round of VLO $55 puts at .50
    • that will bring my avg down to what I originally wanted – should have been more patient…

Posted February 21, 2007 at 11:28 am | Permalink (Edit)

  • 1/2 out of GM $35 puts for $1
    • applying to basis with .75 stop on the rest.




 
 
 

Zero Hedge

Americans' Economic Hope Has Collapsed

Courtesy of ZeroHedge. View original post here.

Which came first, the confidence or the stock market rally?

One thing is for sure, the crash in stocks in December has crushed the hope of Americans that their economic future is going to be better under President Trump.

Overall confidence dipped to 58.1 - a 4-month low, but, U.S. consumers this month were the most downbeat on the economy since November 2016, a third straight drop after expectations reached a 16-year high just three months earlier, as the partial government shutdown wears on toward a fourth week.

...



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Kimble Charting Solutions

Triple Breakout Test In Play For S&P 500!

Courtesy of Chris Kimble.

Is the rally of late about to run out of steam or is a major breakout about to take place in the S&P 500? What happens at current prices should go a long way in determining this question.

This chart looks at the equal weight S&P 500 ETF (RSP) on a daily basis over the past 15-months.

The rally from the lows on Christmas Eve has RSP testing the top of a newly formed falling channel while testing the underneath side of the 2018 trading range and its falling 50-day moving average at (1).

At this time RPS is facing a triple resistance test. Wil...



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Phil's Favorites

Brexit deal flops, Theresa May survives -- so what happens now?

 

Brexit deal flops, Theresa May survives -- so what happens now?

Courtesy of Victoria Honeyman, University of Leeds

As the clock ticks down to March 29 2019, all of the political manoeuvring, negotiating, arguing and fighting is coming to a peak. In the two and a half years since the 2016 EU referendum, views on both sides have hardened and agreement still seems as far away as it was the day after the referendum.

With Theresa May’s withdrawal agreement disliked by all sides, and voted down by an unprecedented majority in the House of Commons, everyone is wondering what can and should be done next?

...



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Digital Currencies

Crypto-Bubble: Will Bitcoin Bottom In February Or Has It Already?

Courtesy of Michelle Jones via ValueWalk.com

The new year has been relatively good for the price of bitcoin after a spectacular collapse of the cryptocurrency bubble in 2018. It’s up notably since the middle of December and traded around the psychological level of $4,000... so is this a sign that the crypto market is about to recover?

Of course, it depends on who you ask, but one analyst discovered a pattern which might point to a bottom next month.

A year after the cryptocurrency bubble popped

CCN...



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ValueWalk

D.E. Shaw Investment Calls For Leadership Change At EQT

By ActivistInsight. Originally published at ValueWalk.

Elliott Management has offered to acquire QEP Resources for approximately $2.1 billion, contending the oil and gas explorer’s turnaround efforts have done little to lift the company’s share price. The company responded and said that a thorough review of the proposition is imperative in order to properly act in the best interests of shareholders, “taking into account the company’s other alternatives and current market conditions.” The news came only a month after Travelport Worldwide agreed to sell itself to Siris Capital Group and Elliott’s private equity arm Evergreen Coast Capital for $4.4 billion in cash and two months after Athenahealth was bought by Veritas and Evergreen for $5.7 bi...



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Insider Scoop

UBS Says Disney's Streaming Ambition Gives It A 'New Hope'

Courtesy of Benzinga.

Related DIS Despite Some Risks, Analysts Still Expecting Double Digit Growth From Communications Services In Q4 ...

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Chart School

Weekly Market Recap Jan 13, 2019

Courtesy of Blain.

In last week’s recap we asked:  “Has the Fed solved all the market’s problems in 1 speech?”

Thus far the market says yes!  As Guns n Roses preached – all we need is a little “patience”.  Four up days followed by a nominal down day Friday had the market following it’s normal pattern the past nearly 30 years – jumping whenever the Federal Reserve hints (or essentially says outright) it is here for the markets.   And in case you missed it the prior Friday, Chairman Powell came back out Thursday to reiterate the news – so…so… so… patient!

Fed Chairman Jerome Powell reinforced that message Thursday during a discussion at the Economic Club of Washington where he said that the central bank will be “fle...



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Members' Corner

Why Trump Can't Learn

 

Bill Eddy (lawyer, therapist, author) predicted Trump's chaotic presidency based on his high-conflict personality, which was evident years ago. This post, written in 2017, references a prescient article Bill wrote before Trump even became president, 5 Reasons Trump Can’t Learn. ~ Ilene 

Why Trump Can’t Learn

Donald Trump by Gage Skidmore (...



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Biotech

Opening Pandora's Box: Gene editing and its consequences

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

 

Opening Pandora's Box: Gene editing and its consequences

Bacteriophage viruses infecting bacterial cells , Bacterial viruses. from www.shutterstock.com

Courtesy of John Bergeron, McGill University

Today, the scientific community is aghast at the prospect of gene editing to create “designer” humans. Gene editing may be of greater consequence than climate change, or even the consequences of unleashing the energy of the atom.

...

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Mapping The Market

Trump: "I Won't Be Here" When It Blows Up

By Jean-Luc

Maybe we should simply try him for treason right now:

Trump on Coming Debt Crisis: ‘I Won’t Be Here’ When It Blows Up

The president thinks the balancing of the nation’s books is going to, ultimately, be a future president’s problem.

By Asawin Suebsaeng and Lachlan Markay, Daily Beast

The friction came to a head in early 2017 when senior officials offered Trump charts and graphics laying out the numbers and showing a “hockey stick” spike in the nationa...



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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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Ilene is editor and affiliate program coordinator for PSW. She manages the site market shadows, archives, more. Contact Ilene to learn about our affiliate and content sharing programs.

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