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Weekly Wrap-Up

That was a nice, short, uneventful week!

We finished the week up just slightly with some good consolidation but, as it was the end of the month, I was a little suspicious about the action into the close.  Volume was not terribly impressive but there was a huge surge as we sold off into the close, hopefully just some funds cashing out but not the way you want to end a week.

We made good progress on our virtual portfolios with fantastic gains in our small virtual portfolios with our 2-week old $10,000 Virtual Portfolio already at $13,965 and our new Day Trading Virtual Portfolio up a decent 10% in 10 days of trading.   Also new is our Stocks Virtual Portfolio but that’s up just 2% in two weeks as there wasn’t enough volatility to play around with.

Our older virtual portfolios also held their own:

  • The Short-Term Virtual Portfolio picked up 8% for the week as we went a little more to cash and are, overall, quite bearish with a lot of open puts covering not too many longs. 
  • Our Long-Term Virtual Portfolio added just 4% and is still fairly bullish with 23 uncovered calls.  We are still well covered on 30 other positions and, of course, our STP puts outweigh the open balance on the calls by a good deal (about 50%).
  • Complex Spreads are flat, up 315% for the year, as GOOG and APPLE are fully covered so the run in both is not doing us any good at the moment.  We are heavy in the CROX Jan $10s, still hopeful they’ll come back.
  • It was a good call to hold our position in the $25,000 Virtual Portfolio as we gained another 40% this week, now up 84% at $46,081.  We took some bullish positions there in EDU and SUN and dismantled the FSLRfly, leaving just the $270 puts.

We closed just 55 positions this week with a 66% average gain, mainly taking winners off the table to get some cash when we had the opportunity but we are not that well protected from a big sell-off in our small virtual portfolios so I’ll trust these gains only when we get to more cash.  Meanwhile, we’ll have to watch carefully and see what sticks.

We got the oil pullback we were looking for but, with a finish at $127.35, we don’t really have much to celebrate just yet.  I wrote up a major expose on how the oil market is being manipulated and it was certainly the topic of the week.  It will be interesting to see how much follow-through we get ahead of the rule changes.  We cashed out of our oil puts and actually made some bullish plays for next week as I think we’re looking at a failed test of $130 before we get a real leg down below $120 but, if there isn’t a good recovery by Wednesday, I’ll be looking for a bearish inventory report to get the ball rolling down the hill again.

Tuesday evening I said that we were hoping for a nice, slow rise in the markets and that’s pretty much what we got for the week.  In Tuesday’s wrap-up I mentioned our picks in FDX, C, JOSB and QID puts all of which continued going so well that even someone coming in that late in the day could have joined in.  We played FSLR like a fiddle this week, going in and out and making the nice gains in our small virtual portfolios possible.  Optrader also posted his excellent Swing Trading Virtual Portfolio on Wednesday morning and he ended the week a little bearish as well.

Wednesday morning we were excited to be making progress on oil but sadly the pre-market open was about where we finished the week.  We got bullish on VLO, which was well rewarded as well as SUN, which gave us a quick pop but fell back down (June $45s are still $1.65).  TM Jan $90s were a great morning pick, up 29% from an easy entry on Wednesday’s sell-off and the BAC 2010 $35s have gone nowhere at $4.65 but I do like them long-term. 

Despite disappointing market moves on Wednesday, in the Wrap-Up I said: "On the whole, it looks like the Nasdaq is simply consolidating under the 200 dma at 2,500 and as long as we hold 2,400 we can remain bullish."  That call worked out as we did break up the next day over 2,500.

The GDP report was the catalyst that got us over the hump at the Nasdaq but I didn’t like the internals and started turning a little more cautious as we rallied.  I called shenanigans on the estimates for the oil inventory report on Thursday morning and we did indeed get 8.8 of the 10M barrel draw I predicted and, the funny thing is, also as I predicted, that was still not enough to rally oil back to hold $130.  We got a nice, quick 50% gainer on our USO calls that I picked in the morning post and got the heck out right at the top as making 50% in 1 hour is always a good day’s work!

By Thursday evening I was trying to illustrate what was bothering me and we pulled out the Big Chart, which clearly illustrated we are still caught in a rut between our "Feeling Better" zone and declining 200 DMAs.  The Nasdaq, SOX and the Russell puched through for us but we need the Transports to confirm a real move as well as participation from the S&P and the NYSE, who have been dragged down by financials and commodities this week.

Friday we noted Cramer had started banging the commodity drum again, giving us a fantastic opportunity to go short on his pals at JOYG as he stampeded his viewers into a stock that’s already up over 100% in 12 months.  We’ll see how long the Cramer magic can keep the commodity bubble going this time as his endless pumping of housing plays extended that rally far past all logical values.  Click on that link and see if Cramer isn’t just following the same script on oil that he read you two years ago to keep you in housing!  Another example is this video.

We’ll see if the last two days were just window dressing or of a genuine rally is building.  We get a lot of data next week and I’m approaching it cautiously as there hasn’t been anything this week to turn me gung-ho bullish.

Stock

Description

Type

  Basis

Open

 Sale Price

Sold

 Gain/Loss

%

ANF 10 Jun 2008 75.00 ANF CALL (ANFFO) LC  $    1,460 5/20  $    1,640 5/28  $        180 12%
BSC 40 Jun 2008 10.00 BSC CALL (BVDFZ) SC  $      330 5/21  $    1,990 5/30  $     1,660 503%
BSC 40 Jun 2008 10.00 BSC CALL (BVDFZ) SC  $      330 5/21  $    1,990 5/30  $     1,660 503%
CROX 10 Jun 2008 11.00 CROX CALL (CZLFI) SC  $      260 5/15  $       950 5/30  $        690 265%
CROX 200 Jun 2008 11.00 CROX CALL (CZLFI) SC  $    5,010 5/27  $    5,990 5/30  $        980 20%
CVX 200 Jun 2008 100.00 CVX PUT (CVXRT) LP  $  30,010 5/22  $  52,720 5/27  $   22,710 76%
DIA 300 Jun 2008 125.00 DIA PUT (DAWRU) SP  $  38,110 5/23  $  44,090 5/30  $     5,980 16%
DIA 300 Jun 2008 125.00 DIA PUT (DAWRU) SP  $  38,110 5/27  $  44,990 5/30  $     6,880 18%
EDU 10 Jun 2008 70.00 EDU CALL (EDUFN) LC  $    2,260 5/31  $    2,090 5/30  $       (170) -8%
EDU 10 Jun 2008 70.00 EDU CALL (EDUFN) LC  $    2,260 5/31  $    2,090 5/30  $       (170) -8%
EDU 20 Jun 2008 70.00 EDU CALL (EDUFN) LC  $    4,510 5/31  $    4,190 5/30  $       (320) -7%
EOG 80 Jul 2008 125.00 EOG PUT (EOGSE) LP  $  26,410 4/15  $  46,580 5/29  $   20,170 76%
FDX 10 Jun 2008 90.00 FDX CALL (FDXFR) LC  $    2,010 5/27  $    3,390 5/28  $     1,380 69%
FDX 30 Jun 2008 90.00 FDX CALL (FDXFR) LC  $    6,010 5/27  $    7,490 5/27  $     1,480 25%
FSLR 10 Jun 2008 260.00 FSLR PUT (HJQRY) LP  $  10,010 5/30  $  15,690 5/29  $     5,680 57%
FSLR 10 Sep 2008 330.00 FSLR PUT (HJPUF) LP  $  58,110 5/15  $  86,990 5/28  $   28,880 50%
FSLR 2 Jun 2008 250.00 FSLR PUT (HJQRX) LP  $    1,700 5/30  $    1,250 5/30  $       (450) -27%
FSLR 2 Jun 2008 250.00 FSLR PUT (HJQRX) LP  $    1,700 5/30  $    1,260 5/30  $       (440) -26%
FSLR 2 Jun 2008 260.00 FSLR CALL (HJQFY) SC  $    2,610 5/30  $    3,450 5/29  $        840 32%
FSLR 2 Jun 2008 260.00 FSLR CALL (HJQFY) SC  $    2,610 5/27  $    3,450 5/29  $        840 32%
FSLR 2 Jun 2008 260.00 FSLR PUT (HJQRY) LP  $    1,860 5/30  $    1,790 5/30  $        (70) -4%
FSLR 2 Jun 2008 260.00 FSLR PUT (HJQRY) LP  $    1,860 5/30  $    1,790 5/30  $        (70) -4%
FSLR 2 Jun 2008 260.00 FSLR PUT (HJQRY) LP  $    1,110 5/20  $    2,490 5/28  $     1,380 124%
FSLR 2 Jun 2008 260.00 FSLR PUT (HJQRY) LP  $    1,110 5/20  $    2,490 5/28  $     1,380 124%
FSLR 2 Jun 2008 270.00 FSLR CALL (HJQFZ) SC  $    2,695 5/24  $    3,930 5/27  $     1,235 46%
FSLR 2 Jun 2008 270.00 FSLR CALL (HJQFZ) SC  $    2,695 5/24  $    3,930 5/27  $     1,235 46%
FSLR 2 Jun 2008 270.00 FSLR PUT (HJQRZ) SP  $    2,610 5/30  $    3,600 5/30  $        990 38%
FSLR 2 Jun 2008 270.00 FSLR PUT (HJQRZ) SP  $    2,610 5/30  $    3,600 5/30  $        990 38%
FSLR 2 Jun 2008 280.00 FSLR CALL (HJQFU) LC  $    1,830 5/27  $    2,470 5/30  $        640 35%
FSLR 2 Jun 2008 280.00 FSLR CALL (HJQFU) SC  $    1,830 5/27  $    8,340 5/30  $     6,510 356%
FSLR 2 Jun 2008 280.00 FSLR PUT (HJQRU) SP  $    4,710 5/20  $    2,290 5/28  $    (2,420) -51%
FSLR 2 Jun 2008 280.00 FSLR PUT (HJQRU) SP  $    4,710 5/20  $    2,290 5/28  $    (2,420) -51%
FSLR 2 Jun 2008 300.00 FSLR CALL (HJQFA) LC  $    3,670 5/20  $       810 5/27  $    (2,860) -78%
FSLR 2 Jun 2008 300.00 FSLR CALL (HJQFA) LC  $    3,670 5/20  $       810 5/27  $    (2,860) -78%
FXI 5 Jun 2008 145.00 FXI CALL (FFPFO) LC  $    3,760 5/27  $    5,075 5/29  $     1,315 35%
HD 40 Aug 2008 30.00 HD CALL (HDHE) LC  $  10,600 11/30  $  12,070 5/30  $     1,470 14%
ISRG 10 Jan 2009 240.00 ISRG CALL (AXVAH) LC  $  67,010 4/22  $  77,990 5/29  $   10,980 16%
MRVL 20 Jun 2008 12.50 MRVL CALL (ULJFV) LC  $    3,610 5/21  $    3,390 5/27  $       (220) -6%
QID 80 Jun 2008 40.00 QID PUT (QIDRN) LP  $  12,010 5/24  $  16,390 5/27  $     4,380 37%
SNE 20 Jun 2008 50.00 SNE CALL (SNEFJ) SC  $    1,210 5/15  $    3,900 5/28  $     2,690 222%
SUN 10 Jun 2008 45.00 SUN CALL (SUNFI) LC  $    1,660 5/27  $    2,240 5/28  $        580 35%
SUN 10 Jun 2008 45.00 SUN CALL (SUNFI) LC  $    1,660 5/27  $    2,240 5/28  $        580 35%
SUN 20 Jun 2008 45.00 SUN CALL (SUNFI) LC  $    3,310 5/27  $    4,490 5/28  $     1,180 36%
TIE 25 Jun 2008 17.50 TIE CALL (TIEFW) SC  $    1,510 5/5  $       115 5/27  $    (1,395) -92%
USO 10 Jun 2008 102.00 USO CALL (IYSFX) LC  $    5,210 5/30  $    6,990 5/29  $     1,780 34%
USO 20 Jun 2008 103.00 USO CALL (IYSFY) LC  $    9,210 5/30  $  12,590 5/29  $     3,380 37%
V 40 Jun 2008 75.00 V CALL (VFO) SC  $  15,210 5/22  $  15,990 5/27  $        780 5%
V 40 Sep 2008 72.50 V CALL (VIV) LC  $    9,010 4/25  $  68,680 5/30  $   59,670 662%
VLO 20 Jun 2008 45.00 VLO CALL (VLOFI) SC  $    6,410 5/10  $    4,890 5/27  $    (1,520) -24%
VLO 20 Sep 2008 45.00 VLO CALL (VLOII) LC  $    9,100 5/10  $  13,800 5/28  $     4,700 52%
VLO 40 Jun 2008 50.00 VLO CALL (VLOFJ) SC  $    3,810 5/19  $    4,790 5/27  $        980 26%
WFR 25 Jun 2008 70.00 WFR CALL (WFRFN) LC  $    4,760 5/24  $    6,240 5/28  $     1,480 31%
WFR 5 Jun 2008 70.00 WFR CALL (WFRFN) LC  $      960 5/24  $    1,215 5/28  $        255 27%
WFR 5 Jun 2008 70.00 WFR CALL (WFRFN) LC  $      960 5/24  $    1,215 5/28  $        255 27%
XOM 200 Jun 2008 90.00 XOM PUT (XOMRR) LP  $  20,010 5/24  $  55,990 5/27  $   35,980 180%

 

 

 

 


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  1. Phil, congragulations on the great performance in ur small portfolios… unfortunately I had a very busy week at work and missed out on many of the moves. I will need your help to analyze my positions:
    12 VLO Sept 47.50s  (basis 7.1) covered with 47.50s (basis 2.8). Wondering if I should roll my caller to 50s?
    FSLR fly - 
    2 –  250puts  sold one 270put and one 280 put against them.
    2 – 290 calls sold one 270 call and one 260 calls against them
    I already made 1k on the spread.   270 will be my max gain.  I will make $1k more at 260 or 280 at expiration. But Fslr looks like it wants to go down from here.
    Thank you very much for ur help!!


  2. Good morning everyone.

    Bad start to the week here in the UK. FTSE down 1.04% in early trading. We’re back below the critical 6000 level. Banks getting hit particularly hard.


  3. Vicky – I’m most worried about FSLR, which analysts are starting to go very negative on.  I think we’re heading back to $250 again at least so you really don’t want those putters.  If you can afford to, take out the $280 puts and, either way, the priority should be spending $4 to roll yourself to the $260 puts.  If you cannot watch a position, as a rule of thumb (and you can always check with me) you want to put in for a roll that improves your position by $10 for $3.50 when you go away.  Logically, if you make a lot of plays where you buy $10 in position for $3.50, you are bound to benefit unless 65% of your bets are "wrong."  Especailly with spreads, where you have $10 in margin used anyway, this is a sensible thing to do.
    On the call side, if we start heading down you can roll the $270 caller to the $250s, or you can just let that side ride if it’s a margin issue and just shut it down when we think we have a bottom.  The $270 calls bottomed out about $9 last week and the $260 calls fell to $13 so those are good goals.  Also, while you were away, it’s not a bad idea to offer to buy out callers for 50% of what you paid for them because what do I always say to people anyway when you are up 50% on a caller?  It never hurts to offer, especially if your system can Email you the sale, alerting you that you may want to re-cover with a lower caller.

    Oil – CNBC is on a kick this morning telling people that gas may hit $12 a gallon now.  How out in space are they.  Do they really believe people are going to pull up to the pump and pay $150-$200 for a tank of gas?  These people should be arrested for impersonating a news station!

    UK looking like a total disaster.  We may be just as bad, our government just hides it better.


  4. GM Phil,
    Looks like IPI came out with good earnings, are you looking to position a play on IPI today?


  5. IPI – I’m staying away from commodity plays for now, of course they had good earnings, the questioin is will this mania continue or will things come down to earth?

    New post is 1/2 up.