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Weekend Wrap-Up – Dynamic Virtual Portfolio Adjustments!

Was that a great week or what?

No really, I'm asking as I'm not sure yet…  We had a great rally once we got Monday out of the way but, all in all, it was a hell of a lot of work to get back to where we were last options expiration day (Feb 20th).  We nailed the market turn to a tee, beginning with my calls to go long on QLD, HOV and FAS while shorting the SKF at $250 (now $138) in last Friday's appearance on LiveStock.  In fact, my closing comment in Friday morning's post was: "We EXPECT a 400-point BOUNCE along this downtrend so we’re not even impressed with anything less than 7,000 next week."

We did a little further investigation in member chat yesterday and decided that we need to break 7,450 on the Dow to actually be impressed next week.  Our main concern is we get a quick spike up to that level and then a rejection that sends us racing down to the bottom so we will be positioning to guard against that next week.  At the moment, we ended the day slightly bullish but would not be surprised by a drop back to the 7,000 line and we're positioned for that, as we sold the 3/31 $72 puts against our longer puts.  The $2.25 we collected from those pays for us to roll up our long protection 400 Dow points but, to the downside, put a break on our insurance at the 7,000 line (the point at which they go in the money). 

By contrast, last Friday, my advice to members was to cover the long DIA puts with $70 puts at $4.32.  Those are now .61 and the profits from that already paid for more than half the cost of our long June puts.  This is very important to understand as we often talk about being 50/50 or 60/40 bearish but when you can offset 1/2 the cost of your 60% bearish side like this, it makes it very easy to go with the flow on a market rally.  The only other stock I picked on Friday was AMZN as $62.50 for reasons I elaborated in the live show, they finished up near the highs at $68.63 but the FAS as $2.85 was a real winner, finishing up at $5.15 yesterday – not bad for a week's work.

Of course nothing says lovin' like a $110 dive in an ETF you are short on and we had a series of 200-1,000% gainers on our put options as our patience finally paid off.  Even as SKF was spiking to $260 last Friday, I was saying live on TV that the puts meant we didn't worry about it and, in fact, gave us a chance to roll up our positions cheaply as we had until Wednesday before we had to truly worry.  For the same reasons we were short on SKF last week, we went long on FAZ yesterday – if you allocate just 5% of your virtual portfolio to volatile speculative positions like this – when they have a run that returns 500%, rare though they may be, then you gain 25% of your virtual portfolio.  If you are generally well balanced otherwise, this is a great way to make "surprise" profits in either direction as the market swings.

We surprised ourselves yesterday when the FAZ $50s we picked up as our first play of the morning at $2 (with a round at $2.25 and $1.75, exactly as planned) rocketed to $3.50 by lunch.  That allowed us to take the cash back off the table and let the profits run into next week.  A lot of people wonder if my trade ideas are clear enough for the average person to follow so here's ALL the comments I made on FAZ in yesterday's member chat:

  • 9:34 ($50 calls at $2.25): The fun FAZ play of the moment is the $50s at $2.25, a fun play to scale into for the weekend.
  • 9:50 ($50 calls at $2.50): FAZ - Buying calls.  A GAMBLE for sure but you can pick some up at $2.25, $1.75 and $1.25 for a $1.75 avg into the weekend on an ETF that was $60 yesterday morning.  I love 5:1 risk/rewards on things that are better than 30% to pay off – not to mention it was $105 on Monday so that would be a nice win, right?
  • 10:18 ($50 calls at $1.75): Yes the $50s are my favorites at the moment, huge gamble though…
  • 11:23 ($50 calls at $3): I do think we can do much better, it’s more the kind of trade I’d stop half out and set a stop on the rest with a traiing 10% but a quick 30% is fantastic.  If XLF fails $8, then FAZ is good for $45, then watch each .20 on XLF for $2.50 on FAZ.  Don’t forget S&P 750 voids bearish plays. (The S&P crossed back over 750 at 1:12 and FAZ topped out at $44.90 at 12:17).
  • 11:46 ($50 calls at $3.50): FAZ/RMM – As I said before, I think there is a 30% chance you can make 500% on that call, which is why I like the play.  If you made 30%, you can re-invest that into some FAZ calls you leave and you have no risk on a 500% gain potential – that’s how you make fun trades, play with the profits…
  • 12:10 ($50 calls at $3.40): FAZ/Wes – I am very anti-chasing but if you can get the $60s for $1.60 and then put in for a $1 roll down to the $50s on a pullback, then I think it’s a fair gamble but GAMBLE is the operative word on this play. (That roll did not execute and the $60 calls fell to $1.20 but, as expected, far less loss than taking the $50s for $3.40 and losing .90).
  • 2:56 ($50 calls at $2.50): FAZ/SW (answering a question to a member who did not get out at 1:12) - If we’re closing way up here I’d either get out or leave 1/3 on for an almost freee trade.  My weekend thought is that Wen’s comments will be a huge topic but Bernanke could erase that sentiment on Sunday night and put everyone in a good mood.  Cramer’s on TV now pushing the "everything’s going to be all right" platform, WHICH I AGREE WITH, but I just think there should be a healthy correction after we examine our monetary policy and then we can move up from there but ignoring what China and Europe are saying to us in very plain language going into the G20 is a recipe for disaster.

So that's how we run a play during chat.  We don't do a lot of day trades but, as we close in on expiration week and the premiums drop on short-term options, we like to take some fun plays like this one while we wait for the premiums on options we sold to other people to expire.

While this is a bearish play, it's only a cover to our already bullish positions – something that lets them run by taking a contrary position that will pay off quite well if we get a reversal.  The ultra-short and ultra-long ETFs can make great hedges like that and using option plays to further leverage them make powerful tools to balance your virtual portfolio on the fly.  Our FAS position, for example, is up 80% in a week.  If you had devoted 10% of your virtual portfolio to it, it now is making up 18% of your old balance. 

Let's say it was $2,000, now $3,600.  Rather than kill the play if you think it has further to run, you can take $400 of the profits and buy 2 of the FAS $50s at $2.50.  When FAS was at $4 on Wednesday, those FAZ calls were $12 so a 20% drop in your $3,600 position to $2,880 (still up 40%) would bring the FAZ position up to $2,400 while a 20% gain in FAS would run that position up to $4,320 and cost you perhaps 1/2 of the $500 you invested in the the weekend insurance – that's hedging!

We begain the week talking about "The Law of Unintended Consequences" and how mark to market rules were being used to push the banks lower than logic would dictate.  In the "Weekly Wrap-Up" we talked about how it wasn't so much that 6,500 was a bottom but that the recent batch of buy-outs suggest that stoks are finally well and truly oversold.  I made the value case for C, then $1 and it was indeed C that sparked the rally this week when they said they were, indeed making some money.

I put up 6 simple plays that could make 500% or more if the market turns.  One was buying C 2011 $2.50s for .42 and selling the 2011 $7.50s .21, a .21 speread that could return $5 if C hits $7.50.  As of Friday the spread already hit .52 (up 148%).  The AA spread is up just 20%, the UYG spread is up 81%, the XHB spread us up 40%, the LVS spread is up 75% and the CBS spread is up 40%.  As I said in the post: "You have to do SOMETHING on the bullish side.  Not all plays have to be short-term as there are many long-term hedges like these that can pay off one time better than being right on 10 20% gainers, you just need a little patience."  Well, in this particular case it didn't require much patience but there are still plenty of deals out there and the most important thing to take away from this is that it's GOOD to buy when other people are panicking.

Other picks we discussed in that post were FAS at $2.50 (yes, I was like a broken record on that one) and the SKF July $175 puts at $37.50 (see the post for full logic on that selection), which are already at $64.60, even if you didn't take advantage of the way-better entries we got Monday morning.  On Sunday I reviewed my logic in a special post that the media, especially Cramer and CNBC, were creating an air of panic that was pushing us below reasonable levels.  John Stewart picked up the torch this week, culminating in this great encounter directly with Cramer which says so many of the things I wanted to say myself.

Monday we got our level tests as we expected and, right out of the gate, I was still bargain hunting with pre-market calls on COF at $9 (now $12.56), V at $50 (now $52.05) and MA at $145 (now $158.31).  IYT Sept $35s jumped from $7.75 to $10.65 and the IWM Aug $38s went from $3 to $5.08.  Other featured trade ideas from Monday's member chat were CCJ at $14.35 (now $15.39), SKF $120 puts yet again at $2, which finished at $4.05 as well as the SKF Apr $145 puts at $13.30, now in the money at $29.10.  GOOG Apr $310s ran from $17.35 to $29.70 and QLD Apr $14s at $6.10 were my last trade idea for members on Monday, now $10.30.  Overall, not a bad start to the week!

The rest of the week is boring as I called it Turnaround Tuesday – The Citi Never Sleeps and, of course, every pick worked as we blew through our 7,200 target for the week.  If anything, I was too skeptical of the rally and will remain so until we hold 7,450 for a few days and made fewer plays as I hate to chase and we have a long, long way to go if this is a real rally so we won't be missing much at these levels.  Even on the way up, I couldn't resist the FAS hedged entry at $1.97 (FAS at $3.60) as it seemed like easy money, as did selling the SKF March $210 calls for $11.40 (now .60) but, other than that, after such a busy Monday, Tuesday was a fun day to just watch happen!

I mentioned how easy Tuesday was on Wednesday morning, what Cap called a "Free Money Day" but Wednesday we expected to have to fight for our gains and we sure did but it was a nice consolidation day overall.  We actually skated right between the levels I set in member chat at 9:36, which was exactly what we wanted after such a nice Tuesday move.  We day traded FAZ (and, of course we always trade our DIA covers around so not worth mentioning) and added SKF Apr $100 puts for $4.20 (now $6.95) ahead of Jaime Dimon's speech at 1:15, which we expected would ring a positive note for the financials.  AA was added hedged to $4.35 (same play is still good) and DPO was a nice pick at $6.62, now $7.25 but it's the .167 monthly dividend we're really after!  DRYS hedged to $3.39 is still the same play but that was it for trade ideas Wednesday as we watched and waited.

Thursday morning I predicted we would test the 5% levels and we held up very nicely at the open and broke through our highs.  Watching levels kept emotions out of it as I said in the morning post: "There’s enough positives on the table to hope for another green day but we’ll have our technical hat on and let our levels be our guide.  We’re still not going to be making many bullish plays into the weekend but we’ll be happy to flip a little more bullish as we hold the 5% levels and take another run at the 7.5% lines."   I was as surprised as anyone that we tested 5% in the morning and hit 7.5% in the afternoon.

My 9:53 comment to members was: "Transports with a big pullback this morning, SOX too but I like this for a bottom call so I’m going with the DIA 3/31 $69 puts as covers here, stop at $4 or if we break 6,800, whichever comes first."  Those DIA puts fell from $2.20 to $1.08, another great set of gains to lower the basis of our longer protective puts…  Once again hedging with FAZ did not work but it's one of those plays that only has to be right once.  TM 2011 $50s were a good deal at $17.60 (now $18.60) but I was still too bearish to make many new plays but we did stay a little bullish into the close and that was pretty much it for the week's gains so nothing to be ashamed of.

I set new levels on Friday morning and we hit them across the board but I didn't "feel" it and, in fact, reloaded on FAZ for the weekend – just in case, although it made so much money during the day that we were able to let just the profits ride, as detailed above.  Should I have been more bullish?  We'll know next week but I laid out a sceneario at the end of Friday's member section that explains my logic of why we must break 7,450 next week or we are very likely to retest the lows once again.

Tune in next week for more fun!

 


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  1. Phil:
    Thanks for all your help this past week.


  2. Phil,
    Could you go over the Futures position you took on gold?


  3.   Phil
    A follow up on having the stock you own and what to sell – full or half covers (the question I asked yesterday).
     
    I was thinking more of an Intel, where I might be fully in at ~ $14, which I like as a long term hold, and where the stock is currently 14.70 and April 15 calls are .77.  Your comments on this as always appreciated.
     
    thx


  4. Hope your week went well Chaps!

    Gold/Emo – Not much to it actually, the Mini Gold Futures trade at $3.32 per 0.1 tick so I prefer to do 15 for about $50 per tick ($49.80 to be exact).  The nice thing about futures is they have very little spread, not premium and you are just buying a couple so, on TOS for example, it’s like $2.50 to get in and out of a trade.  That means you can buy on a bounce at $920, for example, and set a stop at $919 which risks $500 total (or, if just one contract scaling in – about $35 with commissions!).

    So gold hit the $920 line after the news early Friday morning and I thought that looked good enough to take a shot on.  It was lucky as it just went up and up and up with barely a pullback until it hit $940 but usually, it would be smart to take 5 (of 15) off the table at $930, just out of principle – which is a $1,660 gain, leaving 10 on at $33.20 per tick with a $664 stop ($2) to lock in $2,500+ of gains.  Obviously, the bounce back off $940 is a stop-out.  You can’t fall in love with futures positions but they sure are fun!

    Speaking of futures.  Dow is down to 7,120 ahead of Bernanke on 60 Minutes – that’s interesting.  S&P is below 750 and oil is way down at $44.30 and Gold is holding $930 so we shall see….

    Lot’s of bear attacks this weekend, including Jim Rogers coming out against JPM and LIBOR is on the rise again and that is a real concern for the banks, indicating the G20 isn’t going all that great so far.  Pretty much what we expected though as we covered for 7,000 so anything between that and 7,400 is fine with us as an open.

    INTC/Deano – Well it’s the same concept.as the other, you own INTC for $14.70.  Assuming you don’t want to risk having more put to you than you are just selling calls.  You want to make 30% a year, or at least target that so if half of it goes wrong you still make 15%…  That means you need to make $5 of .40 a month selllng calls.  The Apr $15s are .78 so you can do a 1/2 sale on those and see how it goes and you are on track.  That’s all there is to it – have a goal and work backwards to find what you are comfortable with.

    If you are worried about INTC next month, you can collect $1.32 for the Apr $14s.  That lowers your basis to $14.04 on 1/2 that you can sell against so, called away even on 1/2 with the other half making full gains but, either way, accomplishing your monthly collection goal of .40 per share.   For every open position you have you should have a spreadsheet entry with your goals and whether or not you are hitting them each month.  If you see something veering off course more and more 2 months in a row – maybe it’s time to adjust or get out.


  5. Wow, Bernanke says that AIG bailout is a total and ongoing mess!  "Risk’s enourmous impact, not just on the financial system but on the whole US economy." 

    He’d better have a hell of a close to this interview because, so far, I’m back to gold futures and Dow shorts!!!


  6.  Phil, do you have any other trades like the KMP – selling calls and buying put leaps.  I like these for my retirement portfolio. Do you still like it for the Canadian oil sands play?
     
    I bought NFLX 40 March puts last week.  I think they look real toppy here.  A lot of insider selling.  Plus, if BlockBuster doesn’t go belly up, NFLX is going to have a real juicy one day irrational drop in price.


  7.  oops,  i mean NFLX April puts!


  8.  Phil,
     
    Rumor has it Bernanke wrote a paper while at Berkley about what it would be like to be Fed Chair during a depression.  Sounds a little self fulfilling……


  9. ISRG  One minute video showing the Da Vinci doing origami, cute and impressive at the end.   I’m short a 90 put, but I’m really hoping to open a spread if I have the cash the next time the stock is in the low 90s.
    http://www.youtube.com/watch?v=x9Bjs99A0k0


  10. KMP/Jo – You can do it with lots of high-dividend stocks, are there any you really like?  On NFLX, I think that’s a fair play as they are having a rough time at $40 and a pullback wouldn’t be surprising but watch the rising 50 dma at 35, which is going up 1 per week so if they break 40 and hold it, it could bend up and give them a big boost.

    Bernanke/Doc – Oh it’s amazing that he was put in charge, it’s like he was recruited from day one to take the US through a depression.  I am on the side of the conspiracy theorists who believe Ben was selected because he will be willing to inflate our way out of this as inflation is the only thing that will ever wipe out our national debt.

    Robot Origami/Eph – Oh big deal, didn’t the robots in Blade Runner do that 20 years ago?   8-)

    So OPEC left production alone – that will be interesting.  G20 ended up pledging a "sustatined effort" to end global recession and to "cleanse banks of toxic assets."  Of course, this is a meeting of finance ministers so there may be a will but will there be a way when their bosses (the people who have to pay for it) get together April 2nd?

    It’s an interesting mix of things because they did double the IMF, something the US and China had to agree to do as well so we’re giving in but I see no change of stance on the global stimulus issue, which we are kind of alone on in wanting to do more. “Our key priority now is to address the value of assets held on banks’ balance sheets, which are constraining banks’ lending” and damaging economies," the G-20 statement said. Banks are still hoarding cash after being stung by more than $1.2 trillion of writedowns and losses. Interbank lending rates this week rebounded to the highest level since Jan. 8.

    They laid out principles to be followed in bank bailouts that I am surprised isn’t freaking people out:

    Among them: shareholders should be exposed by the “maximum possible” to losses or risks prior to a government intervening. There should also be flexibility when judging which assets can receive support, and it should be clear how they are valued.  Credit rating companies, hedge funds, off-balance sheet vehicles and credit derivatives markets will be subjected to greater oversight.

    G-20 central banks also committed to maintaining expansionary monetary policies for “as long as needed” after cutting interest rates to records and will use all the tools they can.  Have I mentioned I like gold lately?

    Participants said they were pleasantly surprised by the meeting’s unity of purpose, given comments beforehand from the Germans and the French rebuffing U.S. calls to make further commitments to fiscal expansion. But it was also clear U.S. officials had a long way to go before they could satisfy concerns about the banking sector, which emerged as a surprising point of contention during the negotiations.

    I’m waiting for Europe to open to see what happens, I shorted the Dow futures earlier and those are doing great but I have a stop if the S&P breaks 751 (now 749) or the Nas Futures break 1,161.  The Hang Seng sold off pretty hard after the open and is right on their 10% line at 12,650 at lunch so that’s key.  The Nikkei is also right there at 7,700 at their close and the BSE is also right there (8,800) at 8,731. 

    So 10% lines are Dax 4,015 (now 3,953), CAC 2,750 (2,705) and FTSE 3,850 (3,753).  Obviously, if NONE of these indexes can make a 10% bounce, it’s not smart to assume we’ll hold ours.

    Our 10% lines are Dow 7,150 (now 7,223), S&P 748 (756), Nas 1,430 (1,431), NYSE 4,620 (4,721), RUT 380 (393), SOX 209 (220) and Transports 1,375 (1,415). 

    So we have NYSE, RUT, SOX and TRANQ outperforming (and Russell and Transports were our index calls in addition to QLD thank you very much!) on the global stage.  No reason the Transports can’t keep it going today after the OPEC news and I see nothing damaging for SOX so it’s all up to the RUT and NYSE to lead the way.  I think my main concern for the morning is that the G20 will be perceived as good for foreign banks, who are rallying now, and not so good for US banks, who face a lot of regulation ahead.  Also, the OPEC meeting may affect OIH and XLE, who are 20% of our markets and OIH is up 12% from the bottom and XLE is up 10.5% so we need to watch them but they may not take it badly as low oil prices means more fuel demand, which is good for OIH and a lot of the XLE have chemical and refining business which benefit from low oil prices.

    So definitely one of those days when news could be interpreted different ways and we need to let those 10% lines be our guids.


  11. Wow, things really took off when they broke my levels!  Eu Futures are up 2% with 15 mins to go.  2% for us whould be huge (7,450).


  12. Yhoo finance shows dow closed @ 7223.98
     
    Why does futures show 7223 as incfease of 44, that would be around 0


  13. What are the requirements for futures trading?


  14. Futures/Dilbert – I don’t know where they figure them from frankly.  Futures shut down Friday just after the markets close and re-opened last night at 6pm.  I’m not sure what their logic is with the +44 as they were 7,141 at midnight but I guess they are measuring from Friday’s close at 7,187 (futures do not exactly mirror the Dow but tend to line up as trading gets heavier).

    They are looking really good right now. 


  15. Requirements – I have no idea as it wasn’t an issue but noting too aggregious other than the magin requirement, about $7,000 per dow contract that gains or loses $5 per tick so they are asking for 20% movement coverage on the Dow.  That means, if you want to bet the dow to go from 7,200 to 7,300 to make $500, you need to hold $7K in margin for the trade.  If you are a day trader with lots of cash, it’s a non-issue but not something you want to do in an account you are tight in.


  16. Thx Phil. Are you planning to be up all nite?


  17. Already slept, I tend to get up super early on market inflection points as I can’t wait to see what happens in various parts of the world.  With futures trading it’s much more fun too!   It’s kind of strange, you see Europe up 2% but the Dow is up 0.5% so, duh, buy some Dow…  If you keep good stops you can catch a nice winner once in a while that makes it worth it.   At the moment, waiting for S&P to break 762 and Nas to break 1,175 and we can go off to the races on the Dow over 7,240.  If you enter there and use 7,238 as a stop, not too risky and on day they’ll pop 50 points or more.  It is thinly traded pre market but not so bad once Europe opens.


  18. Good Morning Phil & all


  19. Asia Markets :    Monday, March 16, 2009
    (The following is from WSJ; please cross check with other sources to confirm.)   

    Nikkei Average*                         7704.15    134.87     1.78%
    Hang Seng*                             12946.81    421.01     3.36%
    China: DJ Shanghai*                 247.05          3.91     1.61%
    Seoul Composite*                   1125.46         -0.57    -0.05%
    Bombay Sensex                       8943.54    186.93       2.13%
    Baltic Dry Index                      2122.00    -79.00    -3.87%

    *at Close


  20. Asian Markets Advance as Bank Fears Subside

    Asian markets struck a one-month high Monday as reassurances over the health of the U.S. banking sector sparked a broad recovery in investor appetite for risk, while safe-haven government bonds also gained on hopes for more central bank buying. Reports that the Bank of Japan was considering buying subordinated debt issued by banks boosted the Nikkei, taking it further away from a 26-year closing low touched last week.

    Japan’s Nikkei finished up 1.8 percent to post its highest close in a month, as banks rose amid easing fears about the health of U.S. lenders.

    South Korea’s KOSPI ended flat, with technology issues retreating after their latest gains, but banks rose helped by easing U.S. financial worries and the stabilizing won currency.

    Australian closed 0.1 percent higher, after moving in and out of negative territory.

    Hong Kong shares rose 3.6 percent, marking a fifth session of gains. Bank stocks joined the global rally after Citigroup said it would not need a further bailout from the U.S. government.

    Singapore’s Straits Times Index was up 0.6 percent. Blue chips were putting in a mixed performance.

    China’s Shanghai Composite Index rose 1.2 percent in shrinking turnover, continuing to underperform foreign markets, as concern about high valuations and mixed economic data dampened trade.

    Bombay Stock Exchange’s Sensex ended at 8951.32, up 194.71 points or 2.22 per cent. The 30-share index hit high of 8955.73 and low of 8697.46 in trade so far.


  21. Euro Shares Rise for 5th Straight Session

    European shares jumped for a fifth straight session on Monday, led higher by financials, as investor sentiment improved following further assurances over the health of the U.S. banking sector.

    The FTSEurofirst 300 index of top shares was up 2.3 percent at 718.41 points, extending the previous session’s gain of 0.8 percent. But it is still down 14 percent this year after plunging 45 percent in 2008. The broader STOXX 600 was up 2.1 percent at 172.15 points, with banks and insurers topping the gainers list.

    Among banks, UBS rose 6.6 percent, Societe Generale was up 6.5 percent, Natixis jumped 8.6 percent and Dexia climbed 14 percent, as sentiment improved following positive comments made by U.S. banks last week.

    Barclays jumped 14.6 percent after the British bank confirmed it has held talks over the potential sale of its iShares unit, but said it had not yet decided whether to proceed with any disposals. HSBC also said it had no need to raise further cash, removing some of the uncertainty over possible further fund-raising by Europe’s biggest bank. HSBC was up 0.6 percent.

    Italy’s Banco Popolare fell 4 percent. It said it would launch a buyout offer for affiliated Banca Italease at 1.50 euros a share and delist it as part of a reorganization, Popolare and other shareholders said.

    The FTSEurofirst 300 closed higher for a second week in a row on Friday after slipping for 4 consecutive weeks.

    Several energy companies fell as crude prices dropped 4.6 percent. BP, Tullow Oil and StatoilHydro were down 0.7-2.4 percent.

    Among miners, Rio Tinto fell 2.1 percent after Australia extended its review of Chinese aluminum maker Chinalco’s $19.5 billion investment in the global miner, as major Rio shareholders voiced growing concern over the deal.

    Across Europe, the FTSE 100 index, Germany’s DAX and France’s CAC 40 were up 1.6 to 2.4 percent.


  22. Good morning Ramana!


  23. Oil Falls Toward $44 after OPEC Kept Output Steady

    Oil fell 4.5 percent to around $44 a barrel on Monday after OPEC decided to leave existing output targets unchanged.

    OPEC agreed on Sunday to enforce existing output curbs more strictly, rather than introduce new ones, to help heal the economy even though crude oil inventories have remained relatively high and fuel demand has been slow. Ali al-Naimi, the oil minister of the world’s top oil producer and OPEC’s most influential member, Saudi Arabia, said on Monday he was very happy with OPEC’s decision. Some support might come from the world stocks market, which rose on Monday for their fifth session in a row, lifted by hopes that the U.S. economic downturn may be bottoming out and with investors seeking to take advantage of cheaper equities.

    U.S. light crude [ 44.22    -2.03  (-4.39%)] for April delivery fell.
    London Brent crude [ 43.74    -2.14  (-4.66%)] fell traded lower.

    "It’s a very reasonable decision for OPEC to take at this point, but that means they shouldn’t expect to see oil prices at $50 for the foreseeable future," said Jonathan Kornafel, Asia Director of U.S.-based Hudson Capital Energy in Singapore.

    Dollar Slips as Stocks Rally; Focus on Fed, BoJ

    The dollar fell on Monday as a rally in financial shares pulled European stock markets higher, with a recovery in risk appetite weighing on the U.S. currency. The market is looking ahead to Federal Reserve and Bank of Japan policy meetings this week after a meeting of Group of 20 finance ministers at the weekend gave currency investors few trading incentives.

    G20 finance ministers promised more funds to help emerging market economies and said they would use their full fiscal and monetary power to combat the global downturn. "The prospect of a greater pool available to stabilize emerging markets is helping risk sentiment stabilize at present and preventing renewed deleveraging flows out of several at-risk regions," said UBS strategist Geoffrey Yu in a note.

    The dollar fell 0.41 percent against a basket of currencies to 86.892, while the
    euro [ 1.3022    0.0096  (+0.74%)    ] and
    sterling [  1.4225    0.0225  (+1.61%)    ] both rose versus the US Dollar.
    The dollar [98.28    0.30  (+0.31%)   ] was slightly higher against the yen after rising as high as 98.50 on demand from Japanese importers.

    But exporters’ selling capped further dollar gains, traders said.

    The SNB shocked markets by selling the franc, becoming the first major central bank in the current crisis to try to push its currency down.
    The euro [1.5402    0.0081  (+0.53%)    ] hit a 12-week high of 1.5412 francs on Monday, up around on the day versus the Swiss currency.

    The BOJ is also considering buying banks’ subordinated debt to help bolster their capital, the paper said.


    Gold eases as uptick in risk appetite boosts stocks

    Gold eased in Europe on Monday as improved appetite for risk sparked an uptick in the equity markets and dented interest in the metal as a safe haven.

    However, firm investment demand in the precious metal demonstrated by a fresh rise in exchange-traded fund holdings last week was supporting prices, analysts said. The world’s largest gold-backed exchange-traded fund, the SPDR Gold Trust, said holdings hit a record 1,056.82 tonnes as of March 15, up 15.29 tonnes or 1.5 percent from the previous day.

    Gold declined to $922.80/924.30 an ounce from $927.90 late in New York on Friday.

    The trust took over from the Swiss National Bank as the sixth largest gold holder last week. Further buying in ETFs is likely to support gold, analysts said. Meanwhile sales of scrap gold are persisting in India, the world’s biggest gold market, as prices recover from a one-month low.

    Among other precious metals, silver tracked gold down to $13.01/13.08 an ounce from $13.17.
    Platinum was little changed at $1,055/1,065 an ounce from $1,054.50, while  palladium was steady at $197/200 an ounce from $196.50.


  24. Phil: from last week: you said lets revisit this week ??
     

    RMM
    March 13th, 2009 at 3:12 pm | Permalink  
    Phil: getting close to pull the trigger on X situation:
    I did the math, does not look so bad if I:
    roll 1x mar 30 putter to 2x jan 17.5 for 5.8$,  stop where ????
    then sell the X stock and buy X LEAPS jan 2010, 17.5 ( leads to control of 2x ),
    then 1/2 cover with apr 20 calls,
    20 top and 17.5 bottom should work, 1/2 cover leaves top a little open,
    the numbers look good for a start with 12 $ down.
    Is this a wait until next week, I think X was having bad news today.


  25. Test 8)