Comment by Phil

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Phil
May 29th, 2014 at 10:32 am

Wheeee – down we go!  Don't say you didn't have every chance in the World to get good short entries this morning.  It's like I was saying yesterday, we don't care if the market is manipulated as long as we can play along!  We never should have been able to get those entries – only the blatant pumping at the open gave them to us so, THANK YOU evil market manipulators…

NFLX/Lunar – Still plenty of time but I'd go behind earnings now (late July) with the Aug $340 puts at $10.  A $20 drop should bump them to $15 (50%) and a $20 gain would cost about $4 (40%) but then you could spend $4 more and be in the $360 puts at net $14 – and they are now $15.  I think $425 ($20 up) would be a very tough nut for NFLX to crack again.  



FEYE/Mill – Same comment I had in Jan – it's a no play to me:

Submitted on 2014/01/03 at 1:15 pm

FEYE/QC – I can't tell a good company from a bad one in that space but they certainly have enough buzz off the IPO and have been kicked into overdrive now by picking up Mandiant AND raising guidance 10%.  It shows you how much money is being thrown around in this space as FEYE is paying 10x REVENUE for Mandiant, which is essentially buying Kevin Mandia for $1Bn.  So, I wouldn't get in their way but $6.7Bn (at $55) for a company that will gross $150M next year is not for me. 

At $25 earlier in the month, I may have been inclined to gamble (50% below the IPO) but now $35 off $80 is a weak bounce and they aren't even making that.  Since they have no history, it's hard to draw lines but let's say, conservatively, that they popped from $50 to $75 (up 50%) and we'll ignore the whole move over $75 and then we drop to $25 for a reasonable consolidation so down $50 is $10 weak bounce to $35 and $20 strong bounce to $45 before they even begin to be considered recovering.  



You can sell the Dec $30 puts for $4.30 and that nets you in at $25.70 but, to me, if they can't get back over $35 – I don't REALLY want to own them long-term, so I wouldn't play it.  

Weather/Albo – It always does sound like such a great excuse but didn't we have weather last year too?  I also seem to remember some weather in Q4, so all the comps had weather in them, didn't they?

/ES very bouncy off 1,907, /YM held 16,600, /NQ never really went down and /TF tapped 1,132 before bouncing.  Oil hovering right at $103 with inventories in 30 mins.  They'll be expecting at least a 3Mb draw to support $103.