Monday Virtual Portfolio Moves

Posted August 27, 2007 at 9:57 am | Permalink (Edit)

Posted August 27, 2007 at 10:02 am | Permalink (Edit)

Posted August 27, 2007 at 10:28 am | Permalink (Edit)

FXI – looking for a snapback but it would key off a big down day in our markets, which you really can’t be too sure of until about 3:35 (and even then you may get surprised!). Right now I have the $138 puts which I will roll up today to $145 puts as I really think there will be profit taking at a 20% 10-day gain in the Hang Seng. This is a dangeous play, of course but I don’t have many straight puts so, unless we rally, I’ll take my chances.

VIX popped right up with the sell-off this morning so the rubber band is still tight holding the markets up.

Energy market taking a nice hit. COP is slow to give up $80 and might make a nice put as the $80 puts were $3 on Thursday, now $2.95. As $1.75 has been a bit of a floor, I’ll start picking up some if I can get that price but I fully expect to have to double down (happily) into inventories but I don’t want to take a chance of $80 turning into resistance and missing the play.

CVX is still a favorite put for me, again, I’d like to see a run at $90 but for now I’m initiating Oct $80s at $1.

GOOG – I think it’s partially supply and demand. There are a LOT of calls and puts written now and that’s depressing prices somewhat. Also, they’ve relatively flatlined since late July but once you get out to October you are back to an earnings play (earnings usually come out pretty much on expiration day).

That’s why the October/Decembers seem so much higher. I’m migrating to Dec $540s, hoping they come down below $20 where I can knock off half by selling the Sept $520s (or $510s on downward mo). I can roll down from there once I establish a position. After Sept expires I can probably get another $10 for the Oct $540s, especially if they announce a firm earnings date inside Oct expiration. This play is an XXX for people who can stick with it but the margin requirement is a stiff $30 per contract if you are selling the $510s.

PTR – that’s my signal (thanks Happy) but I’ve decided to naked short the $150s for $3.80, not a play for everyone. I see no reason not to take the Oct $140 puts at $5 as long as you can cover with the $145 puts, now $4.95 if it begins to leg up. XXX

FXI flying up on our recovery. Stopped out and will need to see when/if this thing stops to roll up.

DIS suddenly deciding to grow in leaps and bounds since we gave up on it.

QCOM $40s for .68 XXX

BIDU going nuts! Great call by Happy at 11:06 saying they had room to run (and of course in the earlier set-up).

FRE/FNM NOT doing well. I warned of this some time ago but got bored waiting. This is a bad sign too. FRE Oct $60 puts are $1.60 and FNM Sept $65 puts are $1.60. The danger is someone stepping in and doing something with mortgages but looking at housing action today it doesn’t look good.

DNDN – if you are holding the common and looking to lock gains, you have nothing to lose by selling the $7.50s when you think we have a top. At worst, you can buy them back for perhaps a nickel loss if the stock keeps going. HOWEVER – breaking and holding $8 would be a big deal as that hasn’t happened since early July so “When in doubt, sell half” may apply!

FAF/LFG weak too, BSC getting killed.. Something is hitting the fan folks! I’m looking to add 150 DIA $133 puts at $2 which wil weight me pretty nuetral after today’s calls unless BSC turns around.

Treasury bill auction of $43Bn went well at 4.6% (3 and 6 months) so that’s a boost to liquidity, which will rally the markets so holding off on those DIAs but I thought I’d leave it up there in case we hit a wall at 13.400 again.

Wow, FXI calls up 217% since Thursday, totally nuts… Picking up some $155s as a pre-rolll on $142s. Still wanting to short them but it can’t be done like this.

Thanks Kustomz!

Technical indicators – I’m really a fundamentalist who reads charts (most ignore them) so I am generally projecting an intermediate move in a stock and looking for a signal of a breakout or breakdown to make my buy/sell decisions. GOOG, for example, I’m targeting $525 and waiting for a break over $515 but every time it’s rejected at $515 I sell the $510s for $13+ since it covers me up to my target for the month and I can scalp $2 or 3 on a pullback. This has been flawless logic since I got back! As I write this, I have a sell order on the $510s at $15 tee’d up in case the market weakens again.

FXI – out of the $142s at $14.30, since I have the $155s at $6.80, I’m going to sell the $145s for $12 as they should lose money much faster than me on the way down and probably won’t gain much more on the way up.