Not looking so good…
We broke my S&P downside target. This kind of reaction on very good economic news is a very bearish sign, although I do take some solace from the fact that both the DOW and the Nasdaq rejected attempts to go below 10,800 and 2,250. Still, as I said this morning, chances are the S&P will be a major drag until it gets back over 1,263.
The drop on the S&P has been on fairly low volume so far and TXN’s guidance was as good as anticipated but HOV beat estimates by 5% but gave the dreaded “reaffirm” without raising guidance so we need TOL and INTC to give us upside surprises tomorrow to get real traction.
The HOV trade worked already for the Dec or Jan spreads. The stock will trade down in the morning and then either recover or die depending on TOL’s report at 2pm.
Got stopped out of RIMM and GM with nice profits. I think the GM jump at the day’s end was a big overreaction to mediocre news but, with the stock testing an all-time low, I wasn’t going to chance it.
Despite massive efforts to drive the price down, GG keeps making small advances, MRB seems to have no such constraints and is up 4% again today.
Trade of the Day MSFT was especially sweet picking up .20 from a bad start, giving everyone nice entry points this morning.
Yesterday’s Trade of the Day #2 TMG had a nice 3% gain on a bad oil day! Somebody dumped out of the calls with a nice profit but always use a target price to maximize gains. Market orders on options are rarely a good idea! There is now a huge disparity between the bid and the ask on the March $7.50 calls but they should fetch .60 tomorrow for a nice 50% profit!
MOT had a nice comeback at the end of the day as well. The $23 line might hold.
On SHLD (Monday trade) the Dec $135s that were sold for $3 are now worth .10 and should be cancelled. That makes the Jan ’07 $105s a big win already since the base cost is now down to $26 and the call is still worth $32.10. You can exit this position with a 20%+ profit or sell the $125 calls for another $1.15 – it is too dangerous to sell $120 calls, you need a good cushion in case the stock runs up!
CHK gave back a lot of the gains and the option got clipped 5%, I have a heavy COP bet on oil recovering tomorrow but if oil opens down and gas inventories build I will be getting out of both of these positions.
YELL is now oversold but it is worth waiting for a real turn to enter. It is typically a leader of the major truckers but has fallen out of favor of late for no real reason.
http://finance.yahoo.com/q/bc?s=YELL&t=5y&l=on&z=m&q=l&c=fdx,ups
BCRX announced “a webcast of a summary of data” they are presenting to the American Society of Hematology (ASH) in Atlanta, GA on the 12th. I would have to guess something may be up there but you couldn’t tell from this week’s performance although you can’t be greedy when a stock just jumped up 30% 6 sessions ago…
Any stock ploughing towards a new high on a day like today looks good to me. McDonald’s is still a buy but the options are a little pricier than the 12/2 picks, already up 5%.
CSCO may be tomorrows pick of the day but I’m too bearish to make a call atm… On the other hand, the Greenspan effect has officially worn off so we may leap out of the gate tomorrow – Magic 8 Ball says things are uncertain.
