The bond sale went badly today. That is the real story of the day.
Money is flying into copper and gold which both hit new highs today.
Homebuilders got trashed by a weak housing report and oil sold off on inventory builds.
This was a great day!!!! If you had told me all that was going to happen today, even though I said some of it was going to happen this morning, I would have predicted a 50-100 point drop in the Dow and other indexes following down. The fact that we were a little under flat all day was a very pleasant surprise.
Tomorrow will be Telling Thursday (I need better alliteration) but a couple of good earnings reports could make for some real excitement.
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Don’t say I didn’t warn you about Google! I came up with an interesting play today. I took the March $490 calls for $15.60 and I sold the Feb $480 calls for $12 to cover my $410 puts which are nicely up from $12 I came in at. My logic is that the worst case is the stock tanks and I lose the calls but only $3.60 on the spread. On the other hand, if it goes up the March will hold it’s value and give me a lot of leeway no matter what the price. Best case scenario is that Google goes up but can’t break $490 until after expiration…
Wasn’t cash a great trade today? Isn’t it relaxing to have actual money when the market is all over the place?
The gamble of the day – BNI, paid off in less than 30 minutes and gave us a nice 20% return. We can do that one again tomorrow if the market recovers.
BVN did not disappoint with a 1.5% gain, but NEM and GG actually did better. PD was the real star of the commodity stocks with another 2.5% while PCU is still lagging behind.
We await GM earnings, I am blown away by all the people who put money into this company today! Kirkorian bought 12M shares this week, which probably accounted for 25% of the buys so I think that’s a top, although he may actually know something coming into earnings tomorrow…
NFLX finished the day up 15% as expected – there was no way into this stock though as it stayed high all day long.
You would think TXN had a product recall from this stock action! They are high on my list when the Nasdaq turns up.
STJ got beat up for no good reason (reason being that people cannot read an earnings report). JNJ wants to buy a device maker and while STJ may not be as cheap as GDT, they also do not come burdened with their problems. STJ is smaller ($18Bn vs $24Bn and has a p/e of 36 vs GDTs 56). Right now the stock looks like a falling knife, but I will be initiating a small position if it crosses below $48 and adding on the way down.
UNH is having a fire sale today, trading all the way down to $57.50 before taking a bounce right between the 50 and 200 dma. I hate to call this an entry point as the technicals do not support it but this is the biggest pullback in more than a year on this excellent stock. I would say if it holds $56 or better this week all is well.
SU was a great call beating most of the sector by dropping 3% (more if you bought at the inflated open). Valero gave us the all clear to short right at the open and got us out at 12:30, pretty much the day’s bottom for most of the sector. http://finance.yahoo.com/q/bc?t=1d&l=on&z=m&q=l&p=&a=&c=vlo&s=su
Now we can wait for Apple to turn up before buying the way too cheap $80 calls. They went all the way down to $1.20 today which is tempting but I would rather buy them at $1.60 when the Nasdaq is clearly heading up.
JNJ was very very good to me by coming back down and letting me sell the rest of my puts for a 75% profit! I could have picked up another $1 if I was more patient but after yesterday I was itchy to get out.
I’ll call this one now – let’s look at the Feb $45 put on LVS for $1.20. It should hold it’s value through 2/14 earnings and I cannot imagine any way they will be able to spin this once the numbers come out. As always, HET is the class of this group.
On 1/20 at 6 am we said: “WYNN is looking very weak (and is a travel stock) and LVS is looking way overbought. SHFL, on the other hand, is way oversold so you can play the group both ways.” SHFL has picked up 10%, WYNN is flat and LVS is down 8% – Thank you very much, I’ll be here all week!
MCD had a weird day caused by a truce with investor Bill Ackman who wanted to break up the company. The odd thing is that Ackman said this company is doing so great that he is going to leave management alone but the market was hoping for more and sold the stock off early in the day. I doubled up my position in anticipation of some excitement with a good IPO for Chipotle tomorrow.
OXPS $25 calls ran up to $4.20 today so it looks like yesterday’s trade will be a very safe 5%. The Jan $22.50 calls flew up to $9 for an amazing 20% gain in two days – in this market, I take that off the table!
Thursday TOTD CDIS fell another 3% today, this is why I watch fund activity very closely! The $40 put we sold is up .40 while the March $42.50 puts are up a full $1.25 for a .80 profit on a $1.55 investment in 48 hours! As usual, I disavow all interest in anyone who does not take a 50% gain off the table!
Speaking of greedy, my target on PD is $156 but, with a $16 gain in 3 days, I would sell on any drop below $152. This is a very scary market where I would rather have cash than any stock overnight.
OLED is now up 10% from Monday’s pick. Take it off the table – we’ll find another one!
The DIA $111 call improved to .25 but I am hoping for .50.
The ELN Feb 15s that were sold for $1.20 should now be bought back for .60 – 50% is 50% no matter which way you get it.
Although Yahoo is flat, the Jan $30s are up at $7.60 so someone is a believer…
I sprung for the extra .10 and picked up the MSFT March $27.50s for .25. 9,000 contracts were bought at that level today and the April calls and the Jan $30s were extremely active.
