Wheee! That was a good one…
The indexes all came out of the box running and kept up all day, even the Nasdaq contributed and that was a great accomplishment with Intel doing its best to drag it down with a 2.3% loss on a downgrade. Add the fact that oil stocks were down close to 2% on the average and today’s gains are even more impressive!
Oil really cracked me up today, finishing at $61.05 right at the last minute, as if someone was trying to make a point. The point was lost in the after hours trading where the price quickly dropped down to $60.80, just a tick under a $2 loss for the day.
Gold finished up but the gold stocks weren’t really buying it. Like I said, $565 before anyone will take it seriously again. Copper stocks are also getting hammered, even though the price of copper is holding steady at $220ish. In both these groups I will be excited to buy if they pull back another 10%.
The home group didn’t seem to want to wait to jump up and fortunes were made on our trades of the day (I love it when that happens!). Expectations are now very low for oil inventories so it will take a significant build well above 2M barrels to push these stocks down further.
BTW – Anyone who thinks that this Donald and Martha thing isn’t staged for the media is just too naive to live! His show is out next week, her earnings were out this week, she was talking to Newsweek promoting something when she started it. I’ll take wagers that she shows up as a guest on his show this season and they “make up.” Meanwhile MSO is up 14% today!
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GOOG could not get going as it is losing a complicated court case in which it violated (obviously, one would think) the copyrighted images of a pornmonger. The fact that Google is fighting this case, rather than just paying a fine and agreeing not to show their images, indicates how important porn is to Google. This one will not go away so I’m going away from the idea of buying Google. BIDU also suffered a 50% pullback from the open which didn’t help.
CME had a great day, up $10.42 (2.5%). They are officially no longer tied to Google.
TASR dropped to $9.50 but then almost fully recovered, I guess I was greedy hoping for a lower entry…
As predicted, BTU was very slow to move down. This was exacerbated by a split, which I believe is coming tomorrow (sometimes they don’t show up right away). I stayed out of it today but I will be all over it if momentum points down, especially with a large inventory build.
COBR could have been the TOTD with a nice 5% gain. They have a conference call at 11 tomorrow which will set the direction so take it off the table if that pushes the stock down!
The SU $75 puts were a big winner, opening all the way down at $2.15 and going all the way to $3.50 (a 60% gain) before Valero clearly indicated a sell at 3:15.
http://finance.yahoo.com/q/bc?t=1d&s=SU&l=on&z=m&q=l&c=vlo
Once again, you see how I love those tricky earnings statements! HET April $70s opened at $4 and ran up to $5.30 before pulling back (I let go at $5).
JBX was another huge winner, gaining 11% for the day after being nice enough to trade down to let us into the $40s for $1.40. Just 8 hours later and they are selling for $3.20 (120%). Maybe that should have been the TOTD?
JOYG is working very well, up 2.2% today.
I blew CCJ as it got killed on tomorrow’s split (-2.4%). My bad for not seeing this! Hopefully BTU will do the same and make up for it. Of course if you sold the Mar $75s you are very happy…
INFY began its comeback today.
PETS took a bad turn so let’s kill that one until it tests the 50 dma of $16.50.
LIFC came right out of the box with a 4% gain, looking very good!
TIE $40 calls shot up to $3.80 but opened higher than we wanted – 8-(
TALX was a great pick last night, the $33.38s are already up 27% today. No reason to sell this one, it is just getting started…
SNE showed surprising strength today so I dumped the puts for a very nice profit.
Fri TOTD IMAX tacked on another 5.6% and the Mar $7.50s are now $1.80 for a clean 150% profit! The strength is incredible but I set a stop at $1.50 to preserve my double and I will up it every .25 from here on out.
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HOV was also very good to us by opening flat and giving us an in on the $45 calls for just $2.50. The whole sector took off at 10:45 and the calls ended the day at $4.60 (80%). Also not bad for a day trade (and I do hope you took the money and ran!).
Our actual Trades of the Day were also very very good to us:
BZH – May $60s ended at $9.70 (up 25%)
LEN – May $60s ended at $4.50 (up 32%)
BHS – ended up $1.42 (2.85%)
RYL – Mar $70s ended at $4.40 (up 100%)
TOL – Apr $35s ended at $1.25 (up 66%)
TOL – Apr $25 puts ended at .25 (down 20% – of course you can’t win both!).
In the comments, I mentioned that I took the money off the table at about 11:30 as they had already had huge runs and, except for RYL, I didn’t miss anything.
I hope it is understood that I try to make the Trades of the Day the trade with the highest probability of success, not necessarily the one that will make the most money!
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They say “Don’t look a gift horse in the mouth…” Unlike the Trojans, I like to take a gift horse (stock), ram my hand all the way down its throat and take out my profits!
This is what you need to do to make money! Today’s homebuilder trades were a great example. TOL came in really cheap and stayed flat until 10:45 when it soared right into the 5% barrier. At that time, the April $35s had rocked up to $1.25, a 66% profit in 2 hours.
So what did I do? Come on, you know the answer – I sold!!! It’s too much, too fast. Why be greedy? Take the ridiculous profits and let’s look for the next opportunity. Make the gift horse your ATM, not your IRA!
As the stock flattened out, the option deteriorated and actually went lower for a while, even as the stock stayed strong. I took a new spread into earnings on the current $35 calls and $30 puts in a 3:2 ratio with the profits off the first trade. So I can sleep well tonight and profit either way from their earnings!
