What a wild day that was!
I ended up with a spread on Google, see today’s comments for the play by play.
The markets made a dramatic recovery for no reason I could see except, perhaps $59 oil but ended up basically flat – still much better than way down! Tomorrow is Bank of Japan’s rate decision but a hike there is already well priced in so the next big mover (planned anyway) is payrolls on Friday.
Gosh I hate to be an optimist but I smell rotation!!! Oil and commodities are being sold off in droves but we are in the awkward stage where people think they are getting a bargain in dead sectors so money is being misdirected. It will take some leadership to move things forward.
Oil went through the $60 floor and is settling at $59.90 in the overnights. For some reason SUN thought that was good news but we’ll go over those plays later.
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This was a terrible day not to sit on your positions but a great day to day trade as you could have made money both ways on oil today. I was too busy fooling around with Google to pay enough attention to oil but:
VLO opened down 2% and went up 4% from the open, turned down at 10:45 after the mandatory head fake on the oil report, dropped 3.5%, turned again at 12:30 and went up another 3% where it ended the day technically flat.
http://finance.yahoo.com/q/bc?t=1d&l=on&z=m&q=l&p=&a=&c=&s=vlo
XOM did the same at 10:45 and also at 12:30 but not as extreme (that’s why it’s not called the XOM Rule).
http://finance.yahoo.com/q/bc?t=1d&l=on&z=m&q=l&p=&a=&c=&s=xom
Had yo been nimble enough to trade on the Valero rule, you would have made a boatload of money on all our issues but, as far as full day’s go, they were mainly flat.
Longs – very dull except
HYDL Apr $65s ended at $5.40 (up 30%)
UPL was mistake proof as it rocked up all day, the $50 calls ran to $3.40 (up 65%).
Shorts – also dull in general, the April time frame buffered any serious losses
RDSA opened so high the $60 puts opened at .40 and stayed there.
You could have made money on both sides of the spreads today but this crazy market is just what you want with a spread. COP is a good example of having it both ways:
http://finance.yahoo.com/q/bc?t=1d&l=on&z=m&q=l&p=&a=&c=&s=cop
SU got creamed today (-3.6%). They are a great indicator of the future price of oil. The $75 puts I took off the table yesterday for a double at $3 closed today at $5.30 – oh well…
If you made intraday trades like me you will have another crack at essentially the same group tomorrow but I’ll be checking for additions and subtractions.
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PD was another wild ride today, even with a $4 recovery in the afternoon, the $135 puts finished up 10% at $4.20 but shame on you if you didn’t take the double, especially after this morning’s lecture!
It looks like BIIB will be very, very good to me in the morning. After being halted for 2 days it’s up $4 in the after markets on a unanimous approval to bring Tysabri back on the market. ELN will give a better payoff but would have been devastated if the decision had gone the other way while BIIB should have mostly recovered after a month as they have many lines of revenues.
C held up OK in this terrible market. The $45s wound up at $1.85 (up 20%).
DBRN had a scary open but a great finish and the Jun $45s ended at $2.75, up 15% for the day.
NVDA was another one that worked if you took it off the table. The $47.50 puts finished flat at $1 but were good for $1.85 at noon.
http://finance.yahoo.com/q/bc?s=NVDA&t=1d
WIRE didn’t go down much but the perception changed and the $35 puts gained 50% to finish at $2.05 after a 2% drop in the stock. This is another one that was down significantly more at noon when the put was trading for $2.90.
BA also recovered $1 in the afternoon but it still scared up the value of the $75 puts to $2.40 (up 15%) after spending most of the day at $3.80.
COF marches downward but bounced off the 50 dma at $86 today. Anything below this line is very, very good.
CRDN got hammered again today, down 8%! They even reaffirmed their guidance today that will bring their p/e down to 17 this year but nobody cared! Tomorrow the CEO speaks at a conference at 1:55 EST and I will be buying a little during the day as this drop seems way overdone to me. They are down on fears of lower military orders but that will cycle down over 2 years and the company has done a great job of diversifying. And hey, there could always be another war!
http://phx.corporate-ir.net/phoenix.zhtml?c=97537&p=irol-EventDetails&EventId=1212986
