Thursday Wrap-Up

Another bad day in the markets, and that’s with GM up 4.5% (what are we in bizzaro world?) and oil staying below $61 all day. Those technical barriers are getting to be a very solid ceiling and that may be all she wrote folks! There are only so many times you bump your head on the ceiling before you stop jumping up on the bed… The only thing uglier than the S&P’s intraday chart was Google’s! http://finance.yahoo.com/q/bc?s=%5EGSPC&t=1d http://finance.yahoo.com/q/bc?t=1d&s=%5EGSPC&l=on&z=m&q=l&c=goog One of the driving factors is that the European and Japanese investors did not buy our stocks today, even though they bought their own and each other’s because they think this Dubai deal makes us look like some banana republic that is closing itself off to foreign investment. You can say “no, no, that’s not the case at all, this is totally different” but no one in Europe cares, especially as it’s a European company that is getting screwed by our Congress’ fear of Arabs. Add that to the image of Bush slapping the Indians on the back and telling them what nice reactors they have and if they need to borrow a cup of uranium just give us a call vs. Condi saying that there is no way in hell that Iran will be allowed to benefit from “safe, clean, nuclear energy” (Bush’s words) and you have us looking pretty capricious to a third party. Quote of the day from an Iranian “Diplomat:” “The United States may have the power to cause harm and pain but it is also susceptible to harm and pain. So if the United States wishes to choose that path, let the ball roll.” I’ve said it before and I’ll say it again. Cash, cash and more cash. I am very unlikely to hold anything other than a really great leap into this weekend! ===================================== Boy, I really outsmarted myself on Google today! I got greedy and kept sticking to the premise that it was going back up but it never did so I sold my puts too early and held my calls too long. Had I just kept my initial position the $350 puts finished at $13.70 (+5.50) and the $360 calls finished at $4.10 (-3.30) I would have been even, even taking into account my $470s, which wasn’t part of that spread. I was greedy and I suffered for it. I could have taken $2.20 (15%) off the table and gone to the movies but instead I traded myself into an 18% loss (so far!). I am still double weighted on the upside so if I continue to be wrong tomorrow I will just have to pack it in! Nobody has noticed yet but Google’s settlement is exclusive to Google, the plaintiffs will press their case on against AOL, Yahoo and other search providers and Google just gave them $90M to do it with. No wonder the prosecuting attorney was singing Google’s praises on CNBC this morning! Meanwhile someone said something to me that sent chills up my spine today… They said “Alta Vista” and then they said “Lycos” and I almost cancelled all my calls right there! These were the Google and Yahoo of 1999 and I forgot they even existed just 7 years later!!! Luckily, I was more right on oil than I was wrong on Google and there were just so many good oil trades to make I ended up with huge puts on several companies. ===================================== Thankfully gold was down from the open so there was no trigger on those trades. Once again, only GG held up into a massive sell-off. Let’s remember that for when gold makes a comeback. PD dropped another 2% today, all commodities were crushed! AAPL was a disaster. Aside from following the Nasdaq, it seems that people are very worried (again) that Jobs will be stepping into a busy role at Disney and will leave Apple neglected. Apple has an analyst day tomorrow but that is unlikely to resolve anything. BIIB came back in nicely and the Jan $50s only cost $4.40 this morning, a great deal! They settled in at $5.30 (up 22%). MOT had a huge open but fizzled. The Jul $22.50s held their value at $1.15. The jig is up at LVS. This is no surprise to us but it seems to shock everyone else (I especially like the unflattering sketch of Shelly in the article): http://online.wsj.com/article/SB114187624818993423.html?mod=yahoo_hs&ru=yahoo BID hit our bid of $23 but I’m not buying any long calls until I see something positive. IRM went straight down today, the Apr $40 puts finished at .85 (up 100%) but I see no reason to rush out and close this one yet. My first instincts were right about MSFT’s new product – nobody was impressed and the Apr $27.50s dropped 20% to .40. HMT doubled in the morning but the $20 calls ended the day flat. I still like them. TRLG was a thing of beauty (thank you Daniel!) as it went straight down from the open for a 4.4% loss on the day! The $20 puts moved to “just” $1.40 though (up 33%). DWA was a small beat, this is why we went out to September. At this stage, no bad news is good news! TOTD PGIC never came back enough to buy it but, now that the excitement is over, I may be willing to go a little higher ($7.70) to lock it in tomorrow. ===================================== In the comments at 10:39 I said: “I’m so confident in the oil drop that I just shorted Valero.” All those trades worked out great today but you had to have a strong stomach on some as they roller coastered as oil prices were heavily manipulated during the day. The whole sector finished weak on spiking oil prices, what does that tell you? ===================================== The worst thing that can happen tomorrow (aside from war with Iran) is that the rest of the World markets continue up and we continue down – that means that foreign investors are bailing on us in droves, and it’s not just the Port deal – we still have just 11 days left until the dollar MAY become unstable. We take in $2Bn a day of foreign investment dollars, if just 20% of those dollars begin to look elsewhere, we have a new deficit of $500Bn a year! Please read this article from the London Times (the World’s most respected paper) and remember that this is our closest ally! Imagine what the people who don’t like us are saying… http://business.timesonline.co.uk/article/0,,13129-2058398,00.html “If America puts down an unwelcome mat for Dubai, it will also be sending a signal to foreign investors in China, Russia and the Middle East that hostility to foreign investment is high. They might decide to put their money elsewhere. ” Hmmmm. Here’s another guy who agrees with me (so of course I like him!): http://www.timesonline.co.uk/article/0,,2088-2070287,00.html And finally, not to bum you out but here’s the worst case scenario (and it’s pretty bad!): http://www.timesonline.co.uk/article/0,,251-2027979,00.html Isn’t if funny that you can’t get straightforward reporting like that from American papers? It’s almost as if corporations had taken them over and were sanitizing the news or something…