Now it looks like rally time!
Most of the indices are now at pre 9/11 highs, although it’s still a long way to go for the Nasdaq to pre-.com crash levels so you could say that tech is really dragging but there were so many bubble companies in the Nasdaq you could argue that the Nasdaq is right where it belongs.
Every single index topped our numbers nicely, the Dow even edged just above 11,200 and the volume was very nice with broad market participation. Way better than expected! I’m going to need until Monday to believe it is real but by then I think I can get comfortable with a new set of trading ranges (oh it has been so long!!!).
Good thing we stayed away from oil, the POO dropped $1 but that didn’t deter most oil stocks from heading up, even in the face of a 4.8M barrel build – double what was expected! The excuse de jour for bullish oil is a gas drawdown but that always happens this time of year as refineries come off-line for spring cleaning. Once again BTU stayed flat.
Google gave back half of yesterday’s gains and I am done with this thing for the month unless a day trade opportunity comes up. I would love to spread the $350 call and $340 put from here but at $2.70 a pop, I would feel like a real idiot if they flatlined from here. Last Thursday before options the stock ran up 20 points, while it could happen again, I’d rather jump on the train when it’s moving than find myself standing in front of it.
I was totally right about Iran backing off the Bourse! That’s why it’s been so nice around here even though the UN is in the middle of convening on Iran. Fresh off the presses, from the Persian Journal no less, is the story (notice the PR spin they put on it):
http://www.iranian.ws/iran_news/publish/article_14125.shtml
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SHLD finished up a full 13%, gaining $15 on the day, I feel so silly because I just told someone in comments last week what a great company this was way back at $117! I forgot who I was talking to but I really hope I talked them out of shorting this:
http://stockcharts.com/gallery/?shld
As expected LEH couldn’t match up to GS so even with a slight beat and a 25% gain in profit they got treated like an also ran as the stock dropped 1%.
BSC is next to report tomorrow morning and after a big jump yesterday and LEH’s earnings, they didn’t know what to do with this stock today. Unless they blow it they should get a nice beat and blow right into the $140s by April so, if it’s possible, I like the Apr $140s for under $2.
SNE went totally the wrong way as they mitigated the late shipment of PS3s by claiming they would be able to knock out 1M per month. MSFT made the same claim and I believe they’ve been averaging under 500K but Sony is better at making things… This boosted the game stocks but not my pick GME, where the $40 puts finished at .55 (up 30%).
BNI went up all day to 6% but opened so high we’ll call the Apr $75s a not trade (although it did double on the day) while CSX was the right way to go with a low open and the Apr $60s ending all the way up at $1.55 (up 375%) – not bad for a day’s work!
VMC opened way too high and pulled back to a 7% gain. DD and DOW did the same so no useful trades came out of those. The DOW Apr $45s are still just .55 and looking good though. DD’s Apr $42.50s shot up to $1.30 (up 60%) so I don’t want those unless oil keeps going down.
ESLR is being held down into options but the Jun $15s still gained 10% to $3.30.
MSFT got off to an awful start, which was great if you had faith, as the Oct $27.50s were easy to get at $1.50.
Lucky for me RIMM never gave me a chance to buy the puts. It went crazy today (up 7%).
SNDK did as expected with a nice 6%% rally.
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I want to see how OLED handles the 200 dma at $8.30 but they are ahead of schedule on MBTF benchmarks and once they have 3 colors past 50,000 hours they are very close to production!
On my undervalued bank alert screen we have FBP with a p/e of 6.5 and 30% growth. This is a Puerto Rican bank that has been hassled as it breaks into Florida (perhaps justly as US regulations are stricter) but you just can’t argue with the numbers. Jun $12.50s are just $1.40 ( an .80 premium) and it’s a nice play in case a bigger bank wants to help them out by acquiring them. NFB just went for 15 times earnings…
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I have a new theory that Yahoo finance’s slowness (remember I complained about it the other day, then there was a strong retail day) is a leading indicator of a market turn. It’s slow again today but hopefully it’s more people coming in!
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The Google Spread
Google gave back $6.66 today (isn’t that interesting?) so we played both spreads just right by keeping the faith on the short side.
Spread #1
Putting the profits back into more puts was a winner today. We now have 1.75 Jun $330 puts per share which ran up to $20.80 (up $4) against the $6.66 we lost on the drop.
Spread #2
The $380 calls stopped out at $18.50 for a $6.60 profit and we gained $6.66 on the stock but I will be looking to exit this trade as we are now unprotected to the upside so I would set an upside stop at $350 (possible $8 loss on the trade) and hope for a nice drop into Friday.
Again, this is a terrible way to play a spread (just looking at the end of a day) since there were so many opportunities to make money on just this one day but it’s still fun to go through!
