Thursday Morning

Well it looks like today should be a good day again! Europe and Asia sold off somewhat but all markets have been very strong and are pulling back slightly. Inflation looks tame but housing is cooling off quickly (not crashing) so perhaps we are getting back to that rotation into US equities. It is unrealistic to expect to break through significant highs like yesterday and just keep rocketing upward (unless some amazing driving event happens). The trick is how well these new highs can hold. What we really need now is the Fed to say they are done tightening and for housing not to collapse on us. Oil continues down, probably into the $61 range today as traders just can’t keep ignoring those inventory numbers. Natural gas is running into its own ceiling around $7 and, like I said, that tends to put a limit on industrial consumption of oil. Gas inventories come out today and traders are praying for a drawdown that would indicate demand is still there but people are switching to gas. A build in gas = demand destruction that would be a very bearish sign for oil. Nonetheless, I am not seeing any oil plays I am comfortable shorting as they have fairly strong charts. I would have to see oil go below $61, then I would go after our usual suspects. Gold remains very tame, an indicator that the world is not scheduled to end soon as the fear factor is draining out of it. The Google publicity machine is in full swing with 41 articles hitting the Yahoo news headlines yesterday alone! Forbes has been going to bat for Google for 2 weeks, I guess it really is a “Capitalist’s Tool”! If you believe all the press, Google will be all things to all people in the near future with GMail, GDrive, GCash… ===================================== OWENQ looks like a great company – $6Bn in sales $800M in profits and an $88M market cap? They suffer from overhanging bankruptcy issues due to all that asbestos they used to use in insulation. The stock usually trades at .30 on the off chance “something good” will happen but Congressional action sent the stock up to $5 last year but I want to wait on this one as they have a new plan to present on Apr 4. The current plan has a dire warning that people who bought at $5 should have read (you do read these things, right?) before it dropped to $1.25: http://www.ocplan.com/ocplan_shareholder.htm BSC had a 8% beat, good enough to keep them in good graces but not good enough to send them too high so let’s keep our eye on the Apr $140s if we can get them for $2 or less. PALM split yesterday and sold off but I like the stock going into the 3/23 earnings. Just because RIMM put its legal troubles behind it doesn’t mean PALM is dead. Last I heard, RIMM only had 3M users out of 40M US “white collar” jobs so both companies have room to grow. The Apr $20s are very pricey at $1.75 so I like owning the stock and selling the calls for a quick 8%. SPWR is back on the move and I still like playing CY to benefit from this. The Jun $15s are just $3.60 (a .58 premium) but for $18.02 you can just buy the stock! In the auto industry, unions are just happy if you’re not closing plants so expect DCX to get health concessions and move up past $60. The Apr $60s look good at .80 but last April was a disaster for the company so watch them carefully! I may get myself in trouble here but I’m going to take a 1/10 entry into RIMM Apr $85 puts for $3 or less. I may switch to the $90 puts if they go below $4 but there is no way these guys hold 50x earnings into their 4/6 report. If the stock goes above $90 I will hold what I have and pray but at $95 I may short the next level. PD has a long way to move up if we are rebounding. The Apr $75s are $3 (a $2.50 premium). By comparison, PCU’s Apr $85s command a $6 premium… TIE should go up with BA. Now that the stock is cheaper (split) we can play the Sep $40s for $8.80 and sell the Apr $45s for $2.30 (28%). I’m long on INTC with the Oct $22.50s at .75 and I’m adding more. Check out GE for what an underpriced big cap can do when it wakes up. Don’t forget the MSFT trade. ********** Trade of the Day – MOT *********** MOT also looks like it woke back up and July $22.50s for $1.40 should hit their sweet spot after earnings. The stock pulled down on a panic over minor problems with the Razor phone which has already been resolved. Have fun trading today, – Phil