That wasn’t very pretty but we held our lines so I’m very happy!
Oil up $2, the Fed looms its ugly head, the transports take a dive and all you can do is take the S&P down to 1,301? The Dow drops 46 pts when components GE (I know, I want to cry) drops 1%, FDX drops 2%, IBM drops 1.4%, MO drops .7%, MSFT drops 1%, PG drops 1.7%… I’m amazed the Dow didn’t drop 150! Other than HD, I don’t know which component was up!!!
So given that disaster, this was a great show of strength from the broader market.
Today was a great example of why we don’t short the builders! I keep saying it, they are too valuable to bet against… If your building stock wasn’t up 5% today, you should trade for one of the dozen who were. We will see if we get follow through tomorrow as new home sales are reported but I already bought my TOL $35s for $1.50.
Oil was way overdone today as a Nigerian company declared “force majeure” (cancelled contracts due to extenuating circumstances) due to the pipeline attacks a couple of weeks ago. Oil jumped $2 on the news which was really just the logical conclusion of what it already jumped on at the time of the attacks. What actually happened is some clever traders took advantage of what would have been a very slow day to buy up contracts on the release (which, as I said was known well in advance) which drove the prices up where they may stay for the weekend.
We may have to move fast on Monday but after missing one chance this week, I took a couple of short positions (BTU, SLB) already. I am also liking SUN and SU here.
Copper jumped up 3% today but gold stayed flat so you can tell global demand is still strong.
The strong resale numbers today ignited Fed fears (it’s always fear of something) and drove rates up which was the biggest damaging factor of the day as no one is buying $64 oil (see XOM’s chart).
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CEPH was DENIED!!! OMG, I wish we could have taken the put but it was halted all day! We’ll see when they open it, hopefully they will wait until morning but don’t count on it.
PALM had a 36% revenue increase and a 20% earnings beat on increasing market share! We are going to be called away for sure but it’s still a nice 8% gain…
GE was a total disaster. I think this may have been the worst first day performance I ever had for a TOTD! I have no idea what happened but it was below average volume and funds were buying like crazy all afternoon so perhaps someone big just dumped a position (but then you have to wonder why). Sorrry, sorry, sorry (kick, kick, kick)… Of course I didn’t buy because I followed my trading policies but I know somone out there did and I am so sorry!
On a happier note: 3/9 TOTD PGIC really made a nice move today, jumping 5% to $8.45 (up 13%) and just .45 away from crying if you sold the Jun $7.50s!
YHOO was a home run today with the May $30s finishing at a still buyable $2.90 (up 30%).
BCRX opened too low to play, losing 2% right at the open. BIIB was more playable, I didn’t think it would get hammered like that (down 3.4%). These will be great buys soon!
GSK dropped 2% and the $55 puts ran up to $2.30 (up 30%).
MLS got taken out and shot (down 5%) today despite a valiant attempt at a comeback in the afternoon. I will give it until the weekend but I think the VNO trade is dead.
CAG jumped 1.4% and we got the .80 at the open but the $20 calls only moved a nickel! I don’t know why but I’m holding them (now a .35 premium).
TASR had an OK day but got weak near the end. The $10 calls finished at $1.05 (up 25%) but were much higher earlier.
On SCHL I said: “I will hope for a rebound to $27.50 then look to short back to $25.” (pat pat):
http://finance.yahoo.com/q/bc?s=SCHL&t=1d
If you follow my trading rules (please read them at least once) then you would be thrilled with ATYT today. There was plenty of opportunity to pick up the $15s for .60 and they finished the day at .75 (up 25%) even though the stock ended flat. They had a great strong finish so I’m happy to hold them.
INTU had a GE sort of day today. Again I see no reason for it as the May $55s closed flat at $1.25 but not sellable at that price I’m sure.
I know I made money on PD today and I hope you did too! Could not have gone better opening flat and giving us a chance to buy more at 10:30 before jumping $3 for the day. I was never nervous as copper was up all day. The reason for the pullback was trouble in Peru which was bad for PCU and it took PD a little while to break away from its trading partner. The $75s finished at $3.20 (up 85%).
We had a comment conversation about GLW this morning and I sure hope they held as it finally took off in the afternoon and went up 1.5%. The May $30s are still down 10% (.90) but we feel much better about them now!
Today’s brain teaser: If oil is up $2 why did UPL do this?
http://finance.yahoo.com/q?s=upl
Notice NYT went up again!
I think/hope SNE bottomed today. I’m not sure AAPL has a bottom at this point!
INTC continues to act as if any rally is a mistake 8-(
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How bad is GM?
They are so bad I bet if they invented a car that didn’t need a tune up no one would buy the stock. Oh, they did that!
They are so bad I bet if they converted an Army vehicle that they make anyway into an SUV that becomes so popular that movie stars buy 5 at a time no one would buy their stock. Oh, they did that too?
They are so bad I bet if they settle their massive labor issues with the UAW and formulate a plan to get their Delphi obligations under control that still, no one will buy their stock. Oh, that’s happening now…
Now they are holding an asset sale but every asset they sell underscores how little there really is to pay off thier $300Bn in debt!
