What a wacky, bumpy week that was!
We held firm to our new floors all week, withstood another run-up in oil and got wildly conflicting housing data on consecutive days. Tuesday it’s Bernanke’s first real chance to cause economic chaos so we’ll see how that goes if we can ignore Google long enough to pay attention.
The SOX came to life on Wednesday and saved the whole market from what may have been a Microsoft induced death but next week will be key as to whether we can follow through or not. I’ve already stuck my neck out and called Wednesday the day the Nasdaq 2,500 rally started (assuming it really does continue).
The Iran Oil Bourse didn’t trigger on schedule and the Mid-East markets are collapsing and we will see tomorrow if that has a ripple effect on other emerging markets. Of course it could all be part of the grand game of global rotation I called for at the beginning of the year but I am far to humble to believe that I can be that good of a prognosticator.
Look for Mid-East investors to flee to good old reliable gold as they worry about collapsing market values.
My best suggestion of the week was Monday’s observation that you should buy Google every night and sell it every morning. This strategy worked every single day but paid a very nice 10% bonus on Friday!
The Valero rule saved us from some very costly oil mistakes and could have made us a bunch on the plus side if I wasn’t so negative on oil (but there is just soooo much of it!).
Not to waste too much time looking forward, let’s review how we did (I think this was my worst week of the year!):
=====================================
AAPL was by far the worst call of the week (even though, to be fair, I did say it was risky) with the $62.50s finishing at a woeful $2.10 (down 30%). It took a big bounce off $59 on Friday but I think it may still be searching for a bottom.
We are all waiting to see what AMAT will do but the $18 calls have already gone to .50 (up 40%).
I misjudged how strong the reaction to AMLN’s new diabetes drug would be, it jumped 5% on Friday with a very strong finish. This may make a momentum play for next week.
No one told ATYT there was a tech rally. The $15 calls finished at .70 (down 15%) but I just can’t believe that NVDA is kicking their asses this badly:
http://finance.yahoo.com/q/bc?s=ATYT&t=3m&l=on&z=m&q=l&c=nvda
Monday TOTD BA was flat for the week and the $80 calls ended at $1.15 (up 15%) after much heartache!
BEAV had a nice first day with the Jul $22.50s already up at $4 (up 25%).
On Monday I said BTU will head to $51-52 where it will become way overbought before falling. I’m $1 away from the first part of my wish so next week will tell!
Wed TOTD BXP $90 puts finished at $1.30 (up 30%) but have a big bid/ask spread so really even.
CAG was a nice pickup on earnings news, it gathered steam on Friday and the $20s finished at $1.10 (up 35%).
We got into DELL at just the right time Tuesday morning and the $30s finished at .75 (up 25%).
Wed TOTD EOP didn’t go down much in price but a sentiment change rocketed the $35 puts to $2.15 (up 75%).
FDX was very very good to all of us who took a double and ran on the first day but if you just kept it overnight on Weds you were right about back where we started with the $115 calls at $1.25 (up 8%).
FRE went the wrong way at first but the $65 puts finished at $2.05 (up 50%) which is great as long as you didn’t do the FNM pair trade where the $55 puts finished at $1.55 (down 20%)!
GE looks like it might take the honor as Worst Trade of the Day – EVER! The Jun $35s dropped to .60 (down 20%) in just 2 days and the Jan ’08 $35s were no better, losing 10% to finish at $3.50. Anything below $33.75 and I think it’s time to cut losses here, even though I still don’t know why it’s dropping.
GLW was a source of consternation but rode to a flat finish and the May $30s dropped to .85 (down 15%). The way TXN went up Friday there is no way I would sell these unless TXN retraces below $30. Of course the easier trade was to buy the Jan ’08 $25s for 7.60 (now $7.80) and selling the May $30s as we suggested on Wed morning.
GOOG was called as a spread on Wed of the Apr $370s at $6.70 (now $14.90, up 120%) and the May $310 puts at $10 (now $4.50, down 55%). If Google edges above $370, I think it might be wise to cash out of the $310s and reenter later, no sense holding $310s when you can buy $350s for the same price on Friday. On the whole I am very happy with this trade as we were betting down and it could not have gone more wrong and we still made a profit!
HYTM was up and down but finished at $6.90 (down .10).
INTC was disappointing with the May $20s finishing at .65 (down 15%). I really believe in this one!
INTU looks like it took a bad turn with the May $55s at $1.10 (down 15%) I won’t have the patience to see if it can test the 50 dma at $51.50.
LMIA came down to $16 and got a lot of buying activity on Friday that took it up to $16.50, I may have been a little greedy on this one hoping it would come down to $15 before buying.
MSFT knocked us right back where we started with the Oct $27.50s back at $1.30. I still like them but not enough to buy more as it could stagnate for a while, giving us the same price for January.
NYT remains on watch but I would really like a little more time on this before jumping in.
I said NVDA was only a working put if the Nasdaq was heading down and it only took 1 hour for me to be right both ways. The $50 puts shot up to $3 (up 100%) but finished the week at $1.25 (down 25%).
OPXS was a good timing call Friday morning with the May $30s giving us no grief to $1.10 (up 20%).
Timing could not have been better with PD – the $75s finished at $3.60 (up 60%) and I think it’s got a long way to go (but that doesn’t stop me from placing a stop at $3.40!). PCU disconnected due to trouble at home so we just have to watch the price of copper for this one.
PFE underperformed a damaged sector and the Jun $27.50s dropped to .40 (down 20%). We wanted to hold this into earnings but it’s looking weak here so it’s one I would take off the table if I had something better to buy with the money.
PLLL is working so far as the stock is up slightly at $17.79 and the Apr $17.50s we sold for $1.30 are now $1.05 (up 20%).
We missed a nice short on SNE as I predicted problems with the 50 dma at $46.50 but decided not to play it, still, it did turn out to be a great predictor of Apple’s continuing problems.
http://finance.yahoo.com/q/bc?t=5d&s=SNE&l=on&z=m&q=l&c=aapl
SVI is a good example of why you shouldn’t dismiss Cramer. The stock went to $11.70 (up 15%) since we talked about it on Thursday.
TASR is consolidating for something but who knows which way it will go?
Wed TOTD VNO stayed flat but the $95 puts ran up to $1.90 (up 30%).
YHOO May $30s went to $2.85 (up 30%) and now the May $32.50s look more attractive at $1.45 (only if Google keeps going up!).
=====================================
On Thursday morning I said “Gold meanwhile is off 4% since 1/31 but NEM, NAK and ABX are down 25% – this will be a great play if gold turns back up.”
Looks like the timing could not have been better!
http://finance.yahoo.com/q/bc?t=5d&s=NEM&l=on&z=m&q=l&c=nak%2C+abx
Don’t forget GG and MRB as other golden favorites and really don’t forget that NEM is the fastest dropper if gold reverses!
