I hate it when I’m right about negative stuff…
So you see what I meant about cashing out, we got a good chance to exit positions all day but 5 minutes after the Fed announcement and everything was in total hell! The cash also gave me a nice chance to take advantage of the oil puts that developed during the day.
Imagine how you would feel if you owned XOM (down .5%) or CVX (down .6%) or BP (down .8%) or SUN (down .7%) on a day when oil is up $2! XOM has 50Bn barrels of reserves – a $2 rise in oil should add at least 10% to the market cap, what kind of BS is this?
The only explanation is that the run-up in oil is fake and these guys know it! Funds were selling these things all the live long day while retail suckers where jumping in to take advantage of “rising oil.”
http://thomson.finance.lycos.com/lycos/iwatch/cgi-bin/iw_ticker?ticker=xom
Another reason for the big pump is that the AMEX is launching an oil ETF on Monday (assuming it gets approved which it shouldn’t but it will). This is a way for the oil traders, who are stuck with ridiculous priced contracts, to pawn them off to individual investors who will get caught holding the proverbial bag when this international game of hot potato comes to an end.
http://www.marketwatch.com/News/Story/FN78XsxFVm2TcjZHP1KGJ2N?siteid=google&dist=morenews
Much like the run in silver as a new fund opened up, oil is running in anticipation of new participants coming into the market. “This can only end in tears” as my Grandma Lucy used to say!
I’m so angry at this screw job I can hardly think straight, I really hate it when rich guys come up with new ways to rip off average investors!!!
Speaking of being ripped off – gold took a nosedive on the rate hike, not because people sold gold, but because the dollar rose .5% (.5% of $600 = 3). How dumb are people who sell off gold stocks based on that? Again the total ethnocentricity of this country will be it’s downfall…
As we expected, only the Nasdaq held it’s technical mark at 2,304 while the S&P slipped to 1,294 and the Dow dove all the way to 11,154. I’m not worried about the S&P as 12 points of selling is attributable to the reweighting and should flow back in by next week but the Dow made a one day move that took it over halfway to the 50 dma at 11,100.
If you have a position that you are holding, take a look at what happened to it during the first week of February, after the 1/31 FOMC meeting. Since the market had just had a run-up, commodities had just had a run-up and the Fed language is identical, we can assume similar results so make sure you have realistic expectations on your remaining positions!
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GM is halted as GMAC is going to restate results due to “accounting errors.” I don’t know when but I remember last year I wrote a whole blog about GM’s voodoo accounting practices and how it would one day catch up with them so here it is! The $20 puts we took for .40 on Friday don’t seem so silly now do they?
GOOG is going as expected, check the comments for the blow by blows but (even though I was greedy and didn’t) we should have sold (x) $420s for $4 (100% profit) leaving us with free (x) $430s at $2.85 (up 185%) and (x) $440s at $1.90 (up 90%). Tomorrow I will begin to buy 3x the $450s for .70 rather than waiting for them to get to $1 then sell 1x of the $430s to pay for them while pocketing .70 on each set. The trick is to keep that cycle through the $470s where we should end up with 3x the number of calls we started with and a 100% profit in our pockets!
I got stopped out of all the property plays on BXP, VNO and EOP with a small profit and thank goodness because BXP got added to the S&P and jumped 4% in the after hours!
Intra day I called oil pre Fed as I suddenly realized what total BS the whole run up was in conjunction with happening to read over the Fed announcement and connecting the dots. We are off to a very good start on the puts and, depending on tomorrow’s inventory numbers, there may still be a lot of room to run:
VLO $60 puts finished at $2 (up 15%).
XOM $60 puts finished at .60 (up 50%)
SU $75 puts finished at $2.40 (up 33%)
COP $65 puts finished at $2.10 (up 30%)
MUR $50 puts finished at $1.50 (up 20%)
SLB $115 puts finished at $1.10 (Flat – I wrote a wrong price in the post)
I should have called realtors too but I had been watching oil and was in a hurry…
YHOO went crazy at the close, up 3% for the day – either something’s up or it’s tracking Google. The May $32.50s we swapped into yesterday are already up to $1.70 (up 20%) but I sold mine for $1.60 at 3pm when it still looked toppy.
RIMM $80 puts were a great call yesterday. After a bad morning they settled in at $2.40 (up 10%).
The BCRX puts didn’t move so I’m half out on those, leaving the rest for free.
Well, those are the only positions I endorse at the moment, the market could go either way tomorrow but if oil doesn’t pull back there can really only be one way for it to go!
See you in the morning,
– Phil
