Wednesday Wrap-Up

Another good day! Not for my oil puts but for everything else… That was way better than consolidation with SOX and Apple moving the Nasdaq to a 5 year high at 2,359 while the Dow and S&P both made a nice strong finish. Of course the oil sector was a great part of that although it was very strange that the Dow Transport index also made a new all-time high even as oil marched higher. This means that transport traders also think this is a false rally in oil. I could really kick myself because, aside from not following the Valero Rule and wasting a lot of money, I also paid no attention to myself when I said on 3/20: “the oil sector is still in favor as retail investors plow money into everything that worked last year.” I’ve got to start reading this column! I was so right, everything that worked last year is working now, perhaps this year it won’t come screeching to a halt…. Gold remained strong and copper went through the roof with a 2% gain. This is a very strong looking market coming into earnings and there have been very few warnings so a good earnings season could really get us over the hump! ===================================== Speaking of reading my own column, on 3/22 I said: “If the market is sane (I know, when is it?) then AAPL will be a winner today as this can’t help but boost their sales over the holidays. Although risky as Apple has been under attack for a month, the Apr $62.50s aren’t so bad at $3.10 (a 3.70 premium) but obviously to be sold quick as the premium will kill you over time. Also, the broohaha over the French ruling on ITunes will hang heavy over the stock until it is resolved.” Later that day I said: “AAPL is now officially baffling me. I don’t know who’s selling it or why but sell it they do, every single day, into every rally… I hate to say it but the 200 dma is $57.50 and if we don’t hold $60 I think that’s where it’ll end up.” “AAPL started out great then died, very depressing! The $62.50s peaked out at $3.60 (up 10%) but I held mine to the bitter end where they closed at $2.85 (down 8%). I don’t consider that greedy, I didn’t plunk down $3.10 to make .30! This stock is starting to be RIMM level poison to invest in…” We forgot about it until 4/3 when I said: “AAPL looks like it’s on the march which makes PLAY the way to backdoor it. It has been so beaten up lately that the May $25s are only .95.” Here’s the chart: http://stockcharts.com/gallery/?aapl The $62.50s are a nice double and you certainly can’t say we didn’t see that one coming! Sometimes we all get a little impatient but when a stock is really good, patience pays off…. ===================================== On January 30th I said “The market of the year should be India, the government is pushing very hard at Davos and around the world to be counted among the world leaders and a lot of the other Asian investors are seeing India as the value play of the region.” The Bombay Index is up 30% since I wrote that! As we get ready for RIMM earnings tomorrow, Motley Fool saved me the trouble of writing what bothers me about this stock with this nice article: http://biz.yahoo.com/fool/060405/114426321311.html?.v=2 In comments today we took the RIMM $80 puts for $1.15 in anticipation of earnings and they are already at $1.60 (up 30%). RIMM reports after the close tomorrow. Also in the Fool, great article about Chavez and oil: http://www.fool.com/news/commentary/2006/commentary06040503.htm?source=eptyholnk303100&logvisit=y&npu=y The Google $500s opened high but I took advantage to swap my $470s and $480s into the more stable contract. Then I rebought some $470s as they seemed to be in a $1.40-$1.70 range but I never got my $1.70 so I have to hope for the best overnight. Sometimes the winning move is not to play. Staying out of SNDK was smart as it gained 9.7% today. There was no way to see that coming! ADM behaved very nicely giving us a good open with the May $40s finishing at .75 (up 90%) – Everyone say thank you Kyle!!! Well, I got my EBAY $40s for .90 but they are already down a nickle. Speaking of nickle, N had another good day rolling up to $52 (up 4%). I guess those $50 calls weren’t so ridiculous at $1.75 (now $3). ADSK had a nice low open and a great day with the May $40s already at $1.55 (up 70%). DJ was way worse than we thought and the $40 puts ran to $2.50 (up 135%). GAP also did better than expected and the May $35 puts ended at $1.95 (up 50%). SHLD did better than I thought it would, moving up almost 5% for the day. Not bad for a $137 stock! MRK had a very nice day and the $35s finished at $1.55 (up 25%). The Vioxx trial verdict came out just now and seemed mixed but the damages weren’t too severe so I think we will get additional up movement tomorrow but I’d rather wait until I can review the documents to make a decision. GM$17.50s finally moved up to .40 but then the stock reversed and I got stopped out at .30! Waste of time! Our Google spread continues to work with the May $450 calls gaining $1.50 while the $340 puts lost just .30! The disconnect between GLW and TXN is starting to seem very strange. http://finance.yahoo.com/q/bc?s=TXN&t=5d&l=on&z=m&q=l&c=glw That little EFSF that was featured in Barron’s is moving. Up to .41 today (up 10%). AH had another huge day and the $60s are closing on a triple at $2.80 (up 180%). Daniel picked up on BSM in the comments and it made a great 18% move up today to $6.74 and looks very strong so, as I said to Daniel, what are you risking with a 5% trailing stop? Kyle made a nice case for INSM in the comments but I still think it’s too pricey at $1.79. It could be a nice little play if you don’t mind the fact that they make no money and are burning 25% of their cash per quarter (but that’s biotech!). These small biotechs are just too dangerous to play with in my opinion. Also in comments I decided it was time to buy MCD May $35s for .95.