Well that was a good finish to a crappy day.
Google should save the Nasdaq tomorrow and, since that was the only thing keeping down the markets, we may have a heck of a run. I thought it was very funny that Cramer did not have the balls to mention Google at 3:30, he could have been everyone’s hero but he lost faith (as did I when I halfed out my $500s).
I did not like today’s “rally” as there were not that many stocks participating in it but I think Google will give us a reason to follow through on the broader market tomorrow.
Oil was off all day and commodities were a disaster so I was very please with my cash position as flakey was the order of the day.
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There are two issues with Google’s earnings. The real number is $1.95, not $2.29 which excludes items I’m not sure are one-time and a very negative statement is in there: “”We expect that the growth rate in capital expenditures in 2006 will be substantially greater than the revenue growth rate for the year,” Google said. “We expect the majority of investment to be focused on IT infrastructure including servers, networking equipment, and data centers, as well as real estate and campus facilities.”
Uh oh! It’ll be up to the analysts to decipher this and put a spin on it but I will be selling more than half into the excitement in the morning while the volatility premium is huge. I expect this thing to go at least $450 in the morning but $490 and $500 is still a ways away so I will be glad to move to cash on most of my calls.
Don’t forget BIDU has limited after hours trading and may make a nice surrogate play in the morning.
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Nothing worked today so I’m not even going to bother looking at today’s picks. If the market does indeed turn up tomorrow a lot of today’s ideas may be real bargains tomorrow.
I’m very mad at myself for picking up CME $490 puts for $2 as I was sure it was going lower but it didn’t and the puts eroded to almost half by the end of the day. I should have realized how quickly that could happen as it is the same reason I told everyone to stay out of the April Googles! Another great example of do as I say, not as I do!
Luckily gold dropped so fast there wasn’t time to buy in at high numbers but I did think the sell-off was overdone as it was caused by a huge drop in silver which never should have gone as high as it did in the first place.
PLAY is beyond a catastrophe. I got wiped out on my May $25s, here’s an article on it:
http://yahoo.businessweek.com/investor/content/apr2006/pi20060420_138720.htm
Of course this is a good example of why I prefer options to owning stocks. I knew I was risking .95 on the calls and this time I lost my limit. Had I owned the stock I really wouldn’t expect to lose 40% overnight!
INTC decided to end the day down, a very bad sign but GE edged up.
GLW continued to fly, very good against the sad Nasdaq.
AAPL faded hard but I bought out my caller at $2.25 and netted a .25 discount on my May $67.50s at $3 (up 20%) so now I have to hope for some positive announcements.
MRK hit $35.20 like a wall so I dumped in the morning for a small loss. It will be hard for the $35 calls to make money.
http://finance.yahoo.com/q/bc?s=MRK&t=1d
BAY picked up another 1.6% today and the Sept $40s are now $3.70 (up 50%) so it’s time to set a very tight stop!
Gee I would love to believe in UNH at this point but I just can’t!
By the way, when I say things like yesterday: “PD $87.50s should really be taken off the table by now at $4.10 (up 310%)” I really, really mean it!
http://finance.yahoo.com/q/bc?s=PD&t=1d
ALKS finally woke up today:
http://finance.yahoo.com/q/bc?t=1d&l=on&z=m&q=l&p=&a=&c=&s=alks
Today was DD‘s day with the May $45s zooming to .60 (up 100%).
SNE had another great day, up 2% and probably will again tomorrow.
AN had a great day with GM, up 1.7% making the May $22.50s in the money at .55 (up a nickle).
