Hey that was a pretty good theory this morning wasn’t it?
All we need is a little bit of follow through tomorrow and we will have a new all-time high on the Dow! Notice we got exactly the kind of late day action I was looking for and the best is that we did it without tech and without a big performance from the oil patch which we need to leave behind if we are going to rotate out of that sector.
I’m not ready to throw in the towel on the SOX until it crosses $512 but another day like today will do it! TXN is not wowing the analysts in day one of their pump fest and INTC has got to close above $20 to be taken seriously.
http://stockcharts.com/gallery/?%24sox
CSCO was indeed a beat but options expensing hit the company hard and it will take the markets a day or two to figure out that they are actually doing great. Projections for next quarter were in-line on revenue but they should get another beat as cost cutting starts to take hold. The stock is way underpriced and I will be hoping to pick up the Jul $22.50s for .60 or less.
SYMC was less ambiguous and very strong although guidance was muted in the face of a looming threat from Microsoft in the virus arena. Outside of merger items, profits were huge so the spread we took in today’s comments looks very good!
Oil took another run at $71 but couldn’t close the deal and it will all come down to the 10:30 inventory report where any build in crude will be a big disappointment to oil bulls.
http://www.wtrg.com/daily/crudeoilprice.html
Gold broke $700 and finished above it, a big surprise to me as I took my profits off the table a little early in the morning…
It all comes down to the Fed tomorrow but I’m expecting an identical report with identical language in the aftenoon but the market is looking for any excuse to cut loose and I think a lack of bad news from the Fed will be just what they need.
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AAPL has, for some unknown reason, decided to treat $70.50 as some kind of floor and I still like the $72.50s for $1.05 (down 30%) but only if the Nasdaq is recovering.
EBAY finally made a real move and the Jun $32.50s finished at $1.25 (up 35%) but I sold mine at $1.45 earlier in the day but it still looks good to me.
I know everyone was sick of my gold picks in Monday’s comments as I spent the whole day pushing gold but today was a great payoff on all that glittered: BVN went straight up all day and the Jun $30s we bought for $1.30 this morning finished at $2.80 (up 115%).
My favorite current gold plays (as long as gold holds $700) are the AU Jun $60s for $1.50 and the BVN Jun $35s for .65. ABX Jun $35s would be my buy on a pullback below $1.20.
HPQ languished all day, posting less of a recovery than DELL but I’m very happy with the Jun $35s at .60.
In comments, we kept buying the INTC $20s down at .25 but the more sensible play was the Jun $20s which came in at .60 this afternoon. I think it’s do or die on this one tomorrow.
VLO kept us out of oil in the morning but I picked up some puts in the afternoon, we’ll see how that goes but I’m still working off Friday’s list.
MCD had a great day with a strong finish and the Jun $37.50s finished at .35 (up 75%).
AQNT went up 8% today and the Jun $30s ran up to .40 (up 100%) while the $25s only moved up 70% so we made the right play!
AA continues upward with the Oct $37.50s now $2.75 (up 40%).
For some reason the EXPE Jun $22.50s went up 40% to .50 even though the stock fell 1% so I couldn’t be happier even if I don’t deserve it!
KO $42.50s tacked on another 20% to $1.30 (up 400%) and now I wish I hadn’t sold it even though I sold at $1.35 yesterday:
http://finance.yahoo.com/q/bc?s=KO&t=1d
MOT had another solid day and Stuart mentions in comments that this company does indeed look pretty good because they are sitting on a mountain of cash. Although this is nice I prefer to just remember that 1 in 5 phones on the planet is a Motorola phone and that is up 25% from 2004. Portable phones are not like princess phones that you keep all the way through college, they are disposable items unlikely to last 3 years with batteries, chargers and accessories that generate additional profits over the life of the phone. We are in a very early stage of a global cell phone cycle and MOT will be the AT&T of the 21st century without all that tedious investing in wiring. The Jul $22.50s are already $1.40 (up 100%) and it is time to roll into the Jul $25s for .40 which locks in a 50% profit and makes sure you don’t miss anything!
MS $65s are back at $1.40 (up 50%) but we are cutting it too close to expiration so I am not putting up with another dip.
http://finance.yahoo.com/q/bc?s=MS&t=5d
BHP really had a nice day and the Jun $50s are now $2.10 (up 105%) and that was the worst performer of our group of metal related picks from Monday!
http://finance.yahoo.com/q/bc?t=5d&s=ATI&l=on&z=m&q=l&c=tie+bhp+fal
