Weekly Burial

We don’t wrap up this week, we bury it. Actually we shoot it, stab it, poison it, burn it and bludgeon it and then we cut up the body and bury the pieces on opposite ends of the Earth so it can never come back again! But next week may be more of the same, there’s no way to tell from today’s action. Oil sold off to rest right on $68.50 making it a 10% decline in 5 days but the oil stocks barely budged by the end of the day. Gold sold off to $657 making it a 10% decline in 5 days but the gold stocks barely budged by the end of the day. Hmm, something is up but I need to think about what it is over the weekend…. The indices made a brave attempt not to fall off the edge of the earth but with an option expiration day I don’t trust anything that happened today and none of the moves were of note but there was huge volume so perhaps we are setting up for a turn. As I’m in cash I would rather see the market crash another 5% as I would feel safer coming back in. At this level it will be a minefield next week! ====================================== Please please please read the trading rules as I can’t repeat them every day because in this environment it is very unsafe to just make the trades I look at in the morning. I’m thrilled if I can jump in on one out of 4. CMX couldn’t get out of it’s own way today, dropping 6% and the Jun $50 puts opened at $3.30 and finished at $4.80 (up 40%). I’m done with this but we can look at the $45 puts or maybe the $50s again depending on how the investigation looks next week. AMT opened way too low to trade and the Jun $30 puts are already $1.20 but they made a very impressive recovery so we will see if it sticks next week. By the way, important note. Generally, if I’m thinking I would be willing to pay more for an option, I designate it as ($ over premium), like CMX was this morning, as opposed to just picking a number like AMT was this morning. If I pick a straight number then I have no intention of chasing it very far (again see Trade Rules). MT also opened way too far down to chase as everyone seems to think they are overpaying for Arcelor: http://finance.yahoo.com/q/bc?s=MT&t=5d X had the opposite problem, opening way too high but it came all the way down to $63 at noon and the $65 calls were as low as a dime before recovering back to .40 by 2pm and then expiring worthless (isn’t expiration day fun?!?) http://finance.yahoo.com/q/bc?s=X&t=1d I apologize for putting in CLB this morning as it doesn’t cost $30 a share and I have no idea what I was looking at when I wrote that! MDR was a wild play today! The stock opened up a buck and the Jun $60 puts were just $1.05 and they flew up to $1.35 before dropping back to $1 on crazy action. This is a good example of how a trailing stop can save a profit from becoming a loss. I’m not too worried about this one and will be looking at it again next week if oil doesn’t recover. http://finance.yahoo.com/q/bc?s=MDR&t=1d OII also had a wild day but made an easier play as the $70 puts opened at .45 and quickly flew to .80 (where we sold in comments) then went back down to .20 where we bought again and we sold at .50. Too bad the day ended or we probably could have done it again! QCOM had a good day (up 1.5%) so there is hope for MOT next week. I did end up with the Jun $20s for $1.05 but I already took a small hit. CSCO flew up 3% today and I totally missed it as I was on my oil screen all day! SHLD tacked on another 4% today, just $1.11 under my target: http://finance.yahoo.com/q/bc?t=5d&l=on&z=m&q=l&p=&a=&c=&s=shld AAPL went up today, again a little ray of hope in the trash heap! Someone finally put their foot down on SIRI at $3.90 and about time too! FDX stayed down but the $115 puts finished at $5.70 (up 470%) but I don’t regret getting out Wednesday at $5: http://finance.yahoo.com/q/bc?t=5d&l=on&z=m&q=l&p=&a=&c=&s=fdx TIE was up 13% today and ATI was down 5% so we need to keep an eye on this next week (BA was up 2%). I was all proud of myself for taking a triple on the PBR $95 puts (which I had rolled into after making too much money on the $100 puts) from .60 to $1.90. You can see why I got out but you can also see why I want to cry: http://finance.yahoo.com/q/bc?t=5d&l=on&z=m&q=l&p=&a=&c=&s=pbr ===================================== Frankly had we just played Monday’s puts and walked away we would have had an amazing week – it’s like when you make sauce and you keep adding stuff until you mess it up – sometimes we should leave well enough alone… Well I hope your week wasn’t too terrible, hopefully you got paranoid with me and pulled out. Have a great weekend, – Phil