Monday Mop-Up

Not a bad day. The S&P held 1,260 which was all we ever wanted for Xmas (we have such low expectations now!) while the Dow barely flinched and the Nasdaq managed to stay off Friday’s lows (really low expectations). I was encouraged by MOT, MSFT and HPQ turning in positive days and Yahoo was only a minor disappointment with a 3% gain. LOW got slammed 4.5% as nothing is good enough for this market but at least they flattened after the initial drop. Gold was flat but most gold stocks continued down while oil had one of those end-of-day BS rallies of almost $1 to finish up for the day although most oil companies weren’t buying it and the sector closed down about a point. It is now up to Eric Schmidt of Google to save the markets which will be interesting as he decimated them last time they let him open his mouth but hope springs eternal and we picked up our Google shares in comments today. Oops, that interview is over and he said nothing, which is an improvement over last time so we’ll see what tomorrow brings! ===================================== Also in comments we pulled a nice reversal on the oil patch and switched our shorts to longs at pretty much just the right time for a very productive day. The Valero rule gave us a very clear sell signal at 2pm for the puts while the buy was just a feeling I had at the time. The 5% rule was very much in effect today as many of the oil puts pulled a reverse off that mark. MUR lost over a dollar before reversing at 2pm and the $50 puts hit $2.20 (up 45%) before scaling back to $1.95 (up 30%). OII had an amazing day with the $65 puts hitting $2.25 (up 50%) before pulling back. XOM opened too low to play and I made a typo in the morning and said the $62.50 puts when I meant the $57.50 puts so just as well… SU flew down too fast in the morning and creeped up the rest of the day. PBR opened way too low and was a disaster all day, the Jul $80 puts were almost in the money and finished at $3.20 (up 70%). MRO was a good choice and was unloved on the recovery as well and the $75 puts are well in the money at $4.30 (up 80%). ACI had a dreadful morning and a huge recovery but the $45 puts finished where they began at $2.70 (up 45%) after hitting $4 mid day. ====================================== We couldn’t resist the Google $410s when they came down to $3 and we look OK so far as they finish at $3.80 (up 25%) but I’m not excited by what Schmidt had to say and will take my $3 back quickly if it drops tomorrow. BBY was a great play as it opened high and then fell 3% by noon! The $52.50 puts are in the money at $2.15 (up 60%). FRK also gave us a good entry but the $55 puts ended where they began at $1.85 after recovering over $1 in afternoon trading.