Thursday Wrap-Up

Well that was much better! It was touch and go for a while as the Nasdaq had a terrible time getting over 2,180 but around 3pm the markets finally decided up was the right way to go. I am very pleased with today’s action and hopefully the Dow can test 11,275 (the 50 dma) tomorrow, just 64 points away. Even better than the majors were the NYSE, with a 1.5% gain and the Russell, which had a 2% gain on the day indicating a nice broad rally. The SOX are still failing to participate but many of those companies are held up in the current options scandal and it is that, rather than technical or fundamental reasons, that is holding back that sector. MRVL is the poster child for a good stock that is being weighed down by the stocks it is associated with. Oil went crazy today and mineral stocks staged a comeback so 1/3 of the rally came from the sectors we would rather see stay down for now. Crude rushed up to $71.32 on long weekend short covering (never short oil into a weekend) with the NYMEX closing early tomorrow. Gold ran up $11 to $648.50 which was all it took for the oversold gold miners to post impressive gains. The Enron trial is finally over and the convictions are good for the market as it improves investor confidence if there are teeth to corporate investigations. It looks like John Snow is finally leaving the White House, another level of uncertainty that needed to be removed. It was a very good day but only a bounce until we get past a 50% retracement of losses so it will take another day of similar gains to get us back on track – that’s a tall order for the day before a holiday weekend! ===================================== I thought we missed the boat on EBay and Yahoo but they just kept going up and up with Ebay logging 12% and Yahoo putting up another 3.5% for the day. Google never quite came down to where we wanted it but I flipped to the $420s in comments and they seem to be working so far at $3.10. The $410s never got below $3.40 and ended the day at $5. XMSR missed my bottom target by .21 and made a nice recovery to $14.25 but SIRI was the star we expected it to be and finished at $4.22 (up 14%). The QQQQs were a tough one to watch as they were off in the morning but finally rallied and the $40s finished at .50 (up 20%). The 200 dma is at $40.50 so set realistic expectations for this trade! Looks like I wasn’t the only one who thought Mastercard was undervaluing their IPO: http://finance.yahoo.com/q/bc?s=MA&t=1d And I wasn’t the only one who thought Vonage was overvalued as they dropped another 12% today. GME had a huge day and the $45s ran up to .80 (up 60%) and still look good. MTU was flat but the Aug $15s gained .10 to .50, probably because we were buying them… IBM had a terrible start but looked great at the end and the $80s picked up 10 cents to $1.65. I am more comfortable making this play now than I was this morning. UNFI was a very timely call, gaining 10% on the day and the Aug $35s are already $1.70 (up 140%). MOT had a 3% day and the July $22.50s are still a good deal at .55 (up 35%). After a scary open LVS really pulled it together and poked that puppy up almost 6%. The $65s flew to $2.20 (up 60%) and you know I took the money and ran on this one! DRI opened way too high to buy but came back and gave us an entrance on the Oct $40s at $1.20 where it stayed the rest of the day. MS had a nice steady rise for a change and the Jul $65s finished up .10 to .70. UNH actually acted like $42 might be a real bottom today so I’ll be watching that one tomorrow! http://finance.yahoo.com/q/bc?s=UNH&t=5d Tomorrow is a very dangerous day with consumer sentiment and personal income reports coming out. Too much personal income means inflation, not enough means the economy is collapsing and sentiment will probably be down as it was taken against very high oil prices.