Thursday Wrap-Up

Well we got the mid-day turnaround we were looking for and, for those of you who read the comments, I called the turn at the exact minute (11:53) with a very timely purchase of the $38 QQQQs. I’m not going to brag about the rest of my trades as I am painfully aware that most people can’t take advantage of that sort of movement but it’s days like this that can make the whole thing worthwhile! Hard to say if that 175 point thump was enough to flush out all the bears (but that 200 point rally must have hurt!). A lot of people have been asking me why I wasn’t playing more puts and today is why – sometimes it’s better just to have cash ready for the bottom. Let’s not get too excited until we get a relief rally on a more global scale but I am very happy that less than half of today’s recovery was attributable to commodities. I shouldn’t really say recovery as all we recovered from was a morning that was so bad that I did actually call my realtor so I could covert my biggest asset to cash but we got a nice spike volume sell-off around 11:30 that morphed into a low volume, steady upswing that had a nice volume finish at the day’s end – a very nice recovery! http://finance.yahoo.com/q/bc?s=%5EDJI&t=1d The Nasdaq took a very hard bounce off 2,100 while the S&P decided 1,235 was the right place to turn. The Dow’s turning point was 10,750ish, well below the 200 dma of 10,870, which it broke though on the way down without a pause. Oil made one of those famous afternoon recoveries but it looked to me like that was the genuine sort of demand we talked about last week as industrial users (airlines, chemical companies..) decided to lock in purchases under $70. This caused oil to finish above $70 and firmed up the sector. Gold had no such luck as it dropped another $18 to finish at $613 and we are still targeting $583 for a big turn. Copper went down significantly but PD and PCU went up mysteriously so we will be watching them tomorrow. Apple gave us a nice signal today (as expected and bounced exactly off my $57.50 target at about 10:45) and posted a solid 4% gain: http://finance.yahoo.com/q/bc?s=AAPL&t=1d On the whole, it was an encouraging day but only because we have been so abused of late that a day without a beating seems like an act of kindness! Tomorrow should be fun… Speaking of kindness, my 2nd favorite company, TXN is upping guidance with 3% more revenues and 15% more earnings! I LOVE THESE GUYS!!! Now I am very happy I held those Qs! ===================================== You could not have gotten a clearer turn signal from the Valero Rule than the one we did at 12 when VLO and OIH turned sharply higher which was quickly confirmed by XOM and USO. I won’t go over the oil puts as they died at that same juncture but they all made for nice day trades as most oil stocks dropped our target 3% before the turn. Patience was rewarded on our calls though: XOM $60s were just .25 all the way until 1:30 and finished the day at .65 (up 160%). XOM $57.50s hit our $1.50 target early and went down to $1.35 before jumping to $2.30 (up 55%). COP Jul $65s were .85 at the turn (and .80 after for some reason) and moved up to $1.25 at the close (up 45%). NGS did not work as the option lost too much value on the dip. It is still at .35 but not worth holding as the natural gas inventory was a little bearish. SUN finished positive (one of the few) and the Jul $70s went from $1.50 to $2.10 (up 35%). Please write me with any questions on this type of trading as I will be doing a lot of it if the market stays choppy like this and I want to make sure I lay them out as clearly as possible when the opportunities arise! ====================================== Do not write to me to tell me how you didn’t cash out positions that were up 50%! I still don’t trust the market and you really need to set tight stops as soon as we cross 20% as everything can turn on a dime… IBM didn’t care that the market was recovering and kept going down all day for a 3% loss. It gave us a nice high entry as well and the $80 puts finished well in the money at $3.20 (up 130%). I thought nobody cared about CSCO but the Jul $20s popped a nickel to .80 after a rough day. KO got a better drop than we expected and the Jul $42.50s pulled back to .90 before recovering to $1.35 (up 50%). http://finance.yahoo.com/q/bc?s=KO&t=1d We were too greedy with TXN looking for .50 as .65 was the lowest the Jul $32.50s went. I will be crying about those tomorrow! The golds were, of course, no trade. TM gave us our entry point and the Jul $100s quickly recovered to $5 (up 20%). SNE Jul $40 puts moved up to .70 (up 60%) so we won this trade both ways but Sony was stronger than expected and I will look to get out of these quickly. JOSB got destroyed today with a 29% drop! ADBE was a great call to get out with our profits as a 35% profit would have turned into a 60% loss so far! I was thinking of getting back in but the $27.50s are a rip off at $1.10. http://finance.yahoo.com/q/bc?s=ADBE&t=5d GM remains dead. SNDK pulled out of a power dive today and I will be looking at them tomorrow to see if there is any strength in the SOX. http://stockcharts.com/gallery/?sndk LEH (6/12) $65s have lost just .15 this week to $2.10.