Can you believe Bernanke stole my speech?
Check out what I wrote last night and compare it to Ben’s remarks today:
http://philstocks.blogspot.com/2006/08/waiting-for-word.html
Eerie similarities do not even begin to describe it!
Well, I said on Monday that I would be happy with a mild consolidation and here it was…
It was a very low volume week but the consolidation pattern looks excellent with a strong upward bias. We may get more of the same next week (last week of Summer + holiday) but anything other than a sell-off will have me getting very bullish for September.
The whole Armageddon thing was a bust but the oil people quickly proxied the tropical depressions (excuse me, potential Cat 5 hurricanes) to serve as the bogey man for the markets.
It’s always something and the big something is now the UN response to Iran’s response, which seemed friendly enough on the surface but with the psychos involved in the negotiations, you can never be sure! I hear Iran has some fairly unstable people too…
Also, on Monday I said: “You shouldn’t read much into the rise in oil prices until they get back to $73.50 as it is the same effect as taking any option contract a month further, you are paying for the time value of the delivery….” Oil closed out the week at just $72.51 after being firmly rejected from $73.50 this morning.
The dollar climbed 1% for the week and gold dropped 1% so that link remains solid while oil, for all its gyrations, was essentially flat. Oil has not had a flat week that led to a sell-off in a long time and that does worry me just a bit.
Copper also drifted with gold against the dollar as the BHP strike dragged on but, even with 8% of the world’s production shut in for the third week, there doesn’t seem to be any shortage…
Gold is up 20% for the year so far but looks like it needs to retest $600 if it is to gain any ground. However, failure at $600 could throw gold back to $550 and traders are loathe to let that happen if they don’t have to.
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There is not much to review as we took pretty much everything off the table but we still have a few puts and leaps in play from this very choppy week.
I will include the low money plays which we are trapped in (as commissions make them not worth selling, which is the danger of these!).
ADM went nowhere but the Oct $40s ended up a dime at $3.20.
BNHNA is off to a good start at $25.66 (up 5%).
I like the BNI Oct $70s for $1.70 after today’s movement.
CHK $30 puts killed me at .15 (down 50%) but the $32.50 puts are a nice consolation at .90 (up 20%).
CKR went nowhere but the 15s held tough at .45.
CSX Jan $32.50s are up just a nickel to $1.40.
DD Oct $42.50s dropped 33% to .20 but I still like it if oil ever comes down.
http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com:20060824:MTFH72397_2006-08-24_18-06-51_N24448285&type=comktNews&rpc=44
DWSN pulled back from $26.85 to finish at $26.44 (up 2%).
Still looking for the bottom on EBAY – sadly, not yet…
ECA had a scary morning but the $55 puts came back to $1.60.
FCX was a good call with the $55s way in the money at $3.50 (up 80%).
FMD gave up a lot today and the $55s dropped to $1.05 (up 30%) but I told you yesterday to get out at $1.70! The Mar $60s are $3.40 again.
FTK finished the day at $17.25 (up 5%).
GE Oct $35s are up a nickel to .30.
Hurricanes didn’t help HD and the $35s dropped to .30 (down 40%) even though they are buying back 5% of the stock. I still like them at this price.
HPQ $35s are still $1!
KBH $40 puts are back down to $1.15 (up 65%), exiting at $1.50 was the correct (non-greedy) call.
We got our conditional entry on MDR this morning and the $50 puts finished at $2.35 (up 35%).
MO $90s at .20 went down a nickel, even though the stock did go up a buck.
MSFT was amazingly steady since Wednesday’s call and the Oct $27.50s ended up a dime at .25 while the Oct $25s are at $1.40 (up 30%).
NEM $50 puts reversed on us today but I bought more at .45 (down 30%) but these are just 1/3 of the profits from the ABX calls earlier in the week.
PBR $95s came down a nickel to .65 but now we don’t want them. The $90 puts look good at $1.90.
PD Jan $82.50 puts held steady at $6.40 on a wild day! The $80 puts dropped back to .75 (up 70%) if you didn’t take the double off the table.
http://finance.yahoo.com/q/bc?s=PD&t=1d
PEIX $20s finished the day at .70 (up 40%).
PKX had a bad start but it was smooth sailing since Monday and the Nov $65s hit $3.10 (up 25%).
We got out of RSTO but I still like them at $6.12.
SNE $45 puts finished the week at $2.25 (up 75%) but we got out a nickel early.
SLB $62.50 puts are back where we started at $1.05, giving up 40% today but we called out of this yesterday afternoon up 50%.
SU was everywhere and the $80 puts ended up a nickel at $1.95.
http://finance.yahoo.com/q/bc?s=SU&t=5d
SUNW $5s are still a dime.
TIF Jan $35s held $1.
TM dropped too fast to play this morning – too bad because the $105 puts were a double!
We hit the TXN entry on the button and the Oct $32.50s finished at $1.15 (up 15%) but we should have just played the GLW’s we were using as a tracking signal!
http://finance.yahoo.com/q/bc?s=TXN&t=5d
http://finance.yahoo.com/q/bc?t=5d&l=on&z=m&q=l&p=&a=&c=&s=glw
UNH held $50.50 today on a big pullback and quickly recovered. We might want to reenter that one next week.
http://finance.yahoo.com/q/bc?s=UNH&t=5d
Had to take the rest of WSM $30s off the table as it fell below .50 (up 100%) mid-day but I like them again at a .25 entry.
WY held steady but we got out of the $60s just right at $2.60 (up 190%) as they drifted down to $2.15 since (we will watch this next week).
XOM $70 puts were very good to us on Wednesday when we bought them for $1 and took a quick 50% profit so of course I loved them again this morning for .75 (avg), already up 25% again!
http://finance.yahoo.com/q/bc?s=XOM&t=5d
It wasn’t our best week but we did have some nice winners in a very tough environment.
Have a good weekend,
– Phil
