Wow I can’t beilieve that worked!
On Tuesday I titled the post "Turnaround Tuesday" and said "I’m hoping if I put up a headline it might come true" and this morning I said "So no excuse will be given for a half-hearted rally, we want to see some numbers and we want to see them now!" and the markets obeyed me! Congratulations, you are now reading the most powerful column in the Universe!
OK – I’m done being full of myself, let’s try to assess the situation objectively and see if the markets met all of my demands:
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"Dow needs to pop right through 12,600" – Finished at 12,621, check!
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"Transports must retake 2,750." – Finished at 2,755 – check!
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"S&P should fly by 1,430 but will likely pause at 1,440" – bounced off it right at the end to finish at 1,438 – check!
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"NYSE needs to top 9,200 for us to feel secure" -Finished at 9,260 – check!
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"Nasdaq is 2,450 or bust! And I do mean bust as they were at 2,500 last week…." – Finished at 2,466 – check!
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"The SOX are a disaster and AMD isn’t going to help much but INTC needs to lead us back over 460." – Damn! 458.72! We are still having trouble with our SOX drive…
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"Russell CAN"T have any more trouble with 790! IWM $78s for $1.35 will make a nice play if we do break out!" – Finished at 794 – check!
Wow! Needless to say I went straight home and wrote a list out for my wife as well! Since I’m on a roll…
Of course we can blame AMT for holding the SOX back but AMAT was poor too, KLAC was weak, MXIM flat, NSM down, and STM was flat. TXN, MRVL and INTC were the shining stars of the SOX and the working theory is that people are buying big-screen TVs to the exclusion of everything else (computers, electronic toys…) except IPods and TVs dont have that many chips in them so it’s a narrow rally for chips.
That was one tough sell-off to hold out through and I was really close to giving up on Tuesday morning but we held our levels and, more importantly, held on to our positions so congrats to all on a lot of nice winners today! Let’s not get too full of ourselves – I’m very concerned about the SOX and BRK-A, the captian of our ship, still hasn’t come on board and dropped $1,000 during today’s rally!
I’m feeling about my oil puts the way I was feeling about my stock calls on Tuesday mornng, just about ready to pack it in! They pushed oil back up over to $55 and again it was accomplished by a $1 pump job, this time starting as soon as Europe closed at noon. In the course of trading 326M barrels on the NYMEX all they managed to do was move 8M barrels from March (now 395M) to April (now 102M).
Oil plunged at the open on big volume, down to $53.70 after a huge, surprise inventory build was (again) reported but literally at 12:01 on the dot, they started to drive it back to $55. Rather than complain about it here I already vented for national publication so check that article if you are interested.
The dollar held up well again but still can’t break $85 but, like I said, OPEC does not grasp the fundamentals of supply and demand. They are dumping dollars to drive up the price of oil but driving up the price of oil $5 creates a need for $500M more dollars a day. So by driving down the dollar this week they have created a sort of dollar vacuum that needs to be filled and can cause the dollar to "pop" over the 40 week moving average at 85.16 for the first time since April, when that average was up at 90.
Ah well, silly OPEC – I’ve always said their problem is they just don’t have enough Jewish accountants on staff! 😎
Gold is hanging around $650 with $655 being the probable breakout (or pullback) level. Now that we know why gold has gone up (see oil article) I’m not impressed with the move.
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I was impressed with the moves many of our positions got today, we took a few off the table but it was a generally quiet day as we were simply relived to be getting back to where we were last week.
GOOG (1/11) was a huge gift and I lightened up on the $510s while I was ahead at $14.90.
STX Mar $27.50s (1/4) went far enough at $1.60 (up 56%) as I was just glad to see them no be behind anymore!
T Feb $35s (1/9) had gone far enough and I got out at $2 (up 233%) hoping for a pullback to get back in but it just keeps going up!
VLO $52.50 puts (1/23) were a lousy momentum play and I gave up at $1.30 (down 21%).
YHOO also went up far enough and It just didn’t seem worth the risk to keep holding the Jan ’08 $25s (9/18) at $6.70 (up 103%). This is our third Yahoo double from that set of purchases so I’d rather wait for a pullback and reposition.
We took advantage of the run-up and started selling some calls on our income-producing plays (otherwise where would we get the gambling money for our short-term picks?) and that’s all detailed under the "Virtual Portfolio Moves" section.
