Hey that was really fun? Can we do it again?
Let's not get too excited yet, we did finish 8 cents below tha all time high on the Dow – still not bad for a day we got hit with the GDP, the Fed, more than half the earnings are in and we were told by SNDK that there is a semi glut.
What's most important here is that we are doing it this week without a lot of M&A activity, January has been, on the whole pretty quiet, maybe the calm before the storm. All is well in techland, the SOX recovered from a nasty dip Google came in with stunning numbers (67% more revenues, triple profits) that got a big ho-hum in after hours trading
It was a very exciting day, Big GDP (3.5%), calm inflation, a happy Fed, Bush came to Wall Street, Michael Dell came back from wherever he went, MO is finally spinning out Kraft, the Dow touched a new record and oil is back to $58.
Things are certainly looking up in the markets but let's not get ahead of ourselves:
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Dow broke over 12,600 and held it!
- Transports flew up to 2,814, totally ignoring the rise in oil.
- S&P closed at 1,438, 2 points shy of our goal.
- NYSE broke and held 9,250!
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Nasdaq held up nicely at 2,463.
- SOX were rejected at 460, but that was far more than we were even hoping for – the bounce came at $450.91, not a bad morning guess!
- Russell broke 800 which was indeed just the ticket we needed!
Oil gained another 2.1% today, closing at $58.14, which is the biggest 2-day gain since December '04 yet the energy sector barely budged (less than .25%) as the inventory build was again a bearish surprise. NYMEX March barrels came down to 385M but they had to trade 279M barrels (30% more than yesterday) to add just 1,000 contracts. Despite all the trading, just 4,000 contracts were added to April, 2,000 to May and none to June.
Make of that what you will – homebuilders and the energy sector remain firmly rooted in denial but those guys are so sure of their position that it forces us to doubt our own sanity!
The dollar had a terrible day after being rejected from 85.30 and finished at the days low of 84.60, this gave all commodities a great lift and gold shot up to $652 while copper punched back to $260.
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Today was hugely busy as I followed through on my agenda to purge the portolio as we need to have a manageable amount of positions coming into the more opportune moments of earnings season.
I'm going to let the Virtual Portfolio Moves section on the members site speak for itself as there were 27 of them but we did add one new set of Google plays that will be fun to watch tomorrow:
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GOOG Buying Mar $530s for $14
- Selling $520s for $12.75
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GOOG Buying Mar $480 puts for $13.50
- selling $490 puts for $12.90
We went in and out of MER for a 22% gain and in and out (1/2) of MO for a 40% gain (in 20 minutes!) but, other than that it was mainly exits as we clear the decks for a new and hopefully prosperous month!
