Well that was a pretty good week!
Thanks to BIDU and Google our $10,000 Virtual Portfolio is now worth $17,051 just 34 days after we opened it. While you could say this was, to some extent, just fortunate timing – we did make a lot of really good adjustments to get to where we are today!
The 95 remaining open positions in our Short-Term Porfolo have an average open gain of 115% but the more important gain on cash is 29% and we closed 53 positions this week with an average gain of 121%, our best of the year so far. Because we sold a lot of positions the gain on cash was over 100% as well, which means we deployed no additional capital to make our 121% return – this is why you MUST use a broker that lets you do spreads, it is a night and day difference in your risk management.
Ironically we didn't sell positions (for the most part) against our Long-Term Virtual Portfolio as we saw this rally coming a mile away and our average open gain in that virtual portfolio is now 160% on 46 open positions but my trigger finger is very itchy on that side as 28 positions remain uncovered.
Even our pokey 18 position Stock Virtual Portfolio has gained an average of 19% on 60 average days open so I would have to say that we were just very lucky to happen to be very bullish this month – but I'll take being lucky over being good, we can always work on being good later!
Our special (and temporary) Google Virtual Portfolio had 22 positions that were open an average of 11 days and have returned 96% so far with just 8 plays remaining open. That spreadsheet will be available along with the others on the members site today and anyone who doubts the rule "ALWAYS sell into the initial excitement," should compare the value of what we got out of on the 20th vs. what some of the open contracts are worth now.
I'm not going to bore you nice people reviewing how right I was about the markets – obviously you don't generate these kinds of returns being wrong – and I'm a lot more concerned with protecting the positions we have on the table because taking profits off the table, as we did this week, doesn't mean a thing if you blow your principal!
So it will be protect, protect, protect next week until we get a nice, positive break forward. The Asian markets will be flying at half mast at best due to holidays and the month ends on Monday so change will be the big constant next week and we will need to be quick on our feet.
I want the $10KP players to promise me they will move at least half their profits to some long-term covered positions as I am VERY uncomfortable leaving a lot of money in play there. We may have another big payday coming with our DNDN positions as long as the stock holds $14 through expiration. I'm considering doing a monthly reset on that virtual portfolio so please give me your opinions as to what you think about that idea.
Sadly, we are still sitting on some big losers in the STP as our protective DIA and oil puts have been just terrible but the portions were right and we gave up about 20% of our profits to pay for the insurance. We should have shorted the XAL as that index had been under suspicion right from the Monday Morning Post and was, by far, the worst performing sector of the week. Even the broader transports finally got fed up and broke away from their weaker cousins on Friday but don't be fooled, they can't stay apart for long.
Another breakaway for the week was oil, which left gold in the dust as apparently oil and gold traders now analyze the risk factors on totally different planets. Of course we had the Saudi oil plot of the month so at least there's some reason for last week's spike, although last time a big plot was foiled (2/25/06) prices plunged over 5% the next week. That plot was also "uncovered" as crude prices fell from $68 in January '06 to mid February and here we are having trouble getting oil back over $65 and once again the Saudis come to the rescue!
Leaving both the XLE (Energy Spider) and the price of crude in the dust was the OIH (Oil Service Holders) as the XLE stalwarts but the ETF that really suffered was the IXC, which is more specialized with the integrated majors who are, across the board, producing less oil for more money. This has drawn my attention to the XOP which, even though TSO and VLO are it's largest holdings, suddenly turned a little toppy this week. We'll be watching this one for signs of a breakdown or a breakout above $44 as they are nicely diversified and still represent what I consider to be a relatively undervalued segment (TSO notwithstanding) of the industry.
In addition to shrugging off spiking energy prices and a sagging economy (but, as Zman points out, food and energy inflation doesn't seem to count) the market was able to ignore a few earnings disappointments as well.
| Dow | 131290.94 | 1.2% |
| Nasdaq | 2557.21 | 1.2% |
| S&P 500 | 1494.07 | 0.7% |
| 10-year yield | 4.7% | 4.67% |
| Euro vs. dollar | $1.365 | 0.4% |
| Gold (for June delivery) | $681.80 | -2.0% |
| Silver (for May delivery) | $13.44 | -3.7% |
| Crude oil | $66.46 | 3.7% |
We hit 13,000 on Wednesday after our "Testy Tuesday" as Tuesday eveing I said: "But did we pass our test? I think we did because we had awful hosing data but didn’t tank the market (in fact we got a huge dip at 10 and recovered nicely)." We decided it WOULD happen on Wednesday morning as BA and AAI finally gave a lift tou our XAL's and Happy Trading predicted a Nasdaq breakout but I don't think any of us were expecting to zoom right through Dow 13,100 as well. We can thank a happy Beige Book for that!
AAPL kept the party going with an 88% jump in profits on Wednesday night and Thursday we knew were were in for a fun day as Nintendo chipped in with a 77% increase in profits, giving us a nice global balance in consumer tech. Asia continued to give us a nice boost as we wrote a love letter to BIDU on Thursday night as they showed us you can hedge and still make money on a big move.
Speaking of playing games, MSFT announced on Thursday and after saying earnings would be good, then bad, then good – they did indeed turn out to be good but it was the GDP that was BAD on Friday but the markets STILL didn't care! So we took a lot off the table, left on our covers just in case, and we will grin and bear (oops, don't say bear!) it over the weekend where we will get a real test of my Global Market Theory as we're expecting the shutdown in Asia (holidays) to force more money into US equities.
Can anything go wrong? Absolutely! That's what's going to make it so much fun…
Have a good weekend,
– Phil
|
Symbol |
|
|
|
|
Qty |
Paid |
Sold |
|
P/L |
% |
| AAPL | M | $ 95 | P | 3/28 | 4 | $5.00 | $ 1.00 | 4/27 | $ (4.00) | -80% |
| AAPL | M | $ 95 | C | 4/23 | -20 | $3.00 | $ 4.25 | 4/27 | $ 1.25 | 42% |
| AAPL | M | $ 95 | C | 4/19 | 10 | $2.00 | $ 6.75 | 4/27 | $ 4.75 | 238% |
| AIR | A | $ 35 | C | 2/1 | 40 | $0.53 | $ 0.75 | 4/24 | $ 0.22 | 42% |
| AKAM | M | $ 50 | P | 4/25 | 20 | $1.30 | $ 2.15 | 4/25 | $ 0.85 | 65% |
| AMZN | M | $ 45 | C | 4/24 | -40 | $2.00 | $ 8.50 | 4/25 | $ 6.50 | 325% |
| AMZN | M | $ 48 | C | 4/24 | 50 | $0.85 | $ 14.25 | 4/27 | $ 13.40 | 1576% |
| AMZN | M | $ 45 | C | 4/17 | -9 | $2.10 | $ 8.20 | 4/25 | $ 6.10 | 290% |
| AMZN | O | $ 45 | C | 4/17 | 5 | $2.30 | $ 20.00 | 4/27 | $ 17.70 | 770% |
| AXP | M | $ 58 | C | 3/5 | 25 | $1.25 | $ 4.00 | 4/24 | $ 2.75 | 220% |
| BKS | J | $ 40 | C | 3/7 | 30 | $1.20 | $ 2.40 | 4/23 | $ 1.20 | 100% |
| BRCM | J | $ 35 | C | 4/24 | 50 | $1.40 | $ 1.85 | 4/26 | $ 0.45 | 32% |
| BRCM | M | $ 35 | C | 4/24 | -50 | $1.30 | $ 0.30 | 4/27 | $ (1.00) | 77% |
| BRCM | M | $ 33 | P | 4/26 | 50 | $0.40 | $ 0.85 | 4/27 | $ 0.45 | 113% |
| CCJ | J | $ 38 | C | 3/5 | 20 | $5.60 | $ 11.85 | 4/23 | $ 6.25 | 112% |
| CME | M | $ 520 | P | 4/23 | 10 | $4.00 | $ 7.00 | 4/24 | $ 3.00 | 75% |
| CMI | M | $ 100 | P | 4/27 | 10 | $3.00 | $ 5.25 | 4/27 | $ 2.25 | 75% |
| DIA | M | $ 130 | P | 4/23 | 300 | $1.55 | $ 1.75 | 4/23 | $ 0.20 | 13% |
| EWJ | M | $ 14 | C | 4/23 | 20 | $0.60 | $ 0.50 | 4/24 | $ (0.10) | -17% |
| GE | M | $ 35 | C | 4/25 | 100 | $0.55 | $ 2.00 | 4/27 | $ 1.45 | 264% |
| GOOG | J | $ 500 | C | 4/3 | 20 | $11.40 | $ 11.50 | 4/23 | $ 0.10 | 1% |
| GOOG | J | $ 490 | C | 3/30 | 20 | $8.00 | $ 15.75 | 4/23 | $ 7.75 | 97% |
| GOOG | J | $ 490 | C | 2/27 | 40 | $4.60 | $ 15.75 | 4/23 | $ 11.15 | 242% |
| HRB | J | $ 23 | C | 2/27 | 24 | $1.00 | $ 1.65 | 4/26 | $ 0.65 | 65% |
| IBM | M | $ 95 | C | 4/18 | 50 | $1.45 | $ 1.70 | 4/23 | $ 0.25 | 17% |
| IBM | M | $ 95 | C | 4/18 | 50 | $1.20 | $ 4.10 | 4/24 | $ 2.90 | 242% |
| INTC | J | $ 23 | C | 4/17 | 50 | $0.54 | $ 0.90 | 4/26 | $ 0.36 | 67% |
| INTC | M | $ 20 | C | 1/22 | 40 | $0.65 | $ 2.10 | 4/24 | $ 1.45 | 223% |
| JWN | J | $ 60 | C | 4/9 | 20 | $0.95 | $ 1.65 | 4/26 | $ 0.70 | 74% |
| MCD | M | $ 48 | C | 4/20 | 20 | $1.45 | $ 1.70 | 4/23 | $ 0.25 | 17% |
| MSFT | J | $ 30 | C | 4/26 | 100 | $0.80 | $ 1.60 | 4/27 | $ 0.80 | 100% |
| MSFT | M | $ 30 | C | 4/26 | 200 | $0.40 | $ 1.00 | 4/27 | $ 0.60 | 150% |
| MU | M | $ 11 | C | 4/19 | 40 | $0.50 | $ 1.10 | 4/25 | $ 0.60 | 120% |
| NEM | M | $ 43 | C | 3/30 | 20 | $1.75 | $ 2.00 | 4/24 | $ 0.25 | 14% |
| PBR | M | $ 100 | P | 3/29 | 90 | $2.20 | $ 1.95 | 4/24 | $ (0.25) | -11% |
| PBR | J | $ 105 | P | 4/20 | 10 | $5.30 | $ 6.60 | 4/27 | $ 1.30 | 25% |
| PBR | M | $ 105 | P | 4/20 | -10 | $3.90 | $ 1.85 | 4/27 | $ (2.05) | 53% |
| PEIX | S | $ 18 | C | 4/4 | 10 | $1.50 | $ 0.90 | 4/24 | $ (0.60) | -40% |
| QCOM | M | $ 45 | C | 4/23 | -10 | $1.95 | $ 0.75 | 4/27 | $ (1.20) | 62% |
| RIG | A | $ 85 | C | 4/11 | 20 | $4.25 | $ 7.80 | 4/27 | $ 3.55 | 84% |
| SU | J | $ 80 | P | 4/24 | 40 | $2.50 | $ 2.30 | 4/26 | $ (0.20) | -8% |
| SU | M | $ 80 | C | 4/26 | 20 | $2.70 | $ 3.50 | 4/26 | $ 0.80 | 30% |
| TGT | M | $ 60 | C | 4/11 | 30 | $1.72 | $ 2.45 | 4/23 | $ 0.73 | 42% |
| TGT | M | $ 63 | C | 3/27 | 30 | $0.35 | $ 0.50 | 4/24 | $ 0.15 | 43% |
| TM | M | $ 130 | C | 4/16 | 50 | $1.25 | $ 1.00 | 4/23 | $ (0.25) | -20% |
| TSO | M | $ 120 | P | 4/26 | -232 | $ 6.00 | $ 4.95 | 4/26 | $ (1.05) | 18% |
| TXN | M | $ 33 | C | 4/20 | 20 | $1.10 | $ 2.80 | 4/24 | $ 1.70 | 155% |
| UNH | M | $ 55 | C | 4/24 | -10 | $1.00 | $ 0.35 | 4/26 | $ (0.65) | 65% |
| WFR | M | $ 65 | C | 4/24 | -10 | $4.00 | $ 0.50 | 4/27 | $ (3.50) | 88% |
| WFR | M | $ 65 | C | 4/20 | -10 | $2.40 | $ 0.50 | 4/27 | $ (1.90) | 79% |
| WM | M | $ 40 | C | 4/17 | 20 | $1.52 | $ 2.85 | 4/23 | $ 1.33 | 88% |
| XOM | M | $ 75 | C | 4/23 | -50 | $4.80 | $ 4.50 | 4/24 | $ (0.30) | 6% |
| XOM | M | $ 80 | C | 4/23 | 50 | $1.20 | $ 1.40 | 4/25 | $ 0.20 | 17% |
| XOM | M | $ 85 | P | 4/23 | -150 | $5.80 | $ 4.60 | 4/27 | $ (1.20) | 21% |
