Wild Wednesday Wrap-Up

Obviously, we had a great day.

The drop was just what we expected and was great for our virtual portfolios, which were pretty bearsih with very heavy positions in DIA puts, as well as the Jun $137 calls, which were used to offset our bullishly balanced Aug $138 calls.  In the morning, we stand ready to stop out of the June $137s, now .30 either on a reverse, where we will tighten up our calls or to roll down the June $136s should the market continue lower.

The bottom line is that  we take these protective puts generally to ride out the dips and, so far, this was a dip and nothing more.  Still it was a good excuse to move our weak positions to cash (great call by me, pat pat) and now we have to see which way the next wave is going to break before we get back on our board.

There is a tremendous effort being made by the press to blame BSC for the entirety of the sell-off.  Again, this is why I started keeping a blog of my market thoughts a couple of years ago, SO I COULD KEEP TRACK OF THE BS!  We identified this problem last Thursday so, either I’m 6 days smarter than Criminal Narrators who usually Boost Crude but also pump the market when their corporate masters yank their chain and the rest of the market OR they are simply full of it and just latching on to a scapegoat in order to deflect your attention from the real problems that beset the market..

Despite the fact that I’m 144 hours ahead of the World’s leading financial network I don’t let it go to my head.  I expected a drop and we got a drop but this isn’t a correction until we have follow through so we are back to a flexible, near neutral stance but ready to pull protects off either side as needed.  We got our drop in oil, which I have been saying could SAVE the markets (this is one of the reasons we short oil in a bullish virtual portfolio) but this too needs to give us follow through and we were 1/2 out of our oil puts as they bottomed this afternoon.

We had a fantastic series of good day trades today, just playing like fools in the rain:

• Our morning call of selling GOOG $510s, which opened at $21 and closed at $16.60 against new Sept $550s which came in later at $14.20 (we really sold the $510s against our existing Sept $510s so there was no rush) got us off to a good start.
• 9:39: "You guys can all laugh later but I’m doing a mon back on PTR $145 puts at $2.55! XXX"
  • We’re half out at $3.50
• 9:55: "I’m very serious about stopping out – I don’t care what it is but anything showing signs of weakness is getting chopped. XXX" and "Radio on MN1.com at 10:25 – let’s see if I can wing it without Z!"
  • In my radio spot I called the bearish inventory report and the head fake and issued the following puts:
    • XOM $80 puts at .30, finished at .75
    • VLO $75 puts at $1.30, finished at $2.
    • OII $50 puts at .95, finished $1
• 10:42: "That had to be the most bearish possible inventory report thay could have had. It is stunning that these oil companies can even support themselves here!"
• 10:44: "This oil report was genuinely great for stocks so anything less than 1,540 means this rally is tired."
• 10:54: "TSO/VLO – looks more like an opportunity to short to me!"
  • TSO $60 puts were $1.20 at the time, finished at $1.90
  • Our TWX $20s finally cashed in here at .30
• 11:03: "PTR – value of 4Bn shares may be just $6Bn, not going to be very dillutive to $266Bn company so let’s turn that into a day trade and be happy with a small gain." and "Dont’ watch VLO, watch XOM, much harder to fake. CVX $85 puts at $2.60 have just a .70 premium XXX"
  • The CVX $85 puts finished at $4.40
• 11:44: "Oil getting near my $67.50 target so we should at least get a bounce here, maybe a retest of $68 but that was a terrible inventory report."
• 12:15: "In Free Pick virtual portfolio – CROX Iron Condor is up $3,660 and should be sold since it’s off target. XXXX"
• 12:25: "ICE – technical sell of $160s for $8.30 naked, they were worth $5 on Monday. XXX if you have the margin for it. Not worth a bear call… "
  • $160s finished at $6.80

The was more, but the rest of the afternoon was more like a slow motion train wreck that you just couldn’t take your eyes of as stock after stock started to fall.  Not being greedy we are half out of our puts with a nice buffer into tomorrow but, on the whole, the market didn’t do too badly against a 3% sell-off in the energy patch:

We gained a red box on the Dow, S&P, NYSE, Nasdaq and the SOX.  More significantly, none of our indices are at break-out any longer and are falling into our DIScomfort zone so let’s continue to be very careful out there.

While oil did drop back under $69, it was a contract rollover day so tomorrow we will be back at $69 as August becomes the front month.  The July contract finished with just 25M barrels scheduled for delivery, down from 350M barrels that the NYMEX BS Brigade pretended they wanted at the beginning of the month.  For August, they are PRETENDING to have an interest in having 325Mb delivered and we’ll see how many barrels they really want when this contract closes in 30 days.

This is a scam that is being shoved down the throats of the American people EVERY SINGLE MONTH and we just let it happen.  Send this to your Congresspeople, have them call me, I’ll speak very slowly when I explain it to them!

Don’t blame the dollar for oil or gold’s drop yesterday; the dollar was flat as a pancake at 82.57.

We got out (re. "escaped") of a lot of positions and pretty much covered the rest so, on the whole, I’ll be very upset if the market just bounces back at this point – but I don’t think so…