That went about as expected.
Fortunately, in our morning sermon we were reminded to be led not into temptation and we were, in fact, sorely tempted as the Dow went up70, flat, up 50, down 10, and up 110 – all before lunch!
That last one almost got us but the President's sound advice stayed with us and we were on top of this nonsense all morning taking up positions looking for a top. At 12:12, right at the top, we got our new favorite market indicator on CNBC as I said: "Uh oh – Pisani looks concerned again" and he was right on the button at the market fell 100 points from there.
Some people are saying that today's crash was caused by the leak of my Fed statement, which I always publish for members the day before the official release (Ben and I were up all night!) but I tip my hat to Bill Gross, who joined my camp earlier in the morning with some chilling views on the subprime market that OptionDragon brought to our attention, causing me to say at 11:29: "Well that statement makes me want to cash out my virtual portfolio, sell the house, auction the art and have a garage sale!"
At 12:36 I was, as is often the case, annoyed by the television and I said: "Wow – CNBC guy says “pretty good rally for the dow” how does a herky-jerky ride to a 50 point lower high than yesterday constitute a pretty good rally? This is what I don’t get about them – don’t they want ratings? To get ratings you need to give good information, not spin."
We were, of course, thrilled by the breakdown in the oil sector but we took the opportunity to lighten up on our puts ahead of inventories but ZMan and I will address the Nation live tomorrow at 10:25 on MN1 with brand new picks. My live selections last week were 4 for 4 as I gave viewers OII $50 puts at .70, now $1; PTR $145 puts at $2.50, now $4.15; VLO $75 puts at $1.30, now $2; XOM $85 puts at $2.90, now $3.55 with a general comment that the gasoline inventories "were horrendously bearish" for the refiners.
As we were generally bearish we spent a pleasant afternoon on the site chatting about the IPhone (most of us were bullish and the reviews seem to bear us out) and tinkering with our many oil shorts. All in all it was a great day and we had little reason to change our stance but we finished essentially flat for the day:
Happy Trading points out that my long predicted breakdown in gold is starting to take shape so beware my dollar squeeze, which may be triggered by a hawkish Fed statement tomorrow.
We closed just 7 positions, mostly oil coming off the table and some of our Apple covers (we still have the Oct puts) as they've done their short-term job. Our very high-level debate among members yesterday left me much more bullish on the IPhone as we uncovered some very obvious Apple bashing in the press that indicated to me that there's a lot of nervous shorts out there.
|
Description |
Cost Basis |
Open |
Sale Price |
Sold |
Gain/Loss $ |
% |
| 30 JUL 125.00 AAPL CALL (APVGE) | $ 9,310 | 6/20 | $ 15,290 | 6/26 | $ 5,980 | 64% |
| 50 JUL 136.00 DIA PUT (DAZSF) | $ 12,260 | 6/25 | $ 16,490 | 6/26 | $ 4,230 | 35% |
| 20 JUL 90.00 SU PUT (SUSR) | $ 5,210 | 5/17 | $ 9,190 | 6/26 | $ 3,980 | 76% |
| 4 JUL 62.50 TSO PUT (TSOSU) | $ 1,770 | 6/20 | $ 1,270 | 6/26 | $ (500) | -28% |
| 5 JUL 95.00 WYNN CALL (UWYGS) | $ 360 | 6/18 | $ 1,940 | 6/26 | $ 1,580 | 439% |
| 20 JUL 69.00 XLE PUT (XBTSQ) | $ 2,470 | 6/25 | $ 4,090 | 6/26 | $ 1,620 | 66% |
| 80 JUL 80.00 XOM PUT (XOMSP) | $ 5,210 | 6/25 | $ 8,390 | 6/26 | $ 3,180 | 61% |
As a new Apple play we picked up some T $40s we'd been eyeing all week but it's all about the Fed tomorrow and it's sure to be another wild one so stay tuned!
