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Tuesday Virtual Portfolio Moves

By phil
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Posted July 17, 2007 at 10:00 am | Permalink (Edit)

WNR – YAY!

VLO – there is nothing they can do to support themselves if gas and oil keep going in opposite directions like they are now. I’m only mostly negative on them anyway, they are one of my favorite cover plays as well. CNBC seems to be responding to my posts too and is talking up backwardation like it validates strong current demand but that’s an asinine way to look at it when the long contracts are falling. They are talking about backwardation when front month contracts rise FASTER than longer contracts, a situation you can assume will catch up over time but that’s NOT what’s happening now. Of course all those technical terms assume some sort of purity of market movement that has something to do with supply and demand.

WFR pins down almost every month, non-news articles are a great catalyst (see Cramer’s classic video on how hedge funds manipulate the media at will by planting stories). That’s why they are so great to sell calls against! With the SOX up they are a nice buy opportunity on the Aug $65s, now $2, that were $4 yesterday. I’d wait and pick it up on momentum up if the markets hold strong and they hold $60 but this is very likely a flush looking at the very big volume spikes at the open. They may hold this through expiration (earnings are 25th) so you could go longer, like Oct $65s for $4 and sell the July $60s for $1.40 and the 2010s are very cheap with the $60s at $19 (look how much premium you get for 4 days of the July $65s!). XXX

Posted July 17, 2007 at 10:16 am | Permalink (Edit)

COP was just kidding with that opening. Oil sector heading south in general – markets may follow, especially with much of brokers’ gains coming off energy sector investments! So forget the XLF for now, ignore the Dow and if the SOX fail it’s all over for the Nasdaq! XXX

Posted July 17, 2007 at 10:26 am | Permalink (Edit)

NMX – if they oil bubble pops and no on wants to trade 200,000 contracts 500,000 times a day anymore, their revenues could go to half really fast but yes, in hurricane season, they can clean up on volatility.

Uh oh, oil move down starting to look like a flush, going to cash out those TSOs – too far ahead. XXX

Posted July 17, 2007 at 11:10 am | Permalink (Edit)

WNR – I have Sept $55 puts so I’m more thinking of selling the $60 puts, now .78, hopefully $1.

CCJ – ah well, that brings the roll to the Jan $50s down to $1.65 so I’m pre-rolling to those and selling the Aug $50s back at $1.50 against my lower leaps, keeping the $55s as an upside buffer with tight stops (maybe $2.40, a 50% profit).

Posted July 17, 2007 at 11:59 am | Permalink (Edit)

QQQQ if you are tech/4-letter symbol heavy. The Aug $51 puts are $1.35 and should give you better than .70 of protection per 2% Nasdaq loss.

DIA – As a new entry and strict insurance you can take the Sept $137s for $2.15 which will still be worth about $1 if they Dow goes to 14,500 and will gain about .35 for each 100 point drop. Best is to take the gains you made today (on 50 point move up), double it and look to protect at least half of that gain so how many .35s do you need if it goes the other way?

Posted July 17, 2007 at 12:21 pm | Permalink (Edit)

SLB is one funny stock! TSO still hasn’t hist my .25 stop from this morning! Amazing, my shorts almost back to even ($54.37) after 8 months of pain!

Best short on oil – ROFL, I could have given you 20 just 3 hours ago! SU will be a great one if oil really drops down but they make good money above $70 and benefit from low nat gas prices. I’d go XLE right now, maybe Aug $71 puts for $1.25 or SLB Aug $85 puts at $1.75 as a huge earnings gamble but if you can sell the July $90s as a mo play if it goes the other way then it’s an XXX.

Posted July 17, 2007 at 12:42 pm | Permalink (Edit)
EDU – as a bullish earnings play I like the Oct $60s at $4.80, selling the Aug $60s for $2.48
Posted July 17, 2007 at 2:25 pm | Permalink (Edit)

RS Sept $50 – They will have a tough time breaking $65 and I would be taking the $2.22 being offered fro the Aug $65s but first I would take the .90 for the July $65s and I like this so much I’d have to call that play an XXX against the Sept $65s at $3.25, which you may want to roll to as you are way too deep in the money. At least consider the $60s for $5.85 and take $8 off the table.

KO – tough call. Earnings were good and it’s a lucky escape for you but if you intend to sell Augs anyway then no harm in waiting a bit. I have the ‘09 $50s that are a double and sold the same $52.50s. I will be rolling up to the ‘09 $55 at $4.35 and selling the Aug $52.50s, now $1.48 by the week’s end.

Posted July 17, 2007 at 3:25 pm | Permalink (Edit)

COF I have minorly successful Jan $75s at $6.60, now $7.60 and I sold the Jul $75s for $2.02, now $1.71 and I’m happy with that position at the Aug $75s have a $2 premium.

 

 

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