GOOG – damn, I was predicting them for $525 on a breakout but I didn’t think they’d take off today. I wouldn’t buy a September into the excitement unless you’re going for a momentum play but I’ll be looking to sell calls when they slow down against my longer positions.
BSX – I sold the $12.50s against my Jan ’09s so I’m not too anxious to buy out my callers on a spike.
Oil puts – I’m stunned at the moment. I can’t imagine what data these guys are looking at. Seems to be the same old Bomb Iran crap we were talking about on the weekend. No new puts yet, that’s always a great way to die…. We just have to see where this takes us. No inventory until Thursday this week so we’ll see if VLO can crack $70 along with the XLE.
Contstuction spending a huge miss! Down 0.4 vs. expected up .1. ISM at 52.9 shows pretty good growth but down almost a point and 50 represents contraction so think of it more as dropping from 3.8 to 2.9 with anything below 0 being BIG TROUBLE!
RIMM – nope, they still don’t get it. Apparently MSFT is buying YHOO AND RIMM this week! Selling the $86.62s for $3.03 is safer than buying short-term puts so XXX if you have the margin for it. You can cap it with $93.38s at $1 but I hate giving back the $1 just to play… I still like the ‘09 $86.62 for $16.60 and selling the $83.38 puts for $2.85 but its a play that will give you a lot of heartache! XXX
1,480 on the S&P is good if we hold it (I wasn’t even hoping for that today).
GOOG – sold $520s for $12.25 against my Oct $520s. XXX
Why are my Q puts holding up so well?
Gold – I’d be buying it too with this wacky market movement.
There was a strong hurricane season alert for Sept-Nov so it doesn’t matter what the storms actually do, they’re going to press them anyway. Moving a little more to XOM Oct $85s as I don’t want to get caught with my pants down but I’m pretty confident at that $1.20 level on the Sept $85 puts to. XXX
VLO is curling over at $70 as expected so watch for XLE to confirm a top by breaking below $70 as well. The XLE $70 puts are $1.38 and make a nice mo play but you’re just looking for .20. XXX
DAMN – VLO changes it’s mind and is retesting $70. You don’t want to buy any oil puts if they are holding $70 but the fundamentals just aren’t there to support it so it’s a faith call to accumulate puts here.
osted September 4, 2007 at 10:29 am | Permalink (Edit)
AXP – yes I do still like those.
I wouldn’t go overboard on either side right now, just letting most things ride and taking my lumps on the short side, something that’s easier to do mainly in cash. Right now I’m being punished for not following through with my plan to add DIA calls at the close but DON’T FORGET we aren’t even taking out Friday’s Dow high of 13,430 but we have taken it on the S&P and the Nas by a wide margin. NYSE broke up over 9,650 and the Russell took out 795 and the SOX took out 500 with authority so we’re looking for Dow confirmation more than anything.
DIA $134s, now $2.45 are good protection if you are too bearish but the $133 puts dropping to $1.88 after those two reports this morning seems like the bargain play at the moment.
AAPL getting toppy looking here, $140 will be hard to hold unless we get a real volume surge.
CVX – acting weaker than peers, a good sign for the puts. .75 is worth a DD if you are on budget, then get the hell out of half at the reduced basis of $1 and see how they handle $87.50 with tight stops.
You can be bearish below 13,400 but above that you’re just being stubborn!
WFR – They lowered guidance this morning, factory related but a 5% hit on Q3 profits. Good buying opportunity if you’re not in and a huge relief for our LTP as the $60s were getting away from us and just took a nice $1.50 hit. We have to leave them in place in case we get a downgrade but this would be great if we flatline around $60.
Octoper DIA $133 puts are very good 60-day insurance at $3.15 XXX
Last Monday we peaked at Dow 13,438, 61 points up from the open and finished down 55 at 13,322. The Nasdaq peaked out that day at 2,573 and the real top test is 2,627 we put in on the 6th (just before the collapse), a day we closed at 2,612 before opening 6 sessions later below 2,450. I’m not rooting for it to go down, I am painfully avoiding taking sides but since most of you are bullish I feel compelled to point out warning signs. Of course, holding those warning levels through the close would be bullish…
I think the logic on vehicle sales is off this month as they are counting on the fact that Aug had 23 weekdays (the best) with no holidays and it is that, not actual demand increases, that makes them think they will break July’s (with the 4th of July coming on a Wednesday) 11.6M in domestic sales. Since July had 20 non-holiday week days (and who buys a car around the 4th?) less than the 3% bump they expect for August would be beyond pathetic.
Aside from that, this rally is a huge gamble on the Beige book agreeing with the GDP and showing us that things are actually great and the economy is strong and we’re winning the war…
WFR Jan ‘09 $65s for $11.70 are in a good spot as long as you have margin to sell the $60s, now $1.85, otherwise pay the extra $2 for the ‘09 $60s.
DIA – the more bullish you are, the tighter you want to be (and I know you’re not) but it’s all about adequate protection. The Oct $135s would pick up about $1.25 on a 200 point up move while the $133s would gain $1.40 so not too far off but on a bigger move the $133s will start outgaining the $135s significantly. So the big question is are you insuring against a quick move or a real change in direction? Of course for real quick move protection, the Septembers still have 3 weeks to go and give you the most bang for your buck if you pick them the right way but mine are insurance so I’m keeping around October with my accumulations.
Well I held most of my XOM $85 puts because I couldn’t get a good price this morning but I’m adding XLE $71 puts at $1.50-$1.60 as they were double that 2 days ago but it’s a risky play.
CAL is back to being silly at $34.50 so I like the Oct $30 puts at $1 XXX
Up/Down manipulation – it doesn’t “work both ways” when one of the upside manipulators is the $3T US government (that’s $2T they collect and $1T they borrow per year!).
AAPL Oct $125s – Yikes! Of course you should, at this point you may as well own the stock with $21 and just $4 in premium. You can roll out to 2X $145s at $8, taking $5 off the table and then sell 1/2 the current $145s for $4.55 and keep your eye on it for a possible sale of the $140s, now $7.15, if we get downside momentum. This gives you almost an identical upside even if you have to buy back the caller as well as a huge bonus for you on a big breakout, but a much lower downside exposure than you have now. That’s assuming you are still very bullish. Otherwise I wouldn’t roll to 2X, just 1x but following the same sell pattern.
ALL SEPT CALLS/PUTS – this is a fantastic time to take some off the table. If you don’t like your call enough to spend $1-2 to roll it to October then what the heck are you holding the Septembers for?!? The only reason you should have any Septembers open as of Friday is if you SOLD them to some other sucker who wants to watch his premium die or if you have a specific momentum or news play going on that fits the window (still a huge risk).
$49.25 is the must hold on the Qs (about 2,610).
Here’s a good test, right about now the big boys are heading back from lunch and will start harumphing about. Mr. Fund manager has to be concerned about today’s numbers, the upcoming Beige Book and a summer earnings report that should point to some wage inflation. Couple that with the fact that they almost has a heart attack just two weeks ago and even the die-hard bulls may want to take a little off the top here.
XOM – I’m adding at $1.10 to lower my basis to $1.20(ish) and I will get half out there and another half out at no more than $1.80 but once over $1.60 I’ll be stopping at $1.55 if it can’t get back up (or down as the case may be). Also picking up the Oct $85s along the $2.15 line as I’m not going to wait for $2, I’ll just DD at $1.85 if I’m wrong(ish).
Shorting SLB for fun up here with the $95 puts at $1.05 that were $1.75 this morning.
AAPL – my rule of thumb roll up for them is at about $7 on the next level up. Like I said at 1:21, better to bite the bullet there and roll your caller up this month than give up a month’s worth of time value at this stage.
AAPL – my rule of thumb roll up for them is at about $7 on the next level up. Like I said at 1:21, better to bite the bullet there and roll your caller up this month than give up a month’s worth of time value at this stage.
DIA – will be perfect if it tops out here (back at Friday’s high). By the way, this shows how charts do rule – only to a chart person is the market situation today similar to the one on Friday, even after 3 days of news
Oops, oil broke $75!
AAPL at ATH – I like the second leg of Juliet’s play from earlier, spreading the $145s 2:1 while you’re getting this huge September premium. If it keeps going up, that’s the least of your problems.
Oil closed at $75.05.
CAL – I have a $1.025 avg entry on 40. They’ve been no problem at all at $1.05 but I want $1 to buy another 20.
GES – ubiquitous international brand so I wouldn’t bet against them.
GOOG – I said it’s a real rally when GOOG hits $525 and it’s holding it nicely so what can we say. HD is holding down the Dow with a 5% drop so things are BETTER than they seem.
This does NOT stop me from chasing up the DIA puts to cover but I’m hoping for $3 on the Oct $134 puts now otherwise I’ll just take the current $135s, now at $2.17 to cover 60/40 puts back into the close.
CVX/XOM – I’ve rolled 200 of my 300 XOM $85 puts to 100 Oct $85 puts, putting me in them for down about .30. The 100 Sept $85s that remained ($1.38 basis) I doubled downed at $1.03 so my basis here is $1.21 where I will look to dump out of September if we are lucky enough to recover a bit.
