CAL – I’d hold off a bit to see if oil breaks.
Uh oh! Pending home sales off 12.2% and 16.1% for the year period – DIVE DIVE DIVE. Layer those mattresses if you are not protected!
Oil puts – as I said yesterday, if you DD, your goal is to get half out even as quickly as possible. As soon as you hit your lowered basis you need to set very tight stops and look to lighten up ASAP. The way I look at this is that I ABSOLUTELY will sell 1/2 my XOM $85 puts at $1.25 so I sell 1/4 the second the mo starts to fade and let the rest ride with a stop tight stop. I can always buy it back or roll down or do 100 other things with cash but the only thing I can do with a poor position if it bounces back is wait and pray – not my favorite strategy!
AAPL – only the announcement mojo is holding them up right now. If you are exposed on them the best thing to do is take a long put, like the Jan $140 put at $12.65, which is already beaten to death and is unlikely to lose more than 15%, even on a $5 move up, it’s cheaper insurance than buying a close put or selling a call if you’re wrong and the stock flies up. XXX for those who can afford it an otherwise, I will say for the 20th time this month, the premium on the $145s (although I did start off the month saying this about the $125s) is ridiculous – sell it to someone!
Buying as we go down. I still like leaps on BSC, COH, BMY, BA… But I don’t think I’d be calling a bottom until we get the data later.
I have leaps already. BSC ‘10 $120s at $20 I just bought. BA ‘09 $95s for $14 are a good price since you can sell current $95s for $2 and it’s a fairly calm stock. COH ‘10 $50s are great at $8.40, you can sell Oct $47.50s for $1.25 with 26 sales to go. BMY Jan ‘10 $30s are $3.17 and you can sell Oct $30s for .68, you’ve got to like the montly ROI on these!
Apple all crazy – yep, but, like I said, we thought they were crazy since $125.
I hope I don’t have to mention there should be no change in our strategy of getting winners off the table. This includes covers that you are up more than 50% on and any short-term (Oct-Jan) position you are up 20% on that pulls back 20% of the profits unless you have a REALLY good reason to keep it.
I’m currently adding to the DIA $134s at $1.90 as upside protection and I will roll those down to the $133s when/if they get down to perhaps $2.20. I’ve also added some Oct $133 calls as it cambe back down below my initial entry of $3.95 but it went up a little fast for my taste. I am already loaded with puts so all I’m doing here is tighening up around the $133 mark – looking for the next 300-point move.
Puts/Calls – Well it’s kind of out of whack now as I layered down puts that haven’t stopped out yet but I started the day with 700 puts and 400 calls but, due to my cash loss yesterday, they weren’t that far off in market value. I will tighten up to 50:50 ahead of the Beige book but with tight stops on both sides in case we get a big reaction. The STP made up all of yesterday’s losses and I’m just thankful for that. The LTP, as usual, barely budged, which is as it should be when I don’t know which way the markets will go.
COH – 
Did anyone notice SHLD? Down $6.50! I’m took the money I made off my $145 caller and rolled my Jan $170s to the Oct $140s at $5.50 as I’m done with this trade if it drops to $4 anyway and I have a pretty good chance of a double here on a recovery. XXX on a good Beige Book.
XOM – it’s not me, it’s Mr. 3000. Some joker took a huge block and so far he’s not capitulating so they’re going to burn him if they can, that’s why I moved to October, Sept was getting a little crowded and I’ll be glad to be rid of them. There’s also an indication of market sentiment in the pricing, not enough people think this is more than a downspike for XOM to bid up the puts, especially ahead of inventory.
NILE Jan $90s at $6.95 are a nice shorter spread against the Oct $85s, which should get backk to $5+ pretty fast if they break $80 but are a good sell at $3.50, even if the stock stays flat.
WFR looks like a good bottom here. No hurry buying Jan ‘09 $60s at $13 as you’re better off waiting for a good move on the stock so you can sell the Sept $60s for more money.
FXI makes a good mo play if the Dow starts to bounce back. $151s were $7.50 yesterday, now $5.30 so if you’re not greedy you can make a buck or so but it has to take out $149.50 before you can relax.
DIA $134s, that’s September. I want maximum gain to the upside and liquidity to the downside… Glad the puts helped!
The Englewood jack, that I love, I used to live there…
UNH doing a good job of demonstrating why it’s such a fun LTP play to sell calls against. The ‘10 $50s at $11.15 require 10% growth per year to be in the money at $60 and you can sell curent $50s for $1-$1.20 next time it pops back to $50 (something it did 4 times in the past 3 weeks).
YHOO is still green!
BA $100s at .72 were $1.50 on Friday, worth a gamble in $10KP for 10 with a stop at .60, looking for $1.10. XXX
AMZN – I’d wait for the BB as long as AMZN doesn’t punch through $85 you should be OK but those trades (1 month spreads) are often a problem and should be avoided unless you are well prepared for exactly this.
VZ not my favorite, I like T, but they are consolidating nicely for something here so we can assume it’s a break up, not down. Oct $42.50s were $1.55 yesterday, now $1, what’s not to like? XXX
Oops – GOOG flashing bad signal by falling off. APPL will confirm another leg down for the Nas, probably a retest of 2,600, which will be nice if we hold it and sad if we don’t.
AAPL did not come out with an IPod that cures cancer – Investors are shocked!
BIDU is teeing up for a great put if we get a bad BB report. Actually bad is a matter of opinion because good could be bad if it means the Fed won’t lower but bad could be bad because the economy sucks so we need a Goldilocks crappy number that shows that we are lame but not crippled….
CROX just committed suicide or something…
So much for my poor Apple bagholder…
Oh yeah, BIDU – Gotta go in the money with the $230 puts as a mo play at $16, out if they break $222 looking for $20. XXX
Q puts getting tempting, Qs have a huge gap to fill and 12 trading days ahead, Apple did not turn water into wine and there is a legitimat issue with a sweeping housing crisis impacting on-line real estate advertising and listings which could cascade down to everything else out there. To me a weak beige book is bad and celebrating it because the Fed will be able to cut rates is idiotic so I’ll be shorting into that rally. The ECB will be reading this book and I’m a lot more worried about their reaction than wall street’s. If we screwed up our economy with easy money policies don’t expect their reaction tomorrow to be to screw up their’s the same way.
SNDK – now aren’t you glad we left our caller in place?
IPods are getting to the size where you can’t see them. They have a 160Gb IPod “Touch” with WiFi (”expect internet features soon), which will get me running to the store though! This is just what I wanted so I can’t imagine what people are bailing for and I’m taking out my callers.
Financials fading, you would think they’ve got the scoop unless it’s just a flush.
AIG yes. CVS – if things are ok with the BB
BB: Moderate growth. Concern for housing (duh!). Lending tight. “Generally positive non-auto/furniture retail sales” Little price and wage pressures… This is not the kind of book that would make the Fed cut in ordinary circumstances but it is the perfect “soft landing” scenario. So I like it even if investors freak out that the Fed won’t save us.
Look for housing sector to fall now including brokers, so our plan is still 80% cash, we should have some good buying opportunities when this bottoms but anything you don’t love should be sold. XXX
VNO $105 puts at $2.10 are a good put play if you have no down realty.
I’m watching XLF to see if it breaks $33.50, will be very interesting if they lose it here.
Posted September 5, 2007 at 2:13 pm Permalink (Edit)
SHLD Oct $140 calls, still $5.45 – yep those!
CME $560 puts at $11.75 XXX Stop at $11 but I’ll be surprised if we need it.
AAPL – took out callers as they were out of the money. Now selling $140 calls at $6.50, starting to take those $2.50s back!
Getting out of BIDU puts – I recommend getting out at the bottom. Around $215 I’ll be a bit concerned but below that, not until they break back over it. AAPL puts – I KNOW I never said that! I still love them and I will be getting back into shorter (than ‘09) calls once they settle down (not today).
BIDU – depends where we finish. If they break back over $220, I’ll probably just ditch.
MAT coming off the mats…
BA – that depends. If we can hold the line here with the Nas still at 2,600, the S&P at 1,470 and can get the Dow back to 13,300. If we come back it’s going to be a relief rally in energy as the economic fundamentals aren’t too bad and they expect a drawdown tomorrow so that could be good for that sector and that may cheer up the brokers and, before you know it, back over 13,300.
IBM, OIH components holding up well. GOOG staying strong, OII really having trouble breaking 5%.
Volume is low, seems like lack of buyer with sellers frozen like deer in the headlights and that’s not usually good since the headlights may belong to a truck, like YRCW, which is crashing along with the transports…
BA – that’s why you have to be very unemotional about mo plays. I expected a lot more too but didn’t get it so I took my dime and went home, beats losing over principles…
So many tempting things but I’m sticking with cash for now.
SBUX – I liked them down around $27 for accumulation.
This is nuts! DIA $133s jumping from $2.20 lows, may as well pick up $134s, still at $1.80 and take the .20 (or whatever) profit off the table switching to the higher calls with a $1.60 basis (since I don’t really believe in them).
