Last Friday it was "GE, I Wish I'd Stayed In Bed" but last night we couldn't sleep as Christmas came 8 months early on our Google trades.
Just like kids at Christmas, we can't wait for the opening bell to get our presents. We have a big rule at PSW and that's ALWAYS sell into the initial excitement but our other rule is When in doubt, sell half and I think we'll have very tight stops on 1/2 of our shorter calls and also a plan to roll our callers into the initial excitement, as laid out in last night's post.
The whole market is off to a rockin' start because, as I predicted on March 28th, C's earnings were not that terrible and that's all it takes in this market of very low expectation so thanks to Meredith Whitney and all the other hyenas, who worked so hard to give us these phenomenal entry points on so many stocks!
Not only are our bullish plays going well but a reversal of sentiment in equities is going to let a little air out of the commodity bubble as hot money scrambles to follow the next trend so we might even get a little relief on our oil puts – isn't that amazing?!?
Asia was not amazed this morning with the Nikkei posting just a half-point gain while the Hang Seng dropped a quarter point, following the Shanghai Composite, which gave up yet another 4% today, dropping to 3,094, a fresh 52-week low. PTR fell 5% and finished below it's IPO price as inflation worries start to bite the very guys that are at the root of the inflation. This is Shakespearean sonnet-level poetic justice!
Europe is having a better time and is up about 1.5% pre market (8 am) despite RBS indicating they would need to raise a $24 Billion to shore up their capital base. The BOE is aggressively working on a plan to bail out the banks designed to "help banks find a home for billions of dollars in hard-to-sell mortgages that have been piling up on their balance sheets and preventing them from making new loans." Interestingly, the BOE plan is similar to my solution to the US mortgage crisis as the BOE plans to take $60Bn of mortgages off the banks hands as collateral for loans of government securities, my plan does the same thing except we aim the aid at the homeowners while still freeing up the same liquidity on the bank's end.
Our futures are so bright, we've gotta wear shades as CAT adds to the party with exceptional earnings based, not surprisingly on strong overseas growth. SLB had good growth but missed – is it enough to justify the all-time highs of the OIH group?
Well, I'm going to cut this short as it's Google, Google, Google on the board and we have a lot of chips to cash in this morning!
Have an excellent weekend,
– Phil
