Friday’s Watchlist

Ready to tackle Expiration Friday with mostly bullish ideas…

• bullish reversals based on stoch’s/candlesticks:  [[AIG]], [[CMED]], [[MER]]
• [[DVN]]-uptrend from January lows still holds
• ascending triangle in [[LDK]]
• [[LUFK]]-needs to hold $78

…as well as a few bearish ones..

• [[JBLU]]-downtrend from February highs
• [[FTD]]-resistance @ $14.50
• [[SJM]]-resistance @ $52

…while having it both ways… 

• [[VMW]] – h/t Ragin’ – might go with a strangle at this key $72 level. 
• Liking ‘lol’s idea from the comments of RC’s post:  straddle up on [[CAKE]] while waiting for a breakout/down from the triangle.

It is the end of the week, so I’ll probably stick with small positions regardless of direction.

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So nevermind that bit about the market going down.  Up, up, & away we go!

While I had some limit orders in for calls in [[ILMN]], [[LFT]], [[LUFK]], [[SJM]] (none of which filled), the main emphasis was on selling/dumping May options before they expired. 

After yesterday’s near-breakeven, booked a definite net loss on the account for the first time since the 1st of the month…but this was overshadowed by the massive gains (unrealized, yet) in [[SIGM]] and measured gains in [[ALEX]], [[AVB]], [[STP]].

DP Sells:

• [[BX]] calls & [[YGE]] puts from their respective straddles based on initial earnings reaction.  Some benevolent soul later bought my [[CTRP]] calls as well for pennies on the dollar.  Better than worthless, though.
  • [[BX]] later decided to turn positive and shred the bears.  Sold the puts just before they became worthless, booking a decent loss on the straddle.
  • [[YGE]] did the opposite, stopping out the calls in the first hour.  At least this straddle finished in the black, although not by much.
  • (Safe to say I was terrible at picking ‘direction’ today.  Both faked me out.)
• [[MELI]] & [[ZOLT]] puts stopped out on the unrelenting rally, closing the positions, and chalking up 2 more for the losing side in earnings plays.
• [[KWK]] wasn’t playing ball with the rally-monkey…calls hit their trailing stop on a mid-day wave of selling.  Another loss, similar in size to the other 3.
• The rally did help a couple positions that were essentially worthless in the morning:  [[BBBY]] 32.50 calls and [[NVDA]] 22.50 calls (from its earnings strangle).  Sold both at the close, BBBY for 100% profit (unfortunately, it was just a small position).
  • The NVDA strangle is technically not yet completely closed…the 20. puts are still open, although it’s likely that they will expire worthless.  Still, the calls sold have already guaranteed a profit on the position. 

All-in-all a decent ‘housecleaning’ day.  Got rid of almost all remaining May options with the exception of 2 worthless ones (NVDA 20. puts, PALM 5. puts) and 2 ITM ones that will be sold tomorrow (AMAT 20. puts, CTRP 60. puts).  Need those 2 to drop just a little more tomorrow so that their respective starddles/strangles can end in profits.

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Since ABC moved LOST to Thursday nights, Wednesday night TV has become a barren wasteland of boring reality/results shows.  Fortunately for us less braindead types, we have to gift of movies to entertain.

Watched Before The Devil Knows You’re Dead tonight.  Directed by Sidney Lumet, who has got to be around 100, and starring the great Philip Seymour Hoffman, Albert Finney, Ethan Hawke, and the supremely gorgeous Marisa Tomei (I’m sure she’s ‘talented’ as well), it was one of the best reviewed movies of 2007.  Came out on DVD/Bluray a month ago and I finally got around to it.

[youtube:http://www.youtube.com/watch?v=8Jhrxn7QVDc 450 300]

Verdict:  Supremely entertaining, in an emotional/brutal/bleak/50-car-pileup sort of way.  High tension throughout; there is not a single moment that drags.  To reveal any of the plot (other than what you may see in the trailer) would be criminal.  As Roger Ebert wrote:  “[it] is such a superb crime melodrama that I almost want to leave it at that.  To just stop writing right now and advise you to go out and see it as soon as you can.”

[Go.  Now!] 

And in keeping with iBC rules, here are a few trades that, market-conditions willing, I will be looking to enter tomorrow:

• [[LFT]] breakout above $20
• [[LUFK]] attempt to hold breakout above $78
• watching ascending triangles in [[ILMN]], [[LDK]]
• will look to bolster this sparse-looking list in the morning.

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Today’s stupid rally made me feel like I was “missing out” on the bounties of mother market.  I felt like I should buying everything in sight, with both hands, yet I couldn’t/didn’t/wouldn’t due to a combination of work/time/wherewithal. 

But it’s probably for the better.  The end-of-day kick in the bulls’ balls combined with the fishy CPI numbers will probably send this market back down.  Lest we forget, when not trading at $124, oil is still making new highs.

DP Buys:

• Earnings plays enter their last big day with picks in China – [[CTRP]], [[YGE]] – and in financials – [[BX]].  CTRP down 10% AH.  Holla!
• The one bullish play of the day were calls in [[AVB]], and just a small position at that.  Betting on a breakout from the ascending triangle (above $105).

DP Sells:

• [[AMAT]] & [[MELI]] calls from the respective straddles.  Much to my chagrin, neither stock finished anywhere near its lows.
• Solar madness stopped out [[LDK]] puts and closed the earnings strangle for a nice big loss.
• [[MER]] puts stopped out for max. acceptable loss (0/2 with MER this month, both times hitting the m.a.l.).  [[DVN]] calls stopped out for half that on the late day dip.
• Most of the day’s losses were made up by the [[LUFK]] calls.  These also hit a trailing stop late in the day, but still booked a 50% profit. 
  • LUFK is still (tentatively) holding the ~$80 support level, so a show of strength tomorrow could be an opportunity to re-enter this trade.

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Banked a goodly amount of coin on the long side today, despite the overall market spending most of the day in the red.  Credit must go to our resident expert on ‘MadStocks‘ for the initial tips on the stocks that made up the majority of my winners today.

DP Sells:

• Based on their respective earnings, got rid of [[CSIQ]] puts and [[LDK]] & [[ZOLT]] calls at the open, leaving the opposite legs to ride to profit.
• Closed out [[CSCO]] earnings strangle by selling the remaining puts.  Booked a loss on the position…only the second earnings strangle (out 11) this month to not result in profit.  (There are a couple more, still open, that will most likely also end in a loss.)
• Closed out 2 huge winning trades, both 200% (overall position gain): 
  • [[CSIQ]], up 30% intra-day, started dropping towards the end, stopping out the calls and thus closing the strangle.
  • [[OMG]] puts also stopped out a few minutes before close.  Been riding these since last week, to the tune of 450%+ gains…

DP Buys:

• Couple more earnings straddles:  [[AMAT]] & [[MELI]].   I was late in buying the MELI options, and thus missed out on the majority of the 7% pre-earnings move.  May be a good thing, in retrospect, as their earnings appear to have “shit the shower” and the stock is down 10% after-hours.
• Getting back into a few more ‘traditional’ positions (as earnings wind down), with straight calls in:
  • [[DVN]]-(uptrend)
  • [[LUFK]]-(breakout above $78)
  • [[SIGM]]-(holding support @ $20)
  • [[STP]]-(CSIQ sympathy buying, still holding above $40-41)

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What a great day!  Basking in the glory of the following:

• [[CSIQ]] up 30%!
• [[STP]] up ~10%, in sympathy.
• [[SIGM]] holding support @ $20 & up 6% in the process.
• [[LUFK]] breaking out above $78 to the tune of +5%.
• [[MELI]] up 7%, although I was late to the party with the straddle.

I was thinking of an appropriate video to post, but the only one I could think of was the one from World Cup 2006…the official anthem (“Celebrate the Day”) with the accompanying video showing some of the greatest moments from World Cup history.

Obviously the video is 100% soccer, so the JakeGints of the world should not click it (might cause permanent damage).  It is also in German, so if you find that grating to your ears, click here for the English version (not as good IMO).

[youtube:http://www.youtube.com/watch?v=hd4oF4dZg9Q 450 300]

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