Market nervousness in action
The Fed meets today and I think the markets are nervous.
I see profit taking in agriculture and oil - the bubblier parts of the market.
We are going to maintain our short positions. AGN, VMC & HOG are very strong in the face of the sell-off - and I don't like to see that. We have large volume positions such that every $1 or $2 move down can throw off good returns. That's why I watch them like a hawk
Overall, our put positions are neutral right now: 2 are ahead, 2 are near cost basis, and 3 are behind. Only MGM and AGN are generating solid returns at thi stime, and AGN is on day watch (because they expire soon)
MGM - At $13.60, our Sept $50 puts are much higher than our cost (purchase = $3.4). This gain is wiped out by the NKE loss, which is too bad.
AGN - talk about resistant. The July $55s are selling for $3 (purchase = $2.10). The resistance is concerning and I'd hate to see them snap back, so I am going to put in an order to sell at $4. We'll see: I am watching daily
AN - back to purchase basis. They now look broken and every day more bad news about cars. The sooner they get to $10, the sooner we can unload our puts for ~$2 (purchase = $0.90)
VMC - Also resistant and the $50 puts are far out of the money. Nevertheless, we are close to purchase price (current = $3.1, purchase = $3.58). A 10% drop closer to $55 in the next 2 months would give us a chance to sell for close to $6.
ZLC - Who could be buying jewelry today? Our $15 puts are far away from today's ~$20 price, and the put sells for $1 (purchase = $1.85). ZLC depends on holiday season sales, so we may have to ride this one for a while.
HOG - Can't believe these guys won't drop, as if Motorcycle sales aren't suffering like cars and trucks. Our $30 puts are $1.65 (purchase = $3.20).
NKE
ETFC and TRID are very concerning. ETFC because (1) I did not write covered calls to further reduce the cost basis and (2) the absolute price drop is now ~ our cost basis. I think ETC is trading in sympathy with the other financial stocks, which are all trading down. But I am ok sticking with ETFC for another year because they are financially sound imho.
TRID is the mystery to me. They are trading at cash basis despite very tasty market growth and position.
I see profit taking in agriculture and oil - the bubblier parts of the market.
We are going to maintain our short positions. AGN, VMC & HOG are very strong in the face of the sell-off - and I don't like to see that. We have large volume positions such that every $1 or $2 move down can throw off good returns. That's why I watch them like a hawk
Overall, our put positions are neutral right now: 2 are ahead, 2 are near cost basis, and 3 are behind. Only MGM and AGN are generating solid returns at thi stime, and AGN is on day watch (because they expire soon)
MGM - At $13.60, our Sept $50 puts are much higher than our cost (purchase = $3.4). This gain is wiped out by the NKE loss, which is too bad.
AGN - talk about resistant. The July $55s are selling for $3 (purchase = $2.10). The resistance is concerning and I'd hate to see them snap back, so I am going to put in an order to sell at $4. We'll see: I am watching daily
AN - back to purchase basis. They now look broken and every day more bad news about cars. The sooner they get to $10, the sooner we can unload our puts for ~$2 (purchase = $0.90)
VMC - Also resistant and the $50 puts are far out of the money. Nevertheless, we are close to purchase price (current = $3.1, purchase = $3.58). A 10% drop closer to $55 in the next 2 months would give us a chance to sell for close to $6.
ZLC - Who could be buying jewelry today? Our $15 puts are far away from today's ~$20 price, and the put sells for $1 (purchase = $1.85). ZLC depends on holiday season sales, so we may have to ride this one for a while.
HOG - Can't believe these guys won't drop, as if Motorcycle sales aren't suffering like cars and trucks. Our $30 puts are $1.65 (purchase = $3.20).
NKE
ETFC and TRID are very concerning. ETFC because (1) I did not write covered calls to further reduce the cost basis and (2) the absolute price drop is now ~ our cost basis. I think ETC is trading in sympathy with the other financial stocks, which are all trading down. But I am ok sticking with ETFC for another year because they are financially sound imho.
TRID is the mystery to me. They are trading at cash basis despite very tasty market growth and position.
posted by Andrew at
7:42 AM
4 Comments:
http://money.cnn.com/2008/06/18/technology/bigscreenTV.fortune/index.htm?postversion=2008061912
Would this explain the softness of TRID?
Hi Andrew,
congress seems going to put rule on speculation on oil future, would that also affect energy stock ? or they are simply unrelated.
thx
your faithful follower
Niran - I could see a shift to smaller size TVs as a pain point for TRID. That's why they have (suppsoedly) been working on a solution for the low-end. But as that link expresses, business is booming for LCD TVs.
While I don't kid myself that TRID will enjoy its proper price, it certainly deserves to trade for more than cash.
I can only conclude that they are not getting the necessary design wins and word is leaking out.
A concerted and coordinated effort is playing out right now and with the single purpose of bringing down food and oil prices.
* Higher dollar - oil is a dollar hedge
* More supply - Saudi Arabia is offering a bit more oil
* Shake out the speculation
But make no mistake - oil is going to remain >$100 because the suppliers want it there.
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