Opening Bounce
The futures are better
this morning on the back of generally positive earnings news
(
AMZN |
Quote |
Chart |
News |
PowerRating),
but have begun to slide a bit on a worse-than-expected Durable Orders
number. Durable Orders came in at -0.6% vs. an expected gain of 0.5%. Excluding
defense, the number was even worse, coming in at -1.2%. Lately the market
has been unable to capitalize on good news, so it will be important to see if
these early gains can hold. Later this morning (9:00 CDT) we have new home
sales, expected at 890k, and at 13:00 CDT, the Fed’s beige book report. The
beige book report will be the one to watch.
Overseas markets were mixed, with London’s FTSE 100 recently up 0.4% to 5212 and
Germany’s Xetra DAX gaining 0.3% to 5205. Japan’s Nikkei 225 finished down 0.5%
at 11,673, while the Hang Seng closed up 0.5% to 11,396.
The dollar is once again creeping lower, and as readers of "Intrinsic
Value" know, the Fed has basically given its blessing to weakening the
dollar. Gold continues to grind higher in the face of all the pundits, and now
the foreign currencies are starting to build some nice-looking bases. I expect
the dollar to fall out of bed soon. Put the Swiss franc, British pound, euro and
Japanese yen on your screens.
SOX In Trouble — Cavalry Expected Soon
The
(
$SOX.X |
Quote |
Chart |
News |
PowerRating) index dropped 3.1% yesterday to the 555.00
area. If this market is to keep from coming completely unglued, the SOX must
hold 550.00. There should be some powerful "hand-to-hand combat" at
the 550 level, and look for a few upgrades to occur in that area.
Volatility
Volatility is still only mildly bad, which might indicate further down side
potential. Yesterday, the VIX gained .41 to 22.13, the VXN was up 87 to 39.93,
and the QQV gained 1.56 to 34.62.
Trade Updates (4/23/02)
(
$DJX.X |
Quote |
Chart |
News |
PowerRating) — High-risk traders bought the May 100 puts at $1.50
(50%).
Working Orders (Old Recommendations)
(
APC |
Quote |
Chart |
News |
PowerRating) — Buy the May 55/60 1:2 ratio call spread as a "roll" of
our APC May 60 call position. Pay $.65.
(Note: What you are doing is selling
your long May 60 calls to close, buying half as many May 55 calls to open, and
paying $.65 for the privilege). This spread is not currently close.
(
MSFT |
Quote |
Chart |
News |
PowerRating) — Buy the May/July 55 put calendar (buy the July puts, sell
the May puts) at $1.25 (25%).
(
WMT |
Quote |
Chart |
News |
PowerRating) — Sell half of the June 60 puts at $5.00.
New Actions (New Recommendations)
(
QQQ |
Quote |
Chart |
News |
PowerRating) — Buy the May 35 puts (25%) against
the $34.30 area in the QQQ.
Rolls/Adjustments
Chiron
(
CHIR |
Quote |
Chart |
News |
PowerRating) — Investors long the July 50 calls at $3.30 (50%)
may sell the July 60 calls against their positions at $1.00. This will roll us
into the July 50/60 call spread at $2.30.
On The Horizon…
Puking out longs on the next bounce.
Recap of open trades
Long-term
Reverse Collars
None.
Buy-writes
(
AMR |
Quote |
Chart |
News |
PowerRating) — Long the August 25 buy-write at $22.00 (50%).
(
AOL |
Quote |
Chart |
News |
PowerRating) — Long the July 22.5 buy-write at
$19.40 (50%).
(
HAL |
Quote |
Chart |
News |
PowerRating) — Long the July 20 buy-write at $15.00
(50%).
HAL -long the July 17.5 buy-write at $14.50
(50%).
(
SEBL |
Quote |
Chart |
News |
PowerRating) — Long the August 27.5 buy-write at
$23.00 (50%).
Proxy buy-writes
None.
Complex Strategies
None.
Directional Positions
(
JNJ |
Quote |
Chart |
News |
PowerRating) — Long the January 60 puts at $3.30
(50%).
Short-term
Call Positions
(
APC |
Quote |
Chart |
News |
PowerRating) — Long the May 60 calls at $1.50(100%).
(
CHIR |
Quote |
Chart |
News |
PowerRating) — Long the July 50 calls at $3.30
(50%).
(
CPN |
Quote |
Chart |
News |
PowerRating) — Long the May 15 calls at $.40 (50%).
(
MLNM |
Quote |
Chart |
News |
PowerRating) — Long the May 25 calls at $2.40
(50%).
Call Spread Positions
None.
Put Positions
(
BAC |
Quote |
Chart |
News |
PowerRating) — Long the August 65 puts at $3.00 (25%) — part of a spread
"leg" to be completed later.
(
$DJX.X |
Quote |
Chart |
News |
PowerRating) — Long the May 100 puts at $1.50
(50%).
(
SMH |
Quote |
Chart |
News |
PowerRating) — Long the May 40 puts at $.90 (100%).
Holding.
(
WMT |
Quote |
Chart |
News |
PowerRating) — Long the June 60 puts at $2.50
(75%).
Spread Positions
(
BAC |
Quote |
Chart |
News |
PowerRating) — Long the August/May 65 put calendar at $1.50 (50%).
Stops
None.
- Options trading involves substantial risk and
is not suitable for all Investors. - Also note that spread strategies involve
multiple commissions and are not risk-free. Most spreads must be done in a
margin account.
- Because of the importance of tax
considerations to all options transactions, the investor considering options
should consult with a tax advisor as to how taxes may affect the outcome of
contemplated options transactions.
- Supporting documentation for claims,
comparisons, recommendations, statistics or other technical data will be
furnished upon request. One or more of the contributors to these
commentaries may have a position in one or more of the securities mentioned.
- It is important to note that the options
strategies discussed herein are not suitable to all investors. Options are
complex investment tools and involve substantial risk. Moreover spreading
strategies do not eliminate risk and involve multiple commissions.
- Note: All individuals must have read the ODD
carefully before trading options. To obtain the document, click on the OCC
link: https://www.theocc.com/publications/risks/riskchap1.jsp