Praying For A Rally (To Sell)
The screaming headline will be the FBI’s arrest ofÂ Imclone’s
PowerRating)Â ex-CEO Sam Waksal on insider trading charges. This will give
the talking heads something to focus on and will serve to further undermine
investor confidence right when the market is at a crucial point. Siebel Systems
PowerRating) has started the day off on a bad note, with its CFO stating that Q2
is shaping up to be as Q1. (Can anyone say “double dip”?) The stock is
going to get pounded along with other software stocks. We have a 50% position in
SEBL buy-writes, but we are getting hurt, however, given the long-term nature of
these positions. We will probably just adjust and add further units.
Currently, the DJI futures are down 8 points, the S&Ps are down 1.10, the
Nasdaq is 6.5 lower, and the Russell is unchanged.
Look for more of the same today. Any rally will be met by selling, and we are
looking at new, more aggressive sell levels. The insurance sector is now rolling
over, and we’ll be sniffing in there.
Volatility was up yesterday, but it was less than spectacular. The VIX
gained 1.31 to 27.46, the VXN rose .55 to 53.12, and the QQV eked out a .17 gain
to 46.41. No panic? It ain’t over.
Even I Am Praying For A Rally (To Sell)
This is tough.Â Waiting for bounces to sell has not been working lately. It
is getting close to “Edward Scissorhands” time where you just stick
your nose into the market, buy a boatload of long-dated puts, and go to Mexico
for about six months!
Trade Updates (6/11/02)
New Actions (New Recommendations)
Working Orders (Old Recommendations)
PowerRating) — Holders of the DYN January 15 call/June 20 call proxy
buy-write (long the JanuaryÂ 15 calls, short the June 20 calls at $3.20),
buy the JuneÂ 15 calls (to open) and sell the September 17.5 calls (to open)
for $1.00 credit (to you).
Recap of open trades
AOL — Long the October 20 buy-write at $16.30
DYN — Long the January 15/June 20 proxy buy-write at $3.20 (50%).
Call Spread Positions
MER (2) — Long the July 37.5 puts at $1.40 (25%).
MER — Long the June/July 40 put calendar at $.50 (50%).
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