Tuesday, January 16, 2007

Evening State of Play

As the commenter, Lauriston pointed out, in the previous post, indeed it is more a matter of the put sellers making out well in Intel Jan 20 puts! While Intel (INTC) slipped after hours, it doesn't look like there's enough damage to get the Jan 20 put buyers to the promised land tomorrow, but we'll see. Otellinni is no Andy Grove, who I interviewed a number of times. Grove was an interesting guy. The key metric and issue - profit margins which narrowed to 49.6% from 61.8% from the year before. So while INTC was at least able to meet top and bottom line numbers it's still getting bloodied up in its battle with AMD, which last week warned earnings would come up short. INTC has been down about 3% this evening.

The overall stock market is looking so so, with S&P futures drifting a little more than a point lower.

Google was having a great day up until about 3 p.m. today.. cruising above $510, then off a cliff. I have a link to the "Option the Easy Way" blog for a reason. Writer, ODA125, has some great information there on how you can avoid losing your shirt in Google-esque trading situations. It is worth going over to his site and digging around: http://optionstheeasyway.blogspot.com/.

I had to spend the afternoon at Columbia Presbyterian Hospital for my regular post kidney transplant checkup - always a fun time. The place is always packed since there are so many of us folks and I'm blessed to be in decent shape these days. So I took my mind completely off the markets. I've got to say when I got back this evening, I was downright surprised to see where Apple (AAPL) ended up. Those Jan100 calls may yet provide an opportunity tomorrow. Open interest is up to nearly 100,000 contracts. Kevin's Market Blog has some interesting Apple insights as well: http://kevinsmarketblog.blogspot.com/. Apple may single handedly kill tech Wednesday evening if it doesn't fly past 100 Wednesday evening; yet I think it just may and I will be doing analysis tomorrow. Am I saying buy? Remember, this is a not a stock advisory service and you ultimately need to do your own homework and assess your own risk tolerance.

Crude oil has drifted higher by 20 to 30 cents tonight, but look for further downside action. Unless the bulls can get it together, it looks like the bears will work on taking $50 out before long - perhaps in the next few days, but then again, as I've noted in the last few days, the Feb contract is going to expire and these expirations can be wild, as was the case last month with natural gas. So be prepared for anything, including a sudden short squeeze. I am taking a breather from my short position tonight.

Here's our 'Justice' system in action. Exxon making another appeal in the Valdez case (Click Here).

Because of the crisis intervention I was involved with this morning, I'm only now catching up on commenting on a few little things. IndyMac Bancorp is the latest mortgage lender to get caught with pants down, completely exposed by rising credit losses. Read Here. By the way, darn good to know that the CEO of the company takes "full responsibility". What does that mean? Is he being whipped Judah Ben Hur style by the board of directors tonight, or does he give up his key to the executive restroom for two weeks and forego the fruit cup with whipped cream in the executive dining room? I hear that "full responsibility" line often - I think our President said it last week, yet they just go about their business following the mea culpa and continue to retain their full power. Incidentally, IndyMac's shares sliced through their 200 day moving average today closing at $40.50. Over 4,000 Feb 40 calls traded, or bets the stock will fall below 40. Open interest was only 275 contracts meaning the stock is in for m ore hammering.

The market basis the S&P 500 cash moved to my intraday bullish target level, so did March SPX futures and the SPX cash closed only a tenth of a point below my closing target of 1432. Before I left for NYC, I jumped into one bullish blue chip February call play in a drug company and may nibble at a few more things depending on the barrage of economic data tomorrow. But much will depend on bond market reax to the data. 110 on the bonds needs to hold as support, IMO to keep the stock market cooking. If the stock market can keep moving higher, then the next target of resistance on the March S&P looks like the 1457 level which would mean a decent rally ahead. One big factor for the bulls right now is the lower price of crude, though I am fully aware of various economic fundamentals - heck, I have Nouriel Roubini's blog linked to my blog!

Gold pausing after the Friday run. I am long GLD, with many eggs in that basket and waiting for a futures trading opportunity and a run back to $656, but I think much will depending on the crude oil slide stop and a more dollar weakness... I think. Friday was encouraging, in that gold managed to move higher even as oil weakened at the dollar remained fairly flat.

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