GM Play

I have been playing GM for a number of times for the past few months - going in and out of positions. Technically, GM had broke new 52-week high and had been on an uptrend since April 2006. Its uptrend had been quite predictable within a channel (a rally followed by a a good pullback within a range). Lately, I have also been following the news about its possible alliance with Nissan/Renault and the sentiments that its Chairman Rick Wagoner has against the alliance.

03-Oct-06 08:34 ET Briefing.com
General Motors board faces key decision on alliance - Detnews.com (33.50 ) -Update : Detnews.com reports all eyes are on the General Motors board today as directors evaluate the widely different analyses of a blockbuster alliance of GM, Renault and Nissan Motor (NSANY). ........ GM declined comment Monday on the agenda for today's meeting of the 12-member GM board headed by Chairman Rick Wagoner. But people close to the co said Wagoner is certain to report on last week's summit meeting with Renault-Nissan chief Carlos Ghosn in Paris -- and possibly present GM's recommendation against the deal. People familiar with the matter say Ghosn is interested in Renault and Nissan each buying a 10% stake in GM, with GM purchasing a similar stake in the French and Japanese cos. However, GM insiders say that the automaker can't afford to spend its precious capital on stock in Renault and Nissan.

Received further news about GM on the same day.

03-Oct-06 08:44 ET Briefing.com
Newspaper Notable Mentions : FT: Nissan Motor (NSANY) wants to conclude talks on a possible tie-up with General Motors (GM) and Renault by mid-October, despite recent suggestions that the three auto giants should extend a 90-day study of their proposed alliance beyond that...

Since then, I have been on the look out for more news. Futhermore, CNBC reported that the Board is convening a meeting to discuss the proposed alliance. To me, that is strange since they have until mid Oct to decide.

On 4th Oct, Bear Stearns upgraded GM to Peer Perform from Underperform. Then the big news came:

04-Oct-06 11:46 ET
Follow-up: WSJ says GM, Nissan-Renault alliance talks terminated, according to source (32.47 -0.94) -Update : Dow Jones reports the chief execs of General Motors and Nissan-Renault terminated talks about a possible globe-spanning alliance, according to a person familiar with the situation. In a phone call Wednesday morning, GM CEO Rick Wagoner and Carlos Ghosn, chief executive of Nissan Motor (NSANY) and Renault, decided that the two sides were too far apart on the value of the potential tie-up and decided to stop the high-stakes talks which had been underway for two months. The move comes ahead of the mid-October deadline the two sides had set for a decision. Behind the failed talks was GM's demand that Nissan-Renault pay GM a "control premium" if it bought 20% of GM's stock as part of the alliance, according to another person familiar with the matter. Wagoner told his board Tuesday that investment bankers advised GM to secure a 20% control premium because such an alliance -- while not technically control -- would prevent the Detroit automaker from making any other joint ventures.

I interpreted this as bad news for the stock. As such, I expect the price to drop. The stock was dropping when I bought its Nov 32.5 Put. (And I bought F Nov 8.0 Call as I expect the stock to gain from this news. It was mentioned before that it is willing to talk with Nissan-Renault should the talk with GM failed.) It however gained in price over the next two days. Intuitively, I know the stock will drop dramatically. I just do not know when.

{Prior to the Put Position, I played in-the-money Oct Bear Call Spread (30.0/35.00) playing on the pull-back and planning to close my position when the stock reverse again upwards. My mistake was that I did not stick to the plan. From a positive position, my Bear Call Spread turned negative. As it was more negative, I hang-on to it because the Oct options had about 3 weeks more before it expires. Anything is possible in 3 weeks. On hindsight, I should have stick to the plan and close my position when it was positive then. - eventhough Friday's move saved my position}

Then on Friday, 6 oct 06, I saw my GM chart started to move significantly in the direction that I expected (down). The bigger news came as I read from Briefing.com:

06-Oct-06 12:09 ET
Follow up: General Motors dislcoses Tracinda has decided not to pursue the acquisition of additional shares of GM common stock (31.84 -1.29) -Update : From Tracinda's SC 13D/A: "On October 4, 2006, General Motors abruptly announced the termination of discussions regarding its proposed alliance with Renault and Nissan prior to the expiration of the time period originally established for the initial evaluation of the alliance and without the General Motors Board of Directors obtaining an independent evaluation of the alliance. On October 6, 2006, Tracinda received a letter from Jerome B. York stating that Mr. York had resigned his position as a director of General Motors. The Filing Persons have decided not to pursue the acquisition of additional shares of General Motors common stock. The Filing Persons will continue to review their investment in General Motors and may determine, based on market and general economic conditions, the business affairs and financial condition of General Motors, the market price of its shares and other factors deemed relevant by the Filing Persons, to acquire or dispose of additional shares."

A lot more news about GM were released that day. While it is uncertain what Kirk Kerkorian (one of GM's major investor) might do next, the market is not willing to hang on to GM at that price. Two analysts interviewed by CNBC also agreed (normally one is bullish while another is bearish) that GM stock will go down further with one of them saying that the price could be around $26 - $28. I added more to my Put position. The stock ended $2.08 lower at $31.05.

We shall see what happens next on Monday. I would probably lock-in some of my profits.

- PersianCat04 (Millionaire-in-progress)

Home Builders Stocks

Today, the existing home sales data was released. For the first time in years, the median price for the existing home sales decreased (about 1.7%). CNBC also mentioned that the inventory is at the highest since 1993.

The drop in the median sales price is what I have been waiting for. Continuing drop in median sales price would put pressure on the home builders stocks to break its recent support.

- PersianCat04 (Millionaire-in-progress)

Market Update

The DOW is now about 170 points away from its May high and 250 points away from its all-time high. On a very good day, to achieve 250 points is not a problem for DOW. The S&P 500 index had already broke its May high.

However, the market had shown a lot of lethargy, trying to break new high. It is in overbought situation. It had 2 down days for the past 2 trading days. While the market will probably make another attempt to break an all time high for the DOW, it is time to consider that the market might be in for a pull-back. There are many stocks as candidates to short, especially the Tech stocks (many with confirmation candles). The stop-loss should be the recent high.

A few things to consider however:

• Jim Cramer had been calling to dump energy stocks and push for Tech stocks (at least till the end of the month) as he believe that the institutional investors will window dress this quarter with Tech stocks.
• He also mentioned that crude oil will drop to $56 before it go up again.
• Many analysts are still expecting a Christmas rally. Such expectations tend to be a self-fulfilling prophecy.
• September tends to end lower.

While I tend to give what Jim Cramer says with a pinch of salt, what he says tends to move the market in the short-term. As a swing trader, I play on a short-term basis. As such, I have to take notice of what he says eventhough I may disagree with him.

- PersianCat04 (Millionaire-in-progress)

DOW and S&P500

DOW ($INDU) S&P500

Based on the daily charts, the DOW is just about 130 points away from its 52-week high. Whereas the S&P500 is just 10 points away from its 52-week high. One could expect the market to attempt to break the 52-week resistance line. Barring unforeseen circumstances (e.g. war with Iran), I feel that the market would break new high and remain high for most part of the next quarter.

- PersianCat04 (Millionaire-in-progress)

Home Builders

$HGX - the housing index made a strong rally today. Lately, the home builders stocks have been resisting the downtrend eventhough the homebuilders industry had been bashed with continuing bad news (e.g. increasing inventory & increasing lower sales). At current market value, most homebuilder stocks are valued at a very low PE ratio (single digits).

However, what is interesting is that the median price of each houses sold had not dropped. Until and unless the price of houses sold drop, the continuing slide of the home builder stocks could not be justified further. As such, I believe the home builder stocks would get a reprieve it badly needed (as shown in today's rally).

I'm however, feel that the prices of houses sold would start to drop next year if not sooner. Depending on the severity of the drop in prices, it could impact consumer spending (which would impact the market in general)

I've been playing Bear Call Spread on BZH and RYL recently (typically in-the-money). I closed my sold leg yesterday with profits. But what make it more interesting is that my bought legs, which were negative before is now positive. I might close these positions tommorrow.

I would wait for a reversal signal before playing Bear Call credit spreads on the home builders again.

- PersianCat04 (Millionaire-in-progress)

RIG - Huge Oil find in Gulf of Mexico

Heard from CNBC about the huge oil find in the Gulf of Mexico. Also read from American Capitalist:

Black Gold Gushes in the Gulf
Just announced this morning, Chevron Corp. (CVX:NYSE) has successfully completed what it called “a record setting production test” on a well located about 270 miles southwest of New Orleans in the Gulf of Mexico. Chevron said the well sustained a flow rate of 6,000 barrels of crude a day. Unfortunately, the equipment used is not able to maintain more than 6,000 barrels, but we’ll take what we can get.
Chevron owns 50% of the well, with companies like Devon Energy (DVN:NYSE) and Statoil (STO:NYSE) holding the remaining 50% equity interest. All three companies are estimating the new oil field to hold between 3 billion and as much as 15 billion barrels worth of oil and gas reserves. If 15 billion barrels are found, oil reserves would be boosted by 50% in the United States.

The find should benefit Oil Services stocks. One player I like a lot is RIG. It had quietly gained more than $4 on Friday and further gained $2.70 so far today. We have 2 more months before the hurricane season is over. Any freak hurricane in the Gulf of Mexico (where many of U.S. oil rigs are located, apart from Alaska) would again benefit RIG.


Target = 80.10, 84.05 & 90.16 (52-week high)
Stop loss = 65.52

- PersianCat04 (Millionaire-in-progress)

AAPL - Special Media Event

Read from Briefing.com about the impending AAPL Special Media event next week on 12 Sep 06 to introduce new products and services. I would expect the market to react positively to the new slate of AAPL's products and services (It had gained $1.65 so far today).

Chart-wise, AAPL broke its resistance today. Target 73.38, 76.60 and86.40 (52.-week high). Stop-loss at 65.12. Note that AAPL is now above its SMA 200 again.


05-Sep-06 12:13 ET
Apple Computer confirms media event - AppleInsider (69.77 +1.39) -Update : AppleInsider reports in a digital invitation sent out to US-based media this morning, Apple confirmed that it will hold a special media event on September 12 to introduce new products and services. "It's Showtime," reads the invite, which displays a white Apple logo floating amongst four crisscrossing Hollywood movie spotlight rays. The event is scheduled for 10:00 am local time at the Yerba Buena Center for the Arts Theater in San Francisco, Calif. (See 8:30 comment)

05-Sep-06 08:55 ET
Apple Computer: Cell phone is a reality; new product cycles including Macs, iPods, and cell phone drive ests higher; increasing tgt to $91 - AmTech (68.38 ) -Update : AmTech says Skeptics abounded when AAPL first launched their iPod MP3 players and revolutionized an emerging market and created a new business segment and a major rev driver for the co. Firm believes the new AAPL handset will be a major player and competitor set to disrupt another industry. Firm has learned that the kinks have been worked out of the new handset, and it is set for production. Firm is confident that AAPL will time their launch opportunistically, and that the new handsets are positioned to gain significant traction. This new market could easily represent an incremental $2 bln annual rev run-rate rev opportunity in Y07. Firm says 10 mln units does not seem a lofty target to them. This is not even contemplating sales of potential services and accessories which would be incremental. With Steve Jobs' history of revolutionizing the PC industry, the music industry, and the movie industry, firm encourages investors to get aggressive in purchasing shares of AAPL prior to the potential revolution of the handset industry. Firm ests for FY07 are now $22.2bln and $2.60 EPS up from $22 bln and $2.45. Firm adds AAPL to their Focus List, and their new tgt $91.

05-Sep-06 08:30 ET
Apple Computer to roll-out iTunes movies and 'one more thing' - AppleInsider (68.38 ) : AppleInsider reports Steve Jobs plans to summons the worldwide media to a special event this month in which he'll usher in a new chapter in the co's digital media strategy. Although the semi-official word out of Apple Americas is that invitations to the event have "not been sent" out, a seemingly inadvertent leak out of Apple Europe last week pinned the affair for Tuesday, September 12. Jobs will have much to talk about during the event, sources familiar with the chief exec's plans have said, including new iMacs and a much-anticipated update to the iPod nano. But the real push, they say, will be tied to the big screen. After what has seemed like nearly two years of rampart speculation and unbridled enthusiasm on the part of its fans, Apple is ready to introduce its al la carte feature film download service as part of iTunes. For some time now, published reports have insinuated that Apple and Jobs would be unwilling to launch a movie download service without a wide, touch-screen video iPod player to coincide. Jobs many months ago commissioned an elite group of Apple engineers to get the ball rolling on an intuitive hardware solution that would more closely tie the co's digital media strategy to the living-room. And so AppleInsider has been told, Apple has been quietly developing a video streaming device that will interface with an updated version of its iTunes jukebox software.

- PersianCat04 (Millionaire-in-progress)

ENER

ENER (Energy Conversion Devices) is a leading supplier of hybrid car batteries and player of alternative energy (e.g. solar). Yesterday (30 Aug), ENER break its 4-months downtrend by making a new higher high with a spike in volume.

The next target level ranges from $39.28 (38.2% Fibonacci level) to its 52-week high of $56.00. Stop-loss at $31.91. Currently, ENER is hovering at $35.51. This stock might be slow in movement. Have to be prepared to stay in the game for a few weeks.

- PersianCat04 (Millionaire-in-progress)

FOMC minutes (29 Aug 06)

Yesterday (29 Aug 06), the FOMC released its FOMC minutes. While analyst reports I read thought that the report is rather bearish, the market rally after the release of the report. Below is an extract of one such reports:

From Briefing.com The market took a surprisingly optimistic view of the August 8 FOMC minutes released yesterday. The minutes indicated that many members felt higher rates were needed. The minutes stated that it was a "close call" at that time not to raise rates, and that "additional firming may well be needed." The minutes also said that "All members agreed that the statement to be released after the meeting should convey that inflation risks remained dominant and that consequently keeping policy unchanged at this meeting did not necessarily mark the end of the tightening cycle." That's a fairly hawkish tone that conflicts with the financial market view that no more rate hikes are likely.

Nevertheless, traders poured over the minutes to find what could be considered bullish statements about economic and inflation trends. There was a clear effort to find the good news and ignore the bad. In our opinion, the minutes in themselves were clearly bearish for the stock market.

The fact that stocks went up after the release says more about the underlying tone than about what the minutes themselves revealed. We still believe the market is overly optimistic on the inflation and interest rate outlooks. There is a risk of disappointment on both. Nevertheless, the longer-term fundamentals remain good. -- Dick Green, Briefing.com.

I found Dick Green often give good analysis of the market. I tends to agree with him on this regard (FOMC minutes). I will treat any short term rally with care.

- PersianCat04 (Millionaire-in-progress)

DELL Earnings Play

Read in Briefing.com yesterday:

17-Aug-06 15:33 ET
In Play
Dell: earnings preview (22.62 -0.11) -Update : DELL is scheduled to report Q2 results today after the close, with analysts expecting EPS of $0.22 on revs of $14 bln. Note that on July 21, the co issued downside guidance, saying they see EPS of $0.21-0.23; sees revs of $14 bln. The co said these ests primarily reflect aggressive pricing in a slowing commercial market worldwide. AmTech does not anticipate much deviation from its pre-announced miss in late July. For the October qtr, they anticipate DELL to decline official guidance but express comfort with sequential growth. They are modeling $14.6 bln and $0.26 as they see a seasonal pick-up in the Americas offset by weaker seasonality in Europe and continued pricing pressure. With the stock trading at 16x depressed CY07 EPS, they see more upside than downside at these levels. A.G Edwards notes since Dell has already preannounced its July quarter, July sales and earnings are already known but P.C pricing details will be of interest. The firm says Dell's October quarter operating margin expectations will be important. They have assumed that Dell's operating margins will remain stuck in the 4-5% range for some quarters. The firm believes that Dell plans to regain some share in the consumer space, which is likely to result in ongoing margin pressure, though they think this is the right strategic move.

Since the July 21 downside guidance, DELL had gained significantly. As I do not expect any good news from DELL earnings, the only way for it to go is down. I played Bear Call Spread, selling Aug 22.5 Call and buying Aug 25 Call for $0.55. Also bought Sep 22.5 Put for $1.05 (almost at-the-money).

Today, DELL did opened much lower, dragging along the market somewhat. Closed my Sep 22.5 Put for $1.65 for a profit of 57% over one day. At the moment, I am leaving my Bear Call Spread intact. Hopefully, it expires worthless today.

- PersianCat04 (Millionaire-in-progress)

NVDA Earnings updates

NVDA did open lower the next day. However, it moved back upwards to fill the gap and gained much more the next day.

My mistake is not to lock-in my profit immediately in the current volatile market. In total, made a very small profit, helped by Bought leg of my Bear Call spread.

- PersianCat04 (Millionaire-in-progress)

NVDA Earnings Play

NVDA will report its earnings after the market close today. Read from Briefing.com regarding NVDA earnings preview.


14:59
NVDA NVIDIA: earnings preview (23.97 -0.36)
Today after the close NVDA is scheduled to report Q2 results, with analysts expecting EPS of $0.23 on revs of $677.08 mln. Caris says FQ2 results for NVDA should be roughly in-line with increased share in discrete notebook and incremental I.G.P sales. Despite the currently poor sentiment surrounding the PC space, the firm believes NVDA fiscal Q2 results were near expectations with low probability of an impending disaster. This would point to NVDA outperforming typical P.C seasonality with flattish revs QoQ as notebook and I.G.P strength offsets desktop related softness. The firm is expecting NVDA to report roughly $682 mln in sales, slightly above the street expectation. Given the increase in mix to G70 based components, the firm also looks for gross margin to be roughly flat at 42.5% despite the ramp of lower margin IGP business. The firm is slightly more optimistic than the street with a $0.28 EPS estimate for FQ2 as profitability remains relatively stable. Lastly, they believe the inventory situation will improve QoQ as NVDA burned additional G70 product and strictly management TSMC wafer-outs. The firm is looking for mid-single digit sales guidance as seasonal tailwinds commence... ThinkEquity believes Q2 results should be in-line and guidance for Q3 will be better than most are expecting. Most importantly, the firm believes DELL (DELL) will use NVDA's chipsets for its AMD PCs, driving revs up by $140 mln in CY07. Click here for techincal levels of interest.

The stock had a good steep run upwards since 18 July. In normal market, the market would punish stocks that had a good run upwards badly if the earnings outcome and guidance werejust in-line. As such, I expect the stock to correct downwards. (Anyway, Briefing.com earnings preview has served me extremely well before.)

Played a conservative Bear Call Spread (for $0.60) selling Aug 25 Call and buying Aug 27.5 Call. Also played a more agressive play buying Sep 23.75 Put (for $1.50).

After the close, Briefing.com reported:

16:21
NVDA NVIDIA announces voluntary review of the it's stock option practices (24.16 -0.17) -Update-
Co announces that the Audit Committee of the Board of Directors is conducting a voluntary review of the co's stock option practices covering the time from the co's initial public offering in 1999 through the current fiscal year. The Audit Committee is conducting this review with the assistance of outside legal counsel. The co has voluntarily contacted the SEC staff to inform them about the ongoing review.

This news is as good as reporting bad results. At the time of writing, NVDA price had dropped below $22.00. Hopefully, the price remains low when market opens tommorrow. Based on the charts, NVDA can drop further to $17.17 (my target).

- PersianCat04 (Millionaire-in-progress)

Market - Updates

As at yesterday, the indices (e.g. Dow, S&P 500, Russell 2000, Nasdaq 100, Housing) showed a confirmed short-term reversal to the downside. The first target should be the lowest point over the last 2 months. The immediate resistance (stop loss) would be the highest point over the last 2 months. I believe the market will try to break the support (where my target is) and go lower. Let see how it turn out.

There are many possible short plays. These include:

• AAPL - AAPL tends to close its gap whenever it has a huge gap up (last one in early July). Target $55.08 & %50.16
• Homebuilders & homelenders (DHI, TOL, KBH, BZH, RYL, LEN, LEND, etc)
• Index stocks (DIA, SPY, QQQQ)

I had already place my positions and am reaping the fruits of my labour so far. I will probably put more ahort positions soon.

- PersianCat04 (Millionaire-in-progress)

Playing QQQQ

When playing options, we could either play in-the-money options or out-of-money options. For QQQQ, I like to play in-the-money options with at least 30 trading days left. This is because in-the-money options tend to have a much smaller time-value than out-of-money options. For example, when QQQQ was at $36.00, the various in-the-money QQQQ options with its bid/ask price and time value were:

Options Description Bid/Ask Price Max. Time Value

• Aug $36 Put 0.95/1.00 1.00
• Aug $37 Put 1.50/1.55 0.55
• Aug $38 Put 2.15/2.20 0.20

Furthermore, when playing in-the-money QQQQ options (with at least $1.00 of intrinsic value), the movement of the option price follows the stock price movement very closely. As such, I get maximum price appreciation while putting up just a fraction of the price of the QQQQ stock. For example, by playing Aug $38 Put (say paying $2.20), when the price of the stock drops by $0.50, I could expect about $0.45 price appreciation for my Aug $38 options.

Another advantage for playing in-the-money options is that we minimise the time decay waterfall effect especially during the expiration week.

However, should the stock goes against you, you tend to lose more than those who bought out-of-money options.

- PersianCat04 (Millionaire-in-progress)

Middle-East Crisis - 13 July 06

Prior to Israeli military strikes in Lebanon, I believed the market is just waiting for any excuse to rally off its recent low (just like it tried to do on Tuesday, 11 July - rally on news that KLA Tencor is raising its guidance). The S&P 500 formed a bull-flag, i.e. a rally is due soon and it will be fast & furious.

Daily Chart showing the bull-flag (if we take out the last candle - yesterday's candle)

However, the Israeli military strikes in Lebanon changed all that. It seems that the market will get worse before it gets better. Please refer to my 18 May 06 blog posting. Perhaps, this is the trigger that would crash the US market (and the global market). Hopefully, it does not happen but we should be prepared.

The latest Middle East crisis if not tackled rationally could drag Syria and worse, drag Iran to war. Already Iranian President said that any attack on Syria (to punish its support for the anti-Israel militants in Lebanon) is an attack to the Muslim world. It means Iran would be drag into the whole crisis. I cannot help but think that this is the perfect excuse for Israel (with moral support from US) to bomb Iran's nuclear plants. That will "solve" US problem of having to negotiate with Iran on the nuclear stand-off. It seems like everything is well scripted. Iran's involvement would likely increase the oil prices as Iran threatens to choke off the Straits of Hormuz (if it under attack) thus choking off 30% of world oil supplies - thus lead to a dramatic and perhaps a sustained increase in oil prices. This would cause the world stock markets to slide and slide and slide....... and world economy tumble.

Enough of the geo-politics, now how should we play?

Since today is Friday, no sane trader/investor would like to keep a long position over the weekend (anything can happen over the weekend). If they do, they would probably have hedged it. If the crisis escalated, energy stocks should benefit as the oil prices is expected to break new record. Already it broke its record high yesterday and it broke again (US$78) today in the Asian market. To break $80 or even US$100 is within reach.

The rest of the stocks would drop. Close one eye (pun intended) and sell anything except energy (and perhaps gold/metals stocks).

If the crisis showed a promising early end, the market quick reflex would be a rally. Next week, we have a few heavy technology companies which are releasing their earnings. These include AAPL, GOOG and INTC. Their earnings announcement would also move the market.

I have already in position KBH Aug 45 Put and QQQQAug 38 Put (played this yesterday). Both are positive at the moment. KBH was played on 5 July (now waiting for a 100% return - coming soon). Will probably add more positions on other counters later. Of course, playing ES, ER2 or NQ is good if the timing is right.

My XSNX is negative. Will just keep this (very small play) and revisit at end of July.

- PersianCat04 (Millioanaire-in-progress)

Events Updates - Immediately after FOMC

As expected, the market made dramatic moves after the FOMC results. Immediately after the FOMC results, the following moved as much as:

• QQQQ +$0.88
• S&P Index +32.08 points
• Dow Jones 30 +133.35 points

All the above closed towards its session high.

How did I play?

When the news was out, I interpreted that the FOMC would be "data dependent" in raising interest rate (as I expected, as such should not be good news). However, the market treated that as good news and pushed the stocks up. So as the QQQQ retraced back after the rally, I bought the QQQQ Aug 39 Put (in-the-money) thinking that the market had overextended itself. However, the market rally further. My trade was negative for the next 2 days (30/6 - last day of the 2nd Quarter & 3/7 - half-day due to pre-Independence Day holiday). As expected, the QQQQ corrected itself thereafter. The extensiveness of the 29 June rally was partly due to fund managers trying to pruce up their portfolio before the end of the 2nd Qquarter. Closed my QQQQ on 10 July after the QQQQ bounced off its 52-week low. Made 44% over 6 trading days.

- PersianCat04 (Millionaire-in-progress)

How I Would Play The FOMC news

Just had a good shower. Quite refreshing.

Immediately after the FOMC news (2:15pm ET today), I expect dramatic movements in the market. It provides good opportunity to make money.

Key to playing the FOMC news is to have access to the news fast. In this case, I rely on Briefing.com (Platinum service) and CNBC. The next step is to quickly interpret what the FOMC statement meant and what the market interpret it as. Use of Candlesticks charts is also important to me.

If the market interpret it as a pause in interest rate hike, almost any stocks would probably rally. Housing stocks (e.g BZH, KBH, DHI, etc) and home lenders (e.g. LEN) would probably be among the gainers.

If the market interpret it as - more interest rate hikes in the near future, then most stocks would probably slide. The Housing stocks (e.g BZH, KBH, DHI, etc) and home lenders (e.g. LEN) would probably be among the worst losers.

To maxinise returns, I would play at-the-money or in-the-money options. I might even play the QQQQ.


- PersianCat04 (Millionaire-in-progress)

Awaiting FOMC news

The market had been volatile the last few weeks. It is difficult to choose a play without being slaughtered within the next few days. It seems that in such market condition, an intraday play seems to be the best strategy.

The FOMC is due to make their interest rate recommendation today (2:15pm ET). While a 0.25% increase is given, what is important is the language used - whether further rate hike will still be in the making. In this regard, I find that the market expectation is rather foolish. Which FOMC in the right mind would say that there would not be any more rate hike when inflation is still creeping (e.g. light sweet crude oil is still above $70 (abt $73.35 for Aug futures), metals prices are still high as compared to 1 year ago). Logically, the FOMC would still monitor the inflation figures and would be "data dependent" in raising future rate hikes.

Hopefully, whatever the outcome, the market can find some kind of direction. While I am bullish on some of the US companies, the rising trade and budget deficits, extremely low savings, extremely high borrowings, and high cost of raw materials (e.g. oil, metals, food, etc) painted a bearish picture of the overall US economy.

I expect great movements (and perhaps quite volatile) in the market immediately after the FOMC statement at 2:15pm ET.

As for me, I'm waiting for the right signal to short the housing stocks (e.g. BZH, KBH, PHM, DHI) once the overall market direction is clearer. While I am still bullish on the metals (gold, silver, uranium, etc) stocks, it seems that at the moment, they are market followers (i.e. follow the overall market movement).

If the market reads that FOMC would pause any rate hike for sometime, then almost any stocks would rally at least for today.


- PersianCat04 (Millionaire-in-progress)

Updates

No confirmation candle formed on Friday.

Market update

Yesterday, the major indices INDU (DOW), SPX (S&P500), NDX (Nasdaq 100), COMPQ (Nasdaq Composite), RUT (Russell 2000) and even HGX (Housing) formed a hammer at a significant pivot low. ETF such as XLE, OIH and many others also formed a hammer.

And it is about time as I do not know how to play the market as most stocks are already oversold. It would be easier if the market correct itself before continuing in its bear trend. At the end of today, if the market closes above the yesterday's high, we would have a confirmation candle. Then the market is expected to have a rally next week (may be a short one though, but we never know). So far, the market is expected to open higher today.

For the rally, I am focusing on the precious metals (e.g. mining stocks like TIE, NEM, BHP). In the meantime, I have been sharpening my skills in trading ES.

- PersianCat04 (Millionaire-in-progress)

Updates (as at 30 May)

As the market tanked yesterday (30 May), I closed my NEM and BHP to lock-in what little profit I made.

BHP
Closed my BHP Aug06 45 Call for a 1.8% profit over 4 trading days.

NEM
Closed my NEM Jul06 52.5 Call for a 9.7% profit over 4 trading days.

QQQQ - New Play
I bought the QQQQ Aug 39 Put for $1.00 on Friday (towards end of day) when the QQQQ was at $39.45. I played this purely based on intuition. I am trying to trust my intuition. I figured if I am wrong and the market when up on Tuesday (yesterday) then I would close my position and lose probably 5 - 10 cts as my option is out-of-money. As it turned out, the market tanked yesterday. The option closed with a 45% paper gain at closing time yesterday. On hindsight, I should have just lock-in my profit. Will try to close this position today.

- PersianCat04 (Millionaire-in-progress)

Updates (as at mid day 25 May (ET))

My NEM and BHP play was negative yesterday. In fact, I was too engrossed with my ES play (it was very profitable) that by the time I checked the NEM and BHP status again, the NEM exceeded my mental stop loss (last Monday's low). I was prepared to convert it into a credit spread. But the market was already starting to recover from its low. As such, I kept my positions.

As it turned out, the market recovers today. My targets for NEM and BHP remain intact at 52-week high. My stop loss would be their recent lows.

- PersianCat04 (Millionaire-in-progress)

New Play - NEM, BHP

The market attempted to recover from its recent fall yesterday. The market might just rebound and continue to rebound. However, I'm still bearish about the overall market. I would leave it to the Bulls to fight it out with the Bears. As most of the stocks have lost a fair bit from its highs, these stocks need to rebound before it can continue its downward trend. How much it recovers, is yet to be seen. The DOW might even reached all-time high.

In this rebound, I would play Call on the Mining and maybe Energy sectors only. My new play are NEM and BHP - both are mining stocks with a big chunk of gold play (among the biggest players in the world). I figure that should the market burst for good, gold stocks or gold mining stocks would have a good chance of appreciating further. China is also preparing a gold ETF for its citizens. A gold ETF (exchange traded funds) would be required to be backed by physical gold. Furthermore, the Chinese Government were also reported to have been advised to convert some of its US$ reserve to gold. As such, more demand for gold from China could be expected. Anyway, the charts for mining and gold stocks were showing bullish plays (e.g. stochastics crossover, low RSI, break 38.2 or 61.8% Fibonacci level, etc)

Even if the market did not burst, the mining stocks are due for correction.

I played NEM Jul06 52.5 Call and BHP Aug06 45 Call yesterday. My targets are their 52-week high and the stop-loss would be their last Monday's lows.

- PersianCat04 (Millionaire-in-progress)

Market Outlook

The overall U.S. market needs a major correction The writings are on the wall:

Rise in commodities (energy, metals, corn, etc)
Rise in commodities will indefinitely lead to a rise in basic materials which would lead to a rise in cost of doing business; rise in cost of goods and services; lower revenue and profits for most industries (except energy, metals, etc) and rise in inflation.

Rise in interest rate
The rise in inflation would compel the Feds to increase its interest rate further. This will rattle the stock market again. The interest rate hike would further hurt the housing market. We have seen in Singapore and Asia, how a high interest rate badly hurt the housing market. But in the U.S., to make matters worst, they allow 100% loan. If the price of their property drops, they will face a double loss - the outstanding loan is more than the value of their property but if they keep the property, they may not be able to afford the repayment as the interest rate increases.

Trade & Budget Deficit
Needless to say, the U.S. budget & trade deficit are extremely high. But some Republican still feel that the deficits are in good hands.

My 2 cts worth

For the major correction to happen, what the market needs is a trigger to prick the stock market bubble. What we see for the last 5 bearish days may just be a precursor of what is going to happen. I believe the trigger had not been pulled. The trigger could be anything from a huge pullout of funds from the U.S., dumping of U.S. dollars, new war in Middle East, U.S. housing market crash, oil price hike to US$150 per barrel, major terrorist attack, etc. Typically, the trigger is pulled when the market is least expecting it.

A classic scenario would be that the market rally after the recent fall. Perhaps, starting today. The rally could even bring the DOW index to its highest level ever (it was very close to achieve that before the recent market fall). Confidence in the market would be high. Conflicting market indicators were also interpreted as bullish news. About two weeks after the DOW breaks new highs, the trigger is pulled. Thereafter, all hell break loose.

As traders, we trade according to our plan. Do I plan for such a scenario? Yes. My recent positions had been mostly short positions. Should the market tanked again, my best instrument would be to short the eMinis (ES or ER2) as they do not have the uptick rule (unlike stocks or options). I have shorted ES during the last five days (after a long break trading eMinis - as I need to tighten up the trading rules for playing ES). It has been very rewarding - for which, I am thankful.

The market is starting soon. Till next time.

- PersianCat04 (Millionaire-in-progress)

Updates (as at 17 May 06)

The market had tanked for the past 5 days and it had served me well as I had shorted the S&P500 eMini (ES). ES is a fast game and one can make or lose money fast. I would not encourage this play to anyone unless they have good discipline and strictly follow the rules of the game.

Anyway, I am getting a hard time looking for stocks to short for options play. Most stocks had tanked and I am not willing to long a stock in the current weak environment. Perhaps, the energy and commodities stocks will be providing good opportunity for long plays soon.

DELL
Closed my Aug 25 Put on Monday. Made 43.5% over 4 days.
Closed my sold leg May 25 Call for $0.10 on Wednesday. This is the repair strategy for my DELL 27.5 Call (which is now fully paid for (free + some profits) by my profits from the sold legs - sold twice).

HOT
Closed my Aug 60 Put on Monday for a profit of 26.7% over 3 days.

WYE
Closed my Jul 50 Put on Monday at a loss of 24.4% over 4 days.

XSNX
Still holding on. Target date to liquidate is still July 2006 (awaiting the outcome of their marketing campaign).


- PersianCat04 (Millionaire-in-progress)

Updates (As at 11 May)

Under My Radar

The following stccks are under my watch list for potential reversal (just waiting for confirmation candle).

• GM
• SNDK (had ascending triangle - waiting for breakout with good volume spike)
• CMCSA

My Portfolio

My current portfolio updates (over the last one week)

• NVDA Put (Closed for 33.3% profit over 5 days)
• ORCL Put (Closed for 21.4% over 6 days)
• TXN Put (Closed for 3.2% loss. Closed too early)
• GM Bear Call credit spread (Closed my sold leg on Tuesday when the stock strongly rally and let my bought leg ride the rally. Closed my bought leg with small loss in total. Closed too early)
• SIL Bull Put Spread (Closed my sold leg with profit. My bought leg is now free - paid for by the profits made in the sold leg. See also my SIL Play)
• DELL Put and Bear Call (Still in play. See my DELL Repair Strategy Play - paper profit)
• HOT Put (Still in play. - paper profit)
• WYE Put (Closed for 20.5% over 1 day. Bought back the Jul 50 Put at lower price. Still in play. - paper profit)
• XSNX (See my XSNX Play - paper loss)

- PersianCat04 (Millionaire-in-progress)

XSNX

Left: Intraday Chart Right: Daily Chart

XSNX tanked with the market yesterday. As the stock dropped below $1.00, it was about to test SMA200. As it reversed after 10:00am ET, I bought more XSNX at $0.99 (thus lowering my average cost). As it turned out, the stock reversed convincingly and closed at $1.33 with an large volume. It formed a bullish engulfing candle yesterday. The stcchastics and RSI also showed a reversal (upwards). I would pick up more above yesterday's high and release them once I achieved a reasonable return.

- PersianCat04 (Millionaire-in-progress)

DELL - Repair Strategy

I've been playing Put on DELL for some time. For some strange reasons (we do make mistakes!), I bought a Jun 27.5 Call for $0.60 (way out-of-the-money) on 28 Apr. The stock keep going south. Sold May 25 Call for $0.95 (when the stock price was $25.31) on 3 May - thereby converting it into a credit spread. If the stock falls below $25 on expiration Friday, I would keep the $0.95 premium and still get to sell again the Jun $25 Call if needed.

Then the stock crept up (instead of down!). Just when the charts showed a strong bullish play, trading for DELL was halted on 8 May. DELL gave another downside guidance. Yesterday 's downslide saved my play. Yesterday, I bought back my sold leg (for a profit of course) and sold again at $0.70. My Jun 27.5 Call is almost free now (paid by the profits made from my sold leg). Since I am still very bearish on DELL, I also bought the Aug 25 Put for $1.15. DELL closed at $25.20 on Tuesday.

Targets remains at $23.26 and $21.90 (4-yr low).


- PersianCat04 (Millionaire-in-progress)

Trading Halt Play - ARIA

Played this on 4 May 06 (intra-day). I called it Trading Halt Day (for lack of better term). Read from Briefing.com at 9:55 am (ET) saying that trading for ARIA is halted.

Then read the following from Briefing.com:

04-May-06 11:22 ET
Ariad Pharm confirms jury rules in favor of ARIA and co-plaintiffs in Lilly NF-(kappa)B patent infringement lawsuit (ARIA) 5.52 : Co confirms that the jury in the US District Court for the District of Massachusetts has found in favor of the plaintiffs in their lawsuit against Eli Lilly (LLY) alleging infringement of the plaintiffs' U.S. patent covering methods of treating human disease by regulating NF-(kappa)B cell-signaling activity. The jury ruled unanimously in favor of the plaintiffs in finding that the claims of the NF-(kappa)B patent asserted in the lawsuit are valid and infringed by Lilly with respect to Lilly's osteoporosis drug, Evista, and Lilly's septic shock drug, Xigris. The jury awarded damages to the plaintiffs in the amount of approx $65.2 mln, based on the jury's determination of a reasonable royalty rate of 2.3% to be paid by Lilly to the plaintiffs based on U.S. sales of Evista and Xigris from filing of the lawsuit on June 25, 2002 through Feb 28, 2006. The jury awarded further damages on an ongoing basis, in amounts to be determined, equal to 2.3% of U.S. sales of Evista and Xigris through the year 2019, when the patent expires. The co-plaintiffs are Massachusetts Institute of Technology, The Whitehead Institute for Biomedical Research, and The President and Fellows of Harvard College. (ARIA is halted.)

I expected the stock to gap up then drop somewhere mid-way. Since this was going to be a very quick play, I was had prepared my 2 PCs for the play. At 11.50 ET, trading resumed. The stock behaved as expected. I short the stock as the stock came down after it gap-up. Made about $0.33 per share on this play. On hindsight, I should have closed some position (lock-in some profit) and left some to ride the wave instead of closing all positions. Anyway, it is still good money (about 4.5% returns for less than 10 mins effort). Below are the intraday 2-mins chart (on the left) and the daily chart (on the right) for reference.

New Play - SIL & ORCL

SIL
Read from Briefing.com about SIL today:

12:32
SIL Apex Silver Mines: shares plunge on concern for Bolivia mine project- Bloomberg (14.25 -6.75) -Update-

I checked the charts and the stock was already trying to recover its losses (It lost $6.75 at the time Briefing reported). Typically, with this kind of news, the market tends to over-react and the time value for the options would be very expensive. As such, I long the stock. I choose to play May $15.00 / $12.50 Bull Put Credit Spread for $1.00 when the stock is about $15.05. My sold leg was $1.75 or 11.63% of the price of the stock at that time (very expensive for a May At-The-Money option of a stock of just $15).

If the stock remains above $15 on expiration Friday. I get to keep all the $1.00 credit (or 66.7% profit) that I collected.

An hour later, Briefing.com reported:

13:32
SIL Apex Silver Mines responds to unusual trading activity in its ordinary shares (16.50 -4.50) -Update-

Co responded to the unusual trading activity in its ordinary shares. The co believes this activity is related to recent events in Bolivia concerning the country's planned nationalization of its hydrocarbon industry. The co is not aware of any plan by the government of Bolivia to follow a similar policy in mining. The co was particularly encouraged by recent statements made by the Bolivian Minister of Mines and Metallurgy in which he emphasized that "the mining policy does not contemplate nationalization and even less incorporation of private companies such as San Cristobal." The co is developing its 100%-owned San Cristobal silver-zinc-lead project in southwestern Bolivia. The project is expected to commence production in the third quarter 2007.

The stock closed at $17.70 today.

There are conflicting reports about Bolivia from CNBC. It was reported that the Bolivia government might extend the nationalisation of Oil companies to Mining companies too. Let see what happen tommorrow.


ORCL
The stochastic cross-over, RSI and candlestick charting showed a reversal. Played ORCL Jun $15 Put (in-the-money) on Monday.
Target 1 = $14.00
Target 2 = $12.92 (also 61.8% Fibonacci level)
Stop Loss = $15.21

- PersianCat04 (Millonaire-in-progress)

Updates

I am back after a lull of a few days. Been busy attending a course and backtesting a mathematical formula (wow! sound Chimp!! Ha! Ha!) for projecting the resistance and support levels for S&P500 futures (ES). So far, it looks good. Need more work on this though.

DELL
DELL continued its drop. However, I had closed my position in my May $27.50 Put on last Thursday for 29.6% profit. At that point, DELL plunged seems to have lost its steam.

DELL made a rally on Friday morning. Thinking that the stock had reversed, I played a Jun $27.50 Call (out-of-money). Bad mistake – should have waited for confirmation candle before playing the reversal. Anyway, my loss would be limited but I shall monitor closely and decide later whether to keep or close my position.

GM
My position is still negative. It announced its sales figures today. It was below consensus but the stock rally with the news. (This play is not Fun!).

TXN
This stock is still trending south though slowly. My Jun 35 Put is about breakeven (loss some of its time value)

XSNX
Uneventful.

- PersianCat04 (Millionaire-in-progress)

Under My Radar - IGPG

Extracted from "The Natural Contrarion"

Early Contrarians who buy Ignis Petroleum now below $1.50 will witness a 200% gain in weeks and over 1,200% in less than 24 months.

Barnett Shale Prospect, Texas
Ignis Petroleum reports that its Inglish Sisters #3 well in the Barnett Shale has begun production after successful completion. The Inglish Sisters #3 began recording revenue on April 7, 2006 and, as of April 17, 2006, has produced 1,300 barrels of oil and 7.1 million cubic feet of gas. Ultimate recovery and reserve estimates will be determined based on analysis of production data obtained in the coming months.
The Inglish Sisters #3 well is the first of three wells in which Ignis is currently participating in the Barnett Shale. The other two, the Powell #1 well, located in Montague County, Texas and the Powell #2 well, located in Cooke County, Texas, are scheduled to be fully completed shortly.

Acom A-6 Project, Texas
Ignis Petroleum recently announced the discovery of oil and gas on its Acom A-6 project with the successful completion of the A-6 well. Ignis reports that the A-6 well is currently producing oil and gas at an average daily rate of 120 barrels of oil and 460 thousand cubic feet of gas.

IGPG’s management team is placing the final touches on a pending agreement with industry behemoth Kerr-McGee (KMG – NYSE) on an expansive drill campaign for the Acom A-6 project. Surrounded by highly successful drilling campaigns, reserve estimates on this prospect are reported to be an incredible 9 BILLION cubic feet of natural gas.

In fact, one nearby blockbuster well, the Tex Miss, has produced over 3.4 BILLION cubic feet of gas in just 18 months of initial production. Kerr McGee/Ignis Petroleum are focusing on what is believed to be a continuance of this expansive petroleum-bearing structure. A major hit on the Acom A-6 would be an immediate “Company Maker” for Ignis Petroleum – one that would likely send the IGPG share-price exponentially higher.

Barnett Crossroads Area Map
The green arrow indicates the location of the prospect. Just a mile to the east, more than a million barrels of oil has been produced from a moderate sized structure that is about 20% larger than the prospective structure. Less than a mile south and one mile to the north, two small structures have produced over 200,000 barrels of oil each. More than a million barrels of oil has been produced from a moderate-sized structure to the northwest of the prospect.

Barnett Crossroads Project, Alabama
Ignis has now commenced operations on this relatively low-risk oil prospect with the drilling of the 19-1 #1 well. Upon successful completion, IGPG will own a 75% working interest, or 52.5% net revenue interest, in the well. Ignis expects to reach its full target depth of around 14,500 feet in the coming weeks.
Recent analysis suggests that this property could produce in excess of 500,000 BOE (barrels of oil equivalent) — that’s over $35 MILLION in potential revenues at current oil prices. The Gravel Church field to the east of the property has produced in excess of 1 million barrels of oil. Less than a mile south and one mile to the north, two structures have produced over 200,000 barrels of oil each.

Surrounded by successful drilling, and with an expected production rate of 300 barrels of oil per day, the Barnett Crossroads project represents a relatively low-risk oil target that should translate to a significantly higher IGPG share-price in the coming months.

North Wright Prospect, Louisiana
Seismic data suggests that the North Wright Prospect could contain over 118 BILLION cubic feet of gas. That level of natural gas production has the potential to generate a staggering $826 MILLION at current natural gas prices of around $7 per thousand cubic feet.

The North Wright Field is surrounded by Big-Money drilling campaigns. Similar production is currently underway at two fields within seven miles of the prospect. The Leleux Field, located just seven miles to the east along the same geologic formation, has produced over 200 Bcf (billion cubic feet) of gas with an estimated recovery of over 400 Bcf of gas. The Wright Field lies just five miles to the south and has produced over 64 Bcf of gas from just two wells over the last five years.

The pending development plan on the company’s North Wright Prospect estimates four wells (one well per year) to extract the potential natural gas reserves. The Ignis team projects a first year cash flow (net royalty interest) of over $20 million – which I project will translate to a major portfolio win for early IGPG shareholders.

Crimson Bayou Prospect, Louisiana
IGPG’s Crimson Bayou prospect, located in Iberville Parish, Louisiana, is expected to commence drilling in July. Ignis has signed a participation agreement with major energy producer Range Production Company (RRC – NYSE) on this prospect. Upon successful completion of the first well, Ignis will own 25% of the working interest.

Ignis Petroleum boasts a seasoned management team of industry professionals that command the attention of the “Big Players.” By teaming up with top-tier producers like Range Production Company, Ignis Petroleum is setting the foundation for long-term oil and gas production success.

Under My Radar - LDIS

Leadis Tech

Extracted from Briefing.com
LDIS can be described as an IPO bust as the co was poorly managed causing multiple downward estimate revisions. It's now well below its $14 offering price. However, the stock looks like a good turnaround play thanks to 1) new management; 2) its Q1 report; 3) strong balance sheet; and 4) the rolling out of new products, especially thin film transistor liquid crystal displays, or TFT LCDs. A stop loss at support in the $5.25 area makes sense.

On 25 Apr, Leadis Tech reported that its earnings misses by $0.02, ex items; Reports Q1 (Mar) loss of $0.08 per share, excluding non-recurring items, $0.02 worse than the Reuters Estimates consensus of ($0.06); revenues rose 107% year/year to $24.1 mln vs the $21.2 mln consensus. Co issues upside guidance for Q2, sees Q2 revs of $28-32 mln vs. $21.80 mln consensus.

The stock gapped up the next day but retraced some back yesterday. I am waiting for the stock to form a higher low before playing this stock.

- PersianCat04 (Milionaire-in-progress).

Updates - 26 Apr 06

RMBS
My May $45 Put did extremely well and was deep in-the-money. The stock bottomed at $37.70 (my target is $38.00) around 11:45 am (ET) with a spike in volume (5-mins chart). Sold my May $45 Put for $7.50 when the stock seems to reverse shortly after (bought for $4.10, 89.9% profit over 3 days). While the stock could still go down further to $36.00 (next support level, also the SMA50), I guess that the stock would probably need a rest before moving south again (if it want to).

The movement of the stock over the last few weeks is a classic “Buy on rumour and sell on news” pattern.

SNDK
The stock gave a bullish performance again today. The stock’s resistance level should be the lowest ($63.65) of the trade prior to earning announcement. It missed by a penny when it announced on 20 Apr after market closed. The stock dropped for two days thereafter but regained some of its losses over the past 2 days. It would not make sense for the stock to go beyond $63.65.

However, I am not willing to hold on as the stock is too bullish in behaviour. Closed my May 60 Put at a loss of 46.2%.

GM
GM received an analyst upgrade. My May credit spread is pretty negative. Will monitor this stock closely tomorrow.

DELL
My May $27.50 Put which I bought yesterday is showing decent paper profit as DELL continued with its slide.

TXN
TXN stock slided wiping off yesterday’s gain. My Jun $35 Put is uneventful.

XSNX
Uneventful.


- PersianCat04 (Millionaire-in-progress)

News from XSNX

Tue, 25 Apr 2006 19:23:20 -0700

Power Glass(TM) Developer, XsunX, Begins Marketing Phase;Joe Grimes to Present at the National Energy Marketers Association2006 National Energy Restructuring Conference

Irvine, CA, April 25, 2006 - XsunX, Inc., (XSNX:OB) will present the benefits of the company’s thin-film solar technology systems for use in the development and delivery of an array of new power sources this week in Washington, D.C. at the 2006 National Energy Restructuring Conference sponsored by the National Energy Marketers Association. During the conference, which will take place April 25th and 26th at the Marriott at Metro Center, XsunX Chief Operating Officer Mr. Joseph Grimes will provide potential licensees information about the company’s flexible thin-film photovoltaic capabilities, including Power GlassTM, an innovative thin-film solar technology that is intended to allow glass windows to produce electricity from the power of the sun.

According to Tom Djokovich, CEO, this is an important step in the company’s development cycle. "The electrical energy industry is searching for the next generation of power production alternatives to reduce the complexity and cost of delivering energy to a growing global demand for power. As a developer of thin-film solar energy technologies, we are focused on providing improved solar cell designs and manufacturing techniques offering energy marketers and producers opportunities to develop new markets and expand business opportunities. With our deliverables in sight now is the time to begin a meaningful dialog with the people who can help bring Power Glass and our other technologies to the marketplace; and this year’s National Energy Restructuring Conference is an excellent venue for launching that effort."

Update - 25 Apr 06

DELL
Closed my May $27.50 Put for $1.60 (I bought it for $0.55 . 191% profit over 4 days).

Bought back May $27.50 Put for $1.35 (now having 2nd thoughts - could have just move on to another stock). The stock might just reversed (looking at the chart, it need a confirmation candle for the reversal play). Will use a tight stop loss (perhaps $27.00) for this play tommorrow.

RMBS
The stock did very well dropping $3.03 today and closed at $41.47. My May $45 Put could have done better if not because of the volatile time value decay yesterday and today. Anyway, I should still be thankful. My target of $38 still remains. On hindsight, I should have played credit spread instead.

XSNX
The stock gained $0.27 today to end above $2.00. I have played this stock a number of times already. My current play is now positive again.


GM
Uneventful.

TXN & SNDK
Both stocks are against me today. Will monitor very closely tommorrow.

- PersianCat04 (Millionaire-in-progress)

Update - 24 Apr 06

TXN – New Play

The stochastics and RSI showed that the stock turned bearish. Bought TXN Jun 35 Put.
Target 1 = $32.91 (also Fibonacci Level of 38.2%)
Target 2 = $30.75 (Fib Level of 61.8%)

GM – New Play
GM seems to be trading in a range. Played Bear Call Spread (in-the-money) May 20 and 22.50 Call. Will close my sold leg when the stock is around $19.20.

RMBS – New Play


Read from Briefing.com that the trading of RMBS is halted. Then the news came:

13:06
RMBS Rambus: Case will be dragged further before there is a resolution - BWS Financial (38.33 -0.26) -Update-

BWS Financial notes the jury, in the RMBS v Hynix Semi case, found that the DRAM patents in question are in valid and that Hynix should pay RMBS $306.4 mln in damages. The damages are a little higher than the $250 million they were expecting, but do not change their view on the proceedings. The firm had been expecting RMBS to win the case and set precedence for the remaining trials that RMBS is involved in. They would expect Hynix to appeal the ruling to either reverse the ruling or reduce the penalty. The firm says the news is positive for RMBS, as it moves the co closer to finalizing the patent cases they are involved in. They currently est that damages from all the suits brought by RMBS, including the Hynix award, would total approximately $1.5 bln. Some ests are calling for as much as $2 bln. The firm says this is a great sum for a co like RMBS who is expected to generated revs of approximately $190 mln in 2006, but the co receiving this amount would be over the next three to five years. They find that the stock already reflects the news from Hynix and that there would be selling on the news now that the award is known. They underscore that by Hynix losing the case today does not mean that all legal avenues are closed for the co. They think that the case will be dragged further before there is a resolution.

Also heard from CNBC that one analyst said that the fair value of the stock is $38 (est. damages from all lawsuits included). The stock gapped up to more than $7 when trading commenced at 14:05. I expected the stock to yo-yo but should drop thereafter as it seems the market had somewhat priced-in the news. I bought May $45 Put for $4.10. (On hindsight, should have just played credit spread - time value depreciate very fast that day). Let see what happens today.

Target = $36.15
Stop Loss = $46.99



DELL – The stock did well. It extended its loss yesterday. My May $27.50 Put appreciated around 170%.

SNDK – The stock also did well. It extended its loss again yesterday.

AMD - Closed my Jul $32.50 Call with a small profit. I am not comfortable with this stock (nothing to do with technical analysis).

PALM – Closed my May $22.50 Put for a small profit before the stock rise up further. An analyst upgraded the stock today. Anyway, the stock does not seem to show much weakness over the past few days.

XSNX - uneventful.

- PersianCat04 (Millionaire-in-progress)

21 Apr 06

Updates

SNDK
SNDK gapped down on opening (first day after earnings announcement). It closed at $60.05. As such, my Apr $65/70 Bear Call Credit Spread served me extremely well as my sold leg expired worthless. I pocketed all of the $180 premium that I collected. (Played only on Thursday - 1 day only!). 56.25% returns in 1 day.

AAPL
AAPL would probably do well in the next 2 quarters. However, at the moment, AAPL seems weak. Its moves after earnings results on Thursday and Friday are not convincing at all. I have made my money from AAPL in recent trades and I am willing to cut loss on my last trade. That was what I did. Sold my May $70 Call on Friday. Will continue to monitor this stock.

DELL

DELL extend its loss and tanked on Friday with a spike in volume, closing at $27.01. My May $27.50 Put is now in-the-money ($$$) and appreciated more than 100%. The next target (using Fibonacci retracement level of 1.618) is around $26.00. Other targets include $23.26 and $21.90 (4-yr low).


XSNX, PALM, AMD - uneventful.


NEW PLAY - SNDK
Bgt May $60 Put (slightly out-of-the-money).

• Target = $52.15
• Stop Loss = $65.79

STOCKS UNDER MY RADAR

INTC, IR and TXN - Possible bearish (I am a little bearish over the overall market - as such, I will probably have more bearish play in the short term).

- PersianCat04 (Millionaire-in-progress)

New Play SNDK, DELL & CRDN

SNDK (Earnings Play on 20 Apr ATC)

Read the news (below) from Briefing.com today. Based on experience, as the stock had been going up abt $14 since abt 4 weeks ago. the market would not accept in-line earnings results positively. Played Bear Call credit spread Apr $65/70 Put (slightly in-the-money) for $1.80. I reckon that if this play is against me, my loss would be fairly limited and the sold leg time value of $2.41 would be almost wiped out by tommorrow (expiration Friday). If this play is on my side, I would probably keep most, if not all of the $1.80. After market closed today, the stock stayed around $62.10 (hopefully, it stays that way tommorrow).

14:24
SNDK SanDisk: earnings preview (65.29 +1.52) -Update-
SNDK is scheduled to report Q1 earnings today after the close with analysts expecting EPS of $0.45 on revs of $623 mln... C.E Unterberg anticipates that the co will report revs essentially in-line with the Street consensus of $627 mln, with higher megabyte shipments offsetting an aggressive period for retail price drops. However, the firm says G.M pressure may make Street consensus EPS of $0.45 more challenging to meet. Maintain MP view on stock during challenging NAND mkt period. They expect that total megabyte shipments in Q1 will exceed co's guidance for flat to up 10% sequentially, due to strong retail sales data and continued increases in the average density per card... Amtech is looking for EPS of $0.47 with revs of $622 mln. Their product rev calls for $540 mln and $82 mln in royalties. They are above the street for Q2, modeling EPS of $0.60 with revs of $785 mln vs. consensus EPS of $0.51 with revs of $683 mln. They are expecting a seasonally strong quarter following aggressive price cuts in Q1 with 30-50% bit growth. On the gross margin front, the firm says it should start improving with 300mm/70nm/MLC production and less severe pricing declines of approx 10-15% in Q2. Click here for technical levels of interest.

DELL (bearish)
DELL broke its 52-week low today. I have been bearish on DELL for sometime now. Its margin had been dropping and it is facing increased competition from Lenovo. Bought May $27.50 Put.
Target = $23.26
Stop Loss (Tight) = above $$28.60

CRDN (day trade)
Been monitoring this stock. Initially bgt the Jun 55 Put for swing play. But the paper profit is too good to lose (at its peak, it was $110). As the stock reversed back pretty fast, I lock-in my profits for $70. Tried to buy back the June Put but it was not filled. Will probably play this stock again tommorrow.


UPDATES

AAPL
My AAPL Bull Put spread did very well. Closed my sold leg of Apr $65 Put for $0.05 when the stock reversed south (play safe). My May $70 Call is still slightly negative. Have to check the market sentiment tommorrow and decide whether to keep playing this stock.

XSNX, AMD & PALM - uneventful.


- PersianCat04 (Millionaire-in-progress)

Updates (last 2 days)

Market had a very strong rally on Tuesday and maintained its gain yesterday.

AAPL
My AAPL recovered some of its paper losses. Earnings results was announced after market closed. After hours summary from Briefing.com showed AAPL with a 4.4% rise in price. Hopefully, it performs as well when the market opens today. Jim Cramer "Mad Money" is bullish on AAPL (as of yesterday). My price target is still $73 and if it breaks convincingly, $75 (why $75? Don't ask me yet. I am still finding the answer. Anyway, I may just stick to the $73 target). My Bull Put credit spread on AAPL is already positive.

STOCKS UNDER MY RADAR (Reversal soon)
- RIMM (possible bullish play)
- CRDN (possible bearish play. Doji formed yesterday)

ON HINDSIGHT
Should have hang on to my bullish play on CEPH and place a stop-loss (though I made some profit b4 I closed this position). The technicals are still on my side and the set-up is still good when I let go. Fear overcame me. Lesson learnt.

BZH - I was right to have closed this position. The stock is like a yo-yo for the past 2 days. It may still go down though. Time to move on and play other stocks with better chart formation.

STX - I was right to close this PUT position. The stock was up, right till earnings announcement. Then it dropped. When I played STX, I played based on the charts, not knowing the earnings announcement is coming soon (should have checked earlier). Playing with earnings in mind create a new dimension to consider. I am right to play for the right reason.

- PersianCat04 (Milionaire-in-progress)

New Play - AMD (Bullish)

AMD
The stock price had been dropping from its 52-week high of $42.70 to a low of $29.97. The stochastics and RSI are showing "Buy"signals. The candlestick charts showed a confirmation candle ("Buy" signal too). Fundamentally, the stock is good and had been gaining market share at the expense of INTC.
I played Jul $32.50 Call. The stock closed at $31.54.

Target 1 = $34.38 (also 38.2% Fibonacci level)
Target 2 = $36.16
Target 3 = $38.40
Stop Loss = below $29.97


- PersianCat04 (Millionaire-in-progress)

Updates - 17 Apr

Almost the whole market tanked today. My current trades have mixed results. I am quite bearish on the overall market.

BZH - closed my sold leg Apr45 Put for some profit. Housing starts and permits announcement tomm. I rather lock-in my profit. Housing stocks can sometimes work im weird ways. Anyway, the stochastics and RSI showed that the stock is about to reverse. DHI earnings tomm might also affect the overall Housing stocks.

CEPH - Briefing.com reported that the sales and revenue from the Vivitrol had been included in the company estimates. It had only moderate impact on the stock. This is my signal to close my position. As the market tanked, I do not wish hold many long positions. Closed my Bull Put credit spread for $50 profit (b4 comm) - played only on last Thurs .

PALM - My May $22.50 Put (bgt out-of-money) are back in positive territory.

AAPL - My negative territory worsen. Could have converted my straight Call into a spread. Somehow, I am quite reluctant. Let see what happpen tomm. Instead, I played a Bull Put credit spread April $65/$60 (in-the-moeny) for $105.

Stocks I am monitoring - RIMM and AMD.

How I Solve My Spyware/Adware Problem

First of all, I must thank all my fellow traders for sharing their experience in getting rid of their adware/spyware problems. I have tried running SpyBot, Ad-Aware, Windows Defendor, Norton Utilities and Yahoo Anti-Spy. Somehow, the problems persist.

Yesterday, I did a system restore on my notebook (with XP operating system) - choosing the system to restore as at mid Mar. Then I run the various Anti-spyware/Ad-aware, etc. These moves seem to work. No problem so far.


- Persiancat04 (Millionaire-in-progress)

New Play CEPH (Bullish)

CEPH
Bullish. The stock had been going downhill dropping 30% since 15 Mar due to a problem in getting approval for its drugs, Strattera and Sparlon. The stock had been resting around its 61.8% Fibonacci level. I've been waiting for a breakout. The Stochastics, RSI and MACD are showing bullish signals.

Then on Thursday (before market open), Briefing.com reported that one of CEPH drugs, Vivitrol, which is on trial is likely to be approved on 16th Apr (may be its Briefing typo error). I played Bull Put credit spread Apr $60/$55 (slightly in-the-money then). I will pocket $140 per contract (38.9% profit) should the Apr options expired worthless on Fri next week. The long weekend and the waterfall effect of time value over the expiration week deterred me from playing a straight call. Anyway, I am not sure how far the stock can go uphill.

The news of FDA approval for the drug was confirmed, just about 8 mins before the market close on Thursday. The stock price went up - but I think it could appreciate more. Anyway, my Apr options are now out-of-money (+ve for me !) Let see how it go next week.


AAPL
My original target of $73 for AAPL before the earnings announcement had not been met. Instead, it peaked at $72.05 then go downhill. On Thursday, it formed a doji. This stock has a strong support around $60 (its SMA 200). Its earnings annonuncement is on Wed , next week. Not much time. My May $70 Call is -ve. I might sell the Apr $65 Call (convert to Bear Call Credit spread) if things get out-of-hand. The stochastics, RSI and MACD showed bearish signals. I might play this straight call till earnings announcement.


BZH
Sell-to-open the Apr 65 Call again - credit spread (3rd time using the same bgt leg).


STX
Sell-to-close my STX for a small loss (price for not checking its earnings date b4 playing). Not willing to play till earnings annoucement.


- PersianCat04 (Millionaire-in-progress)