After last night’s blowout earnings from Google and buyout of HK from BHP it seemed the bulls had the wind at their backs for a smooth finish to the week. Alas, we cannot forget the shenanigans going on in Europe (bank stress tests) and Washington (budget and debt) that tend to spread poison across every silver lining. I’m sure hopeful that these issues resolve the right way but it makes one wonder – and the rest of the world is watching closely. If we put this aside and focus on what really matters – earnings, m$a, share buybacks, dividends and growth then we might really see this stock market lift off. Regardless of what we may assume the Fed is doing (or not doing) this market is ready to move. For the week markets were down 2-3%. Volatility rose but the VIX did end the week below 20. Put/calls are elevated, reflecting worry and need for protection. The recent mergers are a good indicator and with earnings season to begin in ‘earnest’ this coming week there should be plenty to be aware off. Gold and metals were very strong after the Bernanke Chronicles.
Positions – Below are new position updates. I won’t post comments everyday but will have updates from time to time. We are NOT daytraders by design, therefore needing to justify a move against because of market action is really nonsensical. We need to understand the purpose here, take it easy and trust that the charts tell the story. (We added positions on Friday 7.15.11 – we hold positions until I send an alert that we are exiting).
While the market was strong today we saw some sizeable gains in our positions to close the week. While we carry many plays right now we saw every SINGLE one of them rising, some very strong gains. While some are down, many are up and don’t forget – it’s not how you start but how you finish that matters. Into next week there are earnings to deal with, I’m comfortable we are in the right ideas to take advantage of this most prosperous season! New plays below, will be looking for new ideas as well.
IBM Aug 175 call at 4.10 – We’re into Big Blue here as they have earnings coming this Monday night. I like the action on this one as it could make a move on 185 soon. (chart is below with notes)
ISRG Aug 390 call at 5.30 – Speculative play here with earnings next week, have done well with this in the past.
Summer Breeze (click here for video)
For the coming week it’s all about earnings, earnings, earnings. Don’t be surprised to see some big earnings from some of the major players. Let’s hope the news from Washington and Europe is non-existant or just benign. Be ready for any new alerts and follow the stream on twitter.
Have a great weekend, Happy Carmageddon and I’ll see you Monday!
Bob Lang
Explosive Options
