OIL service companies are a-crashing today led by SLB. Some posts ago we bought put options- the NOVEMBER strike price $100 at 1.80 or so. Believe it or not we doubled our money there... they are trading at 2.80 and going strong. WHY? Because SLB reported earnings today and sell on the news worked out just as predicted. We took some money off that trade and am letting some ride till next week. If SLB trades below 100 we can make more. Since options can be very volatile and timing is everything when we deal with options we will watch this one carefully.
Today the stock market is in the red big time... DOW down 200 points already. This is the pullback I was waiting for. I will wait for DOW 13500 to put our CASH to work. But no harm in nibbling the companies that reported good numbers and raised estimates. I am thinking EBAY. We rode the rally from 32 to 40. Its trading below 37... and I am a buyer on this dip today right away- 36.75 for a quick trade.
A word on why the market is down so much. Its simple. After the unabated rally to new highs... 14200 and some, it was overdue for a correction. Thats whats happening. Nothin to panic about. Panic loses money- got to be objective and buy the right stocks at this opportunity.
The trigger for the crash is earnings obviously... good or bad, stocks get hit. CATERPILLAR was one of the catalysts for it made pessimistic comments on the U.S. economy- (global economy is fine... thats a good read-between-the-lines) and it got slammed- down 3 bucks to 75.
GOOGLE is a face-saver for the markets today- on its way to glory-hooo.... as it beat estimates and analysts have gone ahead and given it price targets as high as 800. Was as high as 658 in the morning. GOOGLE will go to 800 if they say so... who knows. But I would rather buy a stock at 60 that may go to 80... and get the same returns ...
HANG in there... todays pullback is healthy. Maybe the upbeat quarter by GOOGLE and market sentiment not all that bad may pull off a recovery in the markets during the day.... maybe less red and we be down in double digits for the day. I will take that and look forward to better days next week, as we get closer to the FED meeting. Remember he may give us another rate cut. And the market will feel more comfortable...going into the year end.
Meanwhile... we will watch our short positions. SLB worked out. I am short CRM -at an average price of 54. We will talk of that position next week. Read my blog and dont forget to post a comment... anyone can comment- you dont have to be a google email account holder anymore. I fixed that... Today even in the dull bruised market lets say KUDOS to GOOGLE... for continuing its uptrend. GOOG-A-HOOO.... till next week. Have a great one, all.
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2 comments:
Whats your take on CSUN and China stocks and solars? Do you think there are some values to be had in the energy sector like PTEN for one?
Thanks again for your greta blog site.
CHINA stocks until the great debacle of OCTOBER 19th ... were a SELL SELL SELL. Maybe in this volatile market they become BUYS by next week.
CSUN- fell on the news- CEO warned that demand for polysilicon can weigh on the company's results for the year. SHOOT FIRST when such warnings appear. I would not touch it. I like YGE- earnings page on YAHOO shows it earning $5.18 or so... if thats true this one is SOLAR VALUE... versus many SOLAR HYPES.
I would have stop losses in place if I were to trade CHINA stocks. I would not buy and hold china stocks. AND until the US market turns around I will not trade high risk stocks.
ABOUT value in energy- PTEN was one of my picks for the longest time. BUT figured that Wall street does not like it- and called it off my radar. Maybe the earnings slowdown from 2.4 to 1.9 next year is suggesting a higher forward p.e. of 10? PTEN and NBR are off my list -got to move onto better picks when some really incredible values are not picked by wall street for some reason.
GO with the flow. ENERGY is peaked for now in my humble opinion. I will vote for TECHNOLOGY...
THANKS FOR READING and for YOUR COMMENT.
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