Options Trader: Weekly Wrapup

by: Philip Davis

Wow, what an exciting week that was! We had 47 winners averaging gains of 112% thanks to some huge oil plays, 14 losers averaging 27%, and 11 neutrals—not counting commissions or straight stock calls (which were all winners I think).

You can tell by the volume of comments how crazy the trading was this week, as we were up and down all over the place (and that was just yesterday).

I got the finish I predicted (see last 2 day’s comments), but the volume was still a little light and I would have been happier if we would have broken some upside technicals on the day.

The Dow closed a double tap under 11,400 but finished strong on good volume:

The S&P also double tapped 1,300 without cracking it:

The NYSE double tapped 8,300 but couldn’t beat it:

I’ll say the Nasdaq broke through 2,150 just to be positive, but honestly—so what?

The SOX couldn’t crack 440 and the Transports actually snuck down (and they thought I wouldn’t notice!) a third of a point to 2,332—another meaningless spot but still right on that very interesting triangle pattern on the weekly chart.

Oil made it all the way down to $66.25 on a pretty flat dollar and now has one dreadful looking chart:

The last time I saw a pattern like this oil chart I was watching a guy in Acapulco dive off a cliff!

Gold did not fare much better, closing at $611, and I like my new chart guys as I think all the explanations are good for beginners:

I can’t complain as we really pulled this week out of a hat after being caught flat-footed by the drop off on Wednesday. We could have done much, much better if we had continued to treat the market as a hostile entity—a stance that has served us well the past couple of months…

Today's Picks:
Barrick Gold Corp. (NYSE:ABX) Oct $32.50 puts finished the week at $2 and I got out with a neat double. The Wednesday repick of the Oct $32.50s was very timely at .80.

We’re back in Adeza Biomedical Corp. (ADZA) at $16.66 (up .21).

AAR Corp. (NYSE:AIR) had a rough week but sentiment changed and the Feb $25s hit $1.40 (up 10%).

Amgen Inc. (NASDAQ:AMGN) went nowhere and I’m done with it.

AnnTaylor Stores Corp. (NYSE:ANN) $40s finished strong at $1.85 (up 130%) but I got out early:

We got our $1 entry on the Boeing Co. (NYSE:BA) Nov $80s—I hope we don’t regret it!

Bed Bath & Beyond Inc. (NASDAQ:BBBY) Oct $35s finished at $1.10 (up .10).

Burlington Northern Santa Fe Corp. (BNI) Oct $70s are now $1.20 (down 30%):

We very unwisely took a 95% gain on BHP Billiton Limited (NYSE:BHP) and barely got out even —that’s greedy and stupid (kick, kick).

We took the BP PLC (NYSE:BP) $70 puts finished at $4.30 (up 100%) and we rolled out to the Oct $60 puts, down a nickel to .25.

Bear Stearns Companies Inc. (NYSE:BSC) Oct $140s finished at $1.25, down a dime.

Continental Airlines Corp. (NYSE:CAL) was down a point but the Dec $30s held steady at $1.20 (this is why I like leaps).

Sadly, we had to let go of Caterpillar Inc. (NYSE:CAT) Oct $70s for $2.80 (up 100%). I think I am going to regret not pulling the trigger as it finished today at $1.65, just .15 above my target.

Chesapeake Energy Corp. (NYSE:CHK) Oct $30 puts finished at $1.15 (up 105%) and the $30 puts finished at .35 (up 120%). This is very, very good as both plays were freebies from the profits on the $32.50 puts last week so we are really up a million percent!

CKE Restaurants Inc. (CKR) $15s had another good week at $1.20 (up 160%)

Core Laboratories N.V. (NYSE:CLB) was a pretty good pick for a short, down 6% to $71.19 our second day out - too bad they didn’t have options, we would have made a killing!

Consolation Club member, Coach Inc. (NYSE:COH) Oct $32.50s are up 40% to $1.10, enough to buy a bag!

Costco Wholesale Corp. (NASDAQ:COST) Oct $50s finished at .95 (up 30%).

CSX Corp. (NYSE:CSX) Jan $32.50s are back to $1.45 and I still think this sector is ready to go.

We got out of the Chevron Corp. (NYSE:CVX) $65 puts for $1.20 (up 50%) and the Oct $60 puts were a great pre-roll, now .50 (up 40%).

E.I. DuPont de Nemours (NYSE:DD) Oct $42.50s are down to .20 (down 33%).

Dell Inc. (NASDAQ:DELL) Jan ’08 $27.50s held $1.60.

Walt Disney Company (NYSE:DIS) Oct $30s inched up to .70 (up .10).

We had to give up on Dune Energy Inc. (DNE) at $1.41 (down .08).

I still really like the Dow Chemical Company (NYSE:DOW) Dec $40s for .75 (we gave up on October).

DWSN pulled back to $29.32 (up 8%) but we got out of that one at 10%!

EnCana Corp. (NYSE:ECA) Oct $50 puts hit $2.65 (up 260%). I am so glad we decided to hold those this week! The $55 puts finished the week at $5.60 (up 180%) but I cashed out.

Eagle Materials Inc. (NYSE:EXP) Jan $40s dropped to $1.80 (down 15%).

Freeport-McMoRan Copper & Gold Inc.(NYSE:FCX) $55s exited perfectly at $6.90 (up 235%), and we took a 190% off the table and kept the Oct $70s, which are not going too well at .35 (down 60%). I think we are done with these as they backstopped the Phelps Dodge Corp. (PD) puts which are well in the money now.

Fairchild Semiconductor Intl. (FCS) needs a SOX rally with the Jan $20s down to .95 (down 15%).

Florida Rock Industries Inc. (FRK) held up well, as we said last week, it’s consolidating for a breakout.

Force Protection Inc. (NASDAQ:FRPT) finished a rocky week at $7.04 (up 10%) about as good as it gets for straight stocks.

General Electric Co. (NYSE:GE) Oct $35s are back to .25 (up 40%)—that’s right you can still get them!

General Mills Inc. (NYSE:GIS) performed as expected after Cramer's carnival promotion (see morning comments):

Corning Inc. (NYSE:GLW) Feb $25s dropped a nickel to $1.40.

I think I took the Garmin Ltd. (NASDAQ:GRMN) Oct $47.50s for $2 just to stand up to Tom (who was 100% right, I’m just very stubborn). I got my butt kicked (50%) on that one pronto and gained a lot of respect for good TA analysis!

Harrah's Entertainment Inc. (HET) Jan $70s inched up to $1.95 (up 10%) these are profits from the prior trade so very tight stops!

Hewlett-Packard Co. (NYSE:HPQ) $35s stopped at $1.50 (up 50%):

We had a good call on HP today but never got the pullback we were looking for.

We made a perfect exit on our Intel Corp. (NASDAQ:INTC) Tuesday. The $20s finished at .35 (up 75%), the Jan $17.50s let us out at $3.20 (up 100%), the Jan $22.50s hit .50 (up 80%) and the Oct $20s finished at .85 (up 90%). It is so good not to be greedy!

Remember I said on Tuesday morning: "I'm taking INTC off the table as I don't like job cuts as a success model."

iShares Russell 2000 Index ETF (NYSEARCA:IWM) Oct $72s are back to doing well at $2.15 (up 60%), but we wisely took half off at $2.45, and I took the rest of mine on the $1.90 dip.

Johnson & Johnson (NYSE:JNJ) Oct $65s dropped to .70 (down 20%) and have me very worried.

I could not believe they sold us the Lennar Corp. (NYSE:LEN) Oct $40 puts for .80 today on that news! They gained 40% already and made up for my lousy Toll Brothers Inc. (NYSE:TOL) trade:

We took the Las Vegas Sands Corp. (NYSE:LVS) $70 puts off the table Wednesday at $3.30 (up 65%), which I first thought was a mistake, and then I was glad we did:

Medco Health Solutions Inc. (NYSE:MHS) Oct $60 puts finished at just $1.35 (up 35%)

I'm pretty sure we got Marvell Technology Group (NASDAQ:MRVL) just in again on the Jan $21.25s for $1.15 (down a nickel), but we are .55 ahead from the first go round!

Microsoft Corp. (NASDAQ:MSFT) Oct $27.50s are still just .15 and the $25s dropped back to $1.10.

Micron Technology Inc. (NASDAQ:MU) Jan $20s shot up to .95 today (up 220%).

Oil Service HOLDRs ETF (NYSEARCA:OIH) is going well and the Oct $130 puts are $5.10 (up 40%).

Overseas Shipholding Group Inc. (NYSE:OSG) Oct $65 puts finished in the money at $3.70 (up 95%) and the Jan $60 puts hit $3.10 (up 105%). The Octobers should be taken off the table as we bought the Jans for a rollover!

Boy did we pick a good entry on those Phelps Dodge Corp. (PD) Oct $82.50 puts, now $1.75 (up 75%), while the Jan $82.50 puts are back at $5 (up 20%).

We are back in PetMed Express Inc. (NASDAQ:PETS) at $9.63, and selling the Oct $10s for .65.

NASDAQ 100 Trust Shares ETF (QQQQ) Oct $39s held .95, and the current $39s are still at .30.

Royal Dutch Shell (NYSE:RDS.A) $70 puts finished at $3.60 (up 600%) and we’re out! The Oct $65 puts are already at $1 (up 55% and up 33% from yesterday’s repick so don’t say I didn’t tell you so twice!).

Research In Motion Ltd. (RIMM) Oct $75 puts lost 10% today but, obviously, I didn’t take them as they went up all day and they were going to be an insurance play. Still needs to be on the back burner in case the market turns…

We can watch SmartVideo Technologies Inc. (SMVD) at $1.25 for a possible reentry, but we don’t even know why they went up in the first place so I’m staying away unless there is a real bargain again (or real news).

Sunrise Senior Living Inc. (SRZ) got downgraded today but the Jan $30s are still $3.10 (up 45%) but let's keep the stop at $2.75.

Suncor Energy Inc. (NYSE:SU) $80 puts finished the week at $8.60 (up 345%) on a huge drop today.

Sunoco Inc. (NYSE:SUN) $75 puts finished the week at $9.60 (up 700%). We rolled into the Oct $60 puts which already hit $1.25 (up 25%).

Sun Microsystems Inc. (NASDAQ:SUNW) $5s died on us, we will be lucky to get the nickel, down .10.

Target Corp. (NYSE:TGT) had a great day and the Oct $50s hit $2.10 (up 66%) and the Oct $47.50s are already a double at $4! This is a great example of how we double down on a different bracket in a phase 2 trade.

Toll Brothers Inc. (TOL) $25 puts are going to be cutting it to the wire but are down 50% to .20. I did not double down into the weekend, it was just a play call and doesn’t look very smart…

Texas Instruments Inc. (NYSE:TXN) Oct $32.50s are .70 (down 20%) but I’m buying more.

We said goodbye to Harris & Harris Group Inc. (NASDAQ:TINY) March 10s at $2.75 (up 140%), but we need to watch that one for any dips.

Yahoo! Inc. (NASDAQ:YHOO) Oct $30s were exited down a dime but now I like them again at .85.

ExxonMobil Corp. (NYSE:XOM) $67.50 puts hit $1.20 (up 140%):