Dark Horse Trad...'s  Instablog

As I said in my last post, STK will be closed on the buy/write at $21 for a tidy profit. As will JBL at $21 and RDWR at $31.

I discussed rolling up on the strike for WNR but given the market strength WNR has moved outside the range that I would recommend chasing it so I am recommending taking the profit and closing the buy/write at $16.

XRTX Mar $15 call will be called away closing our position in XRTX, for now.

Therefore, the only action needed today is to buy to close LDK Mar $5 put and Sell to Open LDK Jun $5 put.

I will recommend replacements early next week for STK, JBL, RDWR, WNR and XRTX which all closed with nice profits.

Watch HUSA on the bounce today for another chance to short. I wouldn't recommend shorting unless HUSA gets back to $10 but would point anyone to the balance sheet to review the "plenty of cash" statement made by the company in their update today.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I’ve been waiting here to be your guide

So come, reveal the secrets that you keep inside

Step up, no one leaves until the night is done

The amplifier starts to hum

The carnival has just begun

In the psy, Psycho Circus

Psy, Psycho Circus

I say Welcome to the show – KISS

Let me start by saying no one can accurately guess the bottom in markets like we are in now.  Nor do we have to be able to see into the crystal ball and find the exact bottom.  Sabrient is always “waiting here to be your guide” and has the underlying belief in remaining Long/Short at all times to capture opportunities that arise in this “Psycho Circus.”  There is no doubt that the “carnival has just begun.”

Yesterday we took opportunities to close 3 shorts we identified at different periods over the last months as stocks which in a downturn would fall more than most others.  Today is a good opportunity to pick up a long or two that should recover quickly as their “amplifier starts to hum.”

Kronus Worldwide, Inc. (KRO), a producer of Titanium Dioxide, is a stock that was humming along at $31.15 and had just announced quadrupling earnings prior to the Psycho Circus events which began last week (many could argue, and well, that the Psycho Circus has always been here).  KRO closed yesterday at $20.20 after the CEO, Steven Watson, bought 10,000 shares on August 3, 2011 at $26.55 and 8,000 more on August 5, 2011 at $21.83.  The company is expected to grow earnings at 21.35% over the next 5 years and $3.59/share for 2012 providing us an opportunity to buy those for a forward p/e of 5.82.  This is a good opportunity to acquire a GAVRP (growth at a VERY reasonable price) stock and say “Welcome to the show.”

Recommendation: Buy KRO at the market, Tuesday, August 9, 2011