Whew - Close call

The decision to sell early this morning turned out to be the right one.  I saved a major hit to the portfolio by going to cash.  Even strong players got hit hard today.  Generally down days come in threes.  So expect to see more downward pressure.  Since the DOW got rejected at 12,000 I expect a pull back, some consolidation, then another attempt at breaking 12,000.  Be careful, and make some money.

Going mostly to cash

Crazy action.  Selling on good news is prevalent.  Crash on bad news also.  Going mostly to cash again except for my commodities ETFs.

Position Updates

Closed out my GLW calls for 1.10 and the puts for 0.8 for about a 50% profit on the position.  Of course, I sold too early (and I was sure I was selling early).  But I then entered a long position on GLW with the Aug 2011 - $22 calls.  They are now up around 0.40 as well (but the entry price was around 1.48).  I believe the stock has good potential to move up a bit more.

I also entered new positions (shares) in SGG (sugar ETF) and JO (coffee ETF).  I should have entered the sugar ETF last thursday when I hesitated and missed out on about an 8% move already.  But these trends have to be a bit longer term (due to floods in Brazil, Australia, and coffee production impacts in Columbia and Brazil).  Even Starbucks lowered their projections based upon the assumption that they will pay more for coffee (and if you are a coffee drinker, you might have noticed the price spikes at the grocery store).   This is my first venture into commodity ETFs.  Let's see how it plays out.

New Position

Opening a strangle on Corning (GLW) - with Feb 20 calls and Feb 19 puts for a net entry cost of around 0.79 per share (call + put).  Earnings coming out on Tuesday. 

Update

Apple has taken a beating over the last few days since Steve Jobs announced his medical leave.  I might suspect that he may not return this time.  That makes it tough to hold on to the stock, yet I would expect the company to continue to deliver strong results at least for another year or two.

Intuitive Surgical beat earnings handily and the stock jumped 36 dollars on Friday (I believe it was up more than 40 at one time).  This one position has kept me from losing value in the portfolio due to Apple and Coin Star. 


Lot of indicators are now heading lower making me really nervous.  I have been looking at the sugar ETF - SGG.  I almost bought it on Thursday but didn't pull the trigger.  On friday, the shares jumped up around 3.6% to close around 94+.   The floods around the world (the most significant ones being in Brazil - #1 producer of sugar in the world, and Australia - #5 producer) have impacted the supply of sugar at a time when demand is rising.  Pakistan also experienced floods and a huge part of their sugarcane crop was wiped out).  Combine that with the production of Ethanol in Brazil using Sugar cane, and the world has seen the price of sugar more than double in the last year.  The sugar beet crop in UK has experienced damage due to the snow/thaw.  The US industry is in limbo pending the court decision on genetically engineered round up resistant sugar beets.  50% of the US sugar production comes from sugar beets.  The sugar ETF SGG hit a low of 37.18 in May 2010, and closed on Friday at 94.16.  That is almost a 200% run up (and something that made me hesitate on Thursday).  But I guess, with commodities you have to take advantage of the situation when the conditions are right because soon the market will adjust.

Beginning of new earning season

Earning season is upon us again and was opened by Alcoa beating earnings.  With the recovery in the economy, companies should generally surprise to the upside.   I'll start doing some research and see if we can make some money in this stretch.

On a side note, I like NCR - makers of ATMs and the Blockbuster DVD rental kiosks that are popping up all over the place.  I believe there is money to be made there...  (PS:  They are competing against CSTR - coinstar - which I am still holding).