Jeng,
All eyes will be on Intel tommorow as well as the CPI report. The market has turned quickly from limitless optimism to one of inevitable doom. Good earnings on Intel may act as a temporary buffer to potential slaughtering of the Nasdaq. I purchased some index puts on the NWX:Networking index and the SOX. Already making a nice profit on them. The break of 1100 in Nasdaq was a flashing sell signal. There has been alot of damage done. It will take really big money to move this market back up. Smaller investors are most likely jaded and broke. I have a feeling the CPI will come in tame and INTC will be on target, but whether this will mean anything is the question. It is a no win situation in terms of Fed tightening. The market will percieve any or no movement as a negative. The fed should not tighten in my opinion. Other than the average wage figure, I see no real signs of inflation. On the contrary, the nature of competition in the marketplace with companies in many sectors lowering prices is actually lowering inflation. Besides, most people aren't going to be buying anything anytime soon because they probably lost thier *sses in the market in the past few days!
On IOMG, I posted earlier that I bought the stock, sold nov 25 calls, and bought July 25 puts all when IOMG was around 25. I think I am pretty well covered in any situation. Weak hands and those with margin calls are being weeded out. IOMG is at or below fair value in my opinion. If the Nasdaq continues its decline, I would not be surprised to see IOMG at 18-19. I have chalked up a loss on July 30 calls, but anything is possible. There is no fundamental reason for IOMG and rest of quality techs to be hammered, the chart is the only thing to go by now. If a tech breaks support level, get out while you can! A break of 26 in IOMG was a great short opportunity, but hindsight is always 20/20. If the Nasdaq gets bashed again tommorow, you may see IOMG at mid 18's, where it would be undervalued and oversold in my opinion. I would liquidate my puts and buy back my calls at this level.
I purchased an Aug 70 straddle on INTC today. It is sitting at critical support at 69. I am expecting good earnings which may bring stock back up to 72-73, where I will sell my calls. I am expecting major profit taking which may send the stock back down to 69 level. If Intel disappoints, there may be a record drop in Nasdaq. I am properly hedged in this circumstance.
Picked up some more FSCX at 12 today and set a stop for 11.5. The stock is strong at this level. I always prefer in most cases to pick up a stock near its support because setting a stop loss just below support will get you out with most of your $$.
Regards, |
