Monday, December 20, 2010

20 December 2010 I might keep this one another 30 years.

BAGAKOAA; 20 December 2010 I might keep this one another 30 years.

Devin and I celebrated 31 years of marriage today. My buddy Ben of 35 years+ (and a reader) reminded me this morning with a text. I had remembered but thank you Ben and Butch and Deb for the kind notes today.

I was at the wheel about ten minutes after the market opened. It was my intention to be there at the opening, but miniature Italian Greyhounds and Applehead Chihuahuas do not like doing their business in the snow. Fortunately we did not miss much at the opening, during the day or at the close. Volume was scary light today. There were some survey’s and anecdotal reports about healthy holiday shopping and that kept a relatively positive mood. The most interesting thing to watch today was how the S & P 500 bounced off the 1250 number. It closed a couple of points off that level. The reason it is interesting is because there are some important resistance numbers to watch. Back here in the blog in late September we pointed out the 1,140 resistance number and said if it breaks out of that we could see 1,200. Well the next resistance point is 1250. If we break out of that we could see 1,325 as the next barrier. I am thinking we will see 1,275ish then a correction. 1,275ish will make for an average P\E ratio of 23+. Way to high to be sustained. As you know we don’t pay a lot of attention to the DOW number, but they are seeing resistance at the 11,500 level.

Pin Action Today

We mentioned the market was quiet but we did move a couple of pins around. We did catch those calls on FINL Finish Lines. They were May 20 dollar calls at 1.50 each. We also added to our MDR McDermitt position as well as our ACN Accenture positions. We closed out of a sizeable call for INTC Intel. We had been accumulating these since last June and we are 30 days out and I just don’t see us making money on the calls. It was a 39% loss, but after doing a quick forensic, we would have done it again. We also closed out of a January call position on ACOM It was a 32% loss. In looking back at the original position in the end of November, it was not my brightest move. We initiated a speculative call opting for March 2.50 positions in BWEN Broadwind Energy, Inc. provides products and services to the wind energy industry primarily in the United States. Its Towers segment manufactures wind towers designed for 2 megawatt and larger wind turbines. My thinking on this is that it is one of the few buy out rumors that have not escalated in price in the last few weeks. The target price is 4.00 a share the stock is trading at about 2.50 and the calls are .25. This is Vegas Money baby. The rumored suitor could be GE. They would be lunch money for them and the value could break five a share making the call worth $2.75. Of course they could be bought out on March 20th. DO YOUR HOMEWORK. What will happen? The answer my friend is blowing in the wind.

Salve Lucrum


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