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LEAP Trader Update - Tuesday Evening 9/12/06

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LEAP Update - Tuesday Evening 9/12/06

Oil futures closed at $63.75 today and oil stocks, which had been higher on dip buying when oil touched $65, rolled over into the close. There are many factors contributing to the drop in oil prices but none that we have not been anticipating other than the cooling of tensions over Iran. The lack of hurricanes and rising inventory levels added to the current glut of supplies.

The drop under $65 is not a problem for us. We have been expecting it and we will profit from it. We were triggered on several positions and are very close to being triggered on several more. I believe we will see even lower prices in the future. If we do, we will have more entries. If we don't then we will deal with that if it happens. Currently the wind blown analysts are targeting $58 for a bottom to this dip. I say wind blown because they change their outlook every time the wind changes directions. I hope I don't fall into that category. Everyone knows where I stand and it is long term buy the dips bullish.

I hope everyone was able to exit that insurance put on MDR I emailed earlier today. It was a September put and free money at this point.

The other exit we have had this week was the September insurance put on PTR when it hit our profit stop at $105. That exit should have netted you about $5.

Long entries that were triggered include:

 

CEO $79.87 March $90 Call CEO-CS @ $2.40 triggered at $80 9/11

 

SU  $67.23 2009 $80 LEAP Call OYX-AP triggered at $70 9/11

 

SLB $54.72 2009 $70 LEAP Call VWY-AN triggered 1/2 @$57, 1/2 @$55

 

NBR $30.00 2009 $40 LEAP Call VRB-AH triggered at $3.00 9/12/06

Entries still open include:  (***** see note below)

 

UPL $45.72 Target $45 for 2009 $60 LEAP Call OZH-AL   *****

 

SUN $63.01 Target $62 for 2009 $70 LEAP Call VUN-AN   *****

 

PXP $40.59 Target $40 and $37 for 2009 $50 LEAP Call ZXL-AJ *****

 

FST $30.60 Target $30 for 2009 $40 LEAP Call OJG-AH   *****

 

XTO $40.45 Target $40 for 2009 $50 LEAP Call OUO-AJ   *****

 

VLO $51.32 Target $47.50 for 2009 $60 LEAP Call VHB-AL

 

LTR $38.30 Target $36.50 for 2009 $40 LEAP Call VRH-AH

 

APC $43.93 Target $42.50 for 2009 $50 LEAP Call OCP-AJ

Those with ***** after the entry are just a few cents from the target price and will be assumed to be triggered as of the open on Wednesday. (UPL, SUN, PXP, FST, XTO) I do not want to let these get away if a sudden change in inventory levels or the appearance of a hurricane misses our targets by a few cents. The other targets VLO, LTR and APC will remain open.

That gives us a full boat and puts us on the lookout for a rebound but always realize we could see another -$5 dip before that happens.

Jim Brown

 

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