Baker Hughes and Denbury Resources
The market is in full tax selling mode with winners getting hammered along with losers. Greenspan brought up stagflation again in a Sunday speech and raised his recession possibility to 50%. The NY State Manufacturing Survey fell to 10.3 for December, down from 27.4 in November. This is a new 7-month low in activity. Crude dropped to $89.49 intraday but rebounded back over $91 just after the close. The January contract expires tomorrow.
There were some serious losses in several of the current positions as the leaders were sold to cover losses going into year-end. There is a market adage that states, "the bears get Thanksgiving and the bulls get Christmas." This refers to the normal tax selling period in late November and the normal end of year Santa rally. The bulls are going to need some testosterone injections if they are going to pull this market out of its current dive.
Baker Hughes (BHI) declined to hit our entry target of $80. The recommended LEAP is the 2009 $90 call option VBH-AR.Denbury Resources split 2:1 and dropped to $26.34 in today's trading. The pre-split breakdown entry trigger was $53 or $26.50 post-split. The afternoon dip triggered that entry. The post split option (no LEAPS) is the June $30 call option DNR-FF.