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The current format of the Play Updates has changed. Only the pertinent data that has changed from the prior week will be shown in an effort to concentrate more on new commentary on new plays rather than restating existing positions. Each play has a link back to either its last full commentary or its initial description.

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SNP - $81.00 +6.56 Sinopec

The two-day drop in equities from China provided a buying opportunity in Sinopec (SNP) on Tuesday. The two-day sell in Chinese equities knocked Sinopec back to strong support at $74. I sent an email on Tuesday afternoon with the Sinopec recommendation. Sinopec is China's largest refiner and recently saw a sharp spike to $81.10 on its inclusion into the Hang Seng Index. This was on top of an already positive trend.

I would be a strong buyer here on this weakness. There are no LEAPS so I would use the July $80 calls SNP-GP currently $5.40.

Company description:

China Petroleum & Chemical Corporation (Sinopec Corp.) is an integrated energy and chemical company with upstream, midstream and downstream operations. The Company and its subsidiaries operate mainly in the People's Republic of China. The principal operations of Sinopec Corp. and its subsidiaries include exploring for and developing, producing and trading crude oil and natural gas; processing crude oil into refined oil products, producing refined oil products and trading, transporting, distributing and marketing refined oil products, and producing, distributing and trading petrochemical products. Sinopec Corp. has five operating segments: exploration and production, refining, marketing and distribution, chemicals, and corporate and others.

Entry $74.44 11/28/06

Position: July $80 Call SNP-GP @ $5.40

No insurance

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FXI $94.15 -$1.99 - FTSE/Xinhua China 25 Index Fund

FXI took the same hit as Sinopec and PetroChina on the falling dollars but did not recover completely. The gap open the prior week gave us a bad entry but $93 is strong support.

The iShares FTSE/Xinhua China 25 Index Fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the FTSE/Xinhua China 25 Index.

Component list: http://tinyurl.com/y9fv6a

This iShare focuses on the largest companies in China (58% of it positions) and Hong Kong (42%). These are the most liquid companies in these markets. With Asia growing by leaps and bounds the FXI generated a +40% return in 2005 without using options. We hope to do better using LEAPs.

Breakout target: $94.50 hit 11/22/06 on gap open to $95.80

Position: 2009 $100 LEAP Call VHF-AT @ $13.50

No insurance

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MRO $95.53 +4.36 - Marathon Oil

Marathon broke out to a new historic high on Monday and never looked back. There was a small dip on Friday morning after a downgrade from FBR and Citigroup on valuation but that dip was quickly bought. No change in play.

To see the initial commentary on this position click here:
http://tinyurl.com/y6qmvz

Position 2009 $100 LEAP Call VXM-AT @ $12.60

Insurance put: None

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HES - $50.22 +4.98 - Hess Corporation (Formerly (AHC))

Outstanding! HES spiked above initial resistance on Tuesday and set a new three-month high. After the close on Friday HES announced the mandatory conversion of 13.5 million shares of its convertible preferred stock into common stock. No change in play.

To see the initial commentary on this position click here:
http://tinyurl.com/ycoh2o

Position:
11/05/06 2009 $50 LEAP Call VHS-AJ @ $6.80

No insurance due to cheap LEAP, strong support and positive trend.


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BHP - $40.89 +0.15 - BHP Billiton

BHP may be starting to show signs of life as traders forget about the possible bid for Phelps Dodge. BHP continues to hold above support despite those rumors that it could outbid Freeport for PD. We have a good insurance put position in case they do something stupid. No change in play.

To see the initial commentary on this position click here:
http://tinyurl.com/ykl8ka

Position:
10/29/06 2009 $40 LEAP Call ZPK-AH @ $11.10

Insurance Put:
11/12/06 Feb $40 Put BHP-NH @ $1.50

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BTU - $46.97 +4.34 - Peabody Energy

BTU surged for a nice gain on a strong break above resistance. BTU announced a contract to supply Powder River Basin coal to the TransAlta Centralia power plant in Washington. On Tuesday TransAlta announced it had closed its 35-year-old Centralia coal mine. This is a completely new contract for Peabody and a source of new revenue. It was announced the prior week that Peabody would replace HCA in the S&P-500 on some future date. That date has not yet been set. This should continue to provide a floor over the next couple of weeks. No change in play.

To see the initial commentary on this position click here:
http://tinyurl.com/yy2ysv

Earnings: Oct 19th .53 cents, up +26%

Position:
10/22/06 Jan-2009 $50 LEAP Call ZZT-AJ @ $8.70

No insurance put at this time.

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DVN - $73.49 +3.10 - Devon Energy

Devon surged higher on no news to break resistance at $72. Cramer continues to pound the table on Devon on his Mad Money show on CNBC. Keep it up Jim, we were in it before you! No complaints and no change in play.

To see the last full commentary on this position click here: http://tinyurl.com/yest3l

Earnings: Nov 1st, $1.66, beat by +14 cents

LEAP Position:
10/03/06 Position: 2009 $70 LEAP Call VVH-AN @ $9.00

Insurance put:
Buy Apr-2007 $60 Put DVN-PL only if DVN trades at $67 again.

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RIG - $78.84 +3.62 - Transocean Inc

RIG announced a settlement with TODCO on Thursday that would result in $50 million of revenue to be recognized in Q4. RIG spun off TODCO (THE) in Dec-2004. Based on the THE chart maybe they should be a play as well. No change in play.

Their rig report released Dec-1st: http://tinyurl.com/y3shx7

To see the last full commentary on this position click here: http://tinyurl.com/yest3l

Earnings: Nov 2nd, 83 cents, 12 cent beat

LEAP Position:
10/03/06 Position: 2009 $80 LEAP Call VOI-AP @ $12.90

Insurance put:
Buy Jan $65 PUT RIG-ML only if RIG trades at $71.

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TSO - $71.49 +3.32 - Tesoro Corporation

TSO broke above another level of resistance at $70 as I predicted last week. This is a new three month high and no complaints. No news and no change in play.

To see the last full commentary on this position click here: http://tinyurl.com/yest3l

Earnings: Nov 2nd, $3.92, 66 cent beat

LEAP Position:
10/04/06 Position: 2009 $70 LEAP Call ZGC-AN @ $7.70

Insurance put:
Buy Feb $55 PUT TSO-NK only if TSO trades at $59

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APC - $48.90 +1.49 - Anadarko Petroleum

APC is struggling higher as the new rules in Algeria are prepared for distribution. APC is pressing Algeria for terms of the new windfall profits tax that will become effective in 2007. So far Algeria has failed to disclose the details other than the tax will provide an extra $1 billion in revenue for the country. Claiming the tax is much fairer than the nationalism of assets in countries like Bolivia and Venezuela the Algerian minister invited all oil companies to his office for coffee and a chat if they wished to discuss the terms. The current contracts were signed when oil was $15 and Algeria feels it is time to adjust those terms. APC is the largest independent company in Algeria. No change in play.

To see the last full commentary on this position click here: http://tinyurl.com/yest3l

No change in play.

Earnings: Nov 7th, +$1.75 vs +$1.12

LEAP Position:
9/20/06 Position: 2009 $50 LEAP Call OCP-AJ @ $6.90

Insurance put: 9/25
Position: Jan $40 PUT APC-MH @ $2.35, profit stop @ $35.00

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CEO $87.52 -0.33 - Cnooc Ltd

CEO is consolidating its gains from last week after setting a new three month high at 89.67 on Wednesday. Profit taking on Friday returned CEO to initial support. No news and no change in play.

To see the last full commentary on this position click here: http://tinyurl.com/yest3l

No insurance put

Earnings: Oct-31st, $2.33B rev, +25%, no EPS given

Position: March $90 Call CEO-CS @ $2.40 (no leaps)

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SU $79.04 +2.39 - Suncor Energy

Suncor is fighting resistance at $80 but we should be good for a =$5 pop once that level is broken. No news and no change in play.

To see the last full commentary on this position click here: http://tinyurl.com/yest3l

Earnings: Oct 26th, $1.48 vs $0.57 year ago qtr

LEAP Position: 9/11/06
Position: 2009 $80 LEAP Call OYX-AP @ $14.30

Insurance put: 9/18
Position: Dec $60 Put SU-XL @ $2.10, no stop

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SLB $68.34 +2.98 Schlumberger

SLB finally broke out to a new seven-month high at just over $69 and there was little profit taking on Friday. SLB announced it was acquiring Norwegian Oil Well Completion Specialist Reslink. Terms were not disclosed. No change in play.

To see the last full commentary on this position click here: http://tinyurl.com/yest3l

Earnings: Oct 20th: 81 cents vs 44 in Y.A.Q.

LEAP Position:
1/2 9/11/06 @ $8.60
1/2 9/12/06 @ $8.00
Position: 2009 $70 LEAP Call VWY-AN @ $8.30

Insurance Put: 9/18
Position: Jan $50 Put SLB-MJ @ $2.00, no stop

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NBR $34.57 +1.88 - Nabors Industries

Nabors rose to a new three-month high on Friday at $34.57 on no news. It appears the speculation from the prior week about a LBO was just that, speculation. OR, this week's rise could be buying as inside news is leaking to the public. It will be interesting to see what the next month brings.

Link to recent presentation: http://tinyurl.com/o5jmy

To see the last full commentary on this position click here: http://tinyurl.com/yest3l

Earnings: Oct 25th, $1.02 vs 0.55 in YAQ

LEAP Position:
9/12/06 2009 $40 LEAP Call VRB-AH @ $4.50

No insurance

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UPL $54.20 +2.89 - Ultra Petroleum

Ultra finally find some traction as gas hit $9 last week. No news and no change in play.

UPL said recently that their profit margins at $4 gas were +30%, $6 gas 50% and $8 gas 100%. They have a 16-year inventory of wells to be drilled.

OGIS Investment Conference on Oct-4th. hhttp://tinyurl.com/y6xsq3
Enercom Oil and Gas presentation: http://tinyurl.com/kn5cb

To see the last full commentary on this position click here: http://tinyurl.com/yest3l

Earnings: Oct 31st, +33 cents

LEAP Position:
9/12/06 Position: 2009 $60 LEAP Call OZH-AL @ $10.60

Insurance Put:
9/18 Position: JAN $40 Put UPL-MH @ $2.85, no stop

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SUN $68.98 +5.10 - Sunoco

Outstanding! SUN finally escaped from three weeks of selling by somebody with a large position. The spike began on Monday and gathered speed all week as shorts scrambled to unwind positions. Friday's close was a new two-month high. No change in play.

To see the last full commentary on this position click here: http://tinyurl.com/yest3l

Earnings: Nov 1st, $2.76 vs $2.39

LEAP Position:
9/12/06 Position: 2009 $70 LEAP Call VUN-AN @ $13.50

Insurance Put:
Position: Jan $55 Put SUN-MK @ $2.40, no stop

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PXP $47.55 +3.21 - Plains Exploration

PXP finally broke that resistance at 44.50 and surged to a new historic high. Our patience paid off and we could be in blue sky soon. PXP announced a new discovery in 3800 feet of water at their Friesian Prospect in the Green Canyon block 599. Shell is a 50% partner with PXP. No production data is available until the well is completed. PXP also agreed to acquire a 60% interest in nine prospects owned by McMoRan Exploration. No change in play.

OGIS Investment Conference on Oct-4th: http://tinyurl.com/y7vn2w

To see the last full commentary on this position click here: http://tinyurl.com/yest3l

Earnings: Nov 9th, +91 cents vs +37 cents

LEAP Position:
9/12/06 Position: 2009 $50 LEAP Call ZXL-AJ @ 7.50

Insurance Put:
9/25 Jan $40 Put PXP-MH @ $1.90, $35 stop

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FST $35.64 +1.48 - Forest Oil

FST finally cracked the $35 barrier that held it back for the last six months. Hopefully we are off to the races now. No news and no change in play.

Enercom conference presentation: http://tinyurl.com/ggzmv

To see the last full commentary on this position click here: http://tinyurl.com/yest3l

Earnings: Nov-8th, +1.21 vs +0.05

LEAP Position: 9/12/06
Position: 2009 $40 LEAP Call OJG-AH @ 4.50

No insurance due to cheap LEAP

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XTO $50.44 +3.51 - XTO Energy

XTO broke over resistance at $48 and rocketed to a new historic high on Thursday. Limited profit taking on Friday but the high ground held. No change in play.

OGIS conference presentation on Oct 4th: http://tinyurl.com/v6ram
Enercom presentation: http://tinyurl.com/qorbr

To see the last full commentary on this position click here: http://tinyurl.com/yest3l

Earnings: Oct 24th, $0.99 vs $0.85 in YAQ

LEAP Position:
9/12/06 Position: 2009 $50 LEAP Call OUO-AJ @ $6.50

Insurance Put:
Feb $35 Put XTO-NG @ $1.40, no stop

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VLO $55.85 +3.54 - Valero Energy

Valero finally broke resistance at $54 and closed at a new three month high on Friday. No news and no change in play.

To see the last full commentary on this position click here: http://tinyurl.com/yest3l

Earnings: Oct 31st, +$2.42 vs $2.30

LEAP Position:
9/24/06 Position: 2009 $60 LEAP Call VHB-AL @ $7.70

Insurance Put:
Position: 9/25 Jan $45 Put VLO-MI @ $2.25, no stop

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PBR - $93.90 +3.40 - Petroleo Brasileiro

PBR rebounded about +$6 off last week's lows but still remains stuck under resistance at $95. No change in the play.

To see the last full commentary on this position click here: http://tinyurl.com/yest3l

Earnings: Nov 10th, +29%

LEAP Position:
9/08/06 Position: 2009 $100 LEAP Call VDW-AT @ $14.90

Insurance put:
9/11 January $70 PBR-MN @ $1.80, no stop

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DO - $80.59 +4.07 - Diamond Offshore

DO broke initial resistance at $78 and closed just over stronger resistance at $80. There was no news but the trend on DO is accelerating. No change in play.

To see the last full commentary on this position click here: http://tinyurl.com/yest3l

Earnings: Oct 27th. $1.19 vs $0.60 in YAQ

LEAP Position:
8/29/06 Position: 2009 $80 LEAP Call VCT-AP @ 14.20
Cost reduction: Oct $70 Put profit -3.15, cost now $11.05

Insurance Put:
10/08 Dec $60 Put DO-XL @ $2.40, no stop

Position closed:
10/03 October $70 put DO-VN @ $1.65, exit @ $4.80, +3.15

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CSX - $36.06 -0.16 - CSX Corp ** Stop Loss $35 **

NNot a good week for the transports with oil surging and the economy weakening. If we don't see some improvement soon I may exit this transport play. CSX is not impacted by a slower economy with much of its profits coming from energy and commodity transport from Canada. Unfortunately it is guilty by association with the transport sector. Set a stop at $35 and we will exit on any further weakness.

To see the last full commentary on this position click here: http://tinyurl.com/yest3l

Earnings schedule: Oct 17th, 54 cents, +50%

LEAP Position:
9/03/06 Position: 2009 $35 LEAP Call OBC-AG @ $4.90
11/17 Cost update - expired Nov $30 put +1.40 = $6.30

Insurance put:
9/11 November $30 Put CSX-WF @ $1.40, expired

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ATPG - $45.00 -1.32 - ATP Oil and Gas Corp

After a strong run from $35 to $47 ATPG rested for the entire week. They announced a deal to repurchase all their series A and B preferred stock for $325 million after drawing on their credit line to do so. This probably produced some confusion and it appears somebody is setting on $46 with a large quantity for sale. No change in play.

To see the last full commentary on this position click here: http://tinyurl.com/yest3l

OGIS Investment Conference on Oct 5th. http://tinyurl.com/y5jod2

Earnings schedule: N/A

LEAP Position:
8/20/06 Position: 2009 $40 LEAP Call VCL-AH @ $11.70

Insurance put:
9/06 Position Dec $35 PUT HKU-XG @ $1.50, stop at $30

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PTR - $128.10 +4.68 - Petrochina

Definitely no complaints here! PTR added to its prior weeks gains making it a +$12 move for the two week period. We were very patient with PTR, which we have held since May when we bought a dip to $116 that turned out to be the beginning of a crash instead. We have finally recovered all our losses and are profitable once again. I still believe this stock could be well over $150 before our 2008 LEAP comes due. No complaints and no change in play.

To see the last full commentary on this position click here: http://tinyurl.com/yest3l

Current recommendation: Buy under $110

Earnings: August 24th, $10.1 billion, +29%

LEAP Position:
5/14/06 Position: 2008 $120 LEAP Call LJC-AD @ $16.20
Cost adjustment: Close short Dec $115 call +1.30 = $17.50
Cost adjustment: Close long July $90 puts +3.00 = $20.50
Cost adjustment: Close long Sept $110 put -2.60 = $17.90

Insurance put: (9/11)
Position: December $100 Put PTR-XT @ $2.20, stop $90

Insurance put: (8/13)
Position closed:
Sept $110 Put PTR-UB @ $2.40, stop @ $106 @ $5.00, +2.60

Insurance combo: Closed
Short: Dec $115 Call PTR-LC @ $3.20, 6/13, exit $4.50, -1.30
Long: (2) July $90 Puts PTR-SR @ $3.70, 6/13, exit $0.70, -3.00

Insurance puts: (Closed 6/7)
Closed: June $105 PUT PTR-RA, @ $4.20 (5/22), exit 6/7 @ $4.30

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Non-Energy Positions
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PCU $54.18 + 1.07 - Southern Copper

PCU finally started moving higher after a two week consolidation on strike news and a dip in copper prices. The Freeport bid for Phelps Dodge put an end to copper price worries and PCU announced this week that the strike at Cerro Verde had ended. No change in play.

To see the initial commentary on this position click here:
http://tinyurl.com/y6qmvz

Breakdown triggered at $51 on 11/14/06

Position: JUNE $55 Call PCU-FK @ $3.80
(no leaps)

Insurance Put:
PCU-XW Dec $47.50 put only if PCU trades at $49.50


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CAT - $61.19 -1.68 - Caterpillar ** Stop loss $58 **

CAT crashed on Friday giving back all its gains from the prior week after the ISM suggested the economy was weaker than expected. This may be a rocky play as we await some positive economic news. No change in play.

To see the initial commentary on this position click here:
http://tinyurl.com/yy2ysv

Position:
10/22/06 JAN-2009 $70 LEAP Call VKT-AN @ $7.20

Insurance Put: none

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TEX - $55.98 -1.61 - Terex Corp

TEX, another ISM casualty, gave back almost exactly what it gained the prior week but remains very close to an all time high at $58. No news and no change in play.

To see the initial commentary on this position click here:
http://tinyurl.com/yy2ysv

Earnings: Oct 25th, $0.98 vs $0.51 in YAQ

Position:
10/23/06 Jan-2009 $60 LEAP VXQ-AL @ $10.90

Insurance Put:
10/23/06 Jan-$50 PUT TEX-MI only is TEX trades at $54.


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DHI - $26.59 +1.33 - DR Horton

DHI broke out to a new six month high after some positive news in the housing market and upgrades from BAC and JPM. Our 2009 LEAP is now in the money and we have a long time for housing to improve. No complaints and no change in play.

To see the last full commentary on this position click here: http://tinyurl.com/yest3l

Earnings: Nov 14th, 88 cents vs analysts est of 69 cents

LEAP Position:
9/24/06 Position: 2009 $25 LEAP Call VEI-AE @ $5.10
 

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