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BHI $79.31 -0.30 - Baker Hughes *** New Stop Loss $77 ***

Still holding at support despite an upgrade by Wachovia to an outperform. No change.

01/04 North American active rig count rose despite a drop of -30 in the U.S. but Canada rebounded by +196 to push the total 2,093

Earnings schedule: Jan 30th

Breakdown target: $80 Hit 12/17

Position: 2009 $90 LEAP Call VBH-AR @ $8.40

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DNR $29.23 -1.93 - Denbury Resources

DNR eased off its highs and is approaching support on no news. No change in play.

Breakdown trigger: $53, post split $26.50 hit 12/17

Position: June $30 Call DNR-FF @ $2.25

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VLO $59.62 -4.52 - Valero Energy *** Stop Loss $58 ***

Valero continued to fall despite some strengthening in refining margins. This is just a factor of rotation out of the oil sector by investors afraid of a bear market. The whining over narrow refining margins over the prior week did not help. In eight days Valero fell $12 on no change in the fundamentals. I hate to put a stop on it after such a big drop but long-term support at $60 is in danger of breaking.

Entry Dec-16th @ $66.65

Position: $70 LEAP Call VHB-AN @ $9.20

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FLR $143.79 -3.47 - Fluor Corp

A sharp drop at the beginning of the week was overcome to bring Fluor back to resistance at $145. Several new contract awarded and we are just waiting for the bear market to go away.

Breakdown trigger: $145 Hit 12/13

Position: 2009 $160 LEAP Call XOB-AL @ $22.30

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RIG $136.39 -6.07 - Transocean Inc

The profit taking finally arrives but we are still well above support at $130. RIG topped the list of stocks being bought on weakness on Thursday.

Breakdown trigger: Hit 12/4 @ $130

Position: 2009 $140 LEAP Call VOI-AH @ $15.80

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JEC $88.71 -7.90 Jacobs Engineering Group

No specific news but profit taking knocked nearly $20 off JEC over the last two weeks. Much of that has been recovered when traders bought the dip to support at the 100-day average at $82.

No LEAPS

Breakdown target: $80.00 Hit 11/12

Position: APR 2008 $90 Call JEC-DR @ $6.50

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COP $83.04 -3.52 Conoco Phillips *** Stop Loss $81.00 ***

Conoco's appears to be in the lead to develop a multibillion-gas project in the UAE. That is good since Alaska slammed their proposal to develop the North Slope gas field as grossly inadequate. Holding just over support and the stop. Support is $82, stop $81.

Breakdown target: $80 hit 11/12

Position: 2009 $90 LEAP Call OJP-AR @ $8.60

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CNQ $70.91 -3.33 Canadian Natural Resources

No news and CNQ eased off its 2-month high to just above support of $69. No complaints.

Entry 11/29: $66

Position 11/29: 2009 $90 LEAP Call OKR-AR @ $6.50

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CLB $125.09 -6.29 Core Labs

No news, lost last week's gains and holding back at support.

Breakdown Trigger: $130 11/12

Position: 2009 $140 LEAP Call ZYM-AH @ $21.30

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PBR $111.21 +1.32 Petrobras *** Stop Loss $97 ***

Petrobras was the best performer for the week other than the rebound in Mosaic. Now only about $7 off its historic highs so no real loss here. No specific news.

LEAPs Alert Entry 11/12 @ $95

Position: 2009 $90 LEAP Call VDW-AR @ $17.10

Position: 2009 $110 LEAP Call XVQ-AB @ $10.00

Alert on 11/2 recommending an immediate entry into the $110 LEAP. The prior recommendation had been calling for an entry into the $90 LEAP on a dip to $80. The correct LEAP for the current position is the $110 LEAP.

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FWLT $141.58 -18.11 - Foster Wheeler

Foster has been beaten severely by profit taking and has been driven back to strong support at the 100-day average. With the 2:1 split approved by the shareholders for the 22nd we could see some fireworks begin to develop next week assuming the market cooperates.

Shareholders approved 2:1 split for Jan-22nd.

Breakdown trigger: $135 hit 11/06

Position: 2009 $150 LEAP Call ZHF-AW @ $29.10

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XOM - $90.30 -1.78 Exxon Mobil

Back to the 100-day average and support but only about $5 off its highs. No specific news of note.

Breakdown trigger: $88 Hit 11/01

Position: 2009 $100 LEAP Call ODU-AT @ $7.90

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CAM - $48.73 -1.64 Cameron International *** Stop Loss $44 ***

Still holding at resistance at $50 after the 2:1 split the prior week. No news.

Earnings schedule: Jan-31st

Breakdown target: $95 Hit 10/30 (47.50 post split)

Position: Post split (2) 2009 $50 LEAP Call OKA-AJ @ $9

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SLB $94.01 -3.99 - Schlumberger *** Stop Loss $87 ***

No specific news but SLB held its gains until Friday when the drop in oil and the markets knocked $3 off the price. Still well above support at $90.

Earnings schedule: Jan-18th

Breakdown target: $95.00 hit Oct-22nd

Position: 2009 $100 LEAP Call VWY-AT @ $15.60

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CVX $90.67 -2.68 - Chevron

Chevron did better than Conoco and pre-warned of higher than expected profits primarily from their exploration and production business. Still refining margins were less than expected. Despite the stronger than expected guidance upgrade Chevron declined a couple bucks but remains above the 100-day at $90.

Earning schedule: Feb-1st.

Breakdown trigger: $87 hit Oct-22nd

Position: 2009 $100 LEAP Call VCH-AT @ $6.40

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NOV $69.83 -4.48 - National Oilwell Varco

Same story as the first dozen positions. Profit taking on falling oil prices and a decline back to the 100-day average as support. No specific news.

Earnings schedule: Feb 6th

Breakout Trigger: $80, hit 10/11/07

Position: 2008 May $90 Call NON-ER @ $7.20

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MDR - $53.80 -4.20 McDermott Intl *** Stop Loss $45 ***

Support at $58 finally cracked for a $7 intraweek drop but the 100-day returned as support. No specific news.

Earnings: Nov 8th, +37%

Breakout trigger: $53, hit 9/20

Position: 2009 $60 LEAP Call OYZ-AL @ $9.00

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CHK $39.52 +.20 Chesapeake Energy

CHK is stuck in neutral and given the market last week that is not a bad place to be. The prior week CHK lost 21 cents and gained it back this week. That is actually very positive in light of the big losses elsewhere in the energy sector. CHK said it bought 8,600 more acres in the Barnett Shale gas field.

Earnings: Nov 7th -34%, beat by 3 cents.

Position: 2010 $35 LEAP Call WZY-AG @ $6.60
10/28 Price update: Expired Oct Put +90 cents, $7.50

Insurance put:
Oct $30 Put CHK-VF @ 90 cents. Expired

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HP $37.95 -2.16 Helmerich & Payne *** Stop Loss $29.50 ***

Continued low volatility and positive on Friday. Still holding the high ground on no news and no tax selling. I am still surprised.

Earnings: Nov-15th, +18%, beat by +6 cents at 93 cents

Position: Jan 2009 $35 LEAP Call ZQA-AG @ $4.50

Insurance put:
Position: Nov $30 HP-WF. @ .50, Stop $28.50

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BHP - $67.69 -1.60 BHP Billiton ** Stop Loss $65.00 **

BHP continues to move sideways as we await some resolution of the Rio Tinto offer. Still no news on Rio Tinto but time is running short.

Breakdown target: $55 hit 8/15/07

Position: 2010 $70 LEAP Call LPH-AN @ $9.00


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Non-Energy Positions
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MTW $40.01 -4.44 Manitowoc *** Stop Loss $37 ***

The pullback the prior week to give us our entry at $45 continued to fall with support appearing at $40 and the 200-day average. I am adding a stop just in case the slide continues.

Breakdown trigger: $45 Hit 01/04

Position: 2009 $50 LEAP Call VMT-AJ @ $7.45


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Covered LEAP Calls
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RIMM $93.70 -9.65 Research in Motion - Covered Call Stop Loss $77

Major pain and major change in this play. RIMM has declined below the $100 support and could decline further if the profit taking and market weakness continues.

Buy back the short 2009 $150 LEAP XTB-AJ at ask $9.40 on Monday.
Sell the 2009 $110 LEAP VHO-AB at bid of $18.30 on Monday.

That will produce a profit of $9.10 on the $150 LEAP and offset the $8.90 drop in the stock price from when we entered the play.

By selling the $110 LEAP @ $18.30 we reduce our cost in RIMM to $84.30. If RIMM rebounds back over $110 then we have a $25.70 profit at expiration. If RIMM continues to fall I am going to set a stop loss at $77 to close the play.

Alert entry 11/12 @ $102.60

Covered LEAP Call:

LONG RIMM @ $102.60
SHORT 2009 $150 LEAP Call XTB-AJ @ $18.50, close $9.40 1/14
SHORT 2009 $110 LEAP Call VHO-AB @ $18.30 on 1/14/08

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ETFC $3.08 -0.15 E*Trade Financial *** CLOSE Covered Call ***

Rumors of cash drains at E*Trade have soured my outlook on this position. There are rumors of serious problems caused by this drain and we could be looking at a take under much like the Countrywide deal where there is little premium on any takeout. There is not enough profit potential here and the risks are mounting.

LONG: ETFC @ $4.13, exit $3.10, -1.03
SHORT: Jan-2009 $5 LEAP Call OYN-AA @ $1.45, exit $0.75, +.70
Net on trade -.33 cents.

Profit if called: Premium 1.45 + appreciation .87 = $2.32
Cost of entry: $4.13 - 1.45 or $2.68
Profit = $2.32 / $2.68 or 86%
 

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