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CAM $42.12 -1.87 Cameron *** Stopped $39 ***

CAM posted earnings of $126 million for the quarter compared to $96 million in Q4-06. This was a huge boost and easily beat street estimates. However their full year guidance for 2008 of $2.45 to $2.55 per share was below the $2.63 street consensus. CAM was knocked for a $6 loss at the open on Thursday to trigger our stop at $39. CAM recovered $5 of that loss by Friday's close and I would not hesitate to reenter it over $45.

Breakdown trigger: $42.50, hit 1/22

Position: 2009 $50 LEAP Call OKA-AJ @ $5.50, exit $3.90, -1.60

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PBR $113.06 +8.44 Petrobras *** Stop Loss $88 ***

No weakness in Petrobras with a very nice rebound to resistance at $115. Petrobras reported it was going to bid to win the assets in South America owned by Exxon under the Esso brand. Esso controls more than 7% of the Latin America fuel distribution market and Petrobras intends to be the high bidder.

Breakout trigger: $101.50, hit 1/24

Position: 2009 $110 LEAP Call XVQ-AB @ $12.70

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VLO $60.17 +5.58 Valero *** Stop Loss $47 ***

VLO reported strong earnings despite the lower crack spreads and proved once again why their decision to upgrade their refineries over the last few years to process heavy sour crude was a good idea. VLO beat street estimates of 64 cents with earnings of $1.02 and spiked $4 on the news. There was no sell off and with traders anticipating a high priced gasoline season it should move higher from here.

Breakdown trigger: $50.00, hit 1/23

Position: 2009 $60 LEAP Call VHB-AL @ $5.00

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FLS $96.40 +14.01 Flowservev *** Stop loss $74 ***

We got a near perfect entry on the prior week's dip at $77.50 and were rewarded with a +14 bounce after Flowserve raised guidance and was upgraded by Bear Stearns to a buy. No complaints here.

Breakdown trigger: $77.50, hit 1/22

Position: July $90 Call FLS-GR @ $6.00

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FLR $126.17 +5.22 - Fluor Corp

FLR rebounded strongly off the CAM induced drop at Thursday's open to post a nearly $5 gain on Friday alone. FLR appears ready to break resistance at $126 and head north. FLR announced a 25% increase of their dividend on Thursday.

Earnings schedule: Feb 28th

Breakdown trigger: $145 Hit 12/13

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

Remediation plan: 1/20
LONG: April $110 Put FLR-PB @ $9.20
SHORT: Jan $170 LEAP Put XOB-MN @ $58.40

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RIG $125.44 -1.67 - Transocean Inc

RIG was knocked for a loss on the CAM earnings but recovered most by Friday's close. Still two weeks before earnings and no other news.

Earnings schedule: Feb 20th

Breakdown trigger: Hit 12/4 @ $130

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

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JEC $80.22 +3.04 Jacobs Engineering Group *** Stop $70 ***

Another week of contract wins and JEC appears poised to break resistance at $80. No specific news worth repeating.

Earnings: Jan 22nd, +61%

Breakdown target: $80.00 Hit 11/12

Position: Jan-2009 $90 LEAP Call VJE-AR @ $10.40

Closed: APR 2008 $90 Call JEC-DR @ $6.50, exit 1/20 @ $3.10

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CLB $114.54 +1.89 Core Labs

No news, closed at the high for the week while we wait on earnings.

Earnings schedule: Feb 14th

Breakdown Trigger: $130 hit 11/12

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

Remediation addition:
Position: June $130 Call CLB-FF @ $6.10

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FWLT $71.80 +6.23 - Foster Wheeler

No specific news but the post split depression was very limited. Friday's close was a three-week high. I think FWLT is about to make its move.

Earnings schedule: Feb-26th

2:1 split on Jan-22nd.

Breakdown trigger: $67.50 hit 11/06 (post split)

Position: (2) 2009 $75 LEAP Call ZHF-AO @ $14.55

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XOM - $85.95 +2.01 Exxon Mobil *** Stop Loss $82.00 ***

How can you not like a company that earns $11 billion a quarter? No specific news other than earnings. Adding a stop loss just in case.

Breakdown trigger: $88 Hit 11/01

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

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NOV $62.69 -.88 - National Oilwell Varco

NOV lost ground on the CAM earnings but appears to be recovering. NOV earnings are Wednesday.

Earnings schedule: Feb 6th

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

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

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HP $40.32 +4.55 Helmerich & Payne *** Stop Loss $29.50 ***

HP beat street estimates of 94 cents with profits of $1.02. This was a new record for HP. HP also said it had contracts to construct and operate 11 new FLEX rigs. This brings to 94 the number of new build orders HP has gotten since March 2005. 80 have already been completed bringing the total in the HP fleet to 129. HP has a total fleet size of 167 U.S. land rigs and 27 international rigs and nine offshore platform rigs.

Earnings: Jan-31st $1.02

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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Non-Energy Positions
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SGR $58.84 +5.34 Shaw Group

Shaw completed its shareholder meeting without any material news but the share price closed at a new two week high on Friday. Support at $53 held and the next overhead test could be $65.

Breakdown trigger: $55 Hit Jan-16th

Position: 2009 $60 LEAP Call OWA-AL @ 11.50

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MOS $93.47 +2.07 - Mosaic Co

After an $11 rebound the prior week we should be happy with any follow on gain. MOS is going to present at the Goldman Sachs conference on Feb-12th. No complaints and no other news.

Breakdown trigger: $85 Hit Jan-10th

Position: 2010 $100 LEAP Call LXW-AT @ $24.20


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Covered LEAP Calls
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AAPL $133.75 +3.74 Apple Inc *** Covered LEAP Call ***

On Thursday I thought the weakness was over and we were about to see a rebound begin. On Friday sellers returned but in much less volume. I am still positive on Apple but I may be the only one.

Close the short 2009 $200 LEAP currently $9.40
Short the 2009 $150 LEAP Call currently $20.80

That will reduce our cost in AAPL as follows:

LONG AAPL @ $177.52 (Jan-14th open)
Closed $200 LEAP Short ($30.00 - 9.40 = gain +20.60)
Short $150 LEAP @ $20.80
AAPL cost basis $177.52 - $41.40 (20.60 + 20.80) = 136.12

When Apple starts to post a new positive trend we will do a put spread to recover some more money. First we wait for the trend.

Position:
Long: AAPL @ open of $177.52 (Jan-14th open)
Short: 2009 $200 LEAP Call OBR-AT @ $30.00
Breakeven: AAPL @ $136.12

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RIMM $92.24 +1.19 Research in Motion - Covered Call Stop Loss $80

Dead flat. No news other than the continuous stream of press releases on Blackberry developments from RIMM. It appears the whacking RIMM investors received knocked the life out of them. I see no reason to exit and we know how well RIMM can move once investors become motivated.

See the Jan-13th LEAPs newsletter for the description of the change in the options.

Alert entry 11/12 @ $102.60

Covered LEAP Call:

LONG RIMM @ $102.60
SHORT 2009 $110 LEAP Call VHO-AB @ $18.30 on 1/14/08

Closed:
SHORT 2009 $150 LEAP Call XTB-AJ @ $18.50, close $9.40 1/14
 

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