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Stops and 900 Point Swings

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Dropped Plays


IO - ION Geophysical *** Stopped ***

DRQ - Dril-Quip *** Stopped ***

BAC - Bank of America *** Stopped ***

XLF - Financial ETF *** Stopped ***


Energy Play Updates


IO $3.91 -1.35 - ION Geophysical *** Stopped ***

ION never really recovered from the post earnings drop started back on the 4th and dipped below our stop of $4 on Wednesday. There was no specific news and the Thursday rebound was anemic.

Breakout trigger: $7.00, hit Nov 4th

Position: 2010 $7.50 LEAP Call LAC-AU @ $2.15, exit $0.90, 11/12


HK $16.50 -1.08 - Petrohawk Energy

Petrohawk had a lot of good press for the week with Jerry Castellini singling it out for praise on CNBC on Thursday. HK responded with a +17% gain for the day and well off the $13.75 lows.

Breakdown trigger: $16, hit 11/6

Position: MARCH $20 Call HK-CD, $2.85
(no leaps)


XCO $7.05 -0.96 - EXCO Resources

After a dreadful two-day decline on Wed/Thr XCO rebounded +24% into Thursday's close plus another 15% it was in the hole at Thursday's low. It was a miraculous recovery!

Breakdown trigger: $7, hit 11/6

Position: JUN $12.50 Call XCO-FV, $1.25


DRQ $18.51 -4.49 - Dril-Quip *** Stopped ***

DRQ declined all week and I was actually glad to see it stop out. DRQ never recovered from the earnings report on the 10th and the slight earnings miss.

Breakdown trigger: $22, hit 11/7

Position: JUN $30 Call DRQ-FF, $3.40, exit 11/13 $1.35


MOS $32.47 -4.02 - Mosaic

No specific news as Mosaic traded with the market. Support at $30.

Breakdown trigger: $35, hit 11/6

Position: 2010 $50 LEAP Call LXW-AJ, $7.10


DWSN $20.30 -2.13 - Dawson Geophysical

DWSN had no specific news and traded with the market. DWSN said its order book was full and backlogged through 2009. DWSN is the leading provider of seismic services in the continental USA.

Breakdown trigger: $22.50, 11/06

Position: MAR $30 Call DVQ-CF, $2.05


BUCY $25.18 +2.43 - Bucyrus International

BUCY traded with the market but rallied late in the week on receiving an order for a $200 million Model 8750 Dragline. BUCY was the best performer for the entire portfolio.

Breakout trigger: $28.50, 11/4

Position: 2010 $40 LEAP Call YHB-AH, $5.40


DIG $30.42 -$3.16 Proshares Ultra Oil & Gas ETF

A monster drop on Wed/Thr as oil moved under $55 but recovered most of the loss until just before the close on Friday. DIG is hostage to crude so expect volatility.

ETF Info:

Ultra Oil & Gas ProShares seeks daily investment results, before fees and expenses, that correspond to twice (200%) the daily performance of the Dow Jones U.S. Oil & Gas Index.

Position: March $50 Call DPB-CX currently $5.00


NE $26.89 -2.20 - Noble

No news, market weakness only. Support at $26, stop $23. No change in play.

Earnings Oct 22nd, $1.43 per share up from $1.18 and est of $1.33

Breakdown Trigger: $35, hit 10.6

Position: 2010 $40 LEAP Call YVJ-AJ @ $5.20


NOV $25.81 -2.14 - National Oilwell

No news, market weakness only. Stop at $20, no change in play.

Earnings: Oct-23rd $1.44, +28% compared to analyst est of $1.31

Breakdown trigger: $28.50, hit 10/8

Position: May 2009 $40 Call NOV-EH @ $6.00


PBR $21.45 -$5.32 - Petrobras

Petrobras reported record earnings on Wednesday and was promptly downgraded by Credit Suisse. The analyst questioned Petrobras ability to fund the build out of its new finds with oil under $60. Duh, let's see. $500 billion in oil waiting to be drilled and you need $25-$30 billion to get started? Give me a break. Support at $20, stop at $18.

11/12 $1.40 per share record.

Breakdown trigger: $28.50, hit 10/6

Position: 2010 $40 LEAP Call YMO-AH @ $7.00


PDE $15.68 -$1.84 - Pride

Zacks reiterated a buy rating after the analyst presentation on the 10th. $10 billion backlog. Fleet utilization was 98%.

Earnings: Oct 30th, $1.09 vs .67 Q3-07 and est of $1.03

Breakdown trigger: $20, hit 10/6

Position: 2010 $25 LEAP Call YAD-AE @ $5.00


RIG $70.89 -$6.22 - Transocean

Transocean traded with the market losing $10 on the Wednesday drop but recovering into the weekend. No news.

Earnings schedule: Nov-5th

Breakdown trigger: $80, hit 10/6

Position: 2010 $100 LEAP Call YDR-AZ @ 13.40


Non-Energy Positions


UWM $18.06 -4.59 - Russell 2000 Proshares Ultra ETF

Our stop at $17 was hit on Thursday but I sent an immediate email to reenter the position. I believed the retest of the lows was going to work. By Friday's close I was not so sure. I am going to reset the stop at $16 and if we get hit we will be out.

I am still expecting a strong move higher over the next three months so we have plenty of time to watch this position. If the Russell moves back to 700 the UWM should hit $50. The dollar we lost on the stop is chump change compared to our potential profit.

ETF Info:

Ultra Russell2000 ProShares seeks daily investment results, before fees and expenses, that correspond to twice (200%) the daily performance of the Russell 2000 Index.

Recommended 10/23 at $19.94 on the UWM
Stopped at $18 on 10/28 ($2.90, -$1.10)
Reentered at $20.50 11/29 open ($4.40)
Stopped at $17 on 11/13 ($2.90, -$1.50)
Reentered at $17.72 11/13 email ($3.10)

Position: UWM $25 April Call Option ULX-DY


ATI $21.20 -$3.08 - Allegheny Technologies

Same story, different stock. Market weakness blunted last week's gains. No specific news. Stop $18

Earnings: 10/22 -26%, $1.45 vs $1.88 year ago, $1.44 est

Breakout trigger: $26, hit 10/13

Position: 2010 $40 LEAP Call YFQ-AW @ $3.60


BAC $16.42 -$4.07 - Bank of America *** Stopped ***

Continued selling in financials is crushing even the good stocks.

Earnings: Oct 6th @ 15 cents

Entered: Oct 13th @ $20.87

Position: 2010 $25 LEAP Call WBA-AE @ $5.90, 11/13 $2.15


STLD $8.12 -1.40 Steel Dynamics

Support at $7.50, no news. Stop $6.00

Recommended 11/2 @ $11.92

Position: 2010 $15 LEAP Call WAF-AC currently $3.40


JPM $34.47 -$3.28 - JP Morgan

No specific news. Still waiting on the bailouts to kick in and revive the financial sector. Stop $32.

Earnings: Oct 15th @ 11 cents

Breakdown trigger: $40. Hit 10/6

Position: 2010 $50 LEAP Call WJP-AJ @ $6.00


XLF $12.73 $-1.49 - Financial SPDR *** Stopped ***

Continued selling in financials too much for the sector ETF.

Breakdown trigger: $17, hit 10/6

Position: 2010 $20 LEAP Call WFS-AT @ $3.00, 11/13 $1.08

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