[Weekend Summary]
Dear Member:
I entered two positions this week. I bought the Jan '08 10 calls on Micron (MU) and the stock has since continued in its uptrend gaining 30 cents for the week. Since I bought deep in the money calls, the increase in stock value adds to the intrinsic value of my LEAPS.
Yesterday, I got into a bullish put spread by selling the Apr 80 puts and buying the Apr 75 puts on Diamond Offshore Drilling for a net credit before commissions of $1.20 a share. DO is still above 83 and I get to keep the credit if the stock stays above 80 until expiration (unless I make some adjustment(s)). That would be a 31.5% return on risk before commissions for a month and a day.
I closed one position during the week when I sold the put side of my Jun 70 straddle on Cardinal Health (CAH). I kept the Jun 70 calls since the stock is still in an uptrend. It gained $2.42 a share for the week.
The only neutral news is that not much is happening with the straddles on Burlington Resources (BR) and Morgan Stanley (MS) since they expire in August and July respectively, there is plenty of time for a move and/or a spike in volatility. The tech sector SPYDER, XLK, was up 39 cents for the week, but is now bumping along an area of resistance.
You may remember that I closed my short leg on BBH for a handy profit last week. I held onto the Jan '07 200 calls which were aided by a pleasant little $7.21 move up in BBH this week.
I hold a long term bullish calls spread on SPY. SPY moved up $2.03 for the week, but is showing a suggestion of a reversal on the daily candlestick chart.
Both the Dow 30 and the SP-500 have broken above critical areas. The Dow has climbed steadily from near 10,900 to 11,279. The SP-500 broke out above the 1300 level. Each could do a little retracement. The Nasdaq has traded in a range between 2240 and 2300 and failed to pop above resistance again this week.
Overall I am bullish, but with some expectation that there may be a near term retracement.
Our weather reports suggest the possibility of heavy snow Sunday and Monday. Hope your weather will be more pleasant. Enjoy your weekend and thank you for subscribing.
Bill Kraft
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