Doctor Jack's Stock Medicine

[Lyehopper]

Great post, Spike. And Rob, you are a great guy, so please don't take any offense from anything I post. I am just kiddin' around with you when I talk about Martha, etc. But I really do think you'd be happier if you covered up that EBAY play with some options. I hate to mention . . . but I will. I warned our friend Jiesen about not taking MFLX long at $50. But look at MFLX now. And Jiesen is a great guy, and very sharp FA, too. But FA fails when your information doesn't match the INSIDE information.

Rockin'Rob.... PARL's FA was great @ $32.... No it was STELLAR!!!!.... I predicted $50 was forthcoming.... NBB said look for $19.... Spike warned that it would fall.... They never investigated the FA.... He and Spike only looked at the chart.... PARL sits at $18 right now (pre split value.... Actual price is $9)

[jcohen918]

Intc

Dr Jack and others who follow Intel,

A buddy of mine has been in the computers business for years and he came across this article about Intel's new products: http://hardware.slashdot.org/hardwar.../1831221.shtml


The Inquirer is reporting that the new Intel Core 2 processors Woodcrest and Conroe are suffering badly when running RAID 5 disk arrays, even when using non-Intel controllers. Can Intel afford to make a misstep now with even in the small subset of users running RAID 5 systems?"

On a side note, "raid 5 is what the biggest and baddest companies use to protect thier data at all costs."

[jcohen918]

Ebay

Could this article have significant proof that EBAY is distancing itself from Google before it is bought out by Yahoo! ???

http://yro.slashdot.org/yro/06/07/06/232209.shtml

[Jack Haddad]

Amd

Bought 1 block at 22.71

[Jack Haddad]

Nice trade, Jack!

Thanks, I was happy with TSO trades yesterday

[IIC]

Bought 1 block at 22.71

Good call...was watching it at 22.80 myself hoping it would flat base for 5-10 mins...I missed it...Doug(IIC)

[Jack Haddad]

I like that one, Jack. In fact, I like it so much that I followed suit, only in terms of lots rather than blocks. I bought at 27.48 and wrote the July 27.50 calls at 1.30.

Yes, Rob, EBAY has been ditched aggressively. The selling is overdone here.

[Jack Haddad]

Jack,
I love the way you post your trades. And I like the way you are making profits doing it, too. Great going, and I hope you'll keep it up.

Thank you.

[Jack Haddad]

Being that I am a newbie at this hedging by writing covered calls, what would be your recommendation as to how to proceed? The next strike price downward on the July options is 25.00. So if the price drops to a certain level, I should buy to close the contracts I wrote and then sell the 25's?

Rob, before you average down and roll your options into lowers strike prices, please allow the intrinsic value/decay value to take place first. Don't rush into rolling options because your underlying shares have gotten lower. Let some time expire and observe.

[Jack Haddad]

I mean no offense by this post: it is supposed to be helpful.
Yeah, let's say you accept my TA on my previous post. You think EBAY is going to work its way South, and it will not be called away at $27.50. Here is what I would do RIGHT NOW:

EBAY is currently $26.98 You paid $27.41.
1. You sold the $27.50 calls for $1.30
2. I would SELL the $25 strike at 2.55, which guarantees you a small profit of .14 per if EBAY is above $25 at expiration.
3.I would cover my $27.50 strike at $1.15, and that would give me .15 per share profit.

Net: $.29 per share. Beat losing $5 per share.

I would also kick myself for not buying a bulllish chart, and make a promise that I would never buy a chart that wasn't bullish in the future.

Never ever try to penny pinch options. Let the 1.30/contract decay and hedge your shares. If you bought at 27.41, your shares are hedged all the way down to 26.10

[Jack Haddad]

I don't know who "old Jack" is whom you refer to, but you guys who look at charts and nothing else crack me up. Do you know, for instance, that last quarter eBay's revenues were $1.4 BILLION dollars? 40% higher than the same quarter in '05? Do you know that new listings last quarter grew 33% over Q1 '05 to 575.4 million? Do you know that there are now about 193 million registered users? a 31% increase over Q1 last year? So ... what? Are people going to stop buying stuff on eBay? What's the likelihood of that happening anytime soon?

Hey, I know that the market can be irrational. It is my belief, though, that it's easier to take advantage of the market's irrationality by paying attention to fundamentals of a company that's selling pretty cheap, even if the chart looks bad. EBay is oversold, IMO. In fact, I'm really tempted to cover my July calls that I sold (The bid on 'em right now is 1.05) and just hold the stock.

They crack me up in the exact manner that strict technicians entertain trading software systems. These systems can never factor in market sentiment. Therefore, they yield a delayed response.

[Jack Haddad]

Bought 1 block at 22.71

Sold at 23.23

[New-born baby]

Jack

Never ever try to penny pinch options. Let the 1.30/contract decay and hedge your shares. If you bought at 27.41, your shares are hedged all the way down to 26.10

Jack,
I value your opinion. How would you handle this: Let's say that EBAY falls down at the rate of .35 per day for 10 days. Of course, we don't know in advance that EBAY is going to fall for sure. We can look at the chart and see what looks likely to happen. Now if one follows your strategy and lets the time decay the value of the option, you'd certainly lose money on the play. ON the other hand, because the chart looks very bearish, rolling the options guanantees a profit IF EBAY doesn't gap down. It would be my strategy to ensure a profit on a trade I should not have taken, rather than risk losing money on an red chart.

Your counter point is welcome. Like I said, I value your opinion.

[Jack Haddad]

Dr Jack and others who follow Intel,

A buddy of mine has been in the computers business for years and he came across this article about Intel's new products: http://hardware.slashdot.org/hardwar.../1831221.shtml


The Inquirer is reporting that the new Intel Core 2 processors Woodcrest and Conroe are suffering badly when running RAID 5 disk arrays, even when using non-Intel controllers. Can Intel afford to make a misstep now with even in the small subset of users running RAID 5 systems?"

On a side note, "raid 5 is what the biggest and baddest companies use to protect thier data at all costs."

Jordan, I have to seriously question the integrity and validity of this source. Woodcrest reviews from industry analysts and experts has been nothing but spectacular. I was physically there in NY last week when they ran Pixar Software (complicated software) on AMD's Opteron and INTC's Woodcrest side by side. INTC's Woodcrest finished the task 24% faster. I literally saw people's jaw drop in an awe! Seeing is believing!

[Jack Haddad]

Jack,
I value your opinion. How would you handle this: Let's say that EBAY falls down at the rate of .35 per day for 10 days. Of course, we don't know in advance that EBAY is going to fall for sure. We can look at the chart and see what looks likely to happen. Now if one follows your strategy and lets the time decay the value of the option, you'd certainly lose money on the play. ON the other hand, because the chart looks very bearish, rolling the options guanantees a profit IF EBAY doesn't gap down. It would be my strategy to ensure a profit on a trade I should not have taken, rather than risk losing money on an red chart.

Your counter point is welcome. Like I said, I value your opinion.

If youre going to lower your option strike to 25 just becuase the shares may gap down, then covered calls options defy the purpose here. If youre anticipating a drop, youre better off setting a stop loss limit (which I don't). The beauty of options is to hedge shares by realizing as much intrinsic/decay value of the option.