TOL ==> The Summer Solstice Winner

[aggredior]

You guys waste too much time with all this mumbo jumbo...it's EARNINGS EARNINGS EARNINGS that ultimately drive a stock price.

Your are right about earnings, but the chart reflects the market's opinion of those earnings. I think it was Livermore who said all the fundmentals are found in the chart. Since I haven't held a stock for longer than 20 days since January, I tend to focus on buy points, maybe too much so.

But who wants to get into a fundamental vs technical debate. Good luck on that trade.

[mrmarket]

Your are right about earnings, but the chart reflects the market's opinion of those earnings. I think it was Livermore who said all the fundmentals are found in the chart. Since I haven't held a stock for longer than 20 days since January, I tend to focus on buy points, maybe too much so.

But who wants to get into a fundamental vs technical debate. Good luck on that trade.

Yes, the chart reflects the market's opinion of the earnings...but when you know the fundamentals of a company's business model better than the market does, then you are smarter than the market. As a result, the information in the chart isn't as good as what you already know.

[skiracer]

NB,
The whole thing about the option is to have the option to either buy or sell the stock in question for a specific price some time period down the road. In the case of TOL an it's Sept. 100 put, which is the right to sell the stock at a specific price, Sept. 100 put or $100 per share, somewhere down the road, the put, 1 contract = 100 shares, was selling the day I mentioned it, Wednesday afternoon, at $6.60 per share or $660 for a 1/100 share contract. Buying the put contract means that you are bearish on the stock and are betting that it will go down rather than up. Buying the put contract gives you the right to sell the stock at the strike price it was when you bought it, Sept. 100 put, ($100) or to sell the contracts at the price they are selling for that day. Two important things drive the price of the option contract. The price of the stock and the time remaining on the contract or when the contract expires.
So on Thursday I bought a few of the put contracts in the morning a couple of hours after the open before noon when TOL was actually gapping up about .65 or so. This was driving the price of the put option down as the price of the option and price of the stock normally trend in opposite directions. The low price of the option on Thurs. was around 6.03 when the price of TOL was trending up. I bought 5 contracts, the right to sell 500 shares at the strike price of $100, at $6.20 per share or $620 per 100 share contract. 5 contracts x $620 = $3100 invested in the position.
I'm betting that the stock will go down. I'm not obligated to either buy or sell the stock. If the price trends up the price of the put will go down an if the price of the stock goes down the price of the put will go up. Today the stock fell 1.07 or so and the price of the put increased in value to close at $7.00 per share or $700 per contract. This is up $80 per contract ( $700 - 620 and commission) so a little less than $80 per contract or 5 contracts x $80 = $400 gain. If the price of the stock continues to go down the price of the put contract will increase more in value.
The second significant factor is the time element. As the contract moves closer to it's expiration date and the time element lessens each day this usually has some direct effect on the contract. Usually to lessen it in value.
So buying the put contracts doesn't obligate you in any fashion. If the stock goes down the put will increase in value. You will have to make some kind of a decision around it's expiration date or before to insure your gains if you have them or if the stock goes up then you can either sell the contracts for what they are worth or just let the contracts expire worthless and that's it.

[New-born baby]

Thank You, Ski

Ski,

Thank you for the explanation about how your are playing TOL's put options. I was thinking you were SELLING the put, obligating yourself to buy the stock at $100 per share.

You've done quite nicely for yourself already. Congratulations, and I wish you much continued success.

[Runner]

Here is my slop chart of TOL:

[New-born baby]

TOL the Firecracker

Here's three views on TOL:

The weekly:


TOL the daily:


TOL the daily with possible play:


Here's how I see TOL:
She's losing short term momentum. I think she is going to pull back to the $95 level for a day or two, and then bounce back up to the $102 level. She'll then pullback again to the $98-$100 level, before blasting higher. I think she's going to form an inverted shoulder/head/shoulder and move to at least $109 within six weeks. Just my guess.

[IIC]

You guys waste too much time with all this mumbo jumbo...it's EARNINGS EARNINGS EARNINGS that ultimately drive a stock price.

For the intermediate term and long term investor I agree. However, I believe that past earnings as indicated in the IBD EPS rank have little to do with future appreciation. So we are stuck with the analyst projections unless we can dig into a company to find out what is really going on and what it should lead to earnings wise...Doug(IIC)

[nwinvestor]

No Bubble in Seattle

Business & Technology: Thursday, July 07, 2005

Housing market sizzles, shows no sign of bubble
By Elizabeth Rhodes
Seattle Times staff reporter

Despite conjecture that the local housing market is a high-priced bubble ready to burst, key signs of weakening are nowhere to be seen, according to homes-sales figures released yesterday by the Northwest Multiple Listing Service.

When a bubble bursts, prices decline; the number of homes for sale grows; and it takes longer to sell them.

But here's what the Multiple Listing Service says happened in June: Compared with June 2004, prices jumped 13 percent in the 15-county region that the group covers. The number of homes and condominiums for sale fell 17.5 percent.

[mrmarket]

However, I believe that past earnings as indicated in the IBD EPS rank have little to do with future appreciation. So we are stuck with the analyst projections unless we can dig into a company to find out what is really going on and what it should lead to earnings wise...Doug(IIC)

I think that's what I did in my write up.

[skiracer]

Bailed on those Sept puts this am. Just barely escaped with a little profit on the trade. TOL looks strong today but still don't like the housing sector or TOL.

[ninner]

you dont have to like it or the housing boom but the market is showing it still does and that is all you should care about!!!!

[skiracer]

Well the markets liked the housing sector and TOL today. Yesterday was a different story and tomorrow will be another story.

[IIC]

I think that's what I did in my write up.

I know you do...I was just making a general statement for the benefit of whoever wanted to consider it...Best, Doug(IIC)

[mrmarket]

Looks like this 2:1 split has TOL off and rockin'

[ninner]

Yes TOL is up over 3%....keep it going!!!