Market Moves
In brief, I cleared out the oil options play that was heading in the wrong direction, as initiated in the synthetic options play a few weeks ago (here). Fortunately, oil dipped back below $125 per barrel and I was able to buy back the naked calls for net neutral outcome, while still holding the USO 104 contracts long for May expiry. Banking on a short term reversal in the decline of the US dollar and some of the mania surrounding oil of late, I opened a new put position in USO for June expiry. My thinking is that if we have a short term spike due to say, continued interruptions in Nigeria or another pipeline explosion, I can exercise the May 104's. If oil continues to head south (as it should from a fundamentals perspective IMO), I will be in the money on the June contracts.
I also wanted to highlight some notable market news from today:
Goldman Sachs sees 'exceptional value' in Russia
The article's here, but the gist of it is that Goldman Slacks (just kidding, they're pretty much the only guys who got this subprime thing right this cycle) foresees a major advance in Russian equities given mispricing or underestimation of the benefit of oil revenues and an impending tax break and the trickle down effect. Aside from the obvious Lukoil plays and some other smaller outfits listed, they also cite Vimplecom and Wimm-Bill-Dann, which are current holdings in the Everyday Finance portfolio (the former in tradition and latter in IRA). They have performed quite well and I intend on holding for this projected runup. I like Eastern Europe in general and also recommend CEDC and CETV, which were not mentioned in the article, but highlighted in my Interational Hotties post almost a year ago.
Earthquake in China Kills Thousands; Mild Market Impact
Aside from the unfortunate loss of life, including many children in a school in a central province in China, the earthquake had only a modest impact on the market, resulting in a decline of less than 1% as of the timing of this post. In China, I posted recently that I was eyeing VISN and JRJC, each of which were up pretty nicely in Monday trading. I currently have no position in either and will potentially purchase on the next pullback.
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