Option Letter Daily

I am 92% invested in stocks as of Friday, May 26.  I am feeling that the current market has been moving upward at a slow but constant pace and I don’t see this subsiding in the short term.  While I do expect a few down moves short term, I am solidly into a fully invested mode. 

Let’s review Aflac (AFL), and the duck.  Not only do I like the commercials, I think the stock is pretty sound too. The value within the industry has caused me to look into a few sound plays there.  Review of AFL came about when I looked into Allstate (ALL) last week.  Both of these companies have exhibited sound management concepts and have good basis for their company projections.  The stock provides me the ability to put together some nice covered call positions.  They should be a great complement to the ALL moves from the past week. 

Vonage (VG) has battled everything from identity problems through imaginary future industry pressure.  All this in a category that is still attempting to see just where, and what, it is.  Let’s face it, the company has not had the best of luck with many of its previous attempts to shake free from suspicion.  My position lost some value this week.  I have yet to see exactly where this fits within my portfolio.  In the short term, I think the hits to the downside are going to be magnified.  But the long-term thinking shows that I need to be holding this as it is an upward move candidate.  I’ll decide by the weekend where it should fit.  I do know that it is not a seller. 

Wal-Mart (WMT) is now in the portfolio and supporting a solid position for calls.  I am thinking that I’ll be increasing the holding here over the next six months also.  As more and more of the Asian expansion goals start to materialize, the company will provide for an even larger share of the world marketplace.  As a matter of fact, the mind is settled.  There will be more WMT in the portfolio by the end of the week.  The only question now is, will I be really bullish? 

I thought the positions in Toro Corporation (TTC), Valero (VLO) and Exxon (XOM) might be stopped out while the market tested the downside.  They held their own and are still in the portfolio.  XOM will get some covered calls this week as I think it might be flattening out a bit.  The same thing for TTC.  I am not sure about VLO as of yet though.  I believe it will head further upward.  I’ll make a final decision by the Friday. 

After a little further reviewing, I have taken a position in both Motorola (MOT) and Allstate (ALL).  I anticipate that I will place some calls in line by Friday also.  The short positions in Toll Brothers (TOL), Applied Materials (AMAT) and Hovnanian (HOV) will all be rolled over as they mature for another month at least.

My positions in Chipotle Mexican Grill (CMG), Boeing (BA) and CSX Corporation (CSX) have proven to be some of the best investments that I have made in a long while.  All three of these positions will be increased by the end of the week.  With this investment, I’ll have about as close to 100% of my cash into the market as possible.  I’ll be adding some money to the account this before the end of the quarter to be able to take advantage of any additional positions.  I am sure there are more great plays on the horizon. 

CanyonOlogy Trading Servers Update

Well the systems are now fully functional.  I’ll spend more time installing the new upgraded video cards all the way around.  The servers are now fully accessible from the laptops also.  There is over a terabyte of open storage space available also.  I’ll be recording some of the online data feed this week so that I can perform some out-of-market time testing for some of my software products that require streaming data to operate. 

Having the servers have afforded me a lot of ability to do some unique things.  Creating a streaming server is one of the short-term goals.  Having researched how the data flows into the software, I now need to hook up my own stream so as to provide off hours testing.  Yep, I’m looking at being able to further enhance my software training abilities by being able to run a market simulation with many software products during off hours. 

I’ve developed three possible trading profiles for CoolTrade.  I’ll be encoding them into the software this week to test their viability.  This software product strikes me as being a “Best In Class” offering.  I’ll be sharing the live test results with you shortly.  Having trained people in setting up trading platforms and the software, this one seems headed for a lot of glowing reviews from me. 

The Telechart 2005 software product has been installed and I’ll be contacting the company about the product review early this week.  I have used it in the past, but it has been upgraded since.  I’ll be exploring its new capabilities and offerings this week. 

The Wizetrade product has been installed also.  I used it this week to verify my hold postures on my portfolio.  I am satisfied with the current screens and I’ll be expanding on its abilities within the next month.

Moses Harris is President of CanyonOlogy Trading, a trading and technology firm.

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