Friday, April 28

Today we closed our Iron Condor in Amazon with a successful expiration. Last night in post-market trading and at open this morning it looked like the call option might execute and generate a loss, but for whatever reason the contract wasn’t called before the price dropped back down below strike. Someone must not have been at work yet – their loss. This situation evolved from a typical scenario with large tech companies like Amazon. Every time they publish earnings – even if they miss projections – the market floods due to excessive media coverage. Despite once again beating revenue projections, Amazon’s earnings report this time indicated a narrowing margin – no cause for celebration. Coupled with stiff resistance in India from Microsoft and Ebay, I can’t see any reason for Amazon’s P/E to be that far out of line.

In other portfolio news we initiated Schlumberger Limited to our portfolio after they took a 1% dip today. Our target price for that issue is just shy of consensus at $95. They ended the day down, but up from our acquisition price. We’re expecting some level of rally next week, but we have no plans to close that position in the short term.

Seadrill (SDRL) and XLE benefited from a bump in crude prices, pushing SDRL up 2.17% in today’s session. They’re still far from the target price, but it’s good to see such a strong reaction to a change in the underlying commodity.

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