CRS Carpenter Tech

Today's most interesting stock is CRS Carpenter Tech (chart). The overall market is extended, so it is not the best time to be adding longs. However, the other side is that calling top is a poor percentage play.

Elsewhere, BIDU Baidu.com has a huge up move (chart). Bulls and bears continue to push and pull on AAPL and AMZN. These kind of glamour stocks attract so much attention that it makes them seem more risky. An analyst upgrade or downgrade, a hedge fund going long or short or unwinding their position, a major institution deciding to get in or out, can make muddy the waters for the small fish.

Holy cow, a runaway bull

I am surprised at the extraordinary strength of today's rally. AMZN Amazon is particularly impressive. Other stocks of note include CHRW which was recently called away from me. BNI is down after its earnings and would be a stock to buy today, if I had to buy something.

BA Boeing reported strong earnings, however, they did not raise their guidance. The 787 is on schedule and long term that is much more important than one earnings report.

Positions: C hedged, BA, FLR unhedged, and a lot of cash that is waiting to buy selected stocks on a pullback.

More big earnings: AMZN, PCAR, WHR

Three more stocks that I will watch after a big move on earnings:
AMZN Amazon, PCAR Paccar, WHR Whirlpool

BUCY Bucyrus, HAS Hasbro

Nice breakout in BUCY Bucyrus today (chart). It moves higher after CNH in the same industry, heavy machinery, mining supplies, reported strong earnings.

HAS Hasbro had a breakout from a shorter more extended base. Again, it is earnings that moves the stock. Hasbro benefits from Spiderman 3 coming out next month.

Earnings driven rally

I am a bit surprised by the strength into today's close. Some of the stocks in the news that I find interesting include GOOG, MHK, CAT, CAL.

My CHRW and GDX get called away today. CHRW for a breakeven loss, GDX for a breakeven gain. My roll down on GDX calls was within an hour of the low. That call buyer about tripled his money.

The leaves me with long positions in BA, FLR and a hedged position in C.

Three breakouts VMI CBE TXT

Three nice breakouts on earnings news VMI CBE TXT. All have flat bases.

GOOG Google out with good earnings after the close. UNP Union Pacific earnings boost the railroad sector, a sector already warm from Warren Buffett's announced positions.

Insiders keeping their stock

Mark Hulbert says that insiders are not selling into the current rally (article). Insiders tend to be early so this is good news as the market is near or at all time highs.

Technically, parts of the stock market look to be extended. However, other segments look like they may be ready for a sustained rally. In particular, the QQQQ has a nice tight base (chart).

Roll up and out C Citigroup calls

Roll up and out C Citigroup calls. Buy back the short Apr 50 calls, sell the May 52.5. The calls trade for less than it would cost to exit and get back in. The stock recently reported good earnings, so I roll over to the next month. C also goes ex-dividend in early May.

BA Boeing up nicely after an $5.4 billion order for new 787s is announced. The troubles at Airbus are another reason to believe Boeing will do well going forward.

Longs: BA, FLR
Hedged: C, CHRW, GDX, the last two are likely to be called away this Friday, unless I roll the calls up and out like I just did for C.

Tool time at BDK Black & Decker

Best of the bunch from today's news is BDK Black & Decker (chart). KO and JNJ also have good earnings, but those two don't look as promising to my eyes.

Citigroup C up on earnings

Citigroup C up on earnings, that's the good news. The bad news is my delta approaches zero because the short call is deep in the money. In plain English, it means I sold the call, and the call owner is making the money on the rise, not me. Such is the life of a covered call writer.

Volatility is back to pre-correction lows. This is not so good. The tax deadline passing also means the end of the IRA deadline contributions. So I am cautious, as almost always.

Positions: BA, FLR
Hedged: C, CHRW, GDX

MRK Merck and TM Toyota

Merck MRK up on good news (chart). Today's open at 49.28 looks like a decent entry point.

Toyota TM is nearing support at 120 (chart).

RIMM Research in Motion disappoints

RIMM posts disappointing earnings and is down 8% after hours.

AA Alcoa kicked off the earnings season with a good report.

Readers know that I often take positions on the basis of earnings news. The quarterly announcement is often what moves stocks. In the long term, I believe that earnings are the primary engine behind stock movement.

Buffett buying railroads (BNI)

Legendary investor Warren Buffett disclosed a large position in Burlington Northern BNI. Two unnamed rails are also in the buy in. Buffett is usually early. He has to be because of the large size of the buys and sells. BNI has a nice looking chart and looks like a good buy on a pullback. Often times, there is a significant pullback below Buffett's entry point. This would be the natural expectation if he was buying and then is finished buying.

Doubling down, and down, and down

Adams option blog has an entry about a trade gone wrong (link search for AMGN). It almost the opposite of the way I trade. In the blog, the trader buys some calls. When the stock moves against him, he buys more calls. Still more pain, more calls. So much capital is put into one bad position that it will take 12 consecutive winners of the size of the original AMGN position to get out of the hole that has been dug.

Sound money management is at least as important as any indicators to get in or out. A person that doubles down again and again will run out of luck. It is one thing to take a half position or quarter position, with the plan to buy the other part on further weakness. It is another to refuse to admit that you are wrong and lose big on one idea.

Windows closes after rally day

On Monday, I looked at rolling up and out on many of my hedged positions. Today's robust rally makes it that much more expensive, and less rewarding to do so.

Earnings will again be market moving news during the next few weeks with Best Buy BBY set to report tomorrow. Here is a list of a few more stock to watch.

Random Roger writes about two versions of a "lazy portfolio." Click on the link, then search for "lazy update."