SLB and RIG... Basically OIH

July 9th SLB Close: 97.23 RIG Close: 144.32

Today SLB 101.79 RIG 147.56

Oil did hit an all time high as I expected. Once again the threat of war in Africa somewhere, Iran talking trash and the fall of the dollar as Fannie & Freddie TANK provided enough reason for oil to reverse hard. I love it.

The broader market has really dragged my picks down but have provided some reliable trades intra day. On down days these stocks were brought down only to rally back late in the day. On up days these stock rally hard in the morning only to reverse handily around 10-1030. Look at Rig intraday today. Sell some calls as it starts to reverse with the market and and ever more reliable trade has been to wait for a near intraday bottom and ride the reverse when oil is up.

By the way I took some profit today and Friday. A nice 75% return on my options bought three days before on SLB (August 100 Calls bought near the low on 7/8/08). Took some more profit today at the high of the day. SLB has not trended as well as RIG has so I don't sell against it to protect "paper profits," I instead choose to take the cash and run.

Don't get me wrong I believe we have more rally in us, but with RIG and SLB intraday price ranging between 4 or 5 dollars a little extra cash to pump into my core position when these stocks are brought down by S&P futures is priceless and good trading.

At the end of the day the trade that has been working is sell on the pop and buy on the drop.

Can't wait for my Birthday... July 19th the day SLB blows earnings away.

Happy Trading and Wealth building,


The Rich Engineer