FRIDAY MAY 23 THOUGHTS

Yesterday in this space, I discussed the case of CabelTel (GBR) which has changed their business several times in order to be involved in the hot trend of the day. They were most recently a real estate entity, if you recall, but now it has become an 'oil exploration' company. You'll note GBR was one of the biggest gainers in yesterday's trading. It is up more in today's pre-market trading; in fact, the stock has now more than doubled since Wednesday's close.

There have always been companies like this. Another that comes to mind is Zapata (ZAP). ZAP originally can trace its origins to Zapata Oil; it was an offshore driller with a fascinating history for any of you who want to do more research on it. Sticking on point, however, the company continued to engage in natural gas and oil exploration, but focused upon its fish oil business from 1994 to 1998. Well, in late 1998, Zapata decided to get out of the fish oil business and go into the Internet media business using the name "Zap.Com." The stock went from 10 to 25 in two days. A fish oil company that became an Internet media company. Yeah. The main point: this happened in the midst of the NASDAQ bubble. The NASDAQ doubled from the day that ZAP made this announcement. The moral of the story is that just because oil has exploded and we're all trying to pick tops, the fact of the matter is that the likelihood of oil topping out in the immediate future is less likely than seeing more and more crazy things like this happen. So, as I type things on this blog like PDO and MXC for certain day trades...yes, they can be dangerous but take it inthe context that plays like the ones I mentioned yesterday are in fact safer and more realistic than trades in much more reputable entities.

Overnight, the Asian markets were mixed, Europe was down, oil is up, the dollar is down, and metals are up. There still seems to be a somewhat lukewarm bid under the market as stocks like AAPL are up a lot in the early going. I think most of what will appen today will happen in the first couple of hours as people look to cruise to the Hamptons. I do not look for a lot of movement as oil is rangebound in the immediate-term and people have things like barbecues on their mind rather than stock symbols.

CA- missed for the quarter, but beat for the year. Nothing definitve here except the familiar checkmark pattern, i.e. if it opens at say 25.50, falls to 25.25, you eant to be buying that opening price if it gets backto 25.50 i na good market.



VRGY-good numbers. If it opens around 24ish and fails to really rally, it is a short barring the whole open 24, fall to 23.75, buy 24 type pattern...stock should be up more than it is.



SINO- was an IPO Wednesday..dry bulk shipper in China. 2 for 2. Debuted 7.75 on the IPO...closed 21.45 yesterday. if it opens higher and fails to hold strength and oil is down (even if oil is up a little), it is a short around unchanged if not a little before. Will probably open a lot higher...for perspective, this morning, it traded to the mid 25's. At that point, a persistent seller kept selling ("relaoding") on the offer. The stock trickled down with the relaoder coming down with it, i.e. any buyer bought from that selle and he did not move his offer meaning he had mroe stock to sell. Whe it was 25 to 25.10 (low of immediate-term move) with some offers above 10, I shorted 25.01. There were no bids underneath so a few scared longs paniced...I covered my stock at 24. That is the type of trade I am looking for in this thing- both long and short side.



EAC- put itself up for sale. Has had hugr run up and closed near yesterday's low. If it opens higher, it is a short thr unch and probably again around 65.75.



SBP- way up...if it opens unch/slightly lower and breaks unch, it is a buy in the 13 neighborhood.



SOLF- has fallen from 31.50 pre-open Wednesday to 20.65 on the close yesterday. If it opens lower and solars rally, there will likely be rampant short covering in this issue.

Brokers- trading uniformly lower in early trading...will watch as barometer for later.

GNK/EXM/DRYS- if they open higher and go negative and then go back into positive ground ,they are buys. Dry bulk shippers have been hit hard as they have all recently reported earnings, but the mentality was "buy the rumor, sell the news." At this point, ahead of a holiday weekend, some short covering may be in order here.

TLB- The Talbot's retailer looks to be in trouble. Numberous times, it has traded to the 7 level and failed to breach it. Ahead of a holiday, it may be the day it happens as there won't be a lot of people around so moves become easier...look to short 7.

Good luck and have a wonderful holiday.