Chemical Brothers

I received my entry point yesterday afternoon in Gold and it appears that was lucky as the metal is already running again. I have enough of a position now that I feel I can be more selective and wait for market to come to me, but it could run quickly now and I may be forced to commit more capital anyways.

One trade that is coming to me - falling in my lap actually (have to be suspicious) is Dow Chemical (DOW). This stock just set a new 52-week low today at $40.40 and is being dumped on because of fears of higher energy prices which will affects its cost structures and hurts its earnings. Current consensus EPS for 2005 is around $4.36 and for 2006 at $5.53. That would put it around a 10 PE for this year and less than 8 for forward PE. The industry multiple is aroudn 13.

Anyways - I like the January or March 2006 calls - with between $40 and $50 strike prices. These look downright cheap to me. I don't know - maybe I am a sucker. But I have a buy in for 100 contracts of the $50 January 2006 call at $.10 per contract - currently trading at $.20. Probably won't get my entry today - but can try anyways.

Regards,

BG