Yahoo (YHOO, $28.54, down$0.01) posted better-than-expected earnings last night but the numbers fell short in what investors were hoping would be a blowout quarter. The company reported 1Q profits of $542 million, or $0.37 a share. The earnings were only a couple of pennies higher than what Wall Street had forecast and put any chance of Microsoft (MSFT, $30.25, down $0.17) raising its bid at slim and none. That was the case anyway as Microsoft had already said before Yahoo’s earnings release, regardless of the numbers, that it would not raise it bid.

Yahoo said it was still talking with both News Corp (NWS, $18.50, down $0.44) and Time Warner (TWX, $14.64, down $0.31) but Microsoft is their best deal going and the deadline is Saturday for Yahoo to accept. This should get interesting but I seriously doubt Microsoft raises its offer. In after-hours trading last night, Yahoo was down 15 cents while Microsoft was up 21 cents. No matter what happens, the big winner here is Google (GOOG, $550.00, up $17.21). Even if Microsoft is successful in acquiring Yahoo it will take 12-18 months for both companies to integrate and by then Google will have only gotten stronger. BTW, the May 500 calls (GOPEO, $60.80, up $16.40) were at $7.00 last Thursday.

Chipotle Mexican Grill (CMG, $113.15, down $5.13) fell another two bucks after I talked about what McDonald’s (MCD, $58.35, down $0.32) earnings could mean for Chipotle. The May 105 puts (CMGQA, $4.50, up $1.30) were active yesterday.

Intrepid Potash (IPI, $50.40, up $18.40) zoomed nearly 58% in its first day of trading. The stock opened at $65.00. This brings me to a point about IPO’s. Even though our focus is on options, if you`re try to buy an IPO on its first day of trading…Don`t place a pre-opening “market order”. Some people probably did yesterday morning and were filled at the open at $65. They are looking at nearly a 25% loss. Intrepid seems too “hot” right now not to trade higher and yesterday’s call of a 50% gain was on point. The stock is not “optionable” right now meaning you can’t buy calls or puts. Probably in 30 days options will begin to trade. Of course, all of this did indeed mean good news for Potash (POT, $214.83, up $6.04). The stock is on F-I-R-E!!! The May 200 calls (PYPEX, $24.70, up $3.80) were profiled a little over a week ago at $6.40 and are now up three-fold. Nice.

Oh yeah. Airline stocks got hit hard…again. You can’t say I didn’t warn you: AMR Corp (AMR, $7.02, down $1.18), Delta (DAL,$6.80, down $1.40) and Northwest (NWA, $7.47, down $1.59) all fell 15%-17%. In less than two weeks AMR has dropped from $9.48 to $7.02, Delta was at $10.01 and now sits at $6.80 and Northwest from $10.96 to $7.47. Folks, that’s a 30% fall from grace and the scary thing for the Airline sector is it may not be over.

As you can see, some stocks are doing rather well despite economic pressures while others are folding like a cheap lawn-chair. Our option mentoring program will show you how you don’t care if a stock goes up or down – it’s a Non-Directional trade! In fact, you’ll still make money if the stock moves up 20% or down 20% from where you entered. If you would like to learn more about these strategies then take advantage of our free Monthly Cash Flow Video DVD Seminar by clicking here.

Rick Rouse