ATI Warns

Jumping out of a plane without knowing if the chute was packed correctly. That about sums up what happened after hours with ATI. The company warned that they will miss this quarter and they guided down for the rest of the year.

I didn't expect this warning. It is as simple as that. When Pat Hassey talks about the current environment being just the beginning of a 9-inning baseball game for a huge specialty metals up-cycle, and then they warn and guide down a few months later, well you can bet the Street will punish them.

While I felt that Q3 would be tough for the sector, I expected positive anticipation running up to earnings. That was my play and my thesis. I held ATI and TIE calls and they will be sold this morning. The thesis for this trade is gone. Time to move on.

I will be buying TIE again under $30, because I am expecting an upside in 2008. I can afford to be patient with this buy, however.