A quick update, I closed out of my SDS trade at $16.71 early today around 10. I wish I had stuck around for the additional fall that came up to noon time where the SDS hit around $16.90. So do I think the market has more to fall or is this a flush? In simple terms this was a fast move down and a bounce should be expected. I am not always right and most of the time am wrong so I will stick with stock plays instead of going into options.
I have flipped and gone on the buy side with TNA. I have the commodities such as gold and silver going up which should mean risk on. Furthermore TNA has been flagged oversold by my favorite indicators form friendly THE FLY.
Good luck to all.
Monday, June 25, 2012
Thursday, June 21, 2012
Down Day
I positioned myself too early by going short on SDS on Monday morning. An aggressive bet that is setting up to be a small gain. Yet I have not closed out the position so until then its still not a real gain. I may keep my shorts over the weekend, but considering how this market is affected by government interventions I may play it safe and close out my position.
On another note today the market panned out in favor of the shorts. This is probably the best day I have seen for shorts in two years. There simply was no bid on the tape and it want down just like a water slide. Nothing steep so no wash out but yet it was continuing down. This is dread awful due in part by reality of how the global economy growth is slowing.
Its amazing to so how many inverse short etfs have gained so much today.
SKF 46.25 +1.93 (4.35%)
TZA 20.82 +1.39 (7.15%)
TYP 11.19 +0.83 (8.01%)
BGZ 23.15 +1.48
(6.83%)
MWN 25.37 +1.75 (7.43%)
It is very tempting to want to get into trades inverse ETFs and vise-versa with all this tremendous daily gains, but in truth these are terrible vehicles to invest in. Why? The funds are based on daily changes and in general the daily market does not move +/2% such as today:
The gains I can achieve in one day by correctly timing the daily changes are like buying lottery tickets. The odds are not in my favor either. That is why I now do my best to avoid trading in these funds unless I trade in and out of them within the same day.
Good luck tomorrow.
On another note today the market panned out in favor of the shorts. This is probably the best day I have seen for shorts in two years. There simply was no bid on the tape and it want down just like a water slide. Nothing steep so no wash out but yet it was continuing down. This is dread awful due in part by reality of how the global economy growth is slowing.
Its amazing to so how many inverse short etfs have gained so much today.
SKF 46.25 +1.93 (4.35%)
TZA 20.82 +1.39 (7.15%)
TYP 11.19 +0.83 (8.01%)
MWN 25.37 +1.75 (7.43%)
It is very tempting to want to get into trades inverse ETFs and vise-versa with all this tremendous daily gains, but in truth these are terrible vehicles to invest in. Why? The funds are based on daily changes and in general the daily market does not move +/2% such as today:
| 1,325.51 | -30.18 | (-2.23%) |
The gains I can achieve in one day by correctly timing the daily changes are like buying lottery tickets. The odds are not in my favor either. That is why I now do my best to avoid trading in these funds unless I trade in and out of them within the same day.
Good luck tomorrow.
Saturday, June 16, 2012
A quick update on my position: I closed out all my FCX position with in the call options, but left 20 shares on the table. I profited about $300 for the overall trade but really did not want to get out of the stock. I had sold calls that expired on Friday and rather buying them back for a small gain I left them out and during the final hour the stock finally started pulling up. FCX has been creating a bottom the past week and even on Friday the barely +1% gain was very weak compare to other commodity stocks.
The performance of FCX for the past week leads me to believe we are actually in for some more downside in the near future. I hope I am wrong but as I screen through several hundred stocks today I have noticed that a lot of them are near overbought rating.
I am too tempted to get into the market again come Monday, but I have to hold my ground and see what unfolds. With Greek elections over the weekend, Monday can't come any sooner. I have no strong picks to go long other than ABX. ABX has been lagging a lot in relation to gold mining stocks. The overall gold miners seem be hitting near overbought hence even now I am hesitant to go long. If come Monday the market shoots up from positive news I will search for shorts but if the market cracks I will wait and see.
The performance of FCX for the past week leads me to believe we are actually in for some more downside in the near future. I hope I am wrong but as I screen through several hundred stocks today I have noticed that a lot of them are near overbought rating.
I am too tempted to get into the market again come Monday, but I have to hold my ground and see what unfolds. With Greek elections over the weekend, Monday can't come any sooner. I have no strong picks to go long other than ABX. ABX has been lagging a lot in relation to gold mining stocks. The overall gold miners seem be hitting near overbought hence even now I am hesitant to go long. If come Monday the market shoots up from positive news I will search for shorts but if the market cracks I will wait and see.
Friday, June 8, 2012
Lost while going short
So on monday I went in with my shorts and today I closed out with over -$4,000 lost. I can not even describe how stupid I feel about this trade. I went short on CMG options call spread right when the market started spiraling down on Monday but thats when shit hit the fan and market popped. I had told myself to maintain my losses to a minimum but due to small volume of CMG, averaging 550k shares/day, I had a lot of difficulty buying back my options for a lost. In the end I go home with more lose this month than what I gain in all of May. Back to stocks shares only.
I am long in FCX for the weekend at 33.80. I believe we will pop on Monday before anything else. Wednesday was a solid up day and the past two days have been decent consolidation. I am looking for some upward gains on commodities and resources.
Good Luck to all on Monday.
I am long in FCX for the weekend at 33.80. I believe we will pop on Monday before anything else. Wednesday was a solid up day and the past two days have been decent consolidation. I am looking for some upward gains on commodities and resources.
Good Luck to all on Monday.
Thursday, June 7, 2012
Reactive and Proactive
Yesterday ECB decided to keep interest rates unchanged, even though they know there is a problem with Greece and Spain's balance sheets. Today Fed's chairman Bernanke shows reluctance to provide more momentary stimulus to the US economy based on the fact that it has not deteriorated. However the Chinese overnight came in and lower their interest rates by 25 basis points to 6.31 at a time where the global economies are very fragile. The Chinese taking action before the first world economies? Say it ain't so.
There has to be something within China's numbers that has made their government concern and willing to take action, but everyone knows Europe is in trouble and America's economic growth has slowed than why not the US and Europe take action?
What I do not get is that ECB and the Fed know that the economy at present time is not better off than where it was last year and they are still reluctant to take any course of action to do anything. The mentality of wait and see before taking any actions is exactly how America got itself into trouble in 2008. Bernanke ignored the warning signs then and when it was too late the Fed had to take dramatic steps to saving the US economy.
Since 2008 it has been the extra spending provided my the world's governments that has held the global economy from the brink of collapse. The only reason why stocks go up this pass few days is the hope for more stimulus to support the economy. No action taken at the moment will only led to devastating consequences later.
If inflation is a fear for the governments then consider which is better; deflation? Stop reacting to the situation and start being proactive.
There has to be something within China's numbers that has made their government concern and willing to take action, but everyone knows Europe is in trouble and America's economic growth has slowed than why not the US and Europe take action?
What I do not get is that ECB and the Fed know that the economy at present time is not better off than where it was last year and they are still reluctant to take any course of action to do anything. The mentality of wait and see before taking any actions is exactly how America got itself into trouble in 2008. Bernanke ignored the warning signs then and when it was too late the Fed had to take dramatic steps to saving the US economy.
Since 2008 it has been the extra spending provided my the world's governments that has held the global economy from the brink of collapse. The only reason why stocks go up this pass few days is the hope for more stimulus to support the economy. No action taken at the moment will only led to devastating consequences later.
If inflation is a fear for the governments then consider which is better; deflation? Stop reacting to the situation and start being proactive.
Tuesday, June 5, 2012
Are we really in Cross Roads or More of the Same
In 2008 when the markets started to go lower I remember the feeling of excitement and great opportunities created for me. I invested in companies such as Citi Group and MF Global. The share values back then for Citi Group I remember very vividly was at $27. I had over a thousand shares and within one day the stock turned into $21. I left a lost at $23 and from that day on I never got back to break even in all my days investing in the market. (Note the Citi Group share values were before 10:1 reverse split. The stock stabilized around $3 when the reverse split occurred.)
When Obama went into office he was able to pass a stimulus program that would boost America's economy. That was sometime in February 2009. Right before the "so call" most important congress vote for a stimulus bill the stock market had already fallen from its peak. I remember reading and hearing about the news everyday and night about what the stimulus bill would do for the economy, but with all the optimism and hopium for a "necessary" stimulus once the bill was passed the markets plunged. The markets continue to plunge for the next year. The rest is history but it has left mental and emotions scares on me for life.
In less than two weeks Greece with have an election that is now called the election that will seal the fate of Europe. There is hope from everyone that all would be well after this vote. G-20 meeting a day after the vote. Such importance leds me to believe we are about to head lower in the markets.
I see this as a full repeat of 2008-09 because we haven't changed. Simply to put it what ever happens in Greece vote will not change the underlining problem, debt. Rather going into a rant and being negative I simply just want to put out my position in the present market. I am anticipating on shorting the indexes sometime before the vote to be ready for a big hit to the downside. Of course I can be totally wrong hence I need to determine my risks before I enter a trade.
The simple fact is we can go either way here. The Fed could possibly save the day by expressing QE 3 or they could fold their hands and see how Europe unfolds. This is my biggest concern for being a bear, but if I manage my risk properly I should be safe. I will report back next week on my outcome.
When Obama went into office he was able to pass a stimulus program that would boost America's economy. That was sometime in February 2009. Right before the "so call" most important congress vote for a stimulus bill the stock market had already fallen from its peak. I remember reading and hearing about the news everyday and night about what the stimulus bill would do for the economy, but with all the optimism and hopium for a "necessary" stimulus once the bill was passed the markets plunged. The markets continue to plunge for the next year. The rest is history but it has left mental and emotions scares on me for life.
In less than two weeks Greece with have an election that is now called the election that will seal the fate of Europe. There is hope from everyone that all would be well after this vote. G-20 meeting a day after the vote. Such importance leds me to believe we are about to head lower in the markets.
I see this as a full repeat of 2008-09 because we haven't changed. Simply to put it what ever happens in Greece vote will not change the underlining problem, debt. Rather going into a rant and being negative I simply just want to put out my position in the present market. I am anticipating on shorting the indexes sometime before the vote to be ready for a big hit to the downside. Of course I can be totally wrong hence I need to determine my risks before I enter a trade.
The simple fact is we can go either way here. The Fed could possibly save the day by expressing QE 3 or they could fold their hands and see how Europe unfolds. This is my biggest concern for being a bear, but if I manage my risk properly I should be safe. I will report back next week on my outcome.
Friday, June 1, 2012
Falling of a Cliff
At the start of today's trading I was anxious to get out of my long AG. Little did I know gold, silver, and miners would mostly go up A LOT on what is the biggest down day for stocks in 2012 to date. AG ended the day with +6.74% at $14.73. I was out of the stock at $14.00. Missed out on the leg up, but scored a bit on selling call option spreads in CMG and PCLN. All in all I had a decent day and recovered all my loses of last week in one stupid NDX trade. I am far from recovering all my losts for the year and now is not a time to buy into the market with so many negative news around the world and unknowns as to what if any interventions in Europe.
The miners seem to continue on a solid upward swing but with today's significant gains on such a devastating down day on Wall Street I am somewhat hesitant to go long in them. Yet over the weekend I will screen through stocks that I see opportunity.
On a side note the VIX ended today at 26.66 which is still much lower from its peaks in 2008-09 and 2011 down days on wall street. If by Monday there is no change in sentiment I will lean toward shorting the general market through my favorite and less loved index options.
The miners seem to continue on a solid upward swing but with today's significant gains on such a devastating down day on Wall Street I am somewhat hesitant to go long in them. Yet over the weekend I will screen through stocks that I see opportunity.
On a side note the VIX ended today at 26.66 which is still much lower from its peaks in 2008-09 and 2011 down days on wall street. If by Monday there is no change in sentiment I will lean toward shorting the general market through my favorite and less loved index options.
Thursday, May 31, 2012
Flip-Flop
For what its worth this market's indecision is helping me cash a little on both the long and short side with out much waiting. The market can start off down two hundred on the DOW and manage to break even by end of day. What this has created is day trading opportunities. Not a type of trade I like settling into because it is effecting my main job, nothing to do with stocks, watching tick by tick every minute to pin point tops and bottoms.
We are set for something big either up or down and all participants are picking a side. I on the other hand have been going in and out of stocks which will make an interest end of the year tax return.
For now I am long AG @ 13.85, and it got as low as 13.70 and wish I was in front of the computer to command the trade. I see silver and gold prices actually raising on what is to start a terrible down day on stocks. With anticipation for more stimulus from all countries due to Europe's' problems I believe gold and silver prices will have to increase. Also since the past two months commodities prices have been hammered yet in the past week prices stabilize. I was in EXK last week and got out with a small gain. I expect AG to get near 14.50 as a good point to re-evaluate the trade. I anticipate to hold onto the stock for some time if the world really ends and AG falls way below by bought price because I don't have an exit plan.
We are set for something big either up or down and all participants are picking a side. I on the other hand have been going in and out of stocks which will make an interest end of the year tax return.
For now I am long AG @ 13.85, and it got as low as 13.70 and wish I was in front of the computer to command the trade. I see silver and gold prices actually raising on what is to start a terrible down day on stocks. With anticipation for more stimulus from all countries due to Europe's' problems I believe gold and silver prices will have to increase. Also since the past two months commodities prices have been hammered yet in the past week prices stabilize. I was in EXK last week and got out with a small gain. I expect AG to get near 14.50 as a good point to re-evaluate the trade. I anticipate to hold onto the stock for some time if the world really ends and AG falls way below by bought price because I don't have an exit plan.
Friday, October 14, 2011
I got very f*cked!
NDX shot way above 2350 and my total lost on options trade is around $1200. I should have closed the trade yesterday but held on and GOOG's results pulled tech stocks way beyond what I have anticipated. So for the year NDX has shafted me beyond $10k losses. Worst yet I have a wash sale on this trade hence excluded from my income. I just gave away $1200 and paid taxes on top of it. This is the greatest kind of robbery there ever can be. Let it continue as the market churns upward while I trade on the wrong side. My TZA is at a four figure paper loss and growing but I can manage because its still a position. F the market for being so overly optimistic when nothing really has change. Europe still needs to be bailed out and America is not growing economically fast enough to produce decent jobs. Why on earth would the market trade logically I wonder. Let it be known that I intend to battle on. Win or lose I continue this fight because I still have capital. Bring it on!
Thursday, October 13, 2011
Lazy but still playing the market
-This is the real deal. Read at your own discretion.
I have not journal in my blog for a long time due mainly to my laziness and lack of motivation to do anything productive with my life. (That is another story for later.)
Presently I maybe shafted for having sold a weekly vertical on NDX options 2350/2375. Maybe because NDX closed at 2326 as of Thursday but tomorrow right at market open is when the option expires. Google just recorded record profits and the techs are strong in today's lackluster session. Am I f*cked or am I truly f*cked. If options expires above 2354 tomorrow I will lose money hence the f*cking. If it closes below 2350 I survive another day and pay more taxes to uncle sam hence the f*cking. I had been patient to not sell short on the market until yesterday but still I am in the hole.
Furthermore I am holding 400 shares of TZA that I purchased last thursday at $45.50. The market has been shooting up and ripping the faces off of bears. I am one of them and I can not do anything about it. I sold calls to reduce the loses but even that is not enough to subdue the loses.
If I have to hope for the best it would be for the market to kill itself tomorrow. A market decent is highly unlikely any time soon for there is so much hope for all the bulls. (Being sarcastic) Go ahead you rich bastards. Go toss your $$$s into the market to squeeze more shorts. I stand to lose a lot but I am stubbornly willing to hold on for a bit longer. This same thing happen two weeks ago where I had bought TZA at around $49 and began dropping to low the $40s before shooting back over $50. These 3x leverage ETFs are very very volatile indeed. It is definitely not a way to invest one's life's savings on. I intend to get the F out of TZA at breakeven. Odds are not in my favor but I have hope things will go my way. Hey if everyone has hope the market can continue to churn higher, it makes perfect sense for me to have hope for the market to churn lower. Is it not pathetic? Hahahahaha.
Peace Out!
I have not journal in my blog for a long time due mainly to my laziness and lack of motivation to do anything productive with my life. (That is another story for later.)
Presently I maybe shafted for having sold a weekly vertical on NDX options 2350/2375. Maybe because NDX closed at 2326 as of Thursday but tomorrow right at market open is when the option expires. Google just recorded record profits and the techs are strong in today's lackluster session. Am I f*cked or am I truly f*cked. If options expires above 2354 tomorrow I will lose money hence the f*cking. If it closes below 2350 I survive another day and pay more taxes to uncle sam hence the f*cking. I had been patient to not sell short on the market until yesterday but still I am in the hole.
Furthermore I am holding 400 shares of TZA that I purchased last thursday at $45.50. The market has been shooting up and ripping the faces off of bears. I am one of them and I can not do anything about it. I sold calls to reduce the loses but even that is not enough to subdue the loses.
If I have to hope for the best it would be for the market to kill itself tomorrow. A market decent is highly unlikely any time soon for there is so much hope for all the bulls. (Being sarcastic) Go ahead you rich bastards. Go toss your $$$s into the market to squeeze more shorts. I stand to lose a lot but I am stubbornly willing to hold on for a bit longer. This same thing happen two weeks ago where I had bought TZA at around $49 and began dropping to low the $40s before shooting back over $50. These 3x leverage ETFs are very very volatile indeed. It is definitely not a way to invest one's life's savings on. I intend to get the F out of TZA at breakeven. Odds are not in my favor but I have hope things will go my way. Hey if everyone has hope the market can continue to churn higher, it makes perfect sense for me to have hope for the market to churn lower. Is it not pathetic? Hahahahaha.
Peace Out!
Tuesday, September 7, 2010
Friday, September 3, 2010
I was on the opposite end, sh*t!
I blew up my account today, with a better than expected jobs report. There is nothing more to say than me unwilling to admit wrong until it was too late. I regret it. I am again negative for the year. The NDX put trade I have lost is around -15000. Sh*t.
Wednesday, September 1, 2010
wicked losses every where for me...
Again I hold my shorts on NDX but am at hold a tremendous unrealized loss. I figure a bounce was in store but did not want to wait. I now wished I had purchased Oct. puts instead, but tomorrow and Friday will have employment data effecting the market, so we will see. The push upward today was broad, and volume better than a lot of other summer days. The bulls have control, but for how long, not sure. Hopefully not longer than third week of September where options expire. I will take the lose if Friday is another up or consolidation day.
Tuesday, August 31, 2010
I took a hit on SPX longs today...
Title of post says it all. I went short puts yesterday and closed out the trade today for a loss of around -$700. I had the put spread at 1025/1075 but market sank is continues to do so today. Out of emotions for wanting revenge on the market I immediately flip sides and went long NDX September puts. As of now I am at a lost on the NDX position due to my aggressive purchase price, but will be happy to hold through it in the next few sessions.
Reasons for shorting:
1) the $NAMO index is not yet bottomed to previous lows. -60 is what I am looking for, until oversold condition reemerges, and probably within the next two/three trading sessions.
2) Sentiment is negative, and with good data out today and stocks still did not rally leads one to think market is headed lower.
3) The ADP employment data will come out tomorrow. Everyone expects a terrible number, and Friday is big job's number.
I anticipate a fight around SPX between 1040 and 1060 but soon 1040 will fail. I give it a week, therefore I am long NDX September puts.
Reasons for shorting:
1) the $NAMO index is not yet bottomed to previous lows. -60 is what I am looking for, until oversold condition reemerges, and probably within the next two/three trading sessions.
2) Sentiment is negative, and with good data out today and stocks still did not rally leads one to think market is headed lower.3) The ADP employment data will come out tomorrow. Everyone expects a terrible number, and Friday is big job's number.
I anticipate a fight around SPX between 1040 and 1060 but soon 1040 will fail. I give it a week, therefore I am long NDX September puts.
Friday, August 27, 2010
dumb trade with ok ending
About an hour ago I sold a vertical 18/19 call on FAS at $0.35. I thought I was selling 19/20 for a premium but the stock was at $18.32. SH*T man, why so stupid I do not know. Market is shooting up and I set myself up for a short? What a mistake, I went with the trade without review and click ok on order. The order went through in a blink of an eye. Funny how the top of FAS stalled and I bought back the call spread for $0.25. After comissions I got $3 gain. Dumb trade indeed when I was fighting a trend. Wasted a day trade too. Now down to two day trades for the week.
Market bottom maybe in for now...
Market fluctuated in first 30 minutes of trading. INTC lower 3rd Quarter expectations and Ben Bernanke spoke at 10am. All the pessimism seems to be priced in for the day. The market is up presently but not by much, SPX about +4 and Nasdaq about +5. There is something to take a note upon with respect to TLT.
It looks that TLT is fighting a support that held two days ago. Yet it has not made a higher high in the previous two sessions while the market has been very much stuck in a range. A crack in TLT around 106.75 support will be a indication for markets to go higher.
Also to note the 1040 on the SPX was defended today and therefore a bottom may have been in place for intraday. With all the negative news out and the market is still up, it gives me the support to go long the market today.
Disclosure: Short a couple of 105 SPY weekly puts.
It looks that TLT is fighting a support that held two days ago. Yet it has not made a higher high in the previous two sessions while the market has been very much stuck in a range. A crack in TLT around 106.75 support will be a indication for markets to go higher.Also to note the 1040 on the SPX was defended today and therefore a bottom may have been in place for intraday. With all the negative news out and the market is still up, it gives me the support to go long the market today.
Disclosure: Short a couple of 105 SPY weekly puts.
Thursday, August 26, 2010
You win some, you lose some
Reading twits on stocktwits I see a lot of people say they are getting stopped out today. This is good on the part that a lot of the guys on that site know what they are doing and being truthful with their results. I am grateful I was on the other side of the trade today. Yet yesterday was not an easy night for me to sleep through.
Even today in the morning after the 8:30AM weekly jobs numbers coming out -473k, which is a lot lower than consensus. I thought, sh*t. Everyone is optimistic in the morning, yesterday could have been a bottom. It is never easy when one goes all in with a trade. I was short but others went long. Trends were still for more downside but a lot of people bought into the market yesterday. I feel the market has been more at a range than going in a trending direction. (I have been lucky enough to manage a small gain through it. There were trades I made this month that I knew I should not have made and got lucky with small losses. Best example is two weeks ago on my OEX trade. I twitted it on stocktwits. I went all in with selling a vertical call spread with the OEX weekly and got a small loss.) These experiences shape people into being good traders if they remember not to make the same mistakes. That is very hard to do.
For the year to date I am slightly positive, but since my very first trading loss of 2008 to date I am still very deep in the red. Taxes and commissions has wiped out a lot of my gains for this year, but getting green makes me happy. I know how much others feel when they lose, but its apart of the game. You win some and you lose some. Just make sure you do not lose more than you can afford to. Its very difficult to dig yourself back out of a deep hole.
Learn to blog or record all your trades no matter if its a win or a loss. I did not post much in 2008 and 2009 because most of those days I was losing and wanted to forget about my losses. Yet it is not the right thing to do. Not learning from mistakes is a cardinal sin in the trading world. I to this day still have trouble following with that, but that is apart of the job if I want to "succeed" in trading.
Best of luck to all who are trading.
My view on the market:
The market still seems to be in a range. From mid May of this year to date the SPX range has been between 1020 and 1120. There could be a possibility for the SPX to test 1020, but since it held 1040 yesterday I do not think 1020 will be hit in August. I could be wrong with revised 2nd quarter GDP number tomorrow coming out, but Mr. Bernake's speech will be key. If we do test 1020, it will not be a good side for long term traders.
Even today in the morning after the 8:30AM weekly jobs numbers coming out -473k, which is a lot lower than consensus. I thought, sh*t. Everyone is optimistic in the morning, yesterday could have been a bottom. It is never easy when one goes all in with a trade. I was short but others went long. Trends were still for more downside but a lot of people bought into the market yesterday. I feel the market has been more at a range than going in a trending direction. (I have been lucky enough to manage a small gain through it. There were trades I made this month that I knew I should not have made and got lucky with small losses. Best example is two weeks ago on my OEX trade. I twitted it on stocktwits. I went all in with selling a vertical call spread with the OEX weekly and got a small loss.) These experiences shape people into being good traders if they remember not to make the same mistakes. That is very hard to do.
For the year to date I am slightly positive, but since my very first trading loss of 2008 to date I am still very deep in the red. Taxes and commissions has wiped out a lot of my gains for this year, but getting green makes me happy. I know how much others feel when they lose, but its apart of the game. You win some and you lose some. Just make sure you do not lose more than you can afford to. Its very difficult to dig yourself back out of a deep hole.
Learn to blog or record all your trades no matter if its a win or a loss. I did not post much in 2008 and 2009 because most of those days I was losing and wanted to forget about my losses. Yet it is not the right thing to do. Not learning from mistakes is a cardinal sin in the trading world. I to this day still have trouble following with that, but that is apart of the job if I want to "succeed" in trading.
Best of luck to all who are trading.
My view on the market:
The market still seems to be in a range. From mid May of this year to date the SPX range has been between 1020 and 1120. There could be a possibility for the SPX to test 1020, but since it held 1040 yesterday I do not think 1020 will be hit in August. I could be wrong with revised 2nd quarter GDP number tomorrow coming out, but Mr. Bernake's speech will be key. If we do test 1020, it will not be a good side for long term traders.
Tuesday, August 24, 2010
No supports?
The 1050 on the SPX was breached this morning after the horrible housing data, but came off the lows. No real reason to buy though do to no real good news. There is a saying that when people are fearful, I should be very greedy and buy and when people are greedy, I should sell. The bond market is soaring with 2 and 10 year yields continue to fall. Marco economic data are horrible.
As for predicting the market. We are in a downtrend and will continue until the MACD and RSI downward slope is subdued. This will probably not happen due to poor outlook with GDP and unemployment data. I look forward to making money on the down side with expectation of the SPX to reach 1020 and NDX to 1750.
As for predicting the market. We are in a downtrend and will continue until the MACD and RSI downward slope is subdued. This will probably not happen due to poor outlook with GDP and unemployment data. I look forward to making money on the down side with expectation of the SPX to reach 1020 and NDX to 1750.
Third Strike, I missed!
I have learned it is better to wish I was in the right side of the trade than to wish to get out of a losing trade. I did not short the market yesterday, so I miss the morning collapse. I missed a PCLN gap down. I miss making probably the largest profit I could make for the year. Yet I an fine considering I am not losing money, excluding retirement account.
Housing data has not come out yet, but negative sentiment is too heavy to make me bullish. Hopefully the housing data can turn the market. Yet the market does not care about hope.
Housing data has not come out yet, but negative sentiment is too heavy to make me bullish. Hopefully the housing data can turn the market. Yet the market does not care about hope.
Monday, August 23, 2010
Why did I not short the market?
I have several reasons why I did not end the day shorting the S&P. First and foremost my marked price for 1075/1100 SPX weekly puts were not triggered, therefore the trade was out of my risk/reward range. I had no control over that, my instincts just told me not trade it. The premium for puts in all indices seemed to high for my taste. That leads me to the second reason of not shorting the market, to much negativity.
Second, the trend is pretty much negative, too negative that is. Everyone I am hearing expects a bad housing number tomorrow and is shorting the market. From what I have seen last Tuesday when a bad number did not come in as expected the market rallied more than 1%! The lack of trade volume effects the market significantly due to lack of conviction both in bulls and bears. The bears have a slight advantage over the bulls tomorrow, but I am afraid any positive outcome from tomorrow's housing number will only raise the market.
Technically the SPY should continue to go down, but something did not jive with me. The chart above shows that the $tick rating has been towards +1000 more often than -1000 near the end of the day, illustrating institutions are buying even on the end of the day drop. For support on the SPX there is the 1064, last Friday's low, 1060, and the 1050.
For types of trade I am looking going into tomorrow. If the market drops significantly I will look to sell weekly puts. For the SPX the 1000 and 1025 and for the NDX 1700. The market would have to be crushed in order for the ranges I just listed to be hit, not saying it is impossible. If the market rallies then selling calls 1100 on the SPX and 1880 on the NDX. For the week I am concentrated in collecting premiums on options, because I am getting set to go short once September rolls around. I will be trying to save some capital for a big short and expect to position myself before labor day weekend due to jobs report the first Friday of September.
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