USDJPY – yeah, that was a good call yesterday!
Selling calls, if you haven’t sold them yet its going to be tricky. We need to see if we hold recent lows but OUCH in general! Best bet is to sell the calls that are just in the money or barely out of the money as downside mo plays but you have to be ready to cut and run if we turn. Don’t forget that a single word from Bernanke can reverse this market 250 points – as stupid as that would be… And they would make J’s gold $1,000 dreams come true!
DIA – if we start breaking lower after the open, we dump the calls, layer the puts (buying the next level down in the sept DIA puts that costs about $2) and keep doing that, setting very tight stops on each position that goes up .25 with a .25 possible loss on the last posiiton you take.
Be very careful here, I don’t think anyone knows what the hell is going on. The optimists are bargain hunting but we’re coming into the 9/11 anniversary weekend and I am NOT buying today (other than covers) but I’m not dumping either – just going to add protects to the downside if we keep going that way.
IBM – I’m holding mine. Happy stopped out of AAPL and BIDU (I’m short on it anyway) but IBM was a 5 contract entry for me so I’m willing to watch it through $3.50 for a possible DD.
20% bounce off 13,200 (-130, 13,233) is meaningless psychological bounce so don’t read into that until we are clear of 13,250, which is doubtful with the Nasdaq leading us down. Getting another shot at GOOG calls thank goodness because I was reallly mad they got away from me (not yet though).
Wow, dollar below 80!
USO – we spoke about this one this morning, notice it’s not down..
Oops, here we go! Broke 13,200. Now it’s up to us to retake it.
XOM over the weekend. I’ll be holding at least 1/2.
IBM – now is not the time to sell calls unless you are prepared to roll to next month with a loss. You are selling into the initial excitement, not a great thing if you think your stock is strong but, like I said, that’s because I’m heavily protecting with the DIA puts, now in the $131 puts at $2, hopefully I won’t have to pull the trigger on the $130s at $2! Stops on $134 puts at $3.20 but IMB just put out negative news re their sub-prime exposure so we may see 13,000 sooner than I thought!
QQQQ puts/DIA puts (Oct) – I’m tempted to sell Septs against them too, especially with the 130 puts fetching $1.75, at $20 I would sell half on a turn up (and whatever corresponds on the Qs)
10-year rate fell off the table now at 4.69%, also takes the Fed off the table – people just don’t understand economics!
VIX back at 26.44, still a tight rubber band.
Attn Bears – we are holding up quite well considering this absolutely horrible news, we must, of course retake 13,200 or its bearish going into the weekend but holding that line on this crap is not a bad thing. Watch the S&P between 1,450 and 1,460 for the next likely move.
GS predicting 1/2 point cut! No one is buying it yet (or maybe, like I said earlier in the week, it isn’t enough).
LTP still at 202% – did I ever tell you how much I love that virtual portfolio? And that’s with a dozen open calls I was still protecting with the STP (which is up stupid money now).
IBM – taking another round of the Oct $115s at $5 XXX
Rolling my AAPL ‘10 $150s to ‘10 $140s for $3.50 XXX
Manipulation – I wrote that in today’s post – timing too coincidental for my taste so, when in doubt, I get paranoid…
MS making a VERY intersting move.
Don’t forget FXI calls are a great lagging way to play a Dow rebound (intraday only).
FXI is bouncing off the 5% rule and the $146s were $9 3 trading hours ago so I’m grabbing some at $5.80 (dangerous trade!), with a DD at $5 (assuming it holds) and then a stop at $4.60.
Cool Cris2 and welcome!
Weak turn signal here, DE getting attention so I like CAT Oct $75s, at $2.80 (day’s low) to recover at least .75 of the day’s loss on any move over 13,200. XXX but it’s a leap of faith on the next test of $73.75
FNM moving up, that’s a Fed thing. OIH components making a comeback.
Fund buying – dangerous here. With my fund hat on I’ll buy right here BUT I will cut and run and sell some more if we can’t break 13,200 or if we pop below it at the close. Cash is tight and no one is going to lend me money so I can work through my losses…
Don’t forget to let your stops lead you to cash, if we break back over 13,200 it’s time to cash out the puts and put tight stops on the calls but don’t let your put wins turn into losses, half out here isn’t a bad idea if you don’t want to lose 20% of your profits XXX
Wheee, here we go – clack, clack, clack, clack…
COP – yeah, nothing to make me change my plan, if the dollar goes up oil will get trashed. OPEC meeting on 9/11 is keeping that market afloat as we should get some fun comments for Phil Flynn to make hay out of if nothing else.
Stops – depends depends unfortunately. Rule of thumb is any close play (Jan is now close) I will have little tolerance for a 20% loss so it’s either DD there or go home. Once I am more than 20% committed to a position, very strict 20% stop loss. Happy to cash out of positions now and make up for imbalances with the DIA puts and calls.
Weak, weak bounce, no conviction from buyers (including me).
GM broke $30, thats a strong sign (and not a good one). If they can’t break back over $30 I wouldn’t trust a rally as it means no one is spreading Dow indexes.
DIA $132 puts – well I’m half out of all those with just the $132s and $131s left (Septembers, Octobers using normal stop rules). Will bulk back up later when I get a clear signal, still targeting $131s at $1.92 as my next main position if we leg down. Oops, just realized you asked about calls! No, I wouldn’t sell at LOD, I’d roll to $131s or possibly DD real quick and hope it breaks 13,200 but get the hell out if it doesn’t
FNF/FAF/LFG coming back? Something is up… FMD, FNM, Brokers, NMX… Beware the Fed… Still weak but it’s the way I’d be buying if I were scooping up some potential big movers ahead of an announcement. They could halt the market if Bernanke comes in but I would sell into that rally (probably back at 13,400) if it happens.
Rolling down to tighter covers on DIAs, $132s now at $2.23
No reason not to pick up GOOG Dec $540s at $23.80, can always sell against them… XXX
Mattress plays essentially start as squeeze plays and we weight them whichever way we think the market is going (along with factoring in how much protection we need) so the best way to enter is to buy the OTHER way on a big dip or spike and then start working into a squeeze on the bounce. Then we roll to tighten with the goal of squeezing the Dow with at least 30 days left where a 300-point move will do well for us. See, simple!
REJECTED at 13,200! So we tighten… XXX
AAPL – I’m consolidating to $140s right now but anytime you can pay $3.50-$4 to gain $10 in position on a stock that you can get $4 in premium per month means you are on your way to $0 calls by 2010! Since the 2010s are only $10 more for 12 more months of sales, as long as you think Apple won’t go back to $60, these are your best long-term plays. The stock is annoyingly volatile, even the ’10s go up and down $4 per day, but as long as you consistantly sell calls, you are locking down some prime real estate for the long haul.
CCJ/other specific calls – I’ll be happy to do these over the weekend but in the interest of helping the most people I’m going to concentrate on the broader calls today. Remember any adjustments you do right now are panic adjustments because if we hold 13,200, we’ve had a successful week (from where we started last Friday). That all being said, I still like CCJ but wouldn’t buy more here.
SBUX – I like them down here but they don’t generate enough option sales revenues.
As we get to 2pm with no Fed announcement, look for buyers to rethink all that crap they just threw money at!
GSF, SLB immune to the market? GS pretending they are too…
Enering a new DIA play – if you are looking for long-term protection the best way to get started is to spread the Oct $129 puts, now $3.03 against the Oct $134 calls, now $2.90 in a ratio that is opposite your virtual portfolio balance up to 2:1 one way or the other. Your goal is to work your way down to a $2.40 strangle in 2 weeks so anytime you can buy a few more on either side for less than $2.40, then that will make good progress.
Not a buyer for miles!
No announcement and the markets are heading south again, wait ’till the 18th when nothing happens….
GS short better than an index put right now. GS $175 puts were $6.25 this morning, now $4.75 XXX
Added more IBM Oct $115s at $5 as Happy and I really like them and I can always sell the current $115s, now $2.72
Buying reminds me of when people try to get a wave going in a half empty stadium when a sucky team is losing. A bunch of guys jump up then 1/3 that many in the next section then another third and by the time it’s 1/4 way around the stadium some guy jumps up by himself and feels like an idiot…
OIH I continue to love selling those $185 calls. Now into month 2 of this working every time!
$2.40 – that’s about the most I will pay to layer my calls or puts once we get within a month (now, 2 weeks out, it’s $2). Very important to note that the Sept index puts and calls are for day trading purposes, it’s the 45-day+ calls that I want to work into for commitments on a big move.
GS – it’s pretty much just a mo pay. While the DIA stayed around $131.75 GS jumped up $5 making those puts attractive by comparison since they are both hoping for the same news.
IBM – as I’m a strong believer in them, it’s hard for me to short but now that I have 20, I would consider selling 10 sept $115s for cover into the weekend but unless you have a specifc strategy, you don’t generally just cover a Oct with a Sept on the same level (as you wipe out any chance of a gain). If you have so little faith in a posiiton, then shouldn’t you be cashing it out?
AAPL puts – yes, + 50% put money in our pockets that we apply to the basis which takes us out of danger from this dip so mission accomplished there.
BMY getting killed, GS cut them to sell on Tues but nothing new that I see. Interesting chance to get into the Jan ‘10 $30s at $2.80 or less here. I was in for $2.90 and sold the $30s for .65 so I’m up nicely at the moment. GS cut due to 2012 patent expirations, little chance of a buyer and set a $30 12-month target – this is all perfect for an LTP play but at this point I’d let them sell off a bit. I’m rolling my caller to the $27.50s to pick up an extra .30 in premium. XXX
Hedge fund – yes, starts in spring. Contact me through admin for that.
I see lots of support here in various inidices and I see the possibility for a manor chart reversal but I’ll let Happy make that call over the weekend. I’ve made enough money on the bear side that I’m inclined to go 60/40 bull on the calls into the weekend, probably anchored with 300 DIA $132s, now $1.90. XXX
Well this seals the deal for me, will end up with 300 DIA $132s, now $1.90 plus my Octobers vs. 200 $131 puts, now $2.25 plus Octobers XXX
SOX holding 490 is youre looking for a bright spot. S&P should hold 1,450, Nas 2,550 is fine and Dow 13,075 is where we held for Aug 20-22 before making a run up to 13,400 and would represent a higher low than last week.
