12/18 – A day off the hill and in the trading room

Have we come too far, too fast. The technicals are telling me a story.

Boy, I love all this negative sentiment. Everytime we have been getting Negative Negative it primes us for a rally. Likewise, when the rally has been proclaimed, the market puts it to the long market participants.
Last night I was putting up the Christmas tree and doing all the fun seasonal things. i.e. Last minute shopping on Amazon. I just used the Amazon link on this page, it was quick and easy and gave me a 4% rebate when using it.
However, while shopping I was browsing some charts, I saw some very interesting technical things. It gave me a thought to go long today. Just a hunch. The overwhelming impressions I have are medium term down trend within a long term uptrend. How can one be LT bearish yet. It is simply not yet confirmed with a lower low. Yesterday the S&P sold just past the 61.8% retracement. My impression is that it came too far too fast, and the program trading will mount a charge today. I will be looking for a test around the downtrendline and the 50% and 38% retracement lines.
I have been looking to trade this to the long side. Russel Growth index. It is nearing it’s 200 day MA and resuming an uptrend.
Nasdaq hitting a tertiary trendline.
Gold is resting on a 50 day MA
UNG – Natural Gas. Here is the spot price for Nat Gas. I just have 100 shares of UNG. However, yesterday did some damage as the chart broke below the 200 day MA and it’s previous low. There may be a lift today with the rest of the market. That will give me an opportunity to sell into it. I will pick it back up if it breaks the trendline.
On Monday I took advantage of the market selloff and exited a few positions:
ADCT – 7 of my 9 units of 15p.
AZO- 1 unit of Jan 115/105 @ 1.90 @ 119.93
Tuesday was an active day, and the acct grew 1.5% on the day:
AZO – exited final unit AZO for 1.85. The market opened sharply higher, and then sold off rapidly. Mistakenly I didn’t buy another AZO unit. I ended up selling for a small profit. I don’t like the action in AZO so I decided to cut and run.
COH – Sold 2 units of May 35/27.5p today, as planned. 1 unit sold @ 3.4, the other @ 3.75. This has been a nice 50% gainer in 4 days. My only regret is that the Fed action last week through me a little off my game and I didn’t put my full 5% allocation on this trade as planned.
USB – On the strong open I thought I may see a perfect pop in USB. Unfortunately it didn’t happen. I exited the remaining 3 positions for .45-47. I left money on the table, but I am ok with it. This has been an incredible multi-month trade, a 9X winner.
UNG – exited on a pop to 35.08. I didn’t like the trend break of the 200 MA. By the end of the day UNG went higher, but that is fine. I will wait for a trendline break.
ADCT – Exited jan/feb 15p calendar for .22. Now I have 5 units of 17.5p calendar, and 2 units of the 17.5c calendar.
DRQ – I took a loss on 1 unit of the Mar 65/55c spread. I should have sold it yesterday, but it didn’t hit my price and then fell further today. Not bad, I took a .65 loss on the spread.
MTW – I took a stab at support 45.74. I was stopped @ 45.42. The risk/reward was excellent 1 down, 10 up. It was worth a shot.
KNXA – bought 1 unit of April 20-15p for 1.85. It is a wave 4 sell. My stop loss is 21.94, profit target 12.51 by Jan 23.
ACS – 1 unit of Apr 45/35p for 2.53. Wave 4 sell, stop loss is 46.13. profit target 36.13 by March 23.
C – bought 2 units of 32.5c Jan/Mar calendar for .79. If the underlying breaks support @ 29.55 I will add 27.5p calendar as a hedge. If the underlying moves about 33, I will pick up the 30p calendar. This offers a nice edge in Volatility. Jan has a 10% higher Vol. I like this edge as we move through the Christmas/light trading holiday.
MVL – bought 22.5c/30c spread. This is an ITM spread which that is a Theta positive position. It will earn if the underlying moves up in price or stays put. The tight stop is @ 26.40. I will sell half the position as it approaches the top of the consolidation. It is supported by a 50 day MA and a 200 day MA.
BBBY – Bought 3 units of the 30p Jan/Feb calendar spread for . .33-.35. This offers a 2:1 Reward to Risk.

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