Monthly Archives: July 2008

7/27 – Preparing for the week

I am resting this weekend, practicing some golf with my son. Hiking with the family. All the while thinking wondering about what is next for us this week. The past month has been outstanding. I still have a while to go get to my goals for the month. I want to have a 50% return on the month. So far I have had a high watermark of 40.8% on the month, and 145% on the year.
On Thursday and Friday I added a few positions.
POT – 210/200/190c 2/3/1 BrokenWing Butterfly (BWB) for a credit of 3.20. This is bearish position I bought with the underlying @ 203. The price briefly moved up to 205+ and took out some bearish stops. I am looking at resistance levels of 205, 210, 217, and 227. I believe we are going down, as a pattern of lower highs and lower lows. Also, with extraordinarily good earnings the stock still moved lower (Bearish).
MFE – Sold 1 of the remaining 2 units of the Aug/Sept 35p for .63.
I went into the weekend without much exposure and 83% cash.
Position Greeks are:
Delta (SPX weighted) – 13
Gamma -.66
Theta +155
Vega +582
Here is my “until” the election forecast:
You mentioned forecasts, here is mine: I think we get a summer rally off a double bottom SPY 118.92 or so. Then a call for a successful retest by the bulls around the 118.92 level. (It is really the only chance the Republicans have.) We may see a rally to around 1360 or so. But the Market will be smarter.
Eventual lows down to the 1096 level. Then Obama becomes president somewhere after that (I am not an Obama supporter, but much does need to change). That resolution of uncertainty should be a catalyst for an upward move. I am not sure what his tax and foreign policy stance will do to our American Empire. However, there will be many people in power (real power) who will not like it.
It is many times interesting to me how often coincide with previous levels of support. i.e. 126 level of previous support (38.2%), 119 (50%), and 1100 (61.8% and Wave 4 low). Lastly, many W5s retrace back to W4 lows 1096ish.
SPY Weekly
SPY%207.27.gif
This week I am looking for a break below SPY 124.90 as a short indication, and above 126 as a short term up. I will be playing the IWM 68p as a slight short, and probably some type of short vertical in the SPY to take a directional short.
There is also bound to be many Micro calendars which will present opportunity shortly.