6/18 – Digestion

The markets seem to be digesting the past two weeks of radical action. I made a few small missteps of the past few weeks, however when all is said and done, the portfolio is up.
The up portfolio is mainly due to some nice doubles in a few trades.
COGN is up 150% in the past few weeks. This has been a nice calendar. The only downside, was that I only put on one unit.
AMTD is up. I took off half my position last week for a double, I will let the other half decay toward July Expiration.
STLD is working out very nicely. The spread has widened with a drop in front month Vol. Up 50% so far. I will let this continue to decay. There is alot of premium in the front month option.
CREE – This morning I added greatly to this position. I put my 30c hedge in place for .01, and I picked up 4 units this morning. That is right .01 per spread. There is $1.30 of premium in the front month option. And I paid .01 for it. I am looking for a widening of this spread over the next few months. I have not found any news about this, however last summer this was the time to find these spreads. I am guessing there are people out there who buy the Dec contracts for a 6 month play. The prop the Dec options, and the Jan options spread stays in place. I have found this to be a very interesting happening. The Reward to Risk my entire position, including hedges is 9:1.
FXI- The chinese index has exploded. It is pretty awesome to watch this index march. I have no position.
I am very cautious to enter directional plays right now. My directional plays of late have turned to poop. I believe this is because I am using a discretionary strategy (looking for “well” known patterns) and I am loosing on them. I have used Profit Source for some EW setup trades, and 3 of 4 have been dead on. The loser was $60, and the winners have exceeded $1000. I’d call that a clue.
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Goldman downgraded BTU and the coals today. I have been stalking these over the past few days as a W4 buy. I will look in the morning. I don’t really believe the analysts anyway. The public sure doesn’t pay the Goldman analysts to make recommendations to make the public money. They are out there to make Goldman money. I want to put on a August 55/60/65cbutterfly for BTU. There is some great opportunity. I found a trade with a very conservative 7:1 Reward to risk. I am looking to see what happens with the support. We will see.