6/21 – Nervous bulls, stalking bears

The markets bounced back after a down draft this morning. Yesterdays 21 pt down move on the SP was stunned the players looking for a cup and handle formation over the time. The morning rebound has shown a piercing pattern up, and the next 15 minute bar is strong. With heavy volume. Is the selling done? I don’t think so, but bulls are making a strong case for a move back up.
I was able to put on just a half unit of CREE 30c Jan/Dec for .01. I backed it up with 3 more units at .01 and even. There were no follow up orders filled. Picked up 1 more unit of Jan/Dec 25p for .06. With all the orders I have made, I am still not to a full allocation of CREE. Reward to Risk remains @ 9:1 and underlying is between the main strikes. I currently own 7% of the float on both of the Jan contracts.
BIDU was up and then retreated this morning. I wouldn’t mind seeing the underlying stay put for awhile. It is creeping up in mid-day trade. Perfect
BUD is hanging near it’s support @ 52.75. Spread has widened. Nice.
I would like to see BTU get above 51. It has a ways to go. I haven’t put on the hedge. I would like to work this like a strangle. But I would like to see some profit in the trade first.
I just picked up 2 units of USB July/Aug 35p Calendar for .05. I think that interest rate worries are pushing down the bank stocks. However, I am willing to put this on for .05. Reward/Risk is 8:1 for a 29 day trade. If the underlying stays here, the R/R is still 3:1. July Volatility is 3% higher than the Aug. Breakevens are 32.80 and 38.60. Commission is a significant expense in a trade of this cost.
COGN announces earnings in the morning. Spread is at .40. I will ride these through earnings and see where IV levels are tomorrow. 1/2 units still on. I have taken the initial risk out of the trade.
AMTD – Underlying is staying in place around 20. I sold 1 unit last week. I have taken the initial risk from the trade.
I am looking @:
POZN
MVL
FCS
As I mentioned yesterday. I don’t want many more positions. My brain is full. However, I do have a number of Bullets saved, just in case I come across a trade that meets my criteria. My favorite thing about options is that I can do well, while having plenty of reserve (I can always come back and trade for another day). I currently have 66% of my portfolio in Cash as this time. And for me, that is nearly fully invested. There was a point two weeks ago, when I was at a 50% allocation. I didn’t feel comfortable with that, so I was able to pare down my positions. That felt like that was a good thing to do during expiration week. It was. It also made me comfortable taking on a large CREE position, and putting on the speculative BIDU position. Mental and Financial Capital preservation.