Well to day is Ben Bernanke day. He wants to be a Rockstar
Big gap up today. 15pts on the S&P. I covered two of my shorts yesterday, I am happy my instincts paid off on ADBE and AIG. I guess it is less about instincts, and more about getting out before the powers that be will create a reaction that I cannot forecast. President Bush speaks at 9am MST, and Mr. Bernanke speaks this morning.
“It is not the responsibility of the Federal Reserve — nor would it be appropriate — to protect lenders and investors from the consequences of their financial decisions,”
As to my plan here goes:
IWM – I am pyramiding a position. I added 1 unit of the 83p/75 spread @ 78.90. I am playing the down trendline, and the gap and fill. I bought these after the first 15 minute bar had formed. The price broke below the first bar’s low, then I bought this spread when the price retraced to the bottom of the bar’s body. This was a a very good entry. My nervous point of this trade are the strong internals, and the uncertainty of the speeches and reactions today.
IWM – Oct70/Sept72 83/85 Double Double is beautiful. All of my Iron Condor positions are in great shape. They are very wide. So as I sit and wait, I earn Theta on my SPX, SPY and IWM positions. I will continue to play some small direction plays as I see opportunity.
The trading week has been a little disheartening. The good news is that my acct is up 1% on the week, mostly on exiting some winners and earning theta decay. The bad, was that there were no new significant entries. But that is ok really, I have had an incredible 4 weeks of trading, with the percentage results most hedge funds would close their books for the year. The market is in rage up mode, yet difficult to trade with the overnight gaps and sideways day action. I am not sure how to trade this, so I won’t with any size. I may just go on a run this morning.
Another Ode to Ben (CBS put this video together just after Mr. Bernanke was chosen as Fed Chair)
Colombia Business School’s Dean Glenn Hubbard
Not that I do this too often, but ACF Nov/Jan 17.5p has increased to .60. I bought these for .01 credit. I had 200 contracts on at one point. yikes. I was too quick to take that profit. hmmm.