9/23/2007- Preparing for the upcoming week


My overall feeling is that we are going up. Quad Witching took place last Friday. The Mutual and Hedge funds have capital available to them with the expiration cycle. Now that the market broke above the consolidation range.

I have been working on my skiing movement analysis. This seems to be a pretty good start.Hermann%20Centripedal.jpg
My overall feeling is that we are going up. Quad Witching took place last Friday. The Mutual and Hedge funds have capital available to them with the expiration cycle. Now that the market broke above the consolidation range. Fundamentally, I am still scratching my head. The US mkt is slowing enough to create the need for a 50pt increase, but the mkt jolts upward hmmm. Global growth is rocking, the VIX dropped into the teens (19). I am conflicted, but again my gut says up from here through the end of the year.
At this time I am doing poorly with my direction trading, but extremely well with my non-directional trades. Perhaps that is a clue for me.
Here is a little music I was listening to the morning as I was looking at the charts. I think he had as much impact as anyone on my choice to move to Colorado;

I don’t listen to radio in my car much, and only sometimes listen to music. Rather, I spend that time for education and audiobook. When I am reviewing my charts and scans I do listen to internet radio to keep up with the hip stuff. I have been listening to a number of very good podcasts regularly. The iPod shuffle I have has been a great $80 purchase. I use it to take my listening with me, wether I am driving, running, biking, mowing or watering the lawn. Here is my weekly listening:
My favorite daily recap:
The Real Story
Interesting financial topics:

The Disciplined Investor

Great mental side of trading podcast:
The Mind of a Trader
Excellent approach to the week with a few good trade ideas:
Profit Strategies with Tom Gentile
Here are a few index charts:
I am looking at the trend channels right now. SP is in the upper half of the trend channel. It may pull back to the mid-line. After which I will tend toward bullishness.
S&P –
IWM Weekly
Long term trend channel is very compelling
DIA – The dow appears to be approaching the upper realms of it’s channel. It is amazing how quickly the market has went from all-time highs, to tanking, to near all time highs again. Can you say overbought? But the Dow stocks should be benefiting from global growth.
Here is the free Shadow Trader Video Weekly

Monday trades:
ZGEN- I legged out of my Oct/Nov 10p spread. I haven’t been able to exit this trade as a .25 spread, so I decided to do it myself. I leaned on a 99 lot order in the Oct options, and sold just above the bid in the Nov. The chart looked like the underlying may drop, but I didn’t want to get hung on my long options. I probably could/should have held out for an extra .05 or .10, but I met my profit objective (.25) and I am out.
MU – I entered a small ITM jan 10c position. I may be premature, but I do see the beginnings of a double bottom in the chart, and Micron does have components in the new iPod Nano, which is pretty cool. There is .70 of intrinsic, and .70 of extrinsic on this January option. It seems pretty low risk for an interesting upside move.
DGX – underlying exploded to the upside early, and then with the general market moved down sharply. That was great for my Oct/Nov 55p calendar. I sold another 1/2 unit for .80 and .82. I bought 4 units of this trade about two weeks ago for between .30 and .35. I would have bought more if I could get it for my price. Originally when I purchased the Oct options were priced @ a 4% higher IV. Currently the 55p have been reduced to have only a 1% higher Vol. I have 1 unit remaining. I am looking to exit the remainder remainder around 1.00. I am in pure profit mode on this final unit.
GS- 1 unit of Jan08 2/3 – 200/220 Call Ratio Backspread for a 11.50 credit. I believe this to be an excellent trade taken right at the close. There is an inverse IV between the strikes. The Jan 200c about 33% IV, and the 220c about 29% IV with Underlying @ 210.35. Breakevens are 205.80 and 248.60. Volatility has dropped greatly in the past few days. I am just looking for this stock to move, either way is fine with me. Max Loss @ expiration is $2,800 per unit, Max gain if the market goes down is $1,150 (underlying below 200), and an unlimited gain to the upside.
GS Risk Graph for 2/3 200/220 Call Ratio Backspread
GS – Implied Volatilityy (IV)
The market isn’t the only thing that has more than two sides. I wonder how many personalities I actually have? It is hard for me to believe that I had a band in college in which I played lead guitar, this was one of the songs in our sets.

Leave a Reply

Your email address will not be published. Required fields are marked *