9/3/2007 – Prep for the week

As I sit previewing a week, I am really looking forward to the possibilities. I want to get into the mix and trade, although I needed a 3 day weekend.


As I sit previewing a week, I am really looking forward to the possibilities. I want to get into the mix and trade, although I needed a 3 day weekend. I will be flying out to Vegas on Thursday afternoon, for a PPL Leadership Convention. It is always an amazing time. There is nothing like being around affirmative people. Those who turn off the TV, and turn on their life. But prior to leaving I would like to make it a great trading week.
Also, if your reading this let me know if you like the “lightbox” style of graphs i.e. click and they expand.
Here are a few things I am looking over:
10yr – “‘Flight to quality” all the way to the 200 day MA. Too far, too fast? That is my guess. Fundamentally, this is what should have happened. I want to see how this support level gets tested early in the week. I am looking to play this bounce.
TNX%20trend.gif
The Biggest “tell” of the week-
Does resistance of the 61.8% retracement hold? or does the inverse head and shoulders pattern dominate? I doubt I will put any serious capital to work until I get a confirmation either way. My gut tells me “short”, that is why I have puts on IWM. But I am looking to gain some long exposure in Energy, at least through the middle of the hurricane season.
SPY%20headShould.gif
This looks very interesting to me. I was such a sissy early in the week, I couldn’t get myself to pull the trigger on XLE below 67. Going into hurricane season, this seemed like a natural. However, the chart looks really good right now, breaching resistance, and a 50 MA. Will it break above 70.18, I would like to be a part of the next move up. I will be watching this closely.
XLE.gif
I like this as a short, with a well defined stop loss. I have a trade that has a 10:1 risk reward, and it benefits nicely from a spike in Vol.
AEO.gif
I enjoyed this song when Sting created it, I really enjoy this rendition.

This is my favorite rendition of this song, by Israel Kamakawiwo’ole… MAKE it a great week

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Mondays trade. Small gap down then strong bounce. The internals are very strong.
AEO Entered 1 unit Nov 25p @ 1.15. @ 26.24. With the market so strong, I sold the position on the pull back to 25.77 (uptrend line for 1.35). I seem to still be trading timidly. The A/D lines are strong, and I have not seemed to follow these initial plan. Strange. It looked as though there was some support @ 25.70. And Same Store Sales is on thursday. I don’t want to ride options through that.
IWM – I have added to my position with 1 more unit Sept 83/75p for a theta positive trade @ 3.19 underlying at 79.58. This benefits heavily from a down move, Vega drop, and theta decay. I was stopped on this. Bummer. exited @ 80.07, after the afternoon price spike happened.
AMED – I have fully exited the position 40p calendar for .20.
DF – final contact spread of a trade I made a nice .20 profit. This one was for a slight loss (after commission). I sold it for .10. The short option was deep in the money, and I didn’t want to incur the cost of assignment
CY – I sold 3 units of 25p calendar @ .16. I have 5 more units to go. The back month (Feb) is showing huge volume today. Underlying is right in the sweet spot of 25.67.
LCAV – sold 1 unit of 35p calendar for .20.
IWM – 1/2 risk allocation. sept 82/77p, underlying 80.05. I could not have put this on at a better place, give the situation. I bought this spread at the first retest of the 80.05 level. This resistance level has held in place 3 other times. I have a very tight stop on this. I do not plan to hold on too long either way. It is a Sept spread, that gains theta decay, and is biased down.
Look out above it goes passed this level. UNCLE. I was stopped out on this 1 hr trade. Amazingly strong mkt. What is up? Exited @ 1.78 for a .14 loss @ 80.26
UNBELIEVABLY FRUSTRATING!!! The issue dropped like a stone. I hate getting out at the absolute top. SNAP!!!
I just sucked in directional trading today. AEO – exited WAY before I should have. Missed XLE, then tried to short IWM and was stopped. I lost some pretty good ching today. I exited a few of the calendars for nice profits, so I have that going for me… which is nice. But, Damn.

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