Wow, my neck hurts from the market whiplash.
Although I didn’t take full advantage of the double bottom on the 61.8% retracement, I did make money. Dow was down to 11,644 it closed at 12,230. That was amazing.
I was delta positive for the last few days and it was beneficial today. Although I did lose on a few down positions DSL and COH. I cut them with only small losses. Overall the portfolio is up 1.5% on the day, 2.5% on the two day week. Love that theta decay.
I don’t think we are done with the down moves, however this maybe a multi day up trend.
The S&P started down35, then backed off to a 7pt lost, then retested the 35 pt low. At that point I made a few small long purchases. It is quite amazing to me that this near term bottom, bounced on the 38.2% fib retracement from the 2003 lows, and a previous consolidation. Also, the 50% retracement would take us to the S&P 1373 level (the point of the initial break). I’d look for a short around those points.
S&P 500 – This was an incredible bounce today, and very welcome. I want to see a bounce develop and offer some more short opportunities.
GOOG – Feb/Mar 550c calendar for 9.75 (Underlying @ 529), then sold it for 10.85 (underlying @ 547). I saw support @ 520 and made the play. There is so much premium is those options it is amazing.
MA- I wanted to get involved in the financials long with little risk, my preferred way to play is via calendar spread to take advantage of the elevated volatility. I bought the Feb/Mar 190c for 3.20 on the strong down move (underlying 172.28). I am still holding onto this trade. The 20pt rally was amazing. My Breakevens for this 3 week trade is 168 and 220. I was also looking at butterflies, but I liked the non-directional Theta decay nature of this trade.
COH – bought March 25p-17.5p for 1.50 (Underlying 26.81) and 1.05 (underlying 28.45). This is just a small two contract position to take advantage of downside
SDS – bought 69.50, sold 69.69, It ended up running up to daily lows, but I had enough downward exposure for my liking.
XLE – Bought 1 unit Feb/Mar 68c for .91 (underlying 63.58). Theta is 2.4 per contract. Breakevens are 62.4 and 75. It was amazing rally that brought this to the middle of the to 67.57.
DSL – bought 1 Mar 25/17.5p (underlying 29.05), sold it prior to the close for 1.40. Not good. Then sold 1 Feb 25/17.5p for 1.00 to take a .60 loss.
USB- Sold 2-35c for .50, and 2-35c for .60. Now I just have 2 Mar 30p. I kind of messed up this morning, I should have been out of my 30p on the open. The lack of action, cost me.
THIS is Important! I subscribe to Real Money.com, great commentary. This is an article written by James “Rev Shark” DePorre. I think he is right on.
Classic Bear Market Spike Not an All-Clear By Rev Shark
This is a very typical bear market spike. It is big and fast and is stunning in its intensity. It may well continue for another day or two, but the market is still busted.
Make sure you keep things in context. There will be some excited folks saying the worst is over, and even worse, the folks who were bullish a week ago will be congratulating themselves publicly, even though they are still far underwater.
Remain very cautious about this market, not withstanding the very impressive intraday reversal. We were due for that sort of spike, but it doesn’t change the big picture.
I was watching Fast Money and they had Suzie Orman on. Is it just me, or is that the most obnoxious lady on TV. Dollar Cost averaging stocks, without being aware of technicals is one of the surest ways to go broke. Learn how to Dynamically hedge with puts and collars if you must own uptrending stocks. Her method is financial suicide. I know because I added to my 401k consistently from 1999 to 2003. I think I am still trying to dig out of that hole. Brilliant Suzie, Brilliant. Buy the above book if you really want to invest. We as individual investors have advantages that the Whales of Wall Street don’t.
I just put on a few and took off a few before I left for the hill.
MA – Took off the Feb/Mar 190c for 4.70. That was a nice over night trade with a 45% gain.
XLE – Sold Feb/Mar 68c for 1.25. 33% gain
MA – Bought 4 units of MA 190p for 3.70, 3.25, 3.10, and 3.0. The spread closed @ 3.55. This offers 13 theta points per spread. But more importantly it is an ATM time spread with a large 13% volatility skew.
DIA – Double/Double Iron Condor 111/109p and 131/133c for .51.
C- sold 2 units of feb/jan 32.5c for .20. This is a loss. Fortunately my adjustments should allow me to do a little better than breakeven.
Overall it was a very nice day with a 1% portfolio gain and I sit in 82% cash. My Greeks are:
Delta -8.22, Gamma, -288, Theta 169, Vega 291. I happy to be where I am at this moment. I will be happy with a 5% compound gain on the week, considering the volatility. However, honestly it should be much greater.
Although I wasn’t around much on Friday, I did make a few trades. Also, increased my portfolio by 1.5% today. Not bad with the S&P down 21.
C – Sold my final unit of feb/Jan 32.5c on this morning’s opening rally for .27. Sold 2 units of Feb/Mar 25p for .48 and .50
AMT – Bought 2 units of feb/mar 35p for .17 and .16. (underlying 36.85 and 36.15)
DTV – 2 units of Feb/Mar 20p for .52 and .50 (underlying 22.06). This has been a nice 100% gainer. I still have 4 units of 20p and a 22.5p calendar.
WEN – Sold 2 units of 22.5p p 2 .45. This was a nice 120% gainer in a week. I still have 2 units on.
It was an excellent day of trade, as most of the trades went off when I was on the hill. Excellent.
One thought on “Jan 23, 2008 – 600 pt intraday range. Insane. 1/24-1/25 too”
Donâ€™t believe one optimistic word from any public figure about the economy or humanity in general. They are all part of the problem. Its like a game of Monopoly. In America, the richest 1% now hold 1/2 OF ALL UNITED STATES WEALTH. Unlike â€˜lesserâ€™ estimates, this includes all stocks, bonds, cash, and material assets held by Americaâ€™s richest 1%. Even that filthy pig Oprah acknowledged that it was at about 50% in 2006. Naturally, she put her own â€˜humanitarianâ€™ spin on it. Calling attention to her own â€˜good willâ€™. WHAT A DISGUSTING HYPOCRITE SLOB. THE RICHEST 1% HAVE LITERALLY MADE WORLD PROSPERITY ABSOLUTELY IMPOSSIBLE. Donâ€™t fall for any of their â€˜humanitarianâ€™ CRAP. ITS A SHAM. THESE PEOPLE ARE CAUSING THE SAME PROBLEMS THEY PRETEND TO CARE ABOUT. Ask any professor of economics. Money does not grow on trees. The government canâ€™t just print up more on a whim. At any given time, there is a relative limit to the wealth within ANY economy of ANY size. So when too much wealth accumulates at the top, the middle class slip further into debt and the lower class further into poverty. A similar rule applies worldwide. The worldâ€™s richest 1% now own over 40% of ALL WORLD WEALTH. This is EVEN AFTER you account for all of this â€˜good willâ€™ â€˜humanitarianâ€™ BS from celebrities and executives. ITS A SHAM. As they get richer and richer, less wealth is left circulating beneath them. This is the single greatest underlying cause for the current US recession. The middle class can no longer afford to sustain their share of the economy. Their wealth has been gradually transfered to the richest 1%. One way or another, we suffer because of their incredible greed. We are talking about TRILLIONS of dollars which have been transfered FROM US TO THEM. All over a period of about 27 years. Thats Reaganomics for you. The wealth does not â€˜trickle downâ€™ as we were told it would. It just accumulates at the top. Shrinking the middle class and expanding the lower class. Causing a domino effect of socio-economic problems. But the rich will never stop. They just keep getting richer. Leaving even less of the pie for the other 99% of us to share. At the same time, they throw back a few tax deductible crumbs and call themselves â€˜humanitariansâ€™. Cashing in on the PR and getting even richer the following year. IT CANâ€™T WORK THIS WAY. Their bogus efforts to make the world a better place can not possibly succeed. Any ‘humanitarian’ progress made in one area will be lost in another. EVERY SINGLE TIME. IT ABSOLUTELY CAN NOT WORK THIS WAY. This is going to end just like a game of Monopoly. The current US recession will drag on for years and lead into the worst US depression of all time. The richest 1% will live like royalty while the rest of us fight over jobs, food, and gasoline. So donâ€™t fall for any of this PR CRAP from Hollywood, Pro Sports, and Wall Street PIGS. ITS A SHAM. Remember: They are filthy rich EVEN AFTER their tax deductible contributions. Greedy pigs. Now, we are headed for the worst economic and cultural crisis of all time. Crime, poverty, and suicide will skyrocket. SEND A â€œTHANK YOUâ€ NOTE TO YOUR FAVORITE MILLIONAIRE. ITS THEIR FAULT. Iâ€™m not discounting other factors like China, sub-prime, or gas prices. But all of those factors combined still pale in comparison to that HUGE transfer of wealth to the rich. Anyway, those other factors are all related and further aggrivated because of GREED. If it werenâ€™t for the OBSCENE distribution of wealth within our country, there never would have been such a market for sub-prime to begin with. Which by the way, was another trick whipped up by greedy bankers and executives. IT MAKES THEM RICHER. The credit industry has been ENDORSED by people like Oprah Winfrey, Ellen DeGenerous, Dr Phil, and many other celebrities. IT MAKES THEM RICHER. Now, there are commercial ties between nearly every industry and every public figure. IT MAKES THEM RICHER. So donâ€™t fall for their â€˜good willâ€™ BS. ITS A LIE. If you fall for it, then youâ€™re a fool. If you see any real difference between the moral character of a celebrity, politician, attorney, or executive, then youâ€™re a fool. No offense fellow citizens. But we have been mislead by nearly every public figure. WAKE UP PEOPLE. THEIR GOAL IS TO WIN THE GAME. The 1% club will always say or do whatever it takes to get as rich as possible. Without the slightest regard for anything or anyone but themselves. Reaganomics. Their idea. Loans from China. Their idea. NAFTA. Their idea. Outsourcing. Their idea. Sub-prime. Their idea. High energy prices. Their idea. Obscene health care charges. Their idea. The commercial lobbyist. Their idea. The multi-million dollar lawsuit. Their idea. The multi-million dollar endorsement deal. Their idea. $200 cell phone bills. Their idea. $200 basketball shoes. Their idea. $30 late fees. Their idea. $30 NSF fees. Their idea. $20 DVDs. Their idea. Subliminal advertising. Their idea. Brainwash plots on TV. Their idea. Vioxx, and Celebrex. Their idea. The MASSIVE campaign to turn every American into a brainwashed, credit card, pharmaceutical, love-sick, celebrity junkie. Their idea. All of the above shrink the middle class, concentrate the worldâ€™s wealth and resources, create a dominoe effect of socio-economic problems, and wreak havok on society. All of which have been CREATED AND ENDORSED by celebrities, athletes, executives, entrepreneurs, attorneys, and politicians. IT MAKES THEM RICHER. So donâ€™t fall for any of their â€˜good willâ€™ â€˜humanitarianâ€™ BS. ITS A SHAM. NOTHING BUT TAX DEDUCTIBLE PR CRAP. In many cases, the ‘charitable’ contribution is almost entirely offset. Not to mention the opportunity to plug their name, image, product, and ‘good will’ all at once. IT MAKES THEM RICHER. These filthy pigs even have the nerve to throw a fit and spin up a misleading defense with regard to ‘federal tax revenue’. ITS A SHAM. THEY SCREWED UP THE EQUATION TO BEGIN WITH. If the middle and lower classes had a greater share of the pie, they could easily cover a greater share of the federal tax revenue. They are held down in many ways because of greed. Wages remain stagnant for millions because the executives, celebrities, athletes, attorneys, and entrepreneurs, are paid millions. They over-sell, over-charge, under-pay, outsource, cut jobs, and benefits to increase their bottom line. As their profits rise, so do the stock values. Which are owned primarily by the richest 5%. As more United States wealth rises to the top, the middle and lower classes inevitably suffer. This reduces the potential tax reveue drawn from those brackets. At the same time, it wreaks havok on middle and lower class communities and increases the need for financial aid. Not to mention the spike in crime because of it. There is a dominoe effect to consider. IT CAN’T WORK THIS WAY. But our leaders refuse to acknowledge this. Instead they come up with one trick after another to milk the system and screw the majority. These decisions are heavily influensed by the 1% club. Every year, billions of federal tax dollars are diverted behind the scenes back to the rich and their respective industries. Loans from China have been necessary to compensate in part, for the red ink and multi-trillion dollar transfer of wealth to the rich. At the same time, the feds have been pushing more financial burden onto the states who push them lower onto the cities. Again, the hardship is felt more by the majority and less by the 1% club. The rich prefer to live in exclusive areas or upper class communities. They get the best of everything. Reliable city services, new schools, freshly paved roads, upscale parks, ect. The middle and lower class communities get little or nothing without a local tax increase. Which, they usually can’t afford. So the red ink flows followed by service cuts and lay-offs. All because of the OBSCENE distribution of bottom line wealth in this country. So when people f
orgive the rich for their incredible greed and then praise them for paying a greater share of the FEDERAL income taxes, its like nails on a chalk board. I can not accept any theory that our economy would suffer in any way with a more reasonable distribution of wealth. Afterall, it was more reasonable 30 years ago. Before Reaganomics came along. Before GREED became such an epidemic. Before we had an army of over-paid executives, bankers, celebrities, athletes, attorneys, doctors, investors, entrepreneurs, developers, and sold-out politicians to kiss their asses. As a nation, we were in much better shape. Strong middle class, free and clear assets, lower crime rate, more widespread prosperity, stable job market, lower deficit, ect. Our economy as a whole was much more stable and prosperous for the majority. WITHOUT LOANS FROM CHINA. Now, we have a more obscene distribution of bottom line wealth than ever before. We have a sold-out government, crumbling infrastructure, energy crisis, home forclosure epidemic, 13 figure national deficit, and 12 figure annual shortfall. The cost of living is higher than ever before. Most people can’t even afford basic health care. ALL BECAUSE OF GREED. I really don’t blame the 2nd -5th percentiles in general. No economy could ever function without some reasonable scale of personal wealth and income. But it can’t be allowed to run wild like a mad dog. ALBERT EINSTEIN TRIED TO MAKE PEOPLE UNDERSTAND. UNBRIDLED CAPITALISM ABSOLUTELY CAN NOT WORK. TOP HEAVY ECONOMIES ALWAYS COLLAPSE. Bottom line: The richest 1% will soon tank the largest economy in the world. It will be like nothing weâ€™ve ever seen before. The American dream will be shattered. and thats just the beginning. Greed will eventually tank every major economy in the world. Causing millions to suffer and die. Oprah, Angelina, Brad, Bono, and Bill are not part of the solution. They are part of the problem. THERE IS NO SUCH THING AS A MULTI-MILLIONAIRE HUMANITARIAN. EXTREME WEALTH MAKES WORLD PROSPERITY ABSOLUTELY IMPOSSIBLE. WITHOUT WORLD PROSPERITY, THERE WILL NEVER BE WORLD PEACE OR ANYTHING EVEN CLOSE. GREED KILLS. IT WILL BE OUR DOWNFALL. Of course, the rich will throw a fit and call me a madman.. Of course, they will jump to small minded conclusions about ‘jealousy’, ‘envy’, or ‘socialism’. Of course, their ignorant fans will do the same. You have to expect that. But I speak the truth. If you donâ€™t believe me, then copy this entry and run it by any professor of economics or socio-economics. Then tell a friend. Call the local radio station. Re-post this entry or put it in your own words. Be one of the first to predict the worst economic and cultural crisis of all time and explain its cause. WE ARE IN BIG TROUBLE.