So far it is all going to plan. A small morning selldown, just a few SP points, but enough to sell DSX, and SMH into. I was trying to buy more upside GS calendars into the morning selloff, but nothing doing. UST calendars are maturing be a double, I plan on selling off half the position when they double. No need to be greedy. There is plenty of opportunity in the market.
S&P pivots I am watching this morning are 1342.2. If the internals are weak or only mildly strong, I plan on shorting into it.
CNBC is doing a disservice to financial news, by focusing on Spitzer. Stop it already. Do we really care? I absolutely don’t give a crap. Junk on TV.
I like working from the trading blueprint I worked out last night. I am looking for little sell offs as we move through resistance and into the February trading range.
SMH – sold 5 units of the Apr/May 26p calendars for .26. I am fine with taking the .03 loss.
DSX – sold final unit of June 25/20p for 1.80
BSC – Bought 2 units of a 3 month calendar. Apr/Jul 55p for 3.10 with underlying at 65.15. It was interesting, as the price moved down in price (closer to the strike), the spread narrowed a bit. Hmm. I also chose this trade to hedge my GS calendar. If the market goes down, this should gain value in opposition to GS. Personally I like the long GS, short Bear position.
So far so good today. I am working on a number of trades, but not getting filled so far. I am having fun playing Monopoly with my daughter, while collecting time premium in the amount of .3% of my portfolio per day. Lovin it. I ended up the day + .2%. Very nice.
So far this month I have had 3 cherry trades.
GS – 170/185c backratio call spreads from basing volatility. I received a Volatility Rush and directional help. That more than offset any losses I have had in the past 3 months (which thankfully have been mostly small).
Riding the SDS up as the market melted down last friday, then bought bullish GS Apr/July 170cCalendars with the proceeds. Also GS Volatility was peaking in the front month and I sold the April’s at their peak Volatility. Now the spread is widening out.
And the third peach has been UST. And of course anything can happen and screw it up. But I still have enjoyed this trade. I put on a 7% allocation in one acct initially. I have sold off 2% over the past week or two. But it is holding in there very well. I am looking at longer multi-month calendars but I haven’t been filled at reasonable prices. Now this is a sideways chart.
And as I mentioned yesterday, today’s selloff makes lots of sense. Not just because yesterday rose, but because we moved to the Feb Channel resistance and there are lots of people on their knees thanking God for allowing them to get out with only a minimal loss. I think today was a basing action to drive into the Feb trading channel. That would screw the bears, screw the people who trade then pray, and get CNBC to tell everyone that it is safe to go in the water again. Then WHAM! They run headlong into the 50 day MA, top of the trendchannel, and the downtrend line. Suckers.
The market gave up a little, as expected.