Preparing for the week. Feb 9-13, 2009

The clues are written on the charts

I haven’t been posting to much on the market, although I have been quite active. Even when I am on the mountain I have been accumulating a number of March/April calendar spreads, and a few long close-end mutual funds.
We have been operating within two separate flagging patterns. Here are the two triangles I have been watching in the SPY. The downtrend from Sept 19th high has been violated and we are in the middle of the November election high to the “sell the news” low triangle. You can also see the Bollinger bands starting to squeeze. My portfolio is aligned well for this at the moment. I am certainly a seller at the 89-90 level (62% fib level, and downtrend.) 50% retracement, 50 day MA, and previous high @ 87 have offered significant resistance.
Retracements of this current rally are 84.5, 83.7 and 83 on the SPY
Here are the basics to what I see going forward.
Test of 87 level. If we don’t break above, there will be support @ 85, but if the rally fails “by time” then we head back down to 83. A break above takes us to 89-90. Then I exit my longs and get short.
spy 2.8.gif
The trend is my friend. And the trend is UP in the short-term, SIDEWAYS/NEUTRAL in the medium term, and DOWN in the long term. This is how I will play it until we breakout from the Bollinger Bands and triangle. I will be ready to pounce.
Some of my trades from last week:
EDD @ 10.87
ETG @ 9.51
PSY @ 6.31
RCG @ 2.45
SLS @ 2.84
SPY – bought 89/91/93c March butterflies to turn my 91/93c spread into a Broken-wing-butterfly. And doing the same with a few of my put butterflies.
DXO- Entered @ 2.44 and 2.41
NTRS – sold a Mar 60/65c spread
FSLR – 115/125/135 put butterfly for .85db and
and sold a Mar TAN 7.5p as a hedge for a 1.20cr.
and I was very active in calendar land
A video I put together last week…. enjoy

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