Sept 17 – Whaam Baam, thank you Maam

Insane day. I feel very fortunate to be making money in this market.

Today was dizzying. It the gap down caught me by surprise. I thought we may gap up, and then move down.
I became even smaller earlier in the day buy exiting some IWM exposure. Fortunately my AIG position from the other day paid off big today. INTU matured as well.
The Market was bloody today. To recap: Monday, S&P down 62. Tuesday S&P opens down 29, then rallies to up 20. Then Wednesday down 57. Wow. Simply amazing.
I have got to stop worrying about Federal intervention, and better respect the trend. I have some counter trend plays which have been moderately successful, but if I could only be more boring and bearish.
Good analysis from Brian Shannon,

I have been up nicely this week. About 8%. It has been a very busy trading week for me. 45 trades on monday, 40 tuesday, and 64 today. That is what was required for me to get the most out of my positions. I also scale in and out of positions in small amounts. i.e. 1 lot, then 5 lot, 20 lot, 5 lot… I remember when I was a futures day trader. 200-400 a day. That was just stupid.
INTU – Exited Sept/Oct 30p for .75 and .77. Bought for .31 about 3 weeks ago. Also, exited 3/5 of my 27.5p position for .54 and .55.
USB – Closed 2 units Dec/Jan USB 25c for .12. I have a few more of these to go.
FNM – 180 spreads of Dec/Jan 2.5p for .04. I lost a penny on this trade + comm. Fortunately the other 1820 spread worked out to receive very nice profits
AIG – Closed 5 of 7 units of 2.5p for .13. This was a great trade that fell into my lap. I picked these up for free on a panic sale. The profit was welcomed.
IWM – Closed 2 of 3 Oct 67/69p credit spread for .91. I lost some money on this one, which is never a welcome thing. It was just taking up too much mental capital in a difficult market such as this. The risk needed to be cut. I also closed a SeptQ/Nov calendar for 1.79.
UNG – Closed a Sept 36/38/40c Butterfly for .45. I opened this before the first hurricane, and am happy to be done with it. If I would have keep the entire position on, including the BWB and a bull put spread, It would have been a great trade, but I kinda botched it and broke even.
SPY – My most well timed trade of the day was a mid afternoon entry of a Oct/Nov 114p calendar for 1.22. The entry was made at SPY 119.5 (a 50% retracement from last nights close to today’s bottom).
Ideas for tomorrow.
PGH – I bought @ 15.13. If I am able, I will sell half of the position on a rally, and then hedge with an Oct 15p. This will limit my risk. i.e if I sell 1/2 at 15.50, and buy a put for the remaining position for .50. My total risk until Oct expiration will be (.13 less .22 dividend). guaranteed gain of .08. Ideally, I would like to see a breakout and some appreciation.
UPDATE – Sold 1/2 position @ 15.74, buying Oct 15p hedge @ .40. Locked in Profit on the trade. Sold into the downtrend line, and increase in Global Liquidity push in oil.
INTU – Sell the remainder of 27.5p calendars.
PGF – Buy a few hundred shares on breakdowns. Rules against the naked short sellers go into effect tomorrow. This preferred portfolio ETF has been crushed. The Dividend is around 12% and it included 39 different issues. I like the risk reward on this inexpensive ETF.
XLF – A number of ways to play this ETF with Volatility so high.
1 – BWB 1/3/2allocation of an Oct 18/17/15 for a .75 credit. Mx profit- 174, Mx risk 226
2- short put – Oct 17p for 1.15 cr. Mx profit – 1.15, Mx Loss 1700. Take delivery of XLF shares.
C – another banking play. Oct/Dec 17.5c for .40. I love this play. I have a number of these already. Someone was certainly looking to put a bear run on C. The new regulation enforcement may hault those short selling ambitions. The Vol Skew on this is very large, (40+%). Even if the Oct expires worthless, we still have until Dec to let this run. Sell a few units of the Dec17.5 and hedge the rest.
GLD – I’m expecting resistance @ 88-89. With Vol so high, I will look @ an 89/90/92 BWB. Then looking for a retracement. I will also be looking @ the Euro level of 146.95 (38.2% retracement from High 160.19 to Low 138.77)

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