Sept 18th – Fed Day

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The eagerly awaited LEH earnings report was very good. The Market it up off the open. The Fed report takes place around noon. We will see what happens.


The eagerly awaited LEH earnings report was very good. Best Buy reported great earnings. The Market it up off the open. The Fed report takes place around noon. We will see what happens.
I continue to add to my USB position. I can only get filled for .05. Nothing cheaper even though it is mid-marking at lower, interesting.
Here are my views going into the announcement. The index charts do seem very bullish to me, but we will see:
No Change – The market falls because the housing and financials are loosing
1/4% – acknowledging weak growth. Although with proper wording, the market will perceive the Fed is on the job. This is probably the best case scenario. There will still be sellers, believing the fed is not doing enough.
1/2% – The fed perceives the economy NEEDS stimulation. This really isn’t a good thing. The dollar will drop. Banks and financials will recover because of the spread profit potentials will increase. No matter how the bulls spin it, the cheap dollar (record cheap) is not what we want, is it?
Probably the single most influential song to guide my career choices

FED Announcement – Fed knows something is up. Unanimous vote to cut 50 pts and the market rockets to the upside. The economy is slowing so much, let’s drive the market upward. Hmmm.
My acct was well positioned to take advantage of this up move. The account is up dramatically!!!
I can’t believe I am nervous with 3 days togo with the IWM 2.5 pts away from my upper strike on my short Iron Condor, and 350 Dow points on my DIA Iron Condor, but I am. Geez. At the start of the day I was 700 dow points away from breakevens each way. Give me a break. Trading is not easy, not matter how much of an edge one has.

The reason we define these levels is so we do not have to rely on emotions or beliefs in what the price should do based on fundamentals or any other reason we may have. We could argue that the half point says that things are worse than first thought. We could speculate that this could be nothing more than a “one day wonder” as people discover that their reaction to the announcement is “wrong”. The hard cold reality is that the price DID move thru the resistance to cancel the canceled the prospect that a top was trying to form. For the shorter term directional position we have a breakout, and we do not have a top on the shorter term charts, which creates an upward bias. At this time the price would have to cancel the breakout to cancel this upward potential.
– Jim Ellis, TimeFrameInvestor.com

The Day’s Trades:
USB – Added 4 more .05 32.5c calendars. Very nice
DGX – Exited 1 units of 55p Oct/Nov put calendar for .70. That is a nice double. I still have 4 units on. I will start to scale out slowly in 1/2 unit increments.
ACN – bought 40p Oct/Nov calendar unit prior to the fed announcement @ .27. the underlying rallied with the rest of the market.
PDLI – 1 unit Jan/Feb 20p for .05. Nice entry
MTH – Exited 1 contract. Directionally I am so out of sync. Homebuilders exploded to the upside and I am out of this Dec 20-12p spread. BIIB exploded up, and I exited this bullish trade last week. Awe Snap.

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