I now have no positions (except for some old GM Shares)

Lost $220 getting rid of 10 January 15th monthly VIX 14 puts. Not sure if its the right decision, but I wasn't sure if those would ever be profitable a this point since we are entering a new downturn.

SO NOW I'M $1023 in the hole...all this can be made up by selling ONE bull put spread in the money when the market starts to turn. I need to be looking for where this turning is going to happen so I can buy calls too....must make money on this downturn. Will have to bite at first signs, while giving enough time for a turn. These turns are rapid, and getting in at the moment does NOT seem to work for me. Oh well. Get in early then, and suffer for a bit.

Repeat after me: When the vix starts to climb with green candles, buy calls on the VIX.

I will try puts on VIX again when the market is showing signs of a bottom....this time I will have to bite. Better early than late. And buy VIX 18 puts at the minimum...no 14 puts even if they are super cheap because you might not make money. VIX 20 puts even better if vix goes to 25 or so.


AHHHHHHH!! Not as easy to make money on market as I had thought.

So anyway, here's an up to date chart so you can see how things stood when this post was written:

I don't know what's wrong with the charting website but we are not at 2080. We are at 2058.90

DANGER

http://jlfmi.tumblr.com/post/106612362500/smart-money-options-traders-displaying-extreme

So, I lost $600 today. First, TSLA triggered my $5 trailing stop...spent $370 to get in, $200 to get out. Ouch.

Then I had placed an extremely risky (as it turns out) options position at 2090/2085...puts. Market sliced right through it. Sold for a $500 loss. After its all said and done I'm now $1000 in the hole.

The uptrend is starting to wane. I would be very careful and consider shorting soon. Will probably do it on my paper account just to practice.

Neuroderm: crazy day. Saw the news blurb in my feed but ignored it. Should have looked. Holy smokes!

If it keeps going up tomorrow morning I will jump on the band wagon as things often go up for more than one day, although we've undoubtedly seen the most of this rise.

For tomorrow...time to paper trade! Just looked at FinViz unusual volume and here's the results:
I need to look for unusual volume each morning and jump on things such as Neuroderm.

http://finviz.com/screener.ashx?v=320&s=ta_unusualvolume

The following look good and I will put $1000 paper trades on all of them with either stock or options and see what happens:

UP:

SIGM
CHW
RUSS
IMRS*
CJJD
MCR
ACU
NDRM

DOWN:

VSCP
PKO
ARGS
PTY
GNBC
ROIA
SPP
THRK
SYNC
MIN
WDIV

Personal Weekly Review; NW Bias: Stay long or Neutral

Now I'm $200 in the hole, up from $2000 a week or two ago. I'm taking my game much more seriously because I'd love to turn a profit, and build up a $3000 positive buffer zone because being in the green is better than being in the red in terms of potential losses. I plan to not slack off because I've seen what happens...

So SPX has been rallying and will most likely continue to do so next week. The feeling I've been getting from articles I've read on investing.com, businessinsider.com and various other sources is that next week will be more lively. However, its essentially the same setup as this week: 4 trading days, and one of those is a short day. New Years on a Thursday just like Christmas was, and the eve is the short day. Christmas must be a bigger holiday. Anyway, if the action is similar we are likely to not rally more than 30 pts (what we did this week, essentially) especially since the momentum has been slowing from the record-breaking days of last week. I was a bit surprised with how far we went but things (barely) stayed within my iron condor although I was panicking at the last moment there.

My TSLA play turned a profit. I keep hearing about cutting your losses early, but, hey the must mean once you notice a concrete trend change. I was down $130 on my $360 TSLA call at one point...ouch. But I just said I'm going to give this time to work. Now I'm up by $30 or so. But that's not all, momentum seems to be building to the upside, and TSLA (~228) has a good chance of being well above my strike price (232.50) on January 9, expiry day. So this one might turn a nice profit. Have 9 trading days left...we shall see.

Other companies I watch are rallying too, most notably GM which has been itching to do so...that stock started straight off the FED line and hasn't looked back. Momentum has slowed near resistance, however. Should have picked that one up early but I was still spooked being $2000 in the hole and bailing out of some March $33 calls at a significant loss at around $32. AT&T is up...I want to get a piece of that stock for the dividend, but the market is expensive right now. If I get more money in my account I will probably sell cash-secured puts, but the yield isn't much for this company, and selling puts ties up a lot of cash. Not a very attractive proposition overall.

Wish I could put all my cash to work, but with the type of trading I'm doing the rewards are very high per the absolute risk, and thus a little bit of cash can do a lot. But losses aren't cheap. So having cash on hand...or at least being able to sell out of holdings at a profit to get cash is essential.

AAPL is starting to break out. I may buy a call on this stock...a little late, again, but this one could have more to go, or not. I think from a technical analysis standpoint it's not going to go significantly further down now. Momentum is clearly on the up side.

I'm concerned with the show from $TICK. While it was net positive today as shown from the intraday chart, on the daily chart there has been selling into the close every day. This contrasts with the strength seen during the rally after our 9.8% correction in October. This suggests that either people are profit-taking, or institutions are bailing out, AGAIN. And THAT would mean down we go. For now the market should keep on trucking with upward momentum, but I have no clue what will happen in the future.

This discussion wouldn't be complete without mentioning oil: still rangebound. In hindsight I should have allowed more time to get out of my short position profitably instead of at a loss. I had till the 3rd week or January to get out on a down swing. Right now I'm looking for a rally of US crude to the highs of its range at $58 or so to get in and short anew. Crude is probably the perfect swing trade. Get in when its at $54-55, get out at $57-58. Then short it. Then long it. Repeat. It would have worked in the past few weeks at least. However, I'm not brave enough to go long on the lows right now...after all, it is in a downtrend, and I'm still in the hole. I will short it when I get an opportunity, though.

I'd like to short the Yen or Ruble...I suppose I should do some research and then look for a profitable entry point. I think those currencies have stabilized for the time being, however. And options perform best with fast moving underlyings. I should do research.

Topping Out?

I busted a risky move on Wednesday...well, wouldn't have been so risky if the big what I assume to be profit-taking move hadn't happened, but since one of my iron condor spreads, 50-55 puts, were purchased for $0.05 since the market moved so far I decided to make use of that margin and put on some more at 75-80...because that's where I could get some money. The trade was a net $435 credit after comissions. However, I really could have made 6 hundred because of the huge drop at the end of the day on Wednesday...and this drop calls things into question. So while that drop is excellent for my 95-100 calls OMG on the 80 put position!! The market could have a second down day and my position is only 1.88 points away.....

There are several possibilities:

1. Market moves up through calls
2. Market moved partway through calls
3. Market closes between calls and puts
4. Market moves partway between puts
5. Market moves down through puts.

Then there's the possibility that during the day the market will move and I'll be able to buy back both spreads at a pittance, so it doesn't matter where it closes.

The most likely scenarios are 3 or 4. Thus, for risk management, I should be looking to buy back the put side tomorrow at reduced cost unless the market seems to say otherwise. Certainly if market trades closer to 2080 throughout the day (gaps down or what have you) I MUST buy those puts back because market is tending to hammer down at the close. I don't want to lose $2500 to gain $400.

Out of Oil, Into Tesla

Despite trading higher overnight oil was at lows this morning so I paid $60 to get out of my oil shorts.

I could have waited longer perhaps. I don't know what's right. But getting out of a losing trade is important too, although the fundamentals favor that oil continues to slide perhaps. I'll have clearer thoughts about this in hindsight. That's a $60 loss overall

The SPX spread is doing well so far. Market is hardly moving up each day which is just what I need.

EDIT: If I had waited just a bit longer I could have gotten out at a small profit.


Bought 1 January 9 TSLA call for $365. Why? Its rebounded and could go higher. And I want to make money. I will be looking to sell around the expiration data unless TSLA looks to have peaked, at which time I will sell.

If TSLA goes to $215 I will sell.

EDIT: UG. The oil....got out way too soon. TSLA call: got in at a high price. Things aren't going well today. I think I should stop trading.

EDIT 2: I got out of TSLA for a loss of half what I went in for, I believe. BAD TRADE.Trailing $5 stop loss triggered at $223.50 or so after equity moved north of $228. Now (1/6/15) trading at ~210. Fail.

AND IF I HAD STAYED IN OIL I'D BE MUCH HAPPIER.

Not Out of the Woods

I discovered that a period 5 weighted moving average (without trying anything else) does a fairly good job of showing what the $TICK is doing. As we can see there is still some residual selling going...most likely profit taking before the Christmas holiday week. But the fact that we bounced of the resistance of the last highs shows that we are not out of the woods yet to speak. I think the market will break that resistance next week and go to new highs but its possible that it won't. It is hard to imagine it moving back down, especially since oil is now rangebound at $54-57 bbl.

The graph can be accessed from here: http://www.barchart.com/interactive_charts/stocks/$TICK

12-19-14 Bias: Neutral for Christmas week

I just put a $2500 max loss (well, minus the premium I received more like $1,500) iron condor spread on SPX for 2050/2055 - 2095/2100. The underlying was 2065-2068 when the trade was placed, although I legged in that was only partially successful since the aim was to place the higher spread near the close today, but the order triggered before then.

I did this because I expected the market to slowly creep up over the Christmas holiday, and I wanted to take advantage of this pause and the limited trading days. I originally wanted to buy calls but I decided this was not a good idea due to both the holiday and the size of the run the market has already had, and that an iron condor trade would be my best guess in terms of profitable strategies for this time, as it combines both a bull put spread and the additional goodness of a call spread. I was not confident enough to place a butterfly spread.

Right now I'm $1500 in the hole for the year because I bought back my losing spread for $3000 instead of taking the advice I received and sticking with it.

I had an opportunity earlier to get out of some puts I bought an an oil (UCO) ETF but erred in because of greed in assessment of my priorities and erred in executing the trade once I decided I wanted to get out. I need to remind myself that I wish to get out of these oil puts for now since oil is range-bound and time decay will eat away at my position. I will take the next available opportunity to get out profitably. I had profitable trades that I locked in profit on, and placed this trade expecting oil to go even lower, something it seems it will may not do with vigor over the near term. Once I get out of my position I will look for an opportunity to get back in on a small bounce in the oil price.

Merry Christmas!

12-18-14 Market Bias: Consider Going Long (With Caution)

This is just a quick analysis...I'm not going to go into much depth. This analysis really isn't that great.

My biggest concern is with the Christmas holiday we are not getting representative market action. I feel that if you really wanted to be safe you should stay out of the market until after Christmas. However, if you do you're likely to miss opportunity. But its better to be safe than miss opportunity some times.

The SPX gained 48 points today after being trapped in the jaws of a bear downturn. The primary stimulus was the dovish FOMC minutes where the FED left the "considerable time" phrase in and talked about patience in raising rates...this eases some of the concerns that the FED would hike rates quickly. The FED also sounded confident about the markets and that is a green light: http://www.investing.com/news/stock-market-news/u.s.-stocks-extend-rally-on-fed-assurances;-dow-soars-2.43-320862

Economic data had mostly been good the last few days, with US Jobless Claims continuing to fall.

I feel that the first signs of a change in market mood happened early morning on Tuesday 12-16-14 when oil started to rally. Although the day ended down I think that was the last hurrah of the bears on this page of the story--for now. Oil is likely to slowly decline as investor mood has somewhat shifted in my view, but it remains dangerous. If oil starts to decline vigorous we will see a halt in market advance. The price of oil has big influence in the market as can be seen from the following daily chart of Tuesday when the mood shifted. The next day oil fell but the markets decided to rally, and rally they did, up (not shown):

Global concerns remain, so the markets are by no means out of the woods yet. Here are my concerns:

• Oil--could start falling again.
• China's slowing economy.
• Europe's politics and economic growth
• Russia's declining currency.
• Japan's recession.

However, some factors to the upside are:

• Institutional buying
• Europe woes less extreme than thought
• Possible increased central bank stimulus

An upbeat federal reserve and a strengthening US Economy.

I am no expert by far. Much of my opinion is based on the $TICK which now shows solid buying which will probably last for quite a few days, driving the market up. However, the market has risen so fast...this concerns me.

I would feel much better if the market gave back some of its recent gains tomorrow. It didn't seem like this rise was supported with a lot of volume...seems to me to be due to the holidays. However, I will probably jump in tomorrow with $1000 in calls (options) and a month long outlook. I will update if my mood changes.