Friday, May 23, 2008

Weekend notes -- May 24, 2008

I will be leaving this weekend for a business/leisure trip to San Francisco (Stanford Univ.) and won't be back until next the end of next weekend. As the result, I mostly likely won't be able to trade or blog, though I will try to monitor the market.

Position Update:

I decided to close all the positions mostly because of the trip.
AAPL calls: the second half was closed today near 181.
DRYS calls: took a small losses on the remaining position when it was around 89.
EXM calls: exited the remaining position at even.

I also bought GS June 170 calls near 173 around the noon when it rebounded, but stopped out after it broke 172. I probably would have held the position if I would not be around next week.

Briefly on the market:

Today's drop capped a miserable week for bulls, and not only the 2-month rally came to a screaming halt, but the scenario of testing the March bottom becomes a real possibility.
On the weekly chart: the bears fought back by posting yet another counter bearish engulfing candle, and the volumes rose noticeably; positive momentum decreased for the first time in 6 weeks; stochastic turned down from overbought; other indicators are mixed for the near term direction.
On the daily chart: DOW led the market down with a breaking down through both May low and MA50; SP500 also decisively broke the May low and barely closed above MA50; NASDAQ is the strongest as it managed to close above the May low and enjoyed a comfortable distance from its MA50; for all major indices, momentum finally crossed down to the negative side and rising; both stochastic and RSI2 are approaching oversold.

My feeling is that more and more people start to realize that while the acute stage of the credit mess might be over, the hope of a speedy recovery might simply be a wishful thinking, which is now wilting as oil advances relentlessly and inflation signs can no longer ignored. Technically, the market might have a oversold rebound early next week, but the burden is now on bulls to prove that the primarily trend is no longer down. Personally, I will take next week's rebound as opportunity to close long positions and set up some initial short positions. I will definitely keep an eye on the long side, but probably have to be patient to let the decline run its course.

Have a great holiday weekend, folks, good luck!

6 comments:

pcaguy said...

Re DRYS:
Is there a correlation to some shipping rates published or online that affect the stock price ?
It appears DRYS has some correlation ot OIH. Has anyone determined DRYS movements relative to calendar events such as options expiration, Fed meetings, and so forth ?
PCA GUY

RazoR said...

I don't pay attention to the news unless its significant, I play drys on a technical level, it was overbought and gapped up many times on its run as usual. When it goes down it gets evil and nasty...all I know is that they are virtually printing money, so If they want to give me the issue below 80 I'll be glad to load up for the next ride to 130.

What are your plays today Pca?

pcaguy said...

Bot POT:
June $185 call at $12.04 average. -PYPFU
Sold -PYPFV ($11.6) for a 55 cent loss within 15 minutes of open
SAFM;
bot -SQSSJ July 50 puts at $3.86
PLCE:
bot -TUYSH July 40 puts at $5.72
DRYS:
bot 10 more June 90 calls -DQRFR at $5.5 and 5.1 now holding 15 at $5.86.
PCA GUY

pcaguy said...

Bot POT:
June $185 call at $12.04 average. -PYPFU
Sold -PYPFV ($11.6) for a 55 cent loss within 15 minutes of open
SAFM;
bot -SQSSJ July 50 puts at $3.86
PLCE:
bot -TUYSH July 40 puts at $5.72
DRYS:
bot 10 more June 90 calls -DQRFR at $5.5 and 5.1 now holding 15 at $5.86.
PCA GUY

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