Wednesday, June 25, 2008

Fed up?

Is it just me or if Fed is getting better and better at using seemingly plain language to confuse the heck out of everyone? Apparently even the big boys could not figure out what exactly Fed was thinking (just look at the intra-day charts of SPY/QQQQ).

Bulls obviously felt a letdown into the close, and the AH RIMM/ORCL ER have all the looks of a gap down coming tomorrow morning. Speaking of tomorrow, it will be a crucial day for bulls because if they could survive the opening down and closes the day in black, their chance of having a 2-3 day rebound will be greatly increased.

At this stage, even though I have a bearish bias towards the whole market, I am reluctant to be aggressive from the short side mostly because of the deeply oversold conditions on the daily charts, as matter of fact, I might catch a few falling knives tomorrow morning if the market gaps down big, and even better, QQQQ/SPY reach oversold on 30 min charts (at least for RSI2). Of course, pre-determined stops will be in place for all long positions and I will nimble when it comes to take profits.

Bottom line: bears are not yet done, but bulls are not yet over.

On today's trading:

1. Closed OIH put when it sliced through 215, too bad it is a small position.

2. Somehow decided to put BIDU around 327, did not promptly book the profits, ended up with a hole in my pocket.

3. Luckily I put MEE when it rebounded towards 91, and exited when it fell down to 88.5, that got me into the black today, woohoo!


pcaguy said...

Closed puts trades for 59%, 58%, and 38% respectively.
Closed calls for 31%
Sold 35% of my puts position for small profit. Still holding 140 puts.
Holding calls at a loss. Will add to calls position on POT at $217.50
Holding calls in profits.
Buy calls at $169 ?

flyingwabbit said...

My entry zone for aapl is 165-168. I am also eying on calls on all agriculture/fertilizer names.

pcaguy said...

Bot puts
Bot calls.
REBot calls after having exited my calls position at the high of the day.
Will follow your lead, Wabbit.

RazoR said...

blood on the streets, very cute...ok who had fslr puts? Not me, bot drys@79.5, rimm@125 and solf@20...cmon boys bringer back up, I'm sure the economy will be better by tomorrow!

RazoR said...

Oh I see pca had the fslr puts, how do you do that? They could have run it up thru 320 on the upgrade, amazing...

flyingwabbit said...

position update:

bot BIDU calls when it was around 317.5.
bot CTRP calls from 45.5-46.1,

still eying calls on MOS, AAPL and X.

pcaguy said...

Bot calls just under $55.
another coal name, top gainer on the nyse. Did not buy.
Added more calls at mid day
It sure looks like coal is the next big momentum play.
Added 50% more calls at $216.9 but I am way under water as this is the 3rd day in POT.
Waiting for Wabbit price of $166 to buy calls. Tomorrow's open ?
Closed out my puts when it hit $271.20 for a small gain per share but I had run my puts position way up there over 200 contracts.
My Strategy:
1. BUY PUTS on any top gainer that is not a momentum leader.
2. Buy coal stocks on the dips.
3. Trim my POT calls position but keep some on. Every dip in POT has led to profits if you bot calls.
4. Add to OIH if it gets back to $213 or less
5. Take profits when available and keep rotating cash.

flyingwabbit said...


Thanks for sharing the strategy! I like all your calls except coals, I think this sector is showing signs of topping so you might be careful on buying dips..

indeed blood on the street, what's your take here? I did not add/open new positions, might resume bottom fishing tomorrow morning if there is a big gap down, we will see....

pcaguy said...

Carter Worth just did his chart analysis on coal on Fast Money. He says it's gonna break down, too.
I'm in profits on JRCC and KOL but I had planned on them being the sole winners in a market of losers just like MEE had been for the last ten days.
Carter says SPX to 1200 so it looks like the only strategy is keep buying puts every day on the top gainers.

However, MEE ate my lunch for 2 weeks straight on my puts trade and I'm still in a hole.

My puts trade profits were double my call trade losses on POT and MON. I should have bot more PUTS today on AZO a& AEM, and probably should have bot RIMM puts according to Carter. Cramer likes RIMM here though.
Waterski day tomorrow. Ill work the open but hit the lake about 10 am Oregon time.

RazoR said...

my take? I'm pretty sure the market will never go up again! Anyway my last prediction was 11.3...if you connect the dots a total capitulation reversal bottom would be 10750...I'm still laughing at Najarian who said don't sell in may lol down 1500 pts on the same one can predict when the jersey boys will reverse the elevator...