Monday, June 30, 2008

Bottom watching

Trapped bulls hope that the bottom is in while the side-lined bulls and bears are hoping for a capitulation. I have already seen a few articles today talking about bottom-fishing here, however, I won't do any SW from the long side until we see the June employment report, which potentially could be a capitulation trigger.

Trading update:

1. BIDU calls: exited in the early moments when it spiked towards 320, only a small loss.

2. CTRP: exited when it broke 46 again, and lost around 15% instead of last Friday's 20% gain. Originally I planned to exit if it breaks 45, but the accelerating time decay somehow soured the whole thing.

3. PCX: Bought July150 Puts when it was around 154, but oddly enough, by the time it closed just above 153, the price actually drop a bit. A risky trade here, we'll see how this turns out.

Market will attempt another rebound tomorrow, which might gain some tractions if oil/energy sectors pullback somewhat here. Went through my list, and did not see any compelling long setups, and a few half-assed short setups. I think the most sensible thing to do right now is bottom watching.


Doug said...

I don't buy into the capitulation theme. Like housing where prices are still way too high relative to the realities(jobs,inflation, the house of cards in the financial world. consumer debt, retirement funds,etc.) If we get that capitulation in the minds of the wall street pundents the bounce off will be the shorting opportunity of a lifetime. When GM, a C, a KEY etc etc do what they have done in the last 6 months don't rule out the D word.

pcaguy said...

sold 800 contracts july 120 puts for 55% gain.
Bot 250 contracts july $240 calls at $3.36 ave. Was hoping for capitulation today and POT was down to $218 again so I loaded up.
Still holding 110 contracts calls from June 24, big loser.
holding 40 contracts $130 calls at a loss.


flyingwabbit said...

I agree with your assessment on the fundamental basis, however, that is very difficult to implement for a trade with very short time frame like me. are you a long-term player?

TA wise, I would not hold RIMM for long. Also, TA wise, AKS is a sell. but you may be right about the stock behavior following its addition to a major indices. As for MON, it might still be able to get back to 130/132 before the June OE.
Nice trade on AZO, now I see how you set up a trade like this.

pcaguy said...

Thanks, Wabbit
I'm trying to get back even on RIMM, very close. MON is a big loser.
Big winner on POT again but the AZO puts trade was so good it covered all of the other losses with room to spare.
possible puts trade ?