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April 7th, 2014 at 12:58 pm
/NKD/Wombat – That's just been a major line in the past so we expected it to have some support (not much so far). Failing there is very bad for them. All the indexes look more like they are going to fail than rise. I think the funds are too scared to sell now, for fear of causing an avalanche but someone is likely to bail and then things can turn ugly. This is what happens when you have low-volume rallier – you never test the real supports on the way up. Watch that line and the Dollar very closely if you must play but a wiser man might just stay out and watch until we get a clear market signal.
TZA/Wombat – I certainly wouldn't leave naked short calls under any circumstances. If you take a 3-month bull call spread, you are pretty much making a 2-month+ bet and what happens in between doesn't matter much. If you regret not making a short-term play – make one now but don't rip apart a perfectly good trade to make it something it isn't just because you regret your time-frame.
IBM/Scott – I looked at them when I went over the Dow, they are correctly priced so I couldn't see shorting them but I wouldn't go long either until they prove they can hold $200 as support from above.
TASR/Scott – And finally we'll get a chance to go back in!
CZR/Wombat – Well, let's start with the most important thing about Butterflies – LEAVE THEM ALONE!!! Did we sell May puts and calls last Monday so we could change them 7 days later? What if CZR goes back up $2 – will we roll them again? And then, when it goes down $2 again, do we roll back again? What is your target price? When are earnings? What's expected? What did they do last period after earnings and before? I know you must have considered all this before you decided to pull the plug on a position after 7 days, right?
Last earnings were early Feb, by the way and probably these earnings will be first week of May. We were at $17 in Nov and then $26 and now $17 again and we're betting on $20 being where they settle between now and 2016, that's 647 days from now of which, 7 have passed since we entered the trade (1%). Are you seriously going to ask me what to do 100 times between now and then?