Technical Tuesday – Twelve Thousand Two Hundred or Bust!
by Phil - June 7th, 2011 8:11 am
Our winning streak continues!
With 335M barrels of oil still on fake order at the NYMEX, yesterday’s early morning short play at $100.60 gave us a ride back to $99 and that was good for as much as $536M pre-market. In the morning post, I said "hopefully we’ll get another crack at shorting oil at $100 or higher" and we did – right at the open – and that was good for a ride back to $99 for another $335M of potential gains (just following through with last Thursday’s plan to break the NYMEX speculators).
We took the money and ran on those USO June $40 puts at $1.40 (up 22%) in Member Chat at 10:53 but the next rebound in oil didn’t quite get to $100 ($99.88) and we missed the run down to $98.50, which is where it’s sitting this morning.
Of course, we don’t only short oil… In my 9:58 Alert to Members I, of course, reminded them that oil was at $100 and shortable again but we also grabbed the QQQ weekly $56 puts for .33 and those finished the day at .55 for a 66.6% gain (the mark of the Blankfein), which is not bad for 6 hour’s work (or so I am told). We also had a more complicated spread with DDM offsetting SPY as a sort of arbitrage on two spreads.
Thanks to David Ristau’s guest appearance in Member Chat pre-market, where he mentioned he was jumping on our short oil bandwagon, we selected HAL for a short trade in Member Chat at 10:10 along with our planned PCLN short play (mentioned pre-market in the morning post) and both of those were, of course, huge winners already so thanks for HAL David!
It wasn’t ALL bearish, we went long on XLF as it hit $14.90 with some short put sales along with a very long-term bull play on HOV but we took a loss bottom-fishing on IWM as the June $79 calls stopped us out after falling from $2.07 to $1.95 (down 5.8%) but we had to try something long to get a little balance or risk being too bearish. Our bullish sentiment didn’t last long though and we decided to short the Nasdaq futures at the 2,300 line at 11:42, those gave us a spectacular run down…
Facebook
Twitter
LinkedIn 
del.icio.us
DiggTGIF – Stop the Week, We Want to Get Off!
by Phil - August 20th, 2010 8:29 am
This week cannot end soon enough for the bulls.
While it’s no shocker that we are finishing the week where we started and, in fact, finishing the options expiration period where we started last month (July 16th), it’s still very disappointing that we are making no progress. This weekend I asked if it was "Time for a New, New Deal?" I went to DC over the weekend and I’ll write about that this weekend but let’s just say I’m not seeing the political will to actually do something major to put Americans back to work and, as I said last Friday, when I said "Hoping the Weekend Brings Perspective":
Weekend stance – off this disappointing two-day run I’d say as neutral as possible over the weekend. I do think we need a good blow-off bottom now because we blew our chance to turn it around on volume yesterday.
Trading Range – I was counting on QE2 AND a stimulus announcement by next week. After the weekend we may have neither so it’s really going to be all about watching our levels in absence of any fundamental market forces. Monday we have the NY Fed and NAHB Housing Index. Tuesday is Housing Starts, Building Permits and a PPI that will also be BTE along with Industrial Prodcution (probable disappointment) and Cap Utilization (dragged down by refiners). Thursday is Leading Economic Indicators and the Philly Fed and that’s it for the week so, once we get past housing, the newspaper is more likely to move the markets than the data points.
We got so-so Leading Indicators yesterday and a TERRIBLE Philly Fed, leading me to send out a 10:03 Alert to Members saying:
Whoa! Philly Fed is disaster! -7.7. Leading indicators are up 0.1%, which is in-line but Philly was expected at +8 so this is TERRIBLE! We should test yesterday’s lows at least on that.
DIA $103 puts give good bang for the buck at .74 to stop the bleeding – just keep in mind thay have a ton of premium and need to be taken off quickly when momentum stops
While that play worked out very nicely, the bleeding I referred to was my 9:43 Alert to Members where I reiterated my "small gambles" on SSO, QLD, DDM and USO – but I did say at the time: "Don’t forget we get Leading Indicators and Philly Fed at 10 and…
Will “THEY” Hold It Wednesday – Veteran Scammers on the Loose!
by Phil - November 11th, 2009 7:57 am
We are off to the races today!
Too bad I’m going to miss this, I’m away for the day but have fun on what is probably going to be the lowest-volume day since our top in mid-October. Let’s call this a bonus rally as market pushers take advantage of the low, Veteran’s Day volume and lack of substantive news to goose us over our 5% levels, which will now give us some critical bullish lines to hold.
Yesterday I said we would be looking for retraces before breaking higher and clearly we are not getting them as the market is up almost a full point in pre-market trading as the Dollar falls below 90 Yen and now a full $1.50 is needed to buy a Euro, up from $1.25 (20%) in March. Does it bother you that your bank account has lost 20% of it’s buying power compared to the rest of the civilized World in just 8 months? Does it bother you that your wages (if you are one of the 89% that are not already unemployed) have lost 20% of their buying power? If you are the average American citizen – Not at all! No one seems to care and it’s too complicated for the MSM to explain because it requires math.
We are still too bearish (55%) for a move over our range tops as I underestimated the ability of the pumpers to stir enough excitement on low volume to get us over the 5% lines we discussed in yesterday’s post (Dow 10,206, S&P 1,086, Nas 2,152, NYSE 7,087 and Russell 588) let alone the 25% upside levels we targeted in Monday’s post (Dow 10,250, S&P 1,100, Nasdaq 2,187, NYSE 7,000 and Russell 600) – which is where we planned on getting more bullish. Will we hold it? That’s the question of the day and, even if we do hold it today on low volume – it won’t matter until we get a proper test. As you can see from Mojo’s S&P chart, we are now into our bonus round of upward movement that may last until next Wednesday but, more likely than not, 1,100 is a great shorting opportunity on the S&P this morning.
I wrote an article earlier about the Global Oil Scam and the same techniques that are used to manipulate the energy markets are in play today. We are hearing a…
Testy Tuesday – Dow 9,650, Berkshire $60 Edition!
by Phil - November 3rd, 2009 8:14 am
Wheee, this is fun!
Just two weeks ago, on October 17th, I warned in the Weekly Wrap-Up that it was "Dow 10,000 or Bust" for the next week and we failed that one and last Wednesday we were looking to hold NYSE 6,900 and THAT failed too. Now we enter into the second phase of our limbo game where the deep-voiced guy asks the question "how low can you go?" and we’ll be setting our next bar at our long-standing 9,650 target for the Dow, which we are already hitting in pre-market trading. If that fails, we’ll have to look down to S&P 1,000. As you can see from Jesse’s Chart, we took a nice bounce off serious resistance yesterday but we’re just not feeling it yet, even though the market is now as technically oversold as it was in March.
Yesterday was like a roller coaster and my first Alert to Members of the morning targeted 9,775 as the on/off line for our bullish/bearish posture on our DIA covers. We whipped past that line right about 10 am as we got good reports from ISM, Pending Home Sales and Construction Spending but by 12:45 we had broken back down so I sent out an Alert calling to refocus back to 55% bearish by adding the DIA Jan $100 ($5) and Jan $102 puts ($6.20), already covered by the Nov $99 puts ($2.50).
The reason we mess around with our covers is we don’t want to flip in and out of our option positions, which are generally either straight bearish or well-hedged long positions, is because options carry a relatively large bid/ask spread and cost you money every time you get in and out. So, on the whole, we’d rather let our over-riding cover plays, like our DIA spread, adjust our stance as conditions change, making a single adjustment that keeps us balanced as we ride out the market waves.
It’s been a couple of weeks since we had a good, old-fashioned stick save but we got a mother of one yesterday (as seen in Dave Fry’s chart) which was right on schedule as Kustomz bought it up in Member Chat at 3:09 and I agreed at 3:19 that "It does feel like a pre-stick move" and we grabbed VIX $25 puts at .85 to protect ourselves from a sudden surge in complacency.
By 3:33, my next comment to Members was: "The stick lives!" but…
Thrill-Ride Thursday: Jobs, What Jobs?
by Phil - October 15th, 2009 8:12 am
Yesterday was very hard for us.
Our theoretically conservative $100,000 Virtual Portfolio dropped 6% in one day as we had a farily bearish position into options expiration that I stubbornly refused to adjust this week. Surely, I thought, after running up 250 Dow points from Thursday, 10,000 would act as some kind of resistance? We’re also up a neat 500 points for the month of October so that’s our 5% rule and to not get a 1% pullback, even in the most bullish of markets, is very rare indeed.
So we stayed bearish yesterday and got crushed by the AMZN $90 calls we sold as well as UYG calls we sold and our PSQ calls we bought for protection got slaughtered as the Nasdaq flew up not 5% but 5.5% for the month and up 6.2% from it’s October 2nd low. While we are disappointed, we’re not terribly concerned as we’re only going to roll the calls to November anyway and I did promise the members that, if we hold our breakout levels for 2 closes, then I’ll be shifting more bullish. I’ve been trying to identify more bullish positions this week but our mix has still tended bearish as I’m just having so much trouble buying into this rally.
In yesterday’s Member Chat, my comments on the current situation was:
I do wish we were more bullish, this is a very smart group of people and we’re pretty bearish but so is the general investing public or there’d be volume to this rally. I have a hard time ignoring the fact that 600,000 more people lost their jobs this week and, even if it’s "only" 500,000, I still think that’s not really a sign of a healty economy. I think the REITs are off in fantasy land and I think so is the government, who cannot keep borrowing money at these low rates. The dollar has dropped 25% of it’s value since March so the market is only 25% ahead of the currency fall which means a flight back to the dollar, which could happen very suddenly if an EU nation like Spain collapses, could send our market down as fast a 9/11.
That being said, we have no choice but to follow the technicals and now that we can look at nice, easy support levels like Dow 10,000, S&P 1,100, NYSE 7.200, Nas, 2,200 and RUT 620 and simply
…
German
Spanish
French
Italian
Portuguese
Japanese
Korean
Russian
Chinese
Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...
Ilene is editor and affiliate program
coordinator for PSW. She manages the Favorites backup site
(