Weekly Wrap-Up

Very quick wrap-up as something came up this weekend.

Last weekend we were very pleased with a bottom call at 11,000 and we've made nice virtual portfolio progress but we also decided to go much more conservative, closing down our Short-Term and Complex Spread Virtual Portfolio and focusing on our new $10KXtreme, Day Trading, Stocks and Butterfly Virtual Portfolios as four diverse strategies to practice in addition to our continuing $25,000 and Long-Term Virtual Portfolios, which are more market neutral.

This put our balance back to where I like it to be in a normal market, 75% LTP investments and 25% into our various strategies, which should serve well to take us through the summer while the market decides where it wants to go.

The week started very well with a big beat from BAC and we weathered our first serious set of earnings misses on Monday quite well and I said on Tuesday morning that the dip would give us a lot of buying opportunities and it certainly did!  Paulson shored up the markets in the morning and I thanked him that night but by Wednesday traders had already gotten impatient waiting for housing legislation to be officially passed. 

Existing home sales took the steam out of the market on Thursday morning (and 406,000 jobless claims didn't help either) and, in keeping with the week's "Flight to Safety" theme, I put up an article on vacation-proofing your virtual portfolio, as the markets just aren't as much fun as the beach this summer so it's a good time to lock in our profits (or stop our losses) and take a break.  As I said on Friday, it's a good time to take a more market-neutral strategy with a smaller percentage of our capital aimed at directional bets as we still expect a turnaround but, having failed to hit my Friday targets, we're just not sure when…

Meanwhile, our virtual portfolios held up well in what ended up being a flat week.  Our new virtual portfolios are based on taking advantage of the premium erosion of the calls and puts we sell but we did remove some covers over the weekend (the ones we were well ahead on) in hopes a housing bill would be announced and boost the markets.  If not, we re-cover and keep an eye on Washington and, of course, oil – which we still need to see back under $110 to make a serious impact on the market.

• Our new $10KXtreme Virtual Portfolio aims to make as much money as possible with $10,000.  In our first week, that turned out to be $1,607 – not too bad!
• The $25K Virtual Portfolio follows a more neutral strategy and neutrally gained just 1% last week, up 25% overall.
• Our new Butterfly Collection has captured AAPL, BIDU, FSLR and MA in its first week and we're up 4% there but that's really good as it's $3,915 with just $25K committed.  Hopefully, gains accelerate as we near expiration (3 more weeks).
• We also reset our Stocks Virtual Portfolio at $250,000 and we ended up with BAC, WFR, HOV and WM plays but just $17K committed so far so not a lot of conviction just yet.  We have gained a whopping $970 for our troubles so far.
• Day Trading continues to work exceptionally well with a 58% gain on the week.  We went for it on GOOG at just the right time and had a lot of good timing selling short calls against it.  Considering we started and ended the week with just 4 positions, it's funny that the DTP about tied the 50 position LTP for most activity.
• Speaking of the Long-Term Virtual Portfolio, our most senior virtual portfolio scratched out a 13% gain as our longs made a small comeback.

On the whole, we had a 15% gain for the week on 33 positions closed.  I'm trying a new format which breaks up the closed positons by virtual portfolio, hopefully it comes out well here as the gameplan for the summer is to focus on strategy, which we've been able to have ample conversations about as we pursue a more relaxing mix of trades: