covered short on $SPY 135 puts at .46 area from .77 small profits
/t covered short on $SPY 135 puts at .46 area from .77 small profits but was worth the shoot. and the short on 136 puts erased losses on 135 and 136 calls. Disappointing week on SPY but ptofitabe but very good week on $AAPL making this a great year so far
adding $SPY 136 weekly calls at .20-.21 OVERSIZED
/b adding $SPY 136 weekly calls at .20-.21 OVERSIZED so now we are up to a 2x oversized stake on $SPY 136 calls weeklies with the first entry yesterday .26, plus we still hold the credit spread on the puts side I am now considering rolling the SPY puts credit spread up.
buying $SPY 136 calls at .26-.27 OVERSIZED . big smiles on our strategy from yesterday
/b buying $SPY 136 calls at .26-.27 OVERSIZED . big smiles on our strategy from yesterday where we ended up exiting the butterfly holding a strait $SPY 135 puts credit credit spread plus long $SPY 135 calls long position that today is in the money. now we have added a new 126 calls position as I see on my formulas multi day renewed buy signals on the verge and we may get greek resolution today. and big smiles on $AAPL finally not just passing but blowing trough 470s something that was 2 weeks late but inevitable after her last Es $-).
sold the $SPY 135 weekly puts at .83 area and bought $SPY 135 weekly calls at .64 area 2x oversized
/s sold the $SPY 135 weekly puts at .83 area and bought $SPY 135 weekly calls at .64 area 2x oversized. the butterfly did its job am now exiting it at a small loss but overall the strategy remains profitable on the puts spread and adding to the bullish strategy with a new long leg 135 calls. the data was good so want to be bullishly placed now. Since we have a strong credit spread position protecting against sideways action feel comfortable making the long leg twice the usual entry right of the bat.
adding $SPY 132 weekly puts at .19-.20 OVERSIZED yesterday we entered these at .27-.28 so this brings down the average
/b adding $SPY 132 weekly puts at .19-.20 OVERSIZED yesterday we entered these at .27-.28 so this brings down the average. The market fell at open but bounced up on great data but a little to fast so will use this sharp push up as an add opportunity. The data was really good but we should pullback intraday before continuing higher, if we do I wish to instead of looking for a break even level instead will look to create a credit spread by shorting the $SPY 133 or 134 puts next hopefully at a higher premium than they are trading at now.
buying $SPY 132 weekly puts at .27-.28 my formulas are at a critical point multi day where the market direction is soon to be chosen
/b buying $SPY 132 weekly puts at .27-.28 my formulas are at a critical point multi day where the market direction is soon to be chosen for the rest of the week This is a bearish bet of the intraday highs on $SPY but the strategy will be to see if the market pushes higher or not. If we push higher then I would not hesitate to short the $SPY 133 weekly puts same contract amount to bring the strategy into a credit spread. But the reason why I am starting of with bearish position of market day highs is because I see real possibility of my multi day negative on my formulas clearing.
News for February 3 2012
Euro-Area Manufacturing, Services Return to Growth, Led By Germany, France
Apple Infiltrates $3.8 Trillion Market With iPad (AAPL)
Blackstone Studies Brocade Buyout on No Deal (BRCD)
Deutsche Bank Shuns ECB Loans for Reputation (DB)
Greece Seeks Second Rescue, Fights to Stay in Euro
SNB Head Warns of Political Fallout After Crisis
As EU Ramps Up Biofuels, Climate Debate Intensifies
Facebook and Zynga: Sharing Riches Isn’t Always Easy
Rösler Opposes ECB Write-Down on Greece
Merged Glencore, Xstrata Would Take Aim at Iron Ore
Apple Pulls 3G-Capable iPhones, iPads from Germany Online Store Due to Motorola Injunction (AAPL)
The CMA Sovereign Risk Monitor (CDS Values):
adding doubling the $AAPL 460 week y calls leg and adding to the 455 puts short
/b adding doubling the $AAPL 460 week y calls leg and adding to the 455 puts short to make this position off balanced but still 3x oversized the spread. This way if we have a gap up we can still profit though so we will if we pin to the 455 line
Creating debit spread to PROTECT the 200% profits we have on the $SPY 132 calls that we entered into at .45 and are now 1.40 from yesterday by shorting same contract amount of the 133 calls at .62
/s Creating debit spread to PROTECT the 200% profits we have on the $SPY 132 calls that we entered into at .45 and are now 1.40 from yesterday by shorting same contract amount of the 133 calls at .62 . we hold the long $SPY 132 calls leg but we erase risk of a possible pullback by shorting these in the money calls. If we were to pass day highs then would exit this short leg and again allow the long leg to continue. Now with this strategy we are protected against theta and if we were to shake we could lock in the profits on the short lower once we are well placed to move up again. As far as $AAPL this one has been very disappointing today still believe we should see momentum renter her but the long 465 calls are now in danger of removing some of the profits from the short puts strategy. Again on SPY if $SPY passes day highs then will take a quick loss on this short on calls wherever the premium may stand.
selling $AAPL 450 puts at 1.70 area from .86-.90 locking in the 2x oversized profits while buying same contract amount of the $AAPL 445 puts at .64 area same contract amount
/s selling $AAPL 450 puts at 1.70 area from .86-.90 locking in the 2x oversized profits while buying same contract amount of the $AAPL 445 puts at .64 area same contract amount. this moves the long leg on the $AAPL 455 puts credit spread down from 450 to 445 locking in over a 2x oversized profit on the long leg while moving down the long leg from 450 to 445. now this bring up the risk a of this play considerably if the pullback would have follow trough since we still are in deep loss on the $AAPL 455 short leg. I am betting on $AAPL bouncing from here to erase that loss but if it dose not, then mental stop on the short leg reaming at 100% move up from short entry. of this strategy works out and $AAPL dose bounce here then the over profit on the strategy will double, knock on wood.
Rolling Up Credit spread by locking in short on $AAPL 445 weekly puts from yesterday at .40 level from 1.35 then Creating Credit spread by selling $AAPL 455 weekly puts at 2.60 area trough $AAPL 450 puts at .80 area its at .97 now
/s Rolling Up Credit spread by locking in short on $AAPL 445 weekly puts from yesterday at .40 level from 1.35 then Creating Credit spread by selling $AAPL 455 weekly puts at 2.60 area trough $AAPL 450 puts at .80 area its at .97 now. OK I already shorted the 455 weekly puts and am looking to get out long leg around .80 as to not be naked and be in a credit spread. some can’t do this then you would only have a slightly worse spread than me. by rolling up a credit spread means I lock in one that is now very profitable and move up many a strike or 2 and do a credit spread of the same contract amount. and since the last credit spread was 75 cents and this one will be about 1.80 it makes the new money allocation 2.5X oversized twice the size of the first one after locking in good profits of about 70% of an OVERSIZED.
Creating Credit spread by selling $AAPL 445 weekly puts at 1.35 and buying $AAPL 440 weekly puts at .60 area
/s Creating Credit spread by selling $AAPL 445 weekly puts at 1.35 and buying $AAPL 440 weekly puts at .60 area OVERSIZED the spread. By making sure the spread is the oversized money allocation then if we have sideways action and we lose 100% on the 470 calls then we also make 100% on the short puts position . I am bullish and see a pullback on $AAPL here as unlikey, but if it was to tern bearish since the 470s are so far out of the money its easy to short closer to the money calls if I had to and turn the whole strategy into an iron butterfly. I do not think that will happen but have it ask an option.
buying long $AAPL 470 weekly calls at .28-.33 OVERSIZED super high risk play
buying long $AAPL 470 weekly calls at .28-.33 OVERSIZED super high risk play. Its financed with some short puts plays from last week. Last week $AAPL was held back after great Es and believe that this week we should get the follow trough we failed to see last week. Looking to add to the short puts strategy by adding $AAPL 145 weekly puts credit spread trough 140 puts.
The Week in Crayons
Despite ending the week somewhat off their new highs, the markets for the most part continued the slow and relentless rally that began about a month ago. As has been the case during that time, sellers have been few and far between and price action once again occurred on muted volume with relatively little volatility. Not much has changed since last week from a technical perspective and most of the analysis I mentioned in last Friday’s post still stands.
Looking at a chart of the e-mini futures contract for the S&P 500, we can see that we are still in the same narrow rising channel that has contained our rally after breaking out at the start of the year. Price is for the most part in the same range it was in last week except for a failed attempt above 1320 which occurred during the middle of the week off the back of strong eps reports(most notably AAPL). We are now very close to last year’s highs which should serve as a strong magnet for price action as the bulls will eventually try to push price to new highs mirroring the action that has already occurred in the nasdaq composite index.
However, we remain oversold and are beginning to see signs of waning momentum. Notice that we printed a yellow candle on our SG22 momo trend bars on Friday’s close, the first such bar in over a month. This is a hint that upward momentum is slowing down and traders should begin to exercise caution in regards to our current swing up. The first key level to watch if this weakness persists is the 1300 area. This was support last week, and a break below it would also likely take price out of our rising channel. After that, the rising 20 day moving average would likely become the next key area of support which would also coincide with the mid 1280′s which supported price nicely after breaking past our last major pivot high formed in late October. Trader’s should be wary that price dropping into these levels shouldn’t necessarily be seen as a sign to short this market as sellers have been virtually non-existant so far this year and a retracement at this point may end up taking the form of a benign sideways drift instead of a deep price pullback. If price were to remain in our channel and continue squeezing higher, look for the 1340 area to become a major test as we begin to probe last year’s highs.
While this type of slow rise can be frustrating to traders that feel they have not capitalized enough on it can be frustrating, continue to remain patient and wait for the proper setups to appear as we work off our oversold nature very close to some stiff resistance on the longer term charts.
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buying $AAPL 460 weekly calls at .18-.20 OVERSIZED so am now 3x oversized
/b buying $AAPL 460 weekly calls at .18-.20 OVERSIZED so am now 3x oversized and am creating debit spread $AAPL 445 puts at 2.20-2.00 OVERSIZED trough 435 weekly puts at .24. I am now as bullish as one can be in a single day intraday on AAPL with very high risk calls on the table but fully offsetting against theta with puts shorts so sideways action would not hurt me.
Creating a Credit Spread by selling $AAPL 440 puts 1.35 area trough $AAPL 435 puts at .40 area 2X OVERSIZED
Creating a Credit Spread by selling $AAPL 440 puts 1.35 area trough $AAPL 435 puts at .40 area 2X OVERSIZED . am betting on $AAPL not falling more and interim protecting the long on 460 calls against premium decay if we were to have sideways action. Have not yet aded the second long on 460s would like to get 35 cent area if she was to give it. So 2x on puts short to finance the soon to be 2x on calls longs.
bought long $AAPL call long position on 460 weekly calls at .54 area
/b bought long $AAPL call long position on 460 weekly calls at .54 area OVERSIZED, with intention of adding to these calls again with only 2 days till expiery. We still hold the 445 weekly calls and we have 100% profit on the 390 trough 380 puts spread that was 2x oversized. The earnings on $AAPL were to strong and am betting on us getting back above 460 before the close. As I send this out the calls are down to .45 and I have not yet added to the 460s but will get a second entry in soon enough.
The Week in Crayons
The markets continued their slow march up this week with little to no real pull backs as the bulls relentlessly stepped in to support the markets any time there was a hint of a drop. We have now drifted in one direction(up) with relatively light volume and volatility for about a month on most of the major indices which is in stark contrast to the highly volatile back and forth movement we experienced for most of the latter portion of 2011. While we can’t truly know until we experience a substantial retracement on the current move, it appears that the market has had a change of character recently and is more likely to be bullish to neutral instead of the neutral to bearish undertone that characterized the back end of last year’s trading. In fact, the start to 2012 is somewhat reminiscent of the start we had in 2011 which also began with a slow and steady march up that seemed to defy gravity.
Looking at a near term chart of the e-mini futures contract for the S&P 500, we can see this low volatility uptrend clearly. Notice how the last several week’s worth of price action is confined to a single narrow range channel. As mentioned earlier, this is in stark contrast to the volatile oscillation that occurred prior to this move. We are now clearly above several key areas of resistance including all of the major moving averages and are poised to challenge last year’s highs. However, Stochastics has had an oversold reading for the entirety of the breakout and while we can continue this slow squeeze all the way to the highs, risk reward does not favor chasing momentum here unless your time frame is less than one to two days for a trade.
Of course, action has been completely bullish for several weeks now, and someone looking to short this should realize that the potential for us to squeeze to last year’s highs is very real. In fact, the nasdaq composite has already formed new highs this week and could be a harbinger of things to come from its relatively weaker peers. In addition to the possibility of a continued squeeze higher, another thorn in the short seller’s case right now is the potential change in character in the markets which could lead to a benign correction that drifts either sideways or slightly down and fails to offer proper rewards commensurate with the risk taken at this point.
As we can see on an older chart of the e-mini futures contract for the S&P 500, this exact scenario occurred during the end of 2010/beginning of 2011. Notice the long narrow channel which contained price action neatly for practically three months. Also note that we were oversold for basically the entire time as well.
While this scenario doesn’t have to play out exactly the same(and likely won’t), it should offer traders a hint of what can possibly occur over the next couple of months and serve as a good warning for those that are looking to short this type of action prematurely. On the other side of the coin, looking at the steep drops that occurred at the end of that run should also serve as a warning for anyone looking to chase extended price action into areas of potential distribution.
We are now a few weeks into the new year and while the character of the market appears to have changed, astute traders should keep an eye on price action and wait for the market to conform to their expectations/scenarios, instead of allowing the market to force them into poor trading decisions.
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Creating an Iron Butterfly by shorting $NFLX 100 jan calls at .84 area vertical credit spread
/s Creating an Iron Butterfly by shorting $NFLX 100 jan calls at .84 area vertical credit spread. trough $NFLC 105 at .03 area since we already have the credit spread on puts from earlier in the day now with this credit spread on calls on the same 100 strike it puts us into an iron butterfly into the close. This strategy now has the calls short heeding the puts short and vice versa.
buying long stock position IMAX at 20.76-.80 This is with a swing in mind with a target of 25.80
/b buying long stock position IMAX at 20.76-.80 This is with a swing in mind with a target of 25.80 but I may end up holding this instead longer term, have not yet made up my mind. There is a movie coming out in Feb John Carter that is specifically filmed with the cameras used on avatar and if it becomes a big could drive strong revenues to imax so may hold to see how that movie pans out. Larger technically the chart looks great long term. My hesitation in another long term play is due to the huge amounts of TSLA and AAPL stock stake that I hold.
buying a long options call position on $SPY 131 calls at .28-.29
/b buying a long options call position on $SPY 131 calls at .28-.29 sorry for late post as I send this out its at .34 but feel that the market is to well positioned. And big smiles on our shorts on 129 puts yesterday $SPY .
going bearish bonds by buying a long options puts position on $TLT 121 weekly puts
/b going bearish bonds by buying a long options puts position on $TLT 121 weekly puts . I would like to enter around .33 have not yet found an entry but am looking for it here. The market is very strong yet bonds have not fallen so a new bearish swing in bonds may be in order if the market can continue.
The Week in Crayons
While the markets opened down on Friday looking tired and ready to roll over after a week of positive gains, they gained traction midday and eventually rallied to close just below the days high’s. Friday’s price action was part of a larger pattern of afternoon strength that has become prevalent during the early stages of the 2012. While this is typically bullish in nature as it shows that sellers are having difficulty in gaining control of the markets from the buyers, traders should also take into account that sellers are consistently attempting to push the market down but are eventually becoming overwhelmed as buyers continue to step in during intra-day pullbacks. Another key factor to consider is that this price action is occuring at relatively strong levels of resistance.
This behavior is evident as we look at a chart of the e-mini futures contract for the S&P 500. Notice the string of candles with long lower wicks over the last couple of weeks. Most of these are some form of doji candle and reflect indecision as the markets attempt to find a fair price. While there are a few hammer candles sprinkled into the mix and the overall pattern looks fairly bullish, context should always be taken into consideration when examining candles for clues on future price behavior. While a hammer candle often signals a potential for a bullish reversal, this must occur after a prior downtrend in order to be viewed as a valid signal. When hammer candles occur after a long uptrend, they instead hint at future weakness as sellers are beginning to appear even if they have yet to truly gain control of a market. While this is not necessarily a bearish signal, it certainly is a warning that bullish momentum is beginning to wane.
Another point to consider is the strongly oversold Stochastics reading we are printing on the S&P futures. We have been oversold for a few weeks now and are certainly due for some sort of pullback as price attempts to find equilibrium at new levels. However, traders should not take these signs of temporary weakness as flat out bearish signals as overall price action this year has been strongly bullish. There has been a consistent bid throughout the last two weeks and price is now clearly above the critical 200 day moving average. We have also just cleared the pivot high formed in late October and are in the process of forming a critical higher pivot high indicating that we are now techically in an uptrend.
One level to watch if we pull back is 1260. This was the scene of our breakout at the start of the year and held as support when we tested the gap created from that breakout. This will likely also coincide with the rising 20 day moving average which should provide additional price support as well. Past that, the next key level would be around the 200 day moving average in the neighborhood of 1242 or so. Depending on the timing, this could also coincide with the bottom trendline of the symmetrical triangle we formed over the last quarter of 2011 which would also likely support falling price action. If those two levels do not hold, 1200 would be a likely area of conflict and would present a critical test regarding the state of the markets.
Looking at the overall picture, traders should recognize that while the potential for a squeeze higher is possible, the odds are not in favor of buying now when you consider that we are at levels of fairly strong resistance while the market is showing signs of becoming tired after a nice 3-4 week rally. Now is the time to identify key levels of support on stocks and patiently wait for them as the markets begin to work off their oversold nature whether it be through a retracement or a slow sideways drift.
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selling $SPY 128 calls at .32-.30 and .26 from .13 so put to 148% profit and selling $SPY 127 weekly calls at 1.15 area 105% profit so we made on todays day trades 2.5 X oversized profits
/s selling $SPY 128 calls at .32-.30 and .26 from .13 so put to 148% profit and selling $SPY 127 weekly calls at 1.15 area 105% profit so we made on todays day trades 2.5 X oversized profits but more importantly also sold the rest of a huge 127 position from yesterday and that was of size enough to compete with a 8x oversized short puts . Plus it seams like the have a full 100% profit on the 127 SPY puts shorts that we locked in 1/2 of yesterday but today that should be 100% profit. So al in all after taking losses on other longs like 129 spy calls this week we should end up with a full 21X OVERSIZED pure profit week $-). Last week we lost but this week more than makes up for it big smiles $-). This is why in options sizing small controlled positions is vital because U have to be able to take losses for when it works in your favor the $ returns are worth it.
/b buying $SPY 129 and $SPY 130 next week calls at .40 and .74 areas respectively both oversized . and locking in profits on short 1/2 $SPY 127 puts at .19 area as to keep a 4x oversized short overnight.
/b buying $SPY 129 and $SPY 130 next week calls at .40 and .74 areas respectively both oversized . and locking in profits on short 1/2 $SPY 127 puts at .19 area as to keep a 4x oversized short overnight.
selling 1/2 $SPY 127 weekly calls at 1.30-1.28 188% profit
s selling 1/2 $SPY 127 weekly calls at 1.30-1.28 188% profit on the day trade on a position that was very large meant to be a leg to protect the short on 127 puts that are now profiting big aswell.
buying $SPY 127 weekly calls at .45-.50 a very large stake enough to be able to short 126 calls to make this a credit spread and have us in a overall iron condor till clarity is seen
/b buying $SPY 127 weekly calls at .45-.50 a very large stake enough to be able to short 126 calls to make this a credit spread and have us in a overall iron condor till clarity is seen. I am starting off with the long leg before the short leg.
shorting $SPY 127 weekly puts at .75-.72 OVERSIZED trough 126 puts at .39 area this brings up the total short at 4X OVERSIZED at .75-.54
/s shorting $SPY 127 weekly puts at .75-.72 OVERSIZED trough 126 puts at .39 area this brings up the total short at 4X OVERSIZED at .75-.54 . I can not add any more to these shorts, if it were to work against me I would double the contract amount of the long 126 leg. as I send this out 127s are at .83 and long is at .45
/bl buying $FSLR stock long term at 36.00 this is for a tuck away and if you look at weekly and monthly charts I like the potential of such strongly oversold levels.
/bl buying $FSLR stock long term at 36.00 this is for a tuck away and if you look at weekly and monthly charts I like the potential of such strongly oversold levels. I would like to hold FSLR for the next few years from here, I do not think the solar industry will completely go away and this is the strongest US solar company period. The affordability of solar is continually gaining where price per what will in the next few years make solar perhaps one of the cheapest forms of energy. its like the exponential increase in speed of microprocessors, where technology constantly yielded more and more speed year after year. Something similar is happening with solar technology where it constantly is able to get higher amounts of electricity for a cheaper price. I waited years to start loading up FSLR for the long term and at 30s I think this may finally be the all time lows.
adding $SPY 129 weekly calls at .36-.39 OVERSIZED and adding short $SPY 127 weekly puts at .71-.70 OVERSIZED the spread trough $SPY 126 weekly puts and buying TBT at 18.40 2x OVERSIZED stock
/b adding $SPY 129 weekly calls at .36-.39 OVERSIZED and adding short $SPY 127 weekly puts at .71-.70 OVERSIZED the spread trough $SPY 126 weekly puts and buying TBT at 18.40 2x OVERSIZED stock. OK I am more than bullish the markets and today see all pullbacks as buying opportunities hence the ads on SPY 129 weekly calls and the short on 127 puts. Plus bonds I believe are well placed to fall so am focusing on TBT stock 2x oversized thats the bearish bond ETF. Now mind you according to my sizing strategy a stock position is 5 times the money allocation of a more risky option stake so this single 2x oversized stock stake is the money allocation of 10 options plays. Less volatility obviously in TBT. Earlier today when we did the first credit spread on $SPY the long 129 leg I entered into at .29 and wish to make this next long leg around .35 if she will give it. This is the clearest example of a possible market breakout to move into a long term uptrend that we have seen in half a year hence my very aggressive bullish market positioning on pullbacks.
shorting $SPY 127 weekly puts at .58-.54 2x oversized credit spread trough 126 puts
/s shorting $SPY 127 weekly puts at .58-.54 2x oversized credit spread trough 126 puts. I have not yet entered the 126 long leg but would with to get them at .25 area. The reason Im making this twice the spread money allocation as usual is to fully hedge the 2x oversized long stake on 129 calls against sideways action.
adding $SPY 129 weekly calls at .49-.50 OVERSIZED we entered initially last week at .23 and are up 100% already
/b adding $SPY 129 weekly calls at .49-.50 OVERSIZED we entered initially last week at .23 and are up 100% already. The market breakout we saw as a possibility last week I believe is this week finally materializing. Am looking to accumulate strongly $SPY calls this week with another 2 entries lined up. We gaped up a lot so a pull back is very possible would add on a pullback or higher on strength confirmation. Wish to make a new 3 entries on these calls to bring us up to a full 4x oversized options stake this week expiery calls.n Am also looking to accumulate puts shorts to finance the call bets and protect against sideways possibility.
The Year in Crayons
The last week of 2011 in the markets was mostly uneventful as price action basically drifted sideways finishing the week right around where it started, capping off a year that also finished right around where it started. Of course, while the action this week was fairly quiet on low holiday volume, most of this year’s sideways action was done in a much more spectacular fashion as bulls and bears both were trapped on several occasions resulting in explosively volatile moves up and down the charts as the markets figured out the edges of our broad range of consolidation.
Looking at a chart of the e-mini futures contract for the S&P 500, we can see that this year’s action was littered with several bull and bear traps as we probed the key levels of our wide trading range. We can basically divide the year into two periods;
(1)The massive head and shoulders pattern we formed in the first eight months of the year.
(2)The two staged recovery during the last few months as the bulls clawed their way out of the huge hole formed during the breakdown from period one.
Dividing the two phases of this year’s action is the slightly rising neckline of the head and shoulders pattern which supported price action strongly during phase one, but ultimately became a key level of resistance as it became a price ceiling during the second phase of the year. Keep an eye on this trendline as it figures to affect the direction of future price action as we open trading in 2012.
In examining the first period of trading of 2011, one important point to keep in mind is the context under which it took place. We had rallied sharply over the previous two years after a disastrous plunge during the back end of 2008 and there was quite a bit of debate as to whether the markets could break past the highs we formed just prior to the 2008 crash on the back of quantitative easing or if we would drop back down to new lows on a “double dip” move. Each of the key points of the head and shoulders pattern were moments where either the bulls or the bears became convinced that their scenario would win out only to see the market “inexplicably” run away from them. Of course, eventually in late July, the bears finally won out after a strong hammer candle fooled the bulls into thinking that the neckline would indeed hold on the “too obvious and easy” to see head and shoulders pattern.
This spectacular fall led to the second phase of our year’s action in which the previously shell shocked bears now dared to dream of a double dip while the bulls desperately tried to recapture the gains they had made during the previous year’s rally. The markets first attempt at stabilizing after the steep drop we experienced in late July and early August occurred during a volatile two month stretch that featured several swift moves as bulls and bears repeatedly fooled each other as price sharply fluctuated between the extremes of the short term range. In late september, price action finally exited this range to the downside, but ultimately failed as the market instead formed a double bottom as price quickly reversed course and headed higher. The bear trap formed during this false break down can be viewed as the sister move to the bull trap that led to the breakdown from the neckline and amazingly led price back to and through the level from which we had initially broken down from to begin the second phase of the year. Even more amazingly, volatility actually expanded during this tremendous squeeze and even continued for another month as price spectacularly failed at the new price ceiling formed by the neckline from the head and shoulders pattern and threatened to break down back to our lows after several days of repeated distribution with no buyers in sight. However, the bulls eventually stepped in and were able to push the markets back to ground zero to end the year and form a big doji candle on the yearly chart.
Below is a yearly chart of the SPDRs S&P 500 trust etf (SPY) showing the action of the last couple of decades. As we can see, this year’s action formed a doji candle reflecting the indecision that marred most of the year’s trading. This was to be expected after three years of strongly trending action (one down, two up) and is likely to be followed by more indecisive behavior as we are firmly in the middle of a fifteen year range that has now had two major tops and two major bottoms defining it.
The two multi-year tops occurred during the overly exuberant heights of the dot-com era and the real estate boom. The two bottoms occurred during the desperate depths this country experienced shortly after 9-11-01 and after the financial collapse/debacle that led to our most recent recession. These are all MAJOR events and traders should keep in mind that price will likely stay contained within these parameters until there is a proper catalyst to push it through. Of course, part of the reason why trading was so erratic this year is because the threat of major catalysts has become pervasive during the current environment. For instance, the last three years of free money can be construed as the third “good times” era of the last couple of decades and may end up culiminating in another major top if we continue to fall back on quantitative easing. On the other hand, the continued threat of insolvency across the world can ultimately lead to a calamitous drop either to or below this multi-year range and ultimately lead to another major bottom at some point in the next few years.
As we close this year and look towards the next, traders should step back and look at the big picture as they develop their game plan for the coming year(s). Good luck as you enter 2012.
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shorting $SPY 126 weekly puts at .36 and .29 I wanted to short at .40s but markets never fell enough to give the premium on the puts
/s shorting $SPY 126 weekly puts at .36 and .29 I wanted to short at .40s but markets never fell enough to give the premium on the puts. credit spread through 125 puts at .04 oversized the spread. There is again real resistance on $SPY 126.20 area where every body of every candle yesterday stayed bellow. This short on 126 puts can help hedge partly the long on 126 calls both today expire.
adding $SPY 126 weekly calls at .33 to make the position 2x oversized
/b adding $SPY 126 weekly calls at .33 to make the position 2x oversized, the initial entry was yesterday at .47. Still believe that it was hard enough to bring the markets green for the year and I do not believe we will close this day red on the S&P and nasdaq as we now are.
covering then going long $SPY 126 weekly calls at .47 oversized and buying next week $SPY 129 weekly calls at .24 area Also sold $SPY 125 weekly puts at .25
/s covering then going long $SPY 126 weekly calls at .47 oversized and buying next week $SPY 129 weekly calls at .24 area Also sold $SPY 125 weekly puts at .25 area at a loss the same options that were up about 200% yesterday . Earlier sold $GOOG 630weekly puts at .40 area at a strong loss . Sorry for not sending out messages timely today but these SPY bullish bets here I’m making right now, the long on 126 tomorrow expire calls and the long on 129 next week calls. I find it hard to see after the markets built to go green for the year for us not so close green for the year.
buying $GOOG weekly puts at .85 area OVERSIZED GOOG
/b buying $GOOG weekly puts at .85 area OVERSIZED GOOG has hit all time highs and here on my formulas multi day negatives are clearing so am positioning bearish as a additional market hedge.
shorting $SPY 124 weekly puts at .40-.38 trough $SPY 123 puts at .18 area Creating IORN CONDOR
/s shorting $SPY 124 weekly puts at .40-.38 trough $SPY 123 puts at .18 area Creating IORN CONDOR since we have the credit spread on the calls already. I have not yet entered the long leg but wish to do it before the close around .18 area if it will give it.
/s shorting $SPY 126 weekly calls at .47 trough 127 calls at .23 oversized the spread
/s shorting $SPY 126 weekly calls at .47 trough 127 calls at .23 oversized the spread
buying $SPY 124 weekly puts at .34, .37 OVERSIZED , earlier I added a oversized 128 weekly calls position again at .30 so now have a 2x oversized
/b buying $SPY 124 weekly puts at .34, .37 OVERSIZED , earlier I added a oversized 128 weekly calls position again at .30 so now have a 2x oversized long calls stake and a 1x oversized long puts stake so an off balanced strangle strategy. This is meant to create intraday hedge, since we hold so much SPY stock and all the AAPL long stock stakes. If we get to day highs will take a loss on this long puts stake, I really want to take a loss on this one for if we do then we are well positioned for a much stronger market rally to come.
buying $SPY 128 weekly calls at .38 area OVERSIZED This is higher risk weekly calls
/b buying $SPY 128 weekly calls at .38 area OVERSIZED This is higher risk weekly calls above levels not seen in months but doing so after a surprisingly good consumer confidence data . We have tried to break out before and failed this could very well happen again but at .38 cents am willing to risk the full position. $AAPL reached the 409 level we wanted to see since she passes 390.75. Big smiles on the $AAPL stock stake we held after letting options exercise, am considering protecting the position by buying some puts many the 395 weekly puts since out profits are so steering here, have not yet pulled the trigger on that though.
The Week in Crayons
Although the markets opened the week in an ugly fashion, they quickly reversed course and drifted higher for most of the week. Other than a few moments of weakness, there was almost no selling pressure this week as the bulls roamed freely while the bears sat back and let them have their holiday break. However, any illusions (delusions?) of a “Santa Claus Rally” are just that as we have not moved significantly from a technical perspective for quite some time now. The silver lining to this recent lack of movement is that volatility has calmed down allowing the markets to rest constructively as they digest the explosive move they had after making what looked like disastrous new lows in early October.
Looking at a chart of the e-mini futures contract for the S&P 500, we can see the recent constriction in price action as all of this month’s candles are clearly inside of the pivot high and low we formed from late October to late November. Keep an eye on these two areas as there will be significant implications concerning them once they are breached.
A move above them will likely signal a new rally and lead to a retest of this year’s highs while a move below them would invalidate our bounce from this year’s lows and probably lead to a retest and possible failure of those lows as well. However, in the short term, we are now testing the key 200 day moving average once again as we bounce between several important moving averages. Watch for the rising 20 day moving average to support price action if it stalls here as the bulls attempt to clear the recent highs we formed in early December. If the bulls fail here as we close out the year, watch for 1200 to be the first line of support followed by much stronger support at the 1140 level which forms the key pivot we discussed earler.
Next week’s trading will close out the year, and traders should expect action to remain light and mostly muted as the holiday season winds down. Watch the edges of our range this week as price is not likely to move with any real conviction as many of the big boys are on vacation and not likely to return until the start of the new year.
If you have any questions or comments, feel free to contact me on twitter @stockdarts or in our great chat room if you are a stockguy22 member. If you aren’t a member, what are you waiting for?
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Happy Hannukah from Stockguy22
Wishing all my Jewish friends & traders a Happy Hannukah
Thank you for a wonderful year
All the best to you and your families
Stockguy22
adding $TSLA stock at 26.80 OVERSIZED this brings the swing position up to a 2x oversized stake.
adding $TSLA stock at 26.80 OVERSIZED this brings the swing position up to a 2x oversized stake. Never tock the opportunity to accumulate during the fall but want to make this swing a strong one.
adding $TSLA stock at 26.80 OVERSIZED this brings the swing position up to a 2x oversized stake
/b adding $TSLA stock at 26.80 OVERSIZED this brings the swing position up to a 2x oversized stake. Never tock the opportunity to accumulate during the fall but want to make this swing a strong one.
buying $SPY 124 weekly calls at .58 OVERSIZED for a swing high risk
/b buying $SPY 124 weekly calls at .58 OVERSIZED for a swing high risk. these calls expire friday so premium may eat us up fast, but after a market consolidation today am using this as a buying opportunity. I still hold the short on 123 puts on $SPY from yesterday and did not put it into a butterfly because premium decay is working in our favor and multi day direction remains bullish. before the close I may short the 125 calls to create a debit spread on this new 124 call entry. As I send this out the calls are cheaper at .48.
buying $TSLA stock at 27.01 OVERSIZED for a swing. I own a lot of TSLA long term but have not played a swing on her in probably over half a year
/b buying $TSLA stock at 27.01 OVERSIZED for a swing. I own a lot of TSLA long term but have not played a swing on her in probably over half a year. I have long positions from 16s, 20, 22 and 27. The 27 line is a point of significance and it should hold as the a support line. Passing 27 was a big deal last time around and it shoot us up to 35s getting close to all time highs. Now that we are back to these levels I wish to position into a swing on stock that amount to 5 times the money allocation of what I usually put into options. Im willing to add to this swing position again as to accumulate a strong swing from here. We had news today of the pricing of the model S, the first mass production Car coming out of TSLA selling at 49,900$. There were rumors of the model S selling for 47k and some found the 49k as disappoint news despite the fact that this car is fully sold out for the full 2012 production year. This is not only the first mass production car coming out of TSLA but this is the first time any new US auto manufacturer produces a mass production car in over 1 hundred years, very historic. As I send this out, the 27 line looks to be lost and the stock is down to 26.56 and falling, I am waiting next to accumulate further to this swing trade as much as 2 more times into a 3x oversized stock stake , that would be 15 times the money allocation that I usually put into a single options entry. (according to my strategy stock positions are 5 times the money allocation of options positions since the risk and the % volatility is so much lesser in stocks vs options)
shorting $SPY 123 weekly puts at .78-.76 same contract amount as the long on $SPY 119 weekly puts
/s shorting $SPY 123 weekly puts at .78-.76 same contract amount as the long on $SPY 119 weekly puts, this moves the position from 2x oversized bearish to 2x oversized bullish . The strength has been incredible in the markets today and to see the SPY really push above 123.60 here at this point am forced to concede that a retrasement dose not seam to be in the cards. am not ready to go long calls yet though rather allow premium to depreciate if we stay at the 123.60 level for a while.
adding $SPY 121 puts at .33 OVERSIZED to make the day trade position 2x oversized
/b adding $SPY 121 puts at .33 OVERSIZED to make the day trade position 2x oversized , we hit 123.60 and this should be resistance, so I still se possibility of pullback intraday, if it dose not materialize then I would short closer in calls and turn this into a credit spread.
buying $SPY 121 puts at .45-.46 OVERSIZED for day trade
/b buying $SPY 121 puts at .45-.46 OVERSIZED for day trade. Here the strategy is to profit of a pullback that should come intraday after such a huge gap up and continuation. I am still long the 119 puts that we had almost 100% profit on yesterday but today wake up to see profits replaced by losses. On a pullback that should bring SPY back down intraday to 121.50 area I can lock in profits from this day trade and then short these same 121 puts and keep the 119 puts as the long leg of a credit spread. OK I am turning market bullish but believe that fist we should pullback again as far as larger strategic thinking.
sold TBT stock at 17.65 from18.56 and 19.15, taking a loss on that, the long on TLT calls that are now taking off are doing there job well to hedge the intraday loss
/s sold TBT stock at 17.65 from18.56 and 19.15, taking a loss on that, the long on TLT calls that are now taking off are doing there job well to hedge the intraday loss on TBT bearish bong bet that we held for weeks. I had very good profits on the bond bearish bet at one time, for some time but wanted to hold for a market breakout that failed. Now again I believe that there is the possibility of bonds becoming the next gold and that would mean irrational levels can continue for a long time just as gold as a bubble still has an enormous amount of room to fall now that it is no longer the market hedge of choice and gained to irruption levels already. That money that would usually move to gold I now see moving towards bonds.
buying $SPY 119 weekly puts at .47-.48 oversized. initial bearish stake on S&P etf
/b buying $SPY 119 weekly puts at .47-.48 oversized. initial bearish stake on S&P etf. SPY has had so much difficulty getting above 122.75 and holding it and since here the markets are failing I see a possible fall this week with no support till 117.60 the levels I mentioned last week. Such a fall would be a very big drop if it happened in a matter of days and with the low holiday volume its harder to predict direction but the % return would be so great if such a fall was to happen so that I have to make an attempt. If we get market strength we can always use this as the long leg on a closer to the money credit spread worst case. So right now I am bearishly placed on SPY and IMAX though a bit iffy about imax, and bullishly placed on TLT bond etf.
buying $TLT 124 weekly calls at .55 area oversized
/b buying $TLT 124 weekly calls at .55 area oversized. Im taking a bullish position on bonds here this help hedge my long TBT stock stake. I have a theory that now that gold losses its safe haven status perhaps bonds will become the next bubble as gold has been till now. If bonds continue higher ill take the TBT off the table and just hold the long TLT calls.
selling $AAPL 385 dec puts at 5.25-.15 550% profit and buying $AAPL 385 dec calls at .90 OVERSIZED
/s selling $AAPL 385 dec puts at 5.25-.15 550% profit and buying $AAPL 385 dec calls at .90 OVERSIZED. Now this is still great profits on the 385 puts but even greater due to the profits we have from the butterfly short on 380 puts that have depreciated. now if you do the math this leaves the remaining $AAPL 380 puts short with twice the contract amount of the long on 375 those who can’t go naked should first double to the 375 puts long to make the position even in contract amount. I will be adding to the long leg but do it latter something many can’t do but strategy is the same. Am also considering buying TLT puts to go bearish bonds or buying some calls for todays data was very good even though technically the markets are not out of the woods.
/b buying back $SPY 121 puts at 1.04 area to renter the butterfly overnight. the bounce was not strong enough
/b buying back $SPY 121 puts at 1.04 area to renter the butterfly overnight. the bounce was not strong enough
/b buying back $SPY 121 puts at 1.04 area to renter the butterfly overnight. the bounce was not strong enough
/b buying back $SPY 121 puts at 1.04 area to renter the butterfly overnight. the bounce was not strong enough
protecting the 1000% PROFITS ON $AAPL 385 puts by shorting $AAPL 380 weekly puts at 3.25 twice the contract amount trough $AAPL 375 puts at 1.50-.60 same contract amount this creates a butterfly with twice the contact amount on the 380 short as we have on the 385 and 375 longs
/s protecting the 1000% PROFITS ON $AAPL 385 puts by shorting $AAPL 380 weekly puts at 3.25 twice the contract amount trough $AAPL 375 puts at 1.50-.60 same contract amount this creates a butterfly with twice the contact amount on the 380 short as we have on the 385 and 375 longs. yesterday we did well to reverse out positions on $AAPL and $SPY bearishly and now $AAPL 385 puts that we entered into at .80 went passed 8 bucks so 1 thousand % pure profit, its retraced some here. Now by entering the butterfly we essentially lock in the profits and protect against a bounce but we are well positioned to exit the short if a bearish continuation is seen then holding both long legs. Its a way when you see the possibility of the position turning against you but larger picture you want to stay the corse , a way to hedge and suspend the decision till clarity is seen . all loses from last week have been erased today but missing the bearish gold play GLD from friday and the bearish GMCR puts I recommenced yesterday but didn’t clear myself were 2 incredible plays that both made more than a thousand % gains each, to those who entered. I missed both those plays that I recommended , why I don’t know, and they were both the sort of plays that come about rarely. Ok in closing if markets continue down the fall can be very big watch for $SPY reaching 117.60 yea we can fall in a matter of days THAT MUCH ON THE MARKETS according to my analysis. hence why Im hesitant about locking in profits on these bearish bets.
selling $SPY 121 Dec puts at 1.02 over 100% profit on a 2x oversized stake, also shorting again $SPY 120 weekly puts at .66 area same contract amount as our long $SPY 119 puts to make a credit spread.
/s selling $SPY 121 Dec puts at 1.02 over 100% profit on a 2x oversized stake, also shorting again $SPY 120 weekly puts at .66 area same contract amount as our long $SPY 119 puts to make a credit spread. big smiles on yesterdays $AAPL turning bearish on it by first shorting call then covering the puts short and holding the long 385 puts that are now deep in the money. $AAPL has some support at 378 but I have not yet locked in the profits on those puts longs, giving her more time.
covering the short on $SPY 123 Dec puts at 1.10 area then bought $SPY 121 Dec puts at .45-.50 same contract amount
/b covering the short on $SPY 123 Dec puts at 1.10 area then bought $SPY 121 Dec puts at .45-.50 same contract amount. We still hold the long on 119 puts. The strategy here is not to fight the tape as the market lost the day lows and bonds continued to go higher while Euro collapsed further making the position fully bearish and the long on 121s a full 2x oversized stake. the us markets have fought the euro correlation all day but at this point there is to much negative headwinds , if we do build again then I would look to again short the 123 Dec puts and this time can make the position even larger due to the 2 long legs already on the table. As far as $AAPL still hold the short on 390 puts and am considering shorting other the 395 or the 390 calls if SPY loses 123.55.
shorting $AAPL 390 Dec calls at 2.30-.20 credit spread trough $AAPL $AAPL 385 Dec calls at .80-.85 area oversized the spread
/s shorting $AAPL 390 Dec calls at 2.30-.20 credit spread trough $AAPL $AAPL 385 Dec calls at .80-.85 area oversized the spread. am using this market pull back after the fall in Euro as a shorting opportunity on $AAPL puts here . AAPL has held up well during bad market days thats why Im focusing on it as a short on puts opportunity. I don’t think that AAPL will lose its footing this close to Xmas so am willing to make contrarian plays despite the Euro us markets correlation. Have to be careful because Euro markets are falling like a rock.
shorting $GMCR 55 Dec calls at 1.37-.20 vertical trough $GMCR Dec 57.50 calls at .35 area OVERSIZED the spread, sorry for the late post but mentioned it timely in the cc
/s shorting $GMCR 55 Dec calls at 1.37-.20 vertical trough $GMCR Dec 57.50 calls at .35 area OVERSIZED the spread, sorry for the late post but mentioned it timely in the cc. GMCR can fall much more so any short on calls even after this fall should lead to 100% gain . Wanted to buy some 50 puts swell but that slipped away from me, would only enter those if we bounced.
selling selling $SPY 121 weekly puts at .84 area from .54 area 100% profit while buying 119 weekly puts at .45 area same contract amount and buying $SPY 126 weekly calls at .56. OVERSIZED
/s selling selling $SPY 121 weekly puts at .84 area from .54 area 100% profit while buying 119 weekly puts at .45 area same contract amount and buying $SPY 126 weekly calls at .56. OVERSIZED . Ok sorry for the earlier tweet I thought my long leg was 122 but it was 121s . OK what we did was last week create a credit spread 123 calls trough 121 calls now we are down strongly on that strategy but I still think we bounce and do not fall bellow 123 so what we are doing is locking in the profits on the long leg, then moving the long leg further down in strike to 119 as not to leave the position naked credit spread. Now the long 126 calls position is for a bounce play that may be only a day trade after we so fast erased all of fridays gains. Am here positioning to erase some of the losses over the weekend.
buying $SPY 130 Dec calls at .30-.31 and shorting Dec $SPY 123 puts at 1.05 area trough 121 weekly puts at .53 and buying $AAPL Dec 405 calls at .96 all OVERSIZED
/b buying $SPY 130 Dec calls at .30-.31 and shorting Dec $SPY 123 puts at 1.05 area trough 121 weekly puts at .53 and buying $AAPL Dec 405 calls at .96 all OVERSIZED the longs were oversized but the short oversized the spread as usual. This has been a very red week for me but still am positioning bullishly for newt week for the treaty from Euro came trough the main obstacle holding the markets back I believe.
buying $AAPL 395 weekly calls at .45-.49 area and shorting $AAPL 395 puts at 3.65-.50 trough 390s at .50 both OVERSIZED.
/b buying $AAPL 395 weekly calls at .45-.49 area and shorting $AAPL 395 puts at 3.65-.50 trough 390s at .50 both OVERSIZED. This has been a very bad week after a very good week last week. I have a full 9x oversized at risk of 100% loss already and with these 2 entries, I add even more risk of loss for the week. These positions are meant to erase some losses in a week where I could not position with short volatility and the main mistake of the week was exiting the TLT long calls that served as a hedge. TLT calls went deep in the money but 2 days ago I let go of that critical hedge. so again this is why sizing in options is so very important, last week I forget how much we made but it was about 15X OVERSIZED pure profit and this week already close to 9x oversized loss with more risk of loss to come. I see options trading as a game where you have to put chips on the table so make sure they are of a controlled size because when the market is difficult you will have losing hands but the poker player that dose not make bets dose not win the game. In the end a total of 9 plays giving 100% loss in a week is a very very VERY VERY bad week but in options one play can erase all those losses . This is one of the worst weeks I have has in options but its still docent erase last weeks gains. And last week where we made about 15x oversized profits that was by no means one of the best weeks we had just a very good one. The reason I mention this is because yesterday I found out that someone put 50% of there account into an options play when they should of only put no more than 1% of there account in the play. Sp please guys size properly if you have a small 25k account you should put no more than 250$ per options play. a thousand % gain on 250 bucks for a small account is still good money. And for larger account the % U put into options gets even smaller. OK just beating that into the newbies
/b buying $SPY 126 weekly calls at .74 also high risk tomorrow expiery oversized
/b buying $SPY 126 weekly calls at .74 also high risk tomorrow expiery oversized
/b buying $AAPL 400 weekly calls at .65-.75 OVERSIZED tomorrow expire high risk options for a day trade most likely
/b buying $AAPL 400 weekly calls at .65-.75 OVERSIZED tomorrow expire high risk options for a day trade most likely
covering $SPY 126 weekly calls at 1.79 area and covering short on $AAPL 390 weekly calls at 3.00 area also sold $TLT 118 weekly calls at .69 area
/b covering $SPY 126 weekly calls at 1.79 area and covering short on $AAPL 390 weekly calls at 3.00 area also sold $TLT 118 weekly calls at .69 area. Ok market did give us direction and it did so bullishly , the losses we this morning had on short on puts are now profits as we were forced to take a loss on the calls so quickly. one side was meant to hedge the other and it did so till direction became clearer, now multi day direction is still not bullish the markets on my formulas before the close but since SPY plays options after the close I will be adding other $SPY 117 or 118 calls weeklies today. $SPY trades 15 min after the close in options.
buying $TLT 118 weekly calls at .72-.78 OVERSIZED, this position is meant to be a hedge on the long TBT stock position and also the rest of the bullish market positions
/b buying $TLT 118 weekly calls at .72-.78 OVERSIZED, this position is meant to be a hedge on the long TBT stock position and also the rest of the bullish market positions. bonds are showing a lot of strength while the rest of the markets are not falling sharply, so this bullish bond position can help hedge against a snap fall since bonds would today most likely lead it. The bond volume spiked into the bond close was strong but larger multi week picture I remain very bearish bonds thats why wil not lock in the profits on TBT yet but rather hedge it with another calls position that we can turn into a debit spread overnight by shorting 119 calls.
shorting $AAPL 390 weekly calls at 2.40 area and shorting $SPY 126 weekly calls at 1.40-.35.
/s shorting $AAPL 390 weekly calls at 2.40 area and shorting $SPY 126 weekly calls at 1.40-.35. on SPY same contract amount as the long on $SPY 127 and 128 SPY calls that we are at a strong loss on. this makes the SPY a credit spread worth 2 long legs. On AAPL am making it the same contract amount as the long on $AAPL 390 calls. The enterys on 410s are practically 100% loss and can’t add to the short with that as the long leg since the risk would be to great with such a large spread . Remember we still have shorts on puts on AAPL and on SPY. We are short $SPY 126 puts and on $AAPL we are short 390 puts this brings about strangle positions on both plays. This positions us to profit from inactivity sideways action and now we are hedged against big moves in other direction. Once a direction is cleared we can removed the short leg on calls if bullish is the direction or exit the short on puts if bearish becomes the move while holding the further out long legs.
adding $AAPL 410 weekly calls at .38-.40 OVERSIZED and shorted AAPL 390 weekly puts at 2.90-2.75 area OVERSIZED
/b adding $AAPL 410 weekly calls at .38-.40 OVERSIZED and shorted AAPL 390 weekly puts at 2.90-2.75 area OVERSIZED sorry for the late post but mentioned it timely in the cc. The thinking was to accumulate to our bullish AAPL 410 calls when AAPL retraced to a pullback target of 394 and also create some depreciation protection by shorting 390 puts. Now we have a 2x oversized stake on these very far out of the money 410 weekly calls with only a 1x oversized stake on the 390 weekly puts that protect against sideways action if we do not gain fast enough. Since we only have a partial protection with the short on puts , I am waiting to add another oversized stake to the short on AAPL 390 puts if AAPL passes day highs
The Week in Crayons
After taking last week off, the bulls came back ready to work this week lifting us well off our recent lows in all of the broad market indices. Once again as has become par for the course, price action changed course immediately and quite violently as we surged upward negating much of our recent fall with one huge day of buying. Our current environment continues to be a field of landmines trapping both bulls and bears alike each time setiment suddenly shifts depending on what news item or rumor happens to come up. However, while price action has been extremely volatile, it has been contained within a reasonably well defined range for the most part. While there are still plenty of mixed signals and the possibility of strong moves in either direction, the likely scenario is one in which we continue to probe the extremities of our trading range as the markets continue to find their proper value.
Looking at a chart of the e-mini futures contract for the S&P 500, we can see that for the most part we have actually been in a pretty well sustained uptrend after bottoming out early August. While we actually formed new lows in early October, this proved to be a false breakdown and price quickly reverted back its rising channel. This move up culminated with a false breakout above this channel as buyers got ahead of themselves and eventually cascaded down over the last couple of weeks as supply finally overwhelmed demand. The downward momentum was finally reversed this week as we formed a critical higher low pivot price around the 1150 area. While this channel isn’t perfect and has had trouble holding price action on several occassions, it does give us a rough picture of the strengthening price action over the last half year or so.
As we approach the close of 2011, too reference points that are likely to become key levels of support and resistance are the recent pivot low and high we just formed at around 1150 and 1290. The more immediate area of concern would be the recent pivot low we just formed. A break below that would place us firmly out of our rising channel as well as invalidating the higher low we formed and would almost certainly lead to a retest of the year’s lows. A break above our recent pivot high around 1290 however could lead to several scenarios depending on the action prior to a breakout. If we were to surge past it early next week, it would likely be part of an unsustainable squeeze higher destined to fail. On the other hand, if price action were to consolidate and give demand a chance to catch up with the overhead supply then the chances of a breakout holding above this area increase tremendously. As long as price remains in between these two reference points, the markets can be viewed as being in a neutral state of range bound behavior.
If you have any questions or comments, feel free to contact me on twitter @stockdarts or in our great chat room if you are a stockguy22 member. If you aren’t a member, what are you waiting for?
shorting $AAPL 390 weekly calls and puts iron condor straddle $AAPL 390 calls at 1.74-1.60 trough $AAPL 395 at.08 and $AAPL 390 puts at .73-.69 trough $AAPL 385 at .04
/s shorting $AAPL 390 weekly calls and puts iron condor straddle $AAPL 390 calls at 1.74-1.60 trough $AAPL 395 at.08 and $AAPL 390 puts at .73-.69 trough $AAPL 385 at .04 . ok we are betting on the possibility of AAPL finding 390 as the final magnet into todays expiration. The long legs on 395 and 385 since they are so cheap I chose to make them twice the contract amounts. this way of we were to get a big spike or fall then the long leg that is now so cheap could offset the loss on the short. Another rulle I have is to take a loss on the short if it was to gain 150% premium, remember 100% of that is hedged by the opposite side hedge and if the movement becomes continued then there is that larger contract amount on the long leg that can help our us back in a profit picture. Also what I do on day of expiery I get in on the calls short when the stock is above the strike and I get in on the puts short when the stock is bellow the strike and therefore entering can take some time. In other words this is a iron condor straddle off balanced with oversized entries on both spreads making the contract amount much less on the calls than puts, because we entered the calls short at a higher premium than the puts short. so thats 2x oversized bet on 390 magnet today expiery. I mentioned this play earlier today when first entering but now that have entered both sides am sending out this more detailed expiration.
SPY 121 weekly calls at 4.00 area 500% pure profit and sold $SPY 125 weekly calls at .75 area and sold TLT 119 puts at 2.20 area so 214% profit
/s SPY 121 weekly calls at 4.00 area 500% pure profit and sold $SPY 125 weekly calls at .75 area and sold TLT 119 puts at 2.20 area so 214% profit. am removing all my bullish plays exept TBT now before tomorrows employment picture for the week. This has been a great week so even though Im very bullish AAPL from here on multi week because believe a larger AAPL uptrend is beginning and there is the possibility of us seeing unemployment going bellow 9% not that I’m calling for that but its possible and if it happens we would see a big phycological shift.
selling AAPL 385 weekly calls at 2.90 area from as low as .57 so 400% pure profit
/s selling AAPL 385 weekly calls at 2.90 area from as low as .57 so 400% pure profit . and went long 3x oversized 390 calls at .80 area. Now remember we first entered these AAPL 385 calls at 1.19 then added at .90 then she fell more and added one last time at .57 so have a 3x oversized stake, so the profits on this position are now 9.06 X OVERSIZED pure profit or 900% oversized on 385s alone. thats why going long the 390s now 3x on one shoot is warranted after locking in such huge profits. By the way still hold the SPY long positions plus the bearish bonds stakes so huge week this week $-). Plus remember had a few weeks ago AAPL 385 calls turned into stock and now after holding trough all that they are profitable and have no intention on selling them ither. big big smiles $-)
covering short on $SPY 125 weekly calls at .60 same area as where we entered into the debit spread yesterday
/b covering short on $SPY 125 weekly calls at .60 same area as where we entered into the debit spread yesterday, this way it frees up the 121 and 126 weekly calls longs. Huge smiles on both 121 calls from .67. also AAPL 385 weekly calls are now in the money, as I send this out SPY has pulled back some so in hindsight it may not of been good to exit the debit spread but it did its job to lessen overnight risk.
buying $SPY 125 weekly calls at .65 OVERSIZED and have removed the debit spreads on SPY so am fully bullish
/b buying $SPY 125 weekly calls at .65 OVERSIZED and have removed the debit spreads on SPY so am fully bullish , also still hold TFT puts and the TBT stock plus AAPL 385 calls. Big smiles today erasing the losses of last week and making us very profitable.
buying back $SPY 121 weekly calls at 1.06 area same area
/b buying back $SPY 121 weekly calls at 1.06 area same area where I exited to be on the safe side same contract amount and before the close will probably short some 122 weekly calls to create debit spread
selling AAPL 370 weekly calls at 3.60-.50 from 1.50 so over 100% profit but this leaves the short on 385 weekly puts naked, VERY HIGH RISK
/s selling AAPL 370 weekly calls at 3.60-.50 from 1.50 so over 100% profit but this leaves the short on 385 weekly puts naked, VERY HIGH RISK, if we lose the day lows will reenter the long leg but for now want to remove losses when we bounce
adding $AAPL 385 weekly calls at .90 also rolled up the short on $AAPL 370 weekly puts to 375 weekly puts 3.65-3.40 now vertical trough those 370s. Also added SPY 121 weekly puts at .90
adding $AAPL 385 weekly calls at .90 also rolled up the short on $AAPL 370 weekly puts to 375 weekly puts 3.65-3.40 now vertical trough those 370s. Also added SPY 121 weekly puts at .90 plus we exited the short on 123 weekly calls at .45 better than flat . OK thats 3 trades after we received the very positive consumer confidence data. We covered the hedge on SPY 123 calls so that SPY 121 long calls has no hedge then added to that position. On AAPL we simply locked in profits on the 370 weekly puts short from 3.00 at 1.50 area then shorted the 375s 2x oversized trough the 370 as credit spread. Also now that we have 2x on a short on puts on AAPL we added to the long on 385 calls at .90 making that position 2x oversized. so now am fully bullishly positioned with no bearish hedges against the bullish positions.
adding TBT stock at 18.56 area OVERSIZED bearish bond etf
/b adding TBT stock at 18.56 area OVERSIZED bearish bond etf. The bonds fell big over the weekend and now came back to fridays levels so am using this move back up on bonds to position bearishly trough bearish bond etf’s. Since this is a stock entry its 5 times the money allocation that we usually enter into options because the risk is less without premium decay as fast as options. Im still holding stock from 19.15 since chose to ignore my mental stop so am now up to a 2x oversized TBT stock stake. Think bonds have gained to much and am betting on a continued bond retracement.
AAPL 385 weekly calls at 1.19 area OVERSIZED yea I know Im chasing but only because we have the short on 370 puts oversized the spread
buying AAPL 385 weekly calls at 1.19 area OVERSIZED yea I know Im chasing but only because we have the short on 370 puts oversized the spread. So if we had sideways action then the short would offset the long. AAPL never gave us a shake to accumulate lower so now after nothing but build have chosen to enter her 385 well out of the money weekly calls here since a intraday positive is clearing on my formulas, plus if we were to have a pull back I would look to add to the calls stake to makes it 2x oversized for the swing.
buying AAPL 385 weekly calls at 1.19 area OVERSIZED
/b buying AAPL 385 weekly calls at 1.19 area OVERSIZED yea I know Im chasing but only because we have the short on 370 puts oversized the spread. So if we had sideways action then the short would offset the long. AAPL never gave us a shake to accumulate lower so now after nothing but build have chosen to enter her 385 well out of the money weekly calls here since a intraday positive is clearing on my formulas, plus if we were to have a pull back I would look to add to the calls stake to makes it 2x oversized for the swing.
shorting $AAPL 370 weekly puts at 3.05 area OVERSIZED trough $AAPL 365 weekly puts at 1.50 area credit spread
/s shorting $AAPL 370 weekly puts at 3.05 area OVERSIZED trough $AAPL 365 weekly puts at 1.50 area credit spread . I began with the short on puts with the intent of entering the long on puts latter when we can get a cheaper premium. Going naked intraday is not something I recommend for the new bees. Want to wait for the 165 puts to drop bellow 1.50 before getting the long leg in or enter higher if we lose 372.50. Also closely watching 385 weekly calls on AAPL for a possible long if we continue to see strength here then may have to chase an entry on those calls after AAPL today bounced right off the 200 moving average reached friday. Also considering some further out calls perhaps a month or a few months out going into the holiday quarter because historically for the last few years any time AAPL reaches the 200 day moving average , it tends to be a big buying opportunity. Then again keep in mind AAPL did miss earnings estimates last quarter for the first time in 6 years due to the late release of the latest iPhone .
shorting $SPY 123 calls at .49 to create debit spread on our 121 calls now up 200% $-)
/s shorting $SPY 123 calls at .49 to create debit spread on our 121 calls now up 200% $-).See a negative intraday on the markets after this big gap and run. The short on @SPY is the same contract amount as the long to create the debit spread and remove risk of loss while remaining bullish SPY. Finally after a week that was for me very red, the continued betting on a gap up finally worked with this 200% gain we now have on SPY calls and if we pull back would look to accumulate to the long position to make the debit spread temporally unbalanced, then before the close probably adding to the short, hence protecting profits overnight. Also am watching AAPL for a possible short on 370 puts credit spread plus possible long calls positions. We saw a very strong black friday kicking off the holiday season stronger than expected so the market could be in for a good swing after a pullback here.
The Week in Crayons
I mentioned last week that the bulls would likely be tested this week as the bears attempt to regain control of this market, and while the bulls can use the light trading / short week excuse to defend themselves, the bottom line is that they failed that test this week as we not only closed red on each session, but saw downward momentum actually increase as we followed through on last week’s breakdown. While we are oversold and due for a bounce, we have now negated much of the feel good rally we had in October and find ourselves back in the middle of the trading morass we resided in for several months this year. While a bounce from our current levels would still be very positive step in leaving behind are summer lows, the recent weakness gives us a strong reminder that we continue to chop around in a broad range consolidation and it appears we will be flying the same holding pattern for a bit longer as we continue to deal with the same regurgitated mess in Europe we have been dealing with all year.
Looking at a chart of the e-mini futures contract for the S&P 500, we can see clearly that we are right smack in the middle of the 1100-1200 mess we were stuck in for several months after breaking down from our yearly highs. While we are still well off the lows we formed around 1080, we are forming new lows on Stochastics creating a bearish divergence hinting that we may have more weakness in store even if we can hold these levels and create an important higher pivot low.
Traders looking for a an oversold bounce should keep this in mind and continue to use the hit and run tactics that have been the only option available to swing traders for most of this year as we are likely to stall out on any bounces into the heavy supply just above our current price action. The 1180 -1200 area will likely be the first area of distribution if we bounce next week and traders should watch the action in this area closely as failure to get above our October breakout will potentially form a bear flag, not a new leg up. If we can reclaim 1200 and emerge from our current range, look for more supply to emerge just above 1215 or so as we begin to encounter several key moving averages. However, if we continue to have trouble finding a bid, we will likely test 1100 in short order which would serve as a critical level of support for the bulls to defend. Traders waiting for the Santa Clause rally should be very careful here and wait for momentum to clearly turn upward before getting sucked into any of the fakeouts that have become all to common this year.
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buying SPY next week 121 weekly calls at .67-.73 area and $SPY this week 117 weekly calls at .63 plus shorting $SPY 118 this week weekly puts at .65 area vertical trough 117s
/b buying SPY next week 121 weekly calls at .67-.73 area and $SPY this week 117 weekly calls at .63 plus shorting $SPY 118 this week weekly puts at .65 area vertical trough 117s. OK this week has not been a good week with every play this week even though they have not been many, all of them resulting in losses exempt one short on GMCR 50 puts that will only erase a long position on GMCR that lost 100%. Now on day of expiery am putting another 2x oversized not he line for this week betting on a market pop to at least SPY 119 into todays expiery. Plus am making bullish bets for next week with these 121 calls. Anyway it looks like in the end this will be a red week for me but will continue positioning for a bounce as the market has gotten very extended and the holiday season seams to be off to a strong start. Thius is why sizing is so important in options, and why it should be only 1/5 the money allocation that you would put in a stock position. since the % gains and losses are bigger U have to be able to afford losses for when they work they can very quickly gain kenny multiples.
/b buying TF dec 676.70 futures. ill put a stop at 675.00 Am continuing to try to bounce the markets, and doing a little intraday futures on this bet.
/b buying TF dec 676.70 futures. ill put a stop at 675.00 Am continuing to try to bounce the markets, and doing a little intraday futures on this bet.
buying $SPY 118 weekly calls at .78 area OVERSIZED
/b buying $SPY 118 weekly calls at .78 area OVERSIZED. ok the market is dropping like a rock and for the first time in 5 days has found a real possible support line so am here trying to catch the falling knife. The levels I wanted to see was $SPY 117.35 and today we reached it so had to make an initial entry into a new bullish market attempt. Mind you earlier in the week tried to go bullish and lost 100% on that one. This is the first entry and do not mind adding another oversized entry latter on today ither higher on strength or lower once a build starts showing. She is .72 as I send this out.
The Week in Crayons
We had another week of mostly sideways action again as upward momentum in the broad markets continues to wane. While we finished off on a weak note, the bigger picture remains neutral as we have mostly traded in the same range for several weeks now. We are now at the bottom of this near term range and a hold above these levels would be a big win for the bulls as we approach the typically bullish holiday season. However, price action has been weakening throughout the recent consolidation and needs to firm up in order for us to resume upwards.
Looking at a chart of the e-mini futures contract for the S&P 500, we can see the falling momentum clearly as this week’s close broke the upward trend we had maintained since breaking out of our late summer range. While the markets have shown impressive strength in holding above the key 1200 area as they digest the late October run, we are now below several key moving averages and on the wrong side of a short term trendline.
With momentum still on the decline as illustrated by both the declining stochastics readings as well as the red Momo Trend Bars, odds are that the bulls will be tested yet again next week as the bears desperately try to regain control and push price action back down to our previous range. If we pull back furthur, watch for the area around 1200 to 1800 to become a likely area for bulls to defend. If we fall and stay below that, it would likely signify a win by the bears and a return to the 1100 to 1180 mess we chopped around in from August to early October. If the bulls can regain control and push price back up, the first level that would need to be retested would be the 200 day moving average at about 1259. This would likely coincide with the top of our recently contracting wedge and would probably serve as a stalling point for the bulls.
As we approach the traditionally bullish holiday season, astute traders should continue to scan for strong setups that have begun to develop during our recent consolidation and patiently wait for momentum to turn back up and take price action with it.
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buying $TBT stock at 19.15 OVERSIZED mental stop 18.90 so taking a bearish bond stake trough the bearish bond etf
/b buying $TBT stock at 19.15 OVERSIZED mental stop 18.90 so taking a bearish bond stake trough the bearish bond etf. Bonds have been on a huge rally as of late so am here starting to focus bearishly bonds as a contrarian play. This am planing on holding into next week. On my formulas I have not seen multi day negatives on the bond markets yet so this I consider to be an early entry hence higher risk.
shorting $AAPL 380 Nov puts at 1.95 area 2x oversized the spread trough 375 weekly puts at .25 area
/s shorting $AAPL 380 Nov puts at 1.95 area 2x oversized the spread trough 375 weekly puts at .25 area. OK am continuing the bullish strategy but with the possibility of 380 final magnet am putting twice the money allocation on this short since if we pin to 380 then still will have 1x profit in the end.
adding $SPY 122 weekly calls at .72 OVERSIZED
/b adding $SPY 122 weekly calls at .72 OVERSIZED markets bounced pre market and here pulled back so am adding to SPY bullish bet from yesterday . by the time I send this its down to .64 but am holding it
selling 1/2 GMCR 49 weekly calls at 3.40-.10 900% PURE PROFIT from .35 entry yesterday(NOT BAD FOR 2 DAY PLAY
/s selling 1/2 GMCR 49 weekly calls at 3.40-.10 900% PURE PROFIT from .35 entry yesterday(NOT BAD FOR 2 DAY PLAY). This makes today a extraordinary day. the remaining 1/2 will continue to hold with intent of exiting it all if we reach 53s. We accumulated a stock that had fallen excessively for a bounce that today may continue higher still, the target remained 52.50-53.50 at witch point I would fully exit and look for some bearish bets. Great week thus far $-) by the time I send this she is higher and the remaining stake has passed 1 thousand % gain $-).
buying $SPY 128 Nov calls at .58 OVERSIZED, this is higher risk but since SPY has passed 126.20 point of real strength
b buying $SPY 128 Nov calls at .58 OVERSIZED, this is higher risk but since SPY has passed 126.20 point of real strength. I think that the market is well placed to continue what began friday. We pulled back hit trend line, held trend line and now passed point of strength so am willing to take the higher risk strike bullish with the intent of shorting further out to create overnight a debit spread. We were not able to pass these levels yesterday thats why SPY had to pull back to the trend line that has been dictating the motions for the last 3 weeks, and as it was held and now so close to the 126.20 support resistance line, it should set us up better for a larger market bullish direction to possibly begin from here and last into the holidays Especially with todays data and data as of late helping.
shorting AAPL 375 Nov puts at 3.60-.45 credit spread trough $AAPL 370 Nov puts at 2.00 area oversized the spread
shorting AAPL 375 Nov puts at 3.60-.45 credit spread trough $AAPL 370 Nov puts at 2.00 area oversized the spread. This is a single oversized position that helps hedge against sideways action as long as 278 gap cover fill dating back t july is held. Have 2x exposure bullishly and am in the red on both 390 and 400 calls this helps hedge only against sideways action half of it.
buying AAPL 390 Nov calls at 1.59 OVERSIZED the strategy here is to accumulate to the bullish stance now that on my formulas a significant intraday positive has cleared.
/b buying AAPL 390 Nov calls at 1.59 OVERSIZED the strategy here is to accumulate to the bullish stance now that on my formulas a significant intraday positive has cleared. Will for now continue to hold the $AAPL 400 Nov calls long for not but not sure if I wish to hold those overnight. I have the option now if I wish to protect those positions overnight, to short the 395 calls and move the position into a butterfly, or just remove the 400 and turning that leg into the short debit leg depending on where we stand at close. As far as the markets, I don’t think we close at lows this time but rather float upwards due to resolutions in new government formations in both Greece and Italy. I think the Uncertainty is now behind us and we should lift higher in the coming days. But todays weakness thus far calls for cation so have not yet made other a bullish or bearish bet on the $SPY itself. SPY is now under the 126.20 area of strength and build but above the trend line that now is at 124.85. I continue to watch that support resistance as point of real build and the support line as the level to hold before turning bearish.
covering short on $AAPL 405 Nov calls at .20 area from .80 locking in profits bug will continue holding the long on $AAPL 400 Nov calls
/b covering short on $AAPL 405 Nov calls at .20 area from .80 locking in profits bug will continue holding the long on $AAPL 400 Nov calls that are now strongly red. By locking in profits on the short leg am well positioned for a bounce here, and have the flexibility to , if need be, short 395 calls if I would want to take a bearish stake to tern the 400 into a credit spread. Multi day direction on my formulas on AAPL is here on the verge of a strong move but without bullish or bearish clarity. Again friday we let the 385 weekly puts shorts exercise into a very large long stock position, something that I do not mind holding long term if need be, will not be poking for exits on that position today regardless of stock direction.
The Week in Crayons
Despite some rather volatile moves from day to day, this week’s action in the broad markets was still basically sideways as we continue to digest the massive gains we made through out the month of October. While volatility is still somewhat high for “prototypical” consolidation, most of this week’s action was contained within the ranges of our most recent price action on all of the major indexes and is for the most part technically healthy. As I mentioned last week, we were likely to chop around this week as we contended with overhead supply while being buoyed by several layers of support just underneath us. That scenario is likely to continue into the near future as we are still basically in the same situation and probably need another week or two of healthy consolidation in order to try and make our way back to the upper part of our yearly range.
Looking at a chart of the e-mini futures contract for the S&P 500, we can see that while we have mostly gone sideways over the last two weeks, we are still technically in the uptrend that we began in mid-October as we broke from our summer range around the 1200 level. While we are still making higher lows at this point, notice the waning momentum now that we are firmly wedged between most of our important moving averages as we well as facing very strong technical resistance at our recent highs around 1280 which coincide with the neckline of the head and shoulders pattern we formed over the first half of the year. Note the emergence of some yellow and red candles on our Momo Trend Bars indicating a likely end to this particular thrust upwards. Also, stochastics is now firmly moving lower giving us another clue that momentum is slowing down.
Of course, momentum is supposed to slow down after the ridiculous pace we had as we shot up from our year’s lows, so in and of itself it doesn’t necessarily mean we are headed lower, but it does give us a clue that we are likely in need of more consolidation. If we were to have a more substantial pull back, look to the area around our previous breakout around 1200 as a likely level of support. A hold around this level would give the bulls a strongly definable higher pivot low confirming that the recent downtrend is broken. Of course, the market does what it wants to do, not what we want it to do, and if it decides it wants to squeeze higher, traders should not chase as any move above our recent highs is probably suspect and likely to fail and return to our current range [unless there is some substantial news event behind it.]
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buying $SPY 126 weekly calls at .64-.65 OVERSIZED, am tryign to time a bounce
/b buying $SPY 126 weekly calls at .64-.65 OVERSIZED, am tryign to time a bounce, still am holding the debit spread on SPY 128 trough 129 calls that I can release bullishly if we were to see a further bounce (By covering 129 short), also still hold the short credit spread on $SPY 128 weekly calls trough the 127 weekly calls and if we were to see continuation fall we can exit the short there to allow the in the money poition to continue unhedged. That is my strategy on both calls debit spread release ot salls credit spread release depending on weather the market hold this trendline she today reached again or not. So far hourly charts have held the boddys of candles above the trendline now laying arounf 126.50 with only wicks bellow. If we hold trendline then the bounce shuld come and be strong hence the debit spread release, if not then technicaly a new flush attempt shows itself, hence the credit spread short release.
The Week in Crayons
Posted by stockdarts on February 13, 2012 · Leave a Comment
Much to the chagrin of bears everywhere, the markets continued their relentless march up for yet another week as the rally to open 2012 continues. While there continues to be sporadic bouts of selling intraday, there has been a strong and pervasive bid that has supported price action and has consistently thwarted all attempts at selling this market down. From a technical perspective, nothing has changed in about six weeks now as we remain perpetually oversold and extended as we slowly squeeze higher.
This is clearly evident in a chart of the e-mini futures contract for the S&P 500 which shows all of this year’s price action contained within a narrow rising channel. Almost the entirety of this move has occurred with an overbought stochastics reading as well. Also note the preponderance of longish lower wicks on many of the candles during this rally indicating that while there have been some attempts to push price down, it has inevitably been met with a strong afternoon bid.
While this traditionally is a sign of strength, it can also be a hint of future weakness when this behavior occurs after a prolonged rally. However, while it may become tempting for traders to gamble and try to pick a top when the market behaves like this, the more prudent course of action is to assume that the market will continue to behave in the same manner until it breaks out of this channel. Ironically, a breakout above the channel would result in a possibly unsustainable acceleration of the current trend leading to a higher probability short than a corresponding breakdown from the channel which would likely lead to a more benign sideways consolidation. However, while it is prudent to anticipate what the market will do, it is all conjecture until the theories either succeed or fail and astute traders must also recognize the present and profit from it…and the present remains a buy the dip environment until proven wrong.
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