SPY

Looking at the SPY chart for the full year. My best "guess" for January action is we break above 127.26 in SPY and track up to the 135.00 or so where we flag to build a base for the next move. I've got a strong bullish bias at this point as i think traders will be itching to put money to work. Watch the action in TLT, /ZN, /ZB, FXE as leading tells for SPY and of course the Vix for fear creeping back into the markets. It ain't rocket science, watch the tape action and it will tell you what you need to know.

Gold

Doing a lot of defined risk option trading using GLD, EWZ, QQQ, TLT, IWM & SPY. Don't normally exit these early as that is the whole point of defined risk, the ability to hold the position up to expry week to make theta decay work for you. That said, shortly after I put on my Iron Condor in the GLD for January, I could begin to see the handwriting on the wall for the GLD trade so bought this one back at about 1/2 max loss. At 150.34 today would have been seriously underwater with max loss since the put side of the condor was $156/154puts. Don't see it recovering by January expry as path of least resistance seems to be down. Guess we will see, won't be the 1st nor the last time I'm wrong. Currently holding a real mixed bag of both bullish and bearish verticals, some Iron Condors and several calendar spreads plus a large cash position. Only two equities, TOT and XCO.

Today was basically a SOH day. I did put on a bullish put spread in MOS selling the J50 and buying the J47.5 for a $1.09 credit. A bet that MOS will stay above $50 through the January expry. I already have a J47.5/45p eating up theta and like this trade, maybe a little too much.

Looked at some other stuff hoping to find some nice spreads to take advantage of Theta decay but nothing I liked. Almost did an overwrite on my TOT position like I did in December but with oil hot think I will let it run up through another strike. I likey this stock alot and don't mind holding it unhedged.

Last day of trading tomorrow, will continue to look for some good spreads to put on to take advantage of the 3 days of time decay we'll get with no trading until Tuesday, January 3rd.

Happy trading!

12/28/11

Oldest son came over today for lunch and to hang out. He leaves for Dallas next weekend to begin his company training as an otr truck driver. Has passed his CDL, hired by a big firm and good to go. It's good to be employed in todays world. Good visit so didn't trade, just SOH and watched the market drop off the strength in the Euro. Had a bad feeling yesterday that it was time for a pullback so had executed a Jan12 127/124 put spread at the market close. Now I'm thinking I should have bought in larger size. Volume is so light it is difficult to assess what todays selloff means and if it will be a continuation move to the downside. Will follow the /ES's into the overnight and see if a tell is to be had. Jeff Bierman has been beating the drum that this market is overbought & due for a selloff. Says it is the Generals, not the soldiers. Looking for a move down through a 1237 fib # to 1190 or so. We'll see. It fits with my 120-126 range on SPY. This is the 3rd test of the 200 day mva and failure of same. Don K still thinks we move higher after the 1st of the year when traders return to the market. Works for me. Later traders.

Whales!

This is why it is not always smart to follow the whales. David Tepper sold his entire PFE position of 14 million shares in the period ending September 30th. PFE has climbed 20% since the sale. He reduced his stake in MOS from 2.4 million shares to 737,000. Latest MOS rumor as of 12/23 was a buyout coming at the $90.00 level. Current price is $52.45. I'm holding a J47.5/j45 bullish put spread.

Insider Trading

FIN.VIZ screens reveal 2million share purchase in XCO, including 726, 126 shares by Wilbur Ross at $9.66 & $9.84 in December 2011. I'll be buying 500 next Tuesday the 27th.

Also Mario Gabelli added to his position in LGL buying 11k at an average of around $7.06. Enough to get me to buy 250 around the current $7.34 price of the 12/24 close. Good enuff for Mario, good enuff for me.

Thinking about investing $40 a month for the Fin.viz subscription service.

1st Post

Welcome, 1st time blogging so we'll see how it goes. Christmas Eve. Spent it watching Chiefs football and working up some defined risk trades on SPY, QQQ, IWM & TLT using Iron Condors and vertical spreads as well as some calendars on CMCSA, JNJ & CSCO as volatility is being squeezed out of the markets with the Vix @ 20.64 and heading lower. SPY at 126.36 is just above the 200 day MVA so looking for a break to the upside next week if the January effect is going to be in play. Game plan has been to trade the SPY ranges as it has channeled between 120 and 126. If cannot break above the 200 day will be my signal to skew back to the short side and look for volatility to spike up. I generally  want to sell volatility above 25 and buy below 20. Right now, most new trades geared towards January expiration are calendars using either guerrilla or campaign spreads. What ever works!