Anyone who reads this blog knows I think the market is going to tank big time at some point. Capitulation is a descriptive term I'm especially fond of.
In the short term, however, I am riding the bull. I'm not solvent enough to fight the tape, the Fed and the Treasury. They are throwing mind boggling resources at the problem. This is causing a lot of money on the sidelines to now take risk with securities. I don't think that's very smart but I'm not going to fight it. A good trader is an adaptive trader.
I'm long FAS, SPY, GE and GLD with calls. As soon as fear starts building up again they will be closed out and I'm trading the other way. The Fed and Treasury have fired almost all of their bullets and if they are not successful the market will panic....down to single digit P/E's. When fear is back, and I think it's just a matter of time, I plan to ride the bear until the bulls are throwing up in the streets.
Then I'll be bullish again....
Wednesday, March 25, 2009
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12 comments:
Hi PC,
I wonder if your timing may be wrong. Now, we are overbought and probably there is not much room to go up. No one knows for sure though but the overall sentiment is still bearish. God knows when the bears will become happy with their long investments and would start to sell! They are making money both ways and on time! Timing the market is the key.
Hey smart - what indicators ar eyou looking at to see the overbought conditions - i;ve been thinking that for 3 weeks on the spy and keep losing. $%^&^%#
learning - it's so tough to time the market...I wrote some June 35 XLE puts on Friday...I may be going back to being a premium collector again :)
PC,
Be careful about oil and gas. The Fist Coverage report last week called oil and gas double bearish. It may change for the next week though. I will get the report on Tuesday and let you know.
learning- I read articles instead of analyzing myself. It is obvious that we are still in a bear market. But this bear rally may and may not continue for a while. We have broken through SPY 81 which is a bullish sign, but I should warn that technicals no longest make any sense. After experiencing ERX naked puts and getting so panic with it, I realized the best way may be to write naked puts on less violent stocks or etfs. You should start with very small portion of your capital and on a down day. Then watch it. If the stock has gone further down (i.e. the puts are more expensive), sell some more. Always keep some cash to be able to manage it. The best one so far for me was GDX. I think EWZ, SPY, QQQQ or other solid individual socks such as WMT, etc. are good candidates, but I would probably focus on only 1 or two and would not be greedy. The funny thing with selling puts is that even if you are wrong about the trend, if the put is well out of the money and you keep averaging up, you should still gain money.
Hey love this blog! Please shoot me an email when you have a minutes. Thanks!
Hey PC, where you been? Hope all is well, miss your daily commentary!
PC,
Are you on vacation? I sold GDX May puts strike $29 today for about 0.9c/contract
smart,
why dont you start your own blog? i like your ideas.
joe
Joe,
Thanks for your suggestion. I never thought about that. That is a good idea. I will make one soon and let you know.
Joe and PC,
I started the blog. Just be patient and feel free to post your ideas:
http://smartradeideas.blogspot.com/
"Option Premium Collector"?
When does it start?
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