Right Back At You

Energy Compresses Too Fast: (early day post)

This is a quick intra-day note on the market. With Oil dropping $11-12 in 1 1/4 days (or over 10%), and with the big drops in Energy stocks yesterday followed by a gap down today - I am laying off any puts on all Commodity and Energy stocks this afternoon. The play appears to be done. Anyone that hit those sectors with puts this morning should be looking to lock and walk on at least half the positions.

Right Back At You: (after-market post)

Here we go Up the Down Staircase again. Just look at the price action on the Naz for the past 2 weeks, this is about as fun as gum in your hair. I made a little on some day swings today on the DIA and the SPY. But even that was hit by a News Bogey. The game right now in the Financial sector appears to be Bad News Bogey countered by Good News Bogey as the Fed and other organizations try to stop the madness. So we get bad news out of MER then good news out of Fannie and Freddie. Then we get bad news today out of CIT (drawing on its entire $7.3 billion credit line) and then good news out of the NY Fed (modifying its Term Securities Lending Facility). It's no wonder the market charts look the way they do.....
That last news bogey hit 5 minutes after I sold my DIA and SPY calls on a perfect little rollover on the charts (that was probably going to lead to the end-of-the day profit-taking I was expecting). I made money on the trades but I left a few thousand on the table as the Fed once again stepped in to prop up the markets.
Here is a summary of my trades from yesterday into today. I picked up calls on PEP, DIA, and SPY. I added to the DIA and SPY this morning and rode those up for little 15-17 cent gains and sold them when we rolled over later in the day. I wanted more, but I didn't know the Fed was willing to give me more just as soon as the positive news announcement came out 5 minutes after I sold my calls. I am still riding the PEP calls. I picked up half a put position on MCK and CAH and will look to get the other half if the market rallies Monday and Tuesday. If we do rally Monday and Tuesday, I may trade calls on STLD for a quick play ahead of its stock split. GILD looks like it wants to ramp up a bit, I may look for a quick call play there as well. If we roll over the markets around Wednesday, I will look at puts on the Commodity and Energy stocks, including Gold.
I don't know about the rest of you, but I have a little "News" burnout. If we go quieter, then the market may be able to trend a little bit. If we stay newsy, then I will stay with my day swings.
I will post my bullish and bearish watchlist by Saturday. I may be able to figure out how to get the candlestick patterns on here as well. I'll see what I can get done over the weekend.