Strategy, Approach and Statistics

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You may want to investigate other newsletters like Booking Alpha, Benzinga Cash Generator, Benzinga Options and Volatility, Glinser Services, The Option Wiz for the real time alerts and auto trading experience. Commission plays a bigger role in improving the profitability of spread trades. It may be a good idea to open an account with low cost brokerage firm like Options House (100 free trades) to give extra punch to your gains.



Tuesday, January 31, 2012

First Review at Investimonials

I am excited to share the first review of MyWealthOptions blog at Investimonials. Review can be read at  http://investimonials.com/blogs/reviews-mywealthyoptions.aspx 

THANKS Candide! I read it repeatedly and will memorize Jan 31, 2012 as a significant milestone.

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Updates to the "Last 10 trades" section of the blog will be made shortly.



Closed Jan 2012 with 489% Gains

S&P is in range-bound between 1300 and 1332 for a while. Technicals are not signalling if the market is consolidating for a move higher or ready to pull back. VIX is rising silently. Market is likely to pullback following week, if S&P doesn't cross the overhead resistance at 1332.

STX reported better than expected results after the market close. This position will lose. about 20% maximum, if the stock goes higher by 10%. Purposely, I entered into a long-term option contract to mitigate such a risk. Rollover is another option to still close the position with gain.

Portfolio is well-balanced and is in a position to cushion any market shock:
- 3 positions for flat market - STX, TXN, VIX
- 1 bullishing postion - CMI
- 1 bearish position - STJ

Let's be conscious of the market conditions and not be adventurous. Hope is not a game plan.

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Updates to the "Last 10 trades" section of the blog will be made shortly.



Alert 31 - New Position

Buy STJ 20APR12 42.5 Put at a debit of $2.55

Comments: STJ is strong trending stock and may continue its momentum. In short-term, it will hit resistance at 42.06. Conditions are overbought. A quick gain will be booked if the market shows weakness. This will also balance the portfolio as we already traded CMI on the long side. 

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Alert 30 - New Position (CMI 105 Call)

Buy CMI 16MAR12 105 Call at a debit of $4.40

Comments: CMI will report financial results on Feb 2nd. I might sell additional leg against this position to collect premium resulting in lower overall cost.

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Alert 30 - New Position

Buy CMI 16MAR12 105 Call at a debit of $4.40

Comments: CMI will report financial results on Feb 2nd. I might sell additional leg against this position to collect premium resulting in lower overall cost.

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Monday, January 30, 2012

Booked 34% Gains Today

US Market outperformed global markets today. The supports/resistance were held; the market is no hurry to climb or sink. Market is complacent, but we cannot  be.

A pair trade was opened today, which will be rewarding in all three scenarios:
1. Market upside - TXN will be in the money
2. Market downside - STX will be in the money
3. Flat market - Feb legs of spread will expire worthless

VIX position should return approximately 25% in the 3rd week of Feb. Patience will be rewarded.

Quite, a few stocks were on my radar in the morning, but hardly few met the thresholds. Better safer than sorry!

34% gains were booked today. Wasn't it easy?

Today's views on the blog touched 200 mark. I am excited!

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Talk to you tomorrow.

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New Alert - Pair Trade

Alert #28: TXN Diagonal spread at a debit of $1.99
(Buy TXN 21JUL12 32 Call
Sell TXN 17FEB12 33 Call)

Alert #29: STX Diagonal spread at a debit of $2.06
(Buy STX 16JUN12 21 Put
Sell STX 17FEB12 19 Put)

Comments: Each of these trades is good invidually. However, opening both trades should balance the portfolio. I am bullish on TXN and bearish on STX

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Position 27 - Out at $2.21

 Closed SPY at a credit of $2.21. 

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Closed Position 25 & 26 for 27% Gains

GDX Put at $2.15
HAL Spread at $2.45

SPY spread is shaping up nicely and it is likely that there will be another winner today.

I am tracking a new signal and it will be posted soon after my order gets filled.

New Targets - Corrected

Position 27: $2.26, 
Position 26: $3.00 + (may reduce to $2.50 if GDXJ doesn't fall after 1-hour of trading)

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Revised Targets

Position 27: $2.26
Position 25: $3.00 + (may reduce to $2.50 if GDXJ doesn't fall after 1-hour of trading)

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Friday, January 27, 2012

SPX Expired Worthless Realizing 8% Gains

We booked approximately 100% gain this week. SPX position expired worthless realizing 8% gains today. You should see the gains in your account, if acted on this position alert; I know few of you had traded this alert. 

Market today gave several opportunities, and most positions were available repeatedly  at the recommended prices except HAL. All open positions closed with 1-2% gains. Fantastic-5 are generally bullish, but I will not chase the stocks. DOW and S&P are trading below the resistance, so any upside will be difficult to sustain.

Several of you are asking me to make these trades available real time. Some adjustments are made at my end, so you get posts prior to the update to the open position section of the blog. Still, I may have a 10-minute lag. I tried to send a quick alert, but regretted by sending a correction update.

I have no plans to offer real time alerts as a paid service until all of my thresholds are met (all conditions must be met):

Per day hit on blog - 1000 (current 140)
Followers (by Email, Facebook, and Twitter) - 200 (current 36)
Trading History - At least 3-month (Current 1-month)

Have a great weekend! Talk to you on Monday

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Alert 27 - SPY Calendar

Buy SPY Calendar call at $2.06
(Buy SPY16MAR12 131 Call
Sell SPY03FEB 12 131 Call)

Comments: The trade will be profitable if S&P closes within 130 to 133 on Feb 03.

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Alert 26 - GDXJ Put

Buy GDXJ Put at $1.85

(Buy GDXJ16MAR12 30 Put)

Target: 2.30

Comments: Gold and GDXJ are overbought.

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Correction 2 : Alert 25

HAL Diagonal Put Spread at a debit of $2.21
(Buy HAL 16Mar12 39.0 Put
Sell HAL 03FEB12 37.0 Put)

Target: $2.45

Comment: This is a highly speculative trade. Halliburton is outperforming the market due to a court hearing in favor of RIG. Market is expecting a similar hearing for HAL in BP oil spill.

Sorry for the second correction. This is what happens when I do multitasking.


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Correction - Alert 25

HAL Diagonal Put Spread at a debit of $2.21
(Buy HAL 16Mar12 39.0 Put
Sell HAL 03FEB12 36.0 Put)

Target: $2.45

Comment: This is a highly speculative trade. Halliburton is outperforming the market due to a court hearing in favor of RIG. Market is expecting a similar hearing for HAL in BP oil spill.


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Alert 25 - Speculative Play on HAL

HAL Diagonal Put Spread at a debit of $2.21
(Buy HAL 16Mar12 39.0 Put
Sell FAZ 03FEB12 36.0 Put)

Target: $2.45

Comment: This is a highly speculative trade. Halliburton is outperforming the market due to a court hearing in favor of RIG. Market is expecting a similar hearing for HAL in BP oil spill.


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Thursday, January 26, 2012

Fantastic Five Ahead - Booked 78% Gains Today

Many a times, unpredictable things happen and today was one of the such days. In the morning, market was close to touching 3-year high before it gave up early gains. Support (yesterday's resistance - S&P 1325) held for about couple of hours before breaking down. Market is back below the resistance.

About 75% of the portfolio is in cash to leverage any new opportunities. SPX position is looking great for 7% gain by close of the market tomorrow. No closing trade is required if SPX closes below 1240.

It was great to see 78% realized gain in the account today. As the day progressed, RGLD gave up slightly, but SPY was back in the positive territory. I thought it would be better to count on portfolio gain rather than performance of individual trades and hence the move early in the day to close positions. FAZ brought additional 17% intra day gains.

Fantastic-5 Ahead: Market usually goes higher on the last 2 and first 3 days of the month (let's validate again next week). I see higher prices next week.

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Close FAZ - Bring Money Home

Close FAZ Diagonal Call Spread for a net credit of $2.45
(Sell FAZ 17FEB12 28.0 Call
Buy FAZ 27JAN12 30.0 Call)

Comments: I know few of the followers were lucky to get into this trade. Congratulations for nice 17% intraday gain.

Alert 24 - Open FAZ Diagonal Spread

FAZ Diagonal Call Spread for a net debit of $2.10
(Buy FAZ 17FEB12 28.0 Call
Sell FAZ 27JAN12 30.0 Call)

Booked 61% Gains by Closing 4 positions

Closed:
- TXN spread for a gain of 17%
- SPY spread for a loss of (14%)
- SPY spread for a loss of (17%)
- RGLD spread for a gain of 75% (love it)

We are in 75% cash. I am worried about SPX spread which expires tomorrow. S&P closing below 1340 tomorrow should bring maximum  gains. I will watch closely. I like quite a few stocks but do want to chase them at this time.

Wednesday, January 25, 2012

Let's Recap the Rules, and 25% Gain in RGLD (still open)

I have learnt the following rules, by committing mistakes, in last 15 years of my stock trading experience. Let me read it loud and refresh them before making any move.

1. Do not chase the market.
2. Be fearful when others are greedy.
3. Hedged positions offer the consistent results in a long run.
4. Do not put all eggs in one basket.
5. Keep about 50% of portfolio in cash.
6. Balanced portfolio have the strength to absorb any market shock.
7. Today is not the last day to enter/exit a trade.
8. Go for coffee when there is panic in the stock market.
9. Have mental stop losses, but avoid Good Till Cancel (GTC) order with a stop loss.
10. Help me out with more from your experience!!!

Highlights:
  • Booked gains in FXI - 8% gains
  • Opened Texas position - in money by 8%
  • Opened SPX position - in money but current bid is at 2% loss
  • RGOLD position - huge 25% gain (position open)
  • VIX Calendar - breakeven
  • SPY Spread - 12% loss (position open)- double position

Overall, we are in great shape. I might rollover SPY spread sell leg to next week to balance positions, if the market doesn't show weakness tomorrow. S&P is trading above resistance, but DOW is still around resistance levels. Let's take a break before market direction is confirmed. 

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Alert 23 - New SPX Credit Spread

SPX Credit Spread for a net credit of $0.35
(Sell SPX 27JAN12 1340.0 Call
Buy SPX 27JAN12 1345.0 Call)

Comments: 
New position at 2:00 PM; Credit of $0.35 by investing $4.65 (5-0.35)
About 7% gain if S&P closes below 1340 on Friday
Market is overbought

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Closed FXI Put for 8% Gain in 7 days

Close FXI Put for a net credit of $1.68

(Buy FXI20APR12 38 Put)

Comments: Market is finding support at S&P 1308. It was much higher at the market open, anyway, let's close the winner while it is still making money.

Texas Instrument position opened today is in money by 7%. It moved up 2% soon after I got in.

Alert 22 - New Position on Texas Instruments

TXN Calendar Spread for net debit of $0.94
(Buy TXN 16MAR12 31.0 Call
Sell TXN 17FEB12 32.0 Call)

Comments: New position at 10:05AM; Expecting 15% gain by Feb 17 (Target: $1.10+)

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Tuesday, January 24, 2012

Counting on Gains - What's Next?

Apple should do good tomorrow after having reported spectacular results. Historically, stock has not performed very well after reporting the results. I have an upward bias; We will see.

After Apple's blow-out earning, Market will look forward to Fed decision tomorrow. QE3 is not expected, which I think is already baked in the market expectations. 

Both DOW and S&P are at resistance levels with very little room of only 0.6% before they hit ceilings. Market will continue to struggle for upward journey unless it opens much higher tomorrow by-passing the resistance levels.

SPX position was closed today for 21% gain in a day. The portfolio is evenly balanced and only 50% invested, leaving enough to leverage other opportunities market may offer(keeping aside approximately 40% portfolio gain in just three weeks of 2012). Most positions have at least two months to expiry. 

Let's stay focused on our strategy. The focus of the strategy is low to medium risk trades and achieve about 15% average gain per trade. The 2012 track record reflects that there are no mega gains, but a high success ratio.

I am excited to share that in just four weeks of life of this blog, there are 100 hits on this blog today.

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Booked 21% Gains in 1 day

Close SPX Credit Spread for net debit of $0.90
(Sell SPX 27JAN12 1330.0 Call
Buy SPX 27JAN12 1325.0 Call)

Gain of $0.70 by investing $3.4 (5-1.6).

Market is flirting with the resistance at 12,750

Market is flirting with the resistance at 12,750. Technical pattern suggests that market has limited upside, but prone to a scary decline if there is any negative news. Having said that, buyers are on the sideline and will take every opportunity to load the shares if there is any short term dip in the market. 

Apple will report the results on Tuesday, after the market close. The Fed will make policy decision announcements on Wednesday. These two evens could be the catalyst for any directional move of the market. Otherwise, DOW 12750 should act as stiff resistance for the bulls.

We bought a SPX credit spread today, which will expire on Jan 27. The maximum  potential of this trade is 47% ($1.6/$3.4) if S&P closes below 1225 on Jan 27. Furthermore, I covered the short leg of FXI for a net credit of $0.60 resulting in a lower cost of APR FXI 38 Put.


Monday, January 23, 2012

Market Flirting with the Resistance at 12,750

Market is flirting with the resistance at 12,750. Technical pattern suggests that market has limited upside, but prone to a scary decline if there is any negative news. Having said that, buyers are on the sideline and will take every opportunity to load the shares if there is any short term dip in the market. 

Apple will report the results on Tuesday, after the market close. The Fed will make policy decision announcements on Wednesday. These two evens could be the catalyst for any directional move of the market. Otherwise, DOW 12750 should act as stiff resistance for the bulls.

We bought a SPX credit spread today, which will expire on Jan 27. The maximum potential of this trade is 47% ($1.6/$3.4) if S&P closes below 1225 on Jan 27. Furthermore, I covered the short leg of FXI for a net credit of $0.60 resulting in a lower cost of FXI 38 Put.

You can follow me on Facebook for the instant access to the alerts. Henceforth,  I'd post all new position alerts, which will immediately show up on Facebook and Twitter accounts, making it convenient for the  followers of this blog (link to Facebook/Twitter can be found at mywealthyoptions.blogspot.com).



Alert 21 - New Position

SPX Credit Spread at 10:05AM
Net credit of $1.60
(Buy SPX 27JAN12 1330.0 Call
Sell SPX 27JAN12 1325.0 Call)

Comments: Maximum profit of 47% if SPX closes below 1325 on Jan 27 (Spread will reduce in value over the time)

Market is at stiff resistance, which will be difficult to sail through. It seems the market is peaked out for the short term.

Sell the rallies, but avoid shorting.


Saturday, January 21, 2012

Open Positions for the Week of 1/23/2012

Four positions are open entering the week of 1/23/2012. I am looking forward booking 20% gain within a week. We are 60% invested in the market.

SPY 130 Calendar Call - double position at breakeven
(Buy SPY 16MAR12 130.0 Call
Sell SPY 27JAN12 130.0 Call)"

"VIX 21 Calendar Call - 2% gain
(Buy VIX 17APR12 21.0 Call
Sell VIX 14FEB12 21.0 Call)

"RGLD Call - 10% loss
(Buy RGLD21JUL12 67.5 Call)

FXI Put - 12% gain
(Buy FXI20APR12 38 Put)
Sell FXI17FEB12 38 Put)

Please see mywealthyoptions.blogspot.com for the entry date and price.

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Balanced Positions - DOW to Hit Resistance at 12750

Options' expiration week wrapped up in a typical style. S&P closed at resistance, and DOW is shy of resistance around 12750. Mighty IBM and Microsoft were the DOW leaders today.

VIX closed at 18.23, near the annual low.

Entering into next week, our portfolio is balanced with two calls (SPY), two puts (VIX and FXI) and one position in a gold-related  stock. If VIX is an indicator of fear, then it seems bulls are in control, but the market will not gain or drop significantly. Calendar alerts with weekly leg will do well, next week, as long as market stay within -3% to +1%. As such, I do not trust the options' expiration week, so a churn in the market is not ruled out.

Many global ETFs are overbought. A correction in the market will be healthy allowing other investors to get in. It will be interesting to watch gold and heavily shorted stocks if supports go broke.

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Balanced Positions - DOW to Hit Resistance at 12750

Options' expiration week wrapped up in a typical style. S&P closed at resistance, and DOW is shy of resistance around 12750. Mighty IBM and Microsoft were the DOW leaders today.

VIX closed at 18.23, near the annual low.

Entering into next week, our portfolio is balanced with two calls (SPY), two puts (VIX and FXI) and one position in a gold-related  stock. If VIX is an indicator of fear, then it seems bulls are in control, but the market will not gain or drop significantly. Calendar alerts with weekly leg will do well, next week, as long as market stay within -3% to +1%. As such, I do not trust the options' expiration week, so a churn in the market is not ruled out.

Many global ETFs are overbought. A correction in the market will be healthy allowing other investors to get in. It will be interesting to watch gold and heavily shorted stocks if supports go broke.

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Friday, January 20, 2012

Balanced Positions - DOW to Hit Resistance at 12750

Options' expiration week wrapped up in a typical style. S&P closed at resistance, and DOW is shy of resistance around 12750. Mighty IBM and Microsoft were the DOW leaders today.

VIX closed at 18.23, near the annual low. 

Entering into next week, our portfolio is balanced with two calls (SPY), two puts (VIX and FXI) and one position in a gold-related  stock. If VIX is an indicator of fear, then it seems bulls are in control, but the market will not gain or drop significantly. Calendar alerts with weekly leg will do well, next week, as long as market stay within -3% to +1%. As such, I do not trust the options' expiration week, so a churn in the market is not ruled out. 

Many global ETFs are overbought. A correction in the market will be healthy allowing other investors to get in. It will be interesting to watch gold and heavily shorted stocks if supports go broke.

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Thursday, January 19, 2012

Sand Bagging or Upside Momentum

Option expiration week is high risk - reward equation. Market is continue to rise, and the gains are about best in a decade for the similar period. We will know next week if it is sand bagging or real momentum.

As expected, eBay did well in today's market.

We opened a position around 10:30AM today and soon after it traded 5% lower. Per my experience, the best time to open calendar call is either between 11:30 to 12:00 EST or 30 minutes before the market close. It was a good reminder to read my rule-book, anyway; spread closed at breakeven today, and we are on track for 10% gain within a week.

Overall, market is hitting the resistance, and a pullback is not ruled out. I am actively looking forward to opening VIX (Volatility) and GLD (Gold) positions. Gold is showing weakness; I'd be in for any 2% drop. Volatility is under 20, and I want to take a contrarian call on VIX.



Wednesday, January 18, 2012

Think Unpredictable

Job numbers could be a catalyst to drive the market even higher.  Analysis that "higher prices" (from S&P 1295 level) are ahead in the fist week of Feb is not changed. There seems to be more upside before any downtrend.

Unpredictable things happen during expiration week, so be prepared for market gain or break at any moment. I want to ride the momentum train but want to preserve the capital. FXI, the new position opened today, align well with this strategy. A drop/rise in the China market by 7% will still be profitable for this trade. 

We were bang on the Goldman Sach direction (see earlier post). EBay should also perform well after the results.

Overall, We are running over 90% success rate for all the trades in 2012. This is significant considering the risk level for our trades. We never invested more than 50% of the portfolio at any time, and mostly got our gains from Beta (Options Greeks).

Let's ride the wave, but stay cautious. 




Tuesday, January 17, 2012

Excitement of higher China GDP growth faded by the market close

Excitement of higher China GDP growth faded by the market close. Banks were under pressure after Citibank missed the estimates. Soon, we will see a big-day move to either upside or downside. Holiday shortened week has only three more trading days. 

I am expecting downside in the global market on Wednesday. China's market is overbought with about 3% gain yesterday. I'd buy FXI puts tomorrow if this stock shows any strength at the market open. I got into BBT Put, which looks overbought. BBT will report the financial result on Thursday. Either I will get out of this position tomorrow or sell Jan 27 Put to make it a spread which will reduce my investment and risk. Currently, this position is sitting at a 7% profit.

No matter how the market trade in a short term, it is likely that the market will be higher from current levels in the first week of February.


Saturday, January 14, 2012

Pair Trade, and Benefit from Greeks

Last 2 weeks, I made very short term trades (Gorilla trades) assuming that market will mostly be flat. VIX was indicating complacency, so I decided to focus on short term setups. It was good to see that our assumptions proved true. Handsome gains were booked though we never invested more than 50% of portfolio at any time. 

Financial results could be a catalyst to move the market in either direction. There are many stocks with overbought conditions and they still continue to rise. Furthermore, short squeeze is giving momentum to a few weak, but heavily shorted stocks. Commodities look strong, but are under-performing due to strength in the mighty dollar. 

Bottomline, let's pick a pair trade to profit with a move in either direction. In addition, I am screening few stocks with very low option premium (Greeks). Any rise in volatility can give 20% gains even if stock doesn't move much.

It is really exciting to see that followers subscribing by email are in double digits in just two weeks of launch of this blog.

Tip of the week: Do not put all eggs in one basket. Allocate money for short-term and long-term opportunities.

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Friday, January 13, 2012

Our Prediction Held - 88% Gains Booked Today

What a day! All trades met their target with ease. We could have added another 50% gains, but nevertheless, 88% gains were booked today. Portfolio is already up 40% in 2012. Our positions were well-positioned for a profit even with 100 point fall/rise of DOW. 

Market has enormous strength. It was difficult for me to hold myself from entering straight vertical calls last week, so we went ahead with flat market strategies. We just followed the great words, in principle "Don't be greedy when others are." It paid off.

S&P downgraded several European nations and impact of this is unknown. Market may be looking beyond this event on Tuesday. Financial results announcement may lead to volatility in the market. Watch VIX next week. Next week is the options expiration week. It will be exciting! There are no new positions entering the next week. It may be a good idea to open long-term calls on Goldman Sach (GS). EBay will be reporting results next week. I am expecting upside.


Thursday, January 12, 2012

Banks are overbought; Market is shy of resistance

Market is beneath two overhead resistances. S&P should find resistance at 1296 and then at 1307. Investors are nervous, but money on the sidelines is driving the market. 

JP Morgan will report the result before the market open on Friday. No matter how strong the results will be; S&P is not expected to close above 1307 tomorrow. Market may open volatile, but should settle in a narrow range.

Banks looks overbought. Banks triple leveraged ETFs, FAS and FAZ should see action tomorrow. I will buy FAZ (shorting banks) on any strength in the morning.

We still have two market neutral positions open. It will be either 15 to 25% gain or a loss of approximately 10%. I must rollover/ close both positions tomorrow. Portfolio is already up 29% in just 12 days. Total gains are 228%.


Wednesday, January 11, 2012

Spot On

Our prediction for today was spot on. Market as predicted, closed flat, but not before a minor dip in the morning giving us an opportunity to close positions at a gain.

I opened two trades for a neutral market and one put for technical pull back. 

MGM not only over bought, but also trading right below 200 days moving average. It should struggle rallying, and a small pull back should give us 10% gain within five days. There may be a massive rally if it crosses 200-day moving so let's have a strict 10-15% stop loss. 

Master Card was downgraded by Goldman Sach today. It should stay between 333 and 350 by Friday's market close. A close at 340 may double our position. Financial will be active on Friday, so we will see.

Most of the shorted stocks will out perform if the market continue to rally. Watch GME, FSLR, X, NFLX, GMCR, and other heavily shorted stocks.

Overall, market is expected to trade in a narrow band between 1280 and 1305. JPM will set the tone for the banking on Friday before the market open.


Tuesday, January 10, 2012

Advising caution

Do you think the market will continue to go higher after breaking the upper resistance at 1285?

My guess is yes, but not until a small correction kicks-in. 

If the market holds tomorrow, then probably we will see S&P at 1315 in a short term. As such, I'd still play on both short and long sides. When CNBC pundits predict directional move, retailers usually come in at the tail end of the move and in fact, lose money. It seems that we are at a tail-end of the directional move, at least for the next 5-day period. 

Commodities and banks will under perform if there is a mild market correction. Consider weekly credit premiums (call side) above SPY 131. 5-10% gain within three days will be juicy. Global markets will be flat to negative tomorrow.

Our open positions look good in spite of about 14 points rally in Nifty over the last two days.



Friday, January 6, 2012

Great First Week of 2012

It's the perfect way to start 2012. We are up over 20% on the portfolio and over 100% gains for all the trades in a week.

Overall, S&P is still struck in 1260 and 1285. It was surprising to see action/strength in the market today. Commodities didn't drop in spite of strength in the dollar. It indicates that market has strength but no conviction yet to go passed the resistance. 

Any dollar drop may give bulls the reasons to run up the stocks. However, Alcoa will kick-off the results season and market should focus more on financial results than Europe. Alcoa results are likely to be weak giving bear a reason to double their sell positions. I'd stay in a market neutral, and play calendar calls until the market makes a decision.

Congratulations to all who jumped on Neflix bandwagon. I'd also consider long term GS calls. Furthermore, watch GLD which is making strong moves in spite of dollar weakness.


Thursday, January 5, 2012

Go Short and Long Simultaneously

US market is outperforming the global markets. Watch out for the bounce back in MA, and XRT.

PFF looks like a perfect sell, but there isn't any good volume in the options.

It may be a good idea to simultaneously short the weak stocks and go long on the mid cap momentum stocks poised for a huge run.

Market will get direction if SPX crosses 1285 level or falls through 1260. Until then, it's range bound market between 1260 and 1285. End of the day push or Job numbers may provide a catalyst, or otherwise I am  expecting a direction next week.

Our open positions are at break even with only one day left in expiry.



Wednesday, January 4, 2012

Market Indecision

January effect is in play. People are buying beaten down stocks with the hope of a turnaround. Two days of 2012 are gone, and technical patterns indicate indecision. I'd avoid any new position unless a decent opportunity pops up at my desk.

Looking forward to buying in the money puts on PFF, EWJ, MGM on any 2% upside. These are overbought.

Furthermore, watch for SHLD for a potential short term bounce. Wait for an entry though.

Netflix is looking interesting, but trade with strict stop loss.


Sold JNPR at the Open for 35% Gain

We sold JNPR for 35% gain at the open. Our gains are in triple digit now. The only SPY open position is at break even now.

Tuesday, January 3, 2012

51% Gains on day "1" of 2012

As the expected, market went up higher but under performed gains in the global markets. There may be another day of upside before correction in a short term. I'd watch SPX 1260 for potential support, and on the upside, SPX should be capped at 1305.

We made nice gains on day "1" of 2012. Booked 17% in GLD and 32% on the Costco call. Overall 51% gains and portfolio is up by 6%. Two open trades are sitting at a loss of about 10% each and if correction kicks in, we should have them winners as well.


Sunday, January 1, 2012