Reaching the Peak

Futures look flat today, in light of the GDP data which came in slightly below estimates at 2.6% (consensus was 2.7) With tomorrow the last trading day of the week (I think) it well could be a tipping point. December has moved the markets up 4.8%- to put that in perspective for the year is just over 10, so almost half the year's rise has been in the past 21 days. Basically I think when the whole house of cards comes down, it'll come down rather hard. Its just a matter of when.

I'm still heavy stocks, so I'm looking to reduce positions (read liability) in the event of a downturn- not to mention when it turns back around it'd be nice to have some powder to take advantage.

So the IO call was a nice surprise yesterday (I didn't expect it to hit 1.45 so I sort of set it and forgot it) The TCK option bought the other day recovered very nicely yesterday- looking for a small shoot to get us out of the red and into the black, (another +1% move today will do it).

Other moves I'm still heavy DGIT, so a move up I'm a seller of 25% of my position. Everything else I feel pretty good about.

Open... Up?

The answer (again) is yes! Sure why not? Another day another Green start- it does boggle the mind. From a looking stupid standpoint I bought some TCK 50 at 8.3, which proceeded to go up to 8.5 before deciding it liked the 7's better, not that I'm panicked, but its a paper 'loss' on what was somewhat a 'panic' purchase- I wanted in, and I was going to get in. I took a flyer on IO Jan 7's for $1.2 as I said its been bouncing between 8 and 8.75 for a while, and think it could move up nicely on some low volume, and hopefully turn .4-.5/option (~40%)

ANR confirmed its offer for Massey which is unfortunate as I had not gotten in on that. The move makes a lot of sense for Alpha- their management with Massey's mines and resources should yield a nice turnaround, plus it adds cash and adds 1/2 billion in net sales to the bottom line. Coal is starting to get trendy with the analysts however, so once that happens the peak is usually not far behind. Sadly because the institutions are moving out while the individuals move in leaving the little guys as the bad holders.

I think the best advice I ever read about the markets was a two pronged piece, 1) Never fall in love with a stock. 2)The best stockpicker averages about 70% so you are doing well if even 3 out 10 are losers. This goes back to step 1 however, don't fall in love saying 'It'll come back' For a stock to lose 50% it then needs to increase 100% to get back to value- its much faster going down, take your lumps and walk away. I'm still trying to put this into practice.

UPDATE*** Sold all my IO 7's at $1.45 (as some pass at 1.5) but its a 21% gain minus fees, which is a solid win. As I said I'm a little spooked by what could happen between this year and next (that and I won't be in front of a computer) for a week.

Santa Rally Continues!

Its Monday again, and guess what? That's right the market is set to open UP again. Now I am getting more and more bearish on the market for next week but in this shortened and most likely low volume week anything is possible, and I tend to view it as possible. (Side note this Thursday I will be trimming positions as I expect the first week of the new year to be baaaaaaad. Though it may be (as some analysts seem to point to) that the pullback won't be until February- but as far as and as fast as the market has come in the past 2-3 months I just don't see it keeping up this frankly torrid pace.

There was an interesting piece on 60 minutes Sunday regarding states debts- and it was pretty ugly. They said that Illinois state troupers were being turned away from gas stations if they wanted to pay with their state issue cc- that's how delinquent the state is on payments. We're broke, just some states are broke-r than others, and its probably going to take the Federal government to bail the states out now. So what does that mean? Well the previous plan has always been ask someone for the dough, but we're running out of lenders, and we don't like giving up what we have. Its a real lose lose.

The sliver of silver lining to this is that as money gets printed the stock market will go up (as the businesses become somewhat of a 'commodity' But then your dollar is worthless anyway so its really not a great situation. We really need to embrace or maybe a better expression is 'take our medicine' and yes pay taxes and accept they need to go up. We can't have less than 50% of the population paying NO Federal taxes, its unsustainable, and sure in the short term it hurts, but it'd hurt a lot less now then not too far down the road.

Whats the plan for today? I'm looking to grab shooting stars and flip them. TCK has looked strong last two days and closed Friday looking really nice. Looking at some Jan options (deep in money) I think IO should bounce back, looking for 8.5 in a couple days, going to try and grab some $5 options, DGIT may continue to climb, on a drop I'm buying March 25 options mid 4's.

I'll try and update any purchases.

***Bought Jan TCK 50 @8.3

Sick.... bleh

So I'm struggling with this cold for the past few days hence no posts- sorry about that. To be honest though its been a lot of watching and uncertainty and not a lot of action. I exited the TCK position on Wednesday on a 17% gain. It subsequently has dropped further so if you were still in I'd suggest watching the action today and sell on a spike on open or just exercise the shares- the long term outlook I think is still strong. Much of the income is commodities based and I don't know how the dollar is still 'strong' recently in light of the countries continued spending without taxing. In good news a pork filled 1.3trillion rolled bill was rejected (something I never thought I'd see) so maybe there is some hope- or its just too little too late. Short story Commodities=good as China consumes more and the dollar declines, the stock should go up.

One piece of news that makes me interested is the credit cards got slammed yesterday on proposals of capping transaction fees. Most of them cut by 10% or more, I'd look for some follow through on the downside today with some balancing on Monday. The aggressive play is to try and guess the bottom for a quick profit. I'll be watching the charts carefully. Looking at V and M to lead.

Flip a coin

Some nice data this morning with respect to the PPI and retail sales, both which came in above estimates. This could bode well for the markets IF the hesitation of profit taking is shrugged off. The cards seem set perfectly to reach a 2 year high of the markets by Friday, which aligns with our plans for TCK. However, the danger is a breakdown and sell off if the momentum fails and the profit taking kicks into overdrive. Previous patterns have been up big at the open followed by a quick step down then progressive slow drop the rest of the day, it may be better to open lower/unchanged and build over the day.

HRBN has had a nice little run recently; its still to scary for me however, JNJ continues to hemorrhage, and should be due for a turn soon- its too good a stock to continue in this pattern. Finally ANR has continued to disappoint me neither really dropping nor going up- its in a holding pattern and I will hold and watch to see which way it goes. DGIT has had some pops but can't seem to break the 30 ceiling but I did sell a couple covered calls the other day at $.35 (DEC 30) pick up some free dividends as it were. Still holding the TCK options but on a nice move today I'm out at 8.5- just ran out of patience =)

A new week!

Well here we are on another Monday in December and the market is..... UP, AGAIN! They say that the trend is our friend, and it sure seems pretty dependable. Note we have 2 more Mondays left this month, but only 1 that follows the Santa Rally, and that would be next week- BUT that could be under a lot of selling pressure as Friday is Options Expirations. I think an up Monday next week is a reasonable play however, and look for light volume. Which bodes poorly for the following week... but that could be setting up our new positions for next year. But thats another discussion.

We are now in the crunch time for Dec options, and as we let the TCK 50's ride last week we are approaching that 60 threshold. Remember what the tea leaves (option pain chart) told us? However, unless I'm really a believer in the tea leaves, I'm looking to close out my position (We're sitting on close to 45% profit at 10:00, and like last time I'm might have missed some additional gains, but locking in profit is locking in gains which is really what this is all about. The current Pain index is showing now 70 Calls! Of course there are no bids on that but the 60 option is still selling at $.50, so that is still a 4% rise priced in. At an linear average of 1% off the current price its feasible. So I just may hold another day (or two) ((or three)) we're ruled by fear and greed, fear of the loss and greed of more gain. Watch the market and TCK today, a slow rise over the day bodes very well.

Not really watching too much else today, ANR has posted some nice gains off a bad day last week, but I've just been a spectator- plus I think right now TCK is the play for DEC. ANR is still a nice long play especially as it seems likely they will take over Massey, which will seriously increase their potential but also a test to see if their managment can turn Massey around (Current Massey operating costs are abysmal)

Disclaimer: All info is placed in fun, I own all shares I say I own, in no way should this be a solicitation to buy or sell, just educational fun to see how much I lose!

Settling much?

To be fair the market 'settling' has been certainly less dramatic than I anticipated following last weeks impressive showing. Watching the uncertainty in the House Congress about the taxes should cause a pretty tepid back and forth movement until a decision is made. Honestly at this point they all should just resign, they are all useless. Make both house and senate a rotating position like a jury selection, take you average citizens and throw them into seats. If nothing at least those people will be able to compromise a little because what is going on now is a disgrace and downright embarrassing. This way you'll get a good mix of liberal and conservatives with a limited session to do something (Say 1 month) and who wouldn't want to say "Oh and during the January session I helped pass ______." You certainly wouldn't be on the side of "Well we did nothing because nothing was better than a bad bill." What?! It would be downright cool- I'd jump at that in a minute if I got that kind of letter.

Action today: TCK and ANR have slowly been hemorrhagic recently usually with a strong open then decline the rest of the day. I think they may be ripe to start the next leg up. TCK options are still strong for $65 now, but I would be very doubtful those will be in the money by next Friday. Might buy DGIT options on a strong down. Currently the TCK 50 options are down but I'm going to let that ride into next week unless today is particularly good.

Just a point I need to get off my chest; Julian Assange is NOT a hero, this line 'I am Julian Assange' is a naive thing to say; he is nothing more than a figurehead and a thug, and whatever so-called moral highground he said he had long dissapeared when he attempted to blackmail.... well everyone with this 'massive dump' of information. Look I too want my Government to act with honesty and integrity in their actions, but I also know I am not educated enough to undestand diplomatic releations either, nor am I naive enough to believe that goverment (and business) can run without whispers and not megahorns broadcasting their every move. If he (Assange) claims to be 'policing' the US government, who polices him and his organisation? And the answer is no-one. So he is just another hypocriticate- do as I say not as I do. I think he enjoys it, the fame, the intrigue, the life on the run, cloak and dagger mystery surrounding him; he's been called everything from scum to 'a hero of our time.' He is not Woodward to Deepthroat, Assange -though he calls himself a reporter nor writer, does no research, really does nothing but expouse the benifit and beauty of free information, and other Utopian- and completely impractical views. If anyone is the 'hero' here is the former analayst who allegedly stole the information in the first place; and who by-the-way will spend the rest of his life in jail for the largest act of espionage ever reported. But of him Assage dismisses, afterall he can't lose the spotlight, and claims due to 'journalistic integrity' they can't reveal the source- nor support him, and so they leave him to rot- disposable heroes aren't just for the military.

Finally we reach the point where it turns a bit comical; REVENGE! shreiked the headline on Huffpost yesterday and gleefully described the temporary takedown of Mastercard and later Visa, by this new hacker group as 'revenge' for halting payments to Wikileaks. Now this part is where it gets good; An anonymous hacker says 'We don't know Assange but we support freedom on the internet, and together we can take down the credit card web sites' 'Ok' say all the wannabe anachists help us create a new world Utopia of free information, "Alright' says the hacker first you need to download my software and then we can do it! So all these drones download this hacking software which I garuntee is loaded with backdoors and other nastiness and the hacker has expanded his network by a thousand-fold, then sure enough Mastercard goes down, alright tell your friends and we'll take down more! So now the hacker has an even larger network of zombie computers. Good they deserve eachother.

"In an online letter the group said its activists were neither vigilantes nor terrorists. It added: "The goal is simple: Win the right to keep the Internet free of any control from any entity, corporation, or government.""

So purposefully shuttuing down websites is not control by an entitity? Its the dillusitional running the asylum. The only thing that their mucking around does is point out a growing need FOR a governing/police body on the internet; exactly opposite what they said they stand for. Next thing that will be said is this is a Governement conspiracy to control the internet. Its just unbelievable.

Runaway Train?

I can't say that its off the tracks, but right now I look at the market and wonder how its still accelerating. Today's movement (which again points to a very strong start) is based on optimism fueled by the renewal of the tax cuts.... tax cuts for all. Which I have to say is a big mistake. I think that the middle class will still benifit by the tax cut continuing; read it as NOT a tax increase! But the renewal of this tax cut for all is difficult to swallow. Why Republicans continue to stubbornly refuse to budge for this tiny percentage (who by their very description are NOT suffering through this downturn- or they wouldn't be making so much money) is aggrevating in the highest order. If it comes down again that nearly half the population do not pay any taxes again this year however, I have to declare the system broken and accept failure. If everyone is paying tax than tax them, if 90 of the federal taxes are taken from these top %'s and businesses well then we are hypocrites of the first order if we yell tax them more.

I am looking to recoup my losses with the TCK and ANR options bought yesterday, and I'll be looking to sell on any weakness (sounds familiar?) On a strong move by JNJ I might also clear my position. The stock has been very weak for the past few weeks and seems to have a new lawsuit everyday which never bodes well. I'd like to see 8.5 or 9 for the TCK 50's if I'm being greedy. As I said it looks like (based soley on options) that over 21 million says it goes over 60 to close on the 17th (11mill over 55) We'll see it looks like a good day!

***Afternoon update: Well today was.... strange, spiking prices for both ANR and TCK at the start led to selling the ANR within the first 10 minutes at a 40% take; I held TCK and now am unhappily looking at what was a 40%+ up early completely disappear under selling pressure all day. So the ANR was a win; TCK I'm stuck kicking myself again. The weakness ending today looks to me like a very bad day tomorrow for the market. To that end I think I should take my medicine and sell today even at a slight loss thinking tomorrow I could buy lower. But I've been wrong so much on this stock I'm going to do a wait and see on it. The plan is to double down on a steep drop tomorrow, with a watchful eye to see if it looks like it could be 2 down days before a turnaround. To compensate for this I sold (FINALLY!) the Mar 25 DGIT calls for $4.7 even better than the 4.3 I've been looking for forever. Go Figure.

Please let me out

Well another starting down day and TCK continues to float, I swear it has a jet pack on. I doubled down on Friday with respect to my put which currently has me at ~17% in the hole which would hurt a bit. Basically at this point I just am waiting for the drop or at least a pullback then drop the put and go long. Of course at that point the stock will throw a full reversal and my put would look genious; but I'll be long out of the that and then looking at the wrong side of a buy call. Right now I have no feeling of where th market is at. A couple articles seemed bullish thorugh January to make up for a 'dismal' year- hey everybody likes an end year bonus. Of course the 'false' inflation of wealth bodes really bad in a couple months (Feb-March) but until then I suppose just hold on a go for the ride.

Looking to get in to TCK and ANR today despite my gut feel that everything is due for a pullback.... right now there is just too much optimism not to try and take advantage.

***Update, closed out the puts at a 18% loss then went long on the 50 Calls at 5.5. Judging by the option pain, TCK is expected to pass- not hit but pass 60 by next Friday (17th) Which means that I should be able to get $4 on my call if I'm right which will be a tidy 80% to over my poor move on the put. At this point I'm a bit sour I sold those calls last week- they'd look really nice today! Also riding the coal train, picked up some Dec 18 2010 55.0 Call @ 1.6.

The great game

Sometimes its better to be lucky than good. Such an example I found this morning when it appeared that the futures we UP again! With the markets up over 3% in the past 2 days I was certain that would be the end of the up days and give me a chance to pick up some new stocks/options on the down. Yes I think December will be a good month for stocks so I do think the overall trend is bullish, but corrections are normal- no essential to a healthy situation. So imagine my dismay with a double helping of news; consolidation in the Metalurgical coal companies, (TCK and ANR would be affected) and an uptick in the futures= looking bad for my puts- which you might say I deserved for jumping anyway, and then you wouldn't be wrong. Then I got lucky, the jobs report-which was supposed to be a can't miss +100,000 jobs came out at 39,000 and the unemployment rate went up .2% to 9.8%. And the futures dropped; which is good for my short term, that and base metal pricing dropped by almost a 1%. Now to be honest I find the unemployment rate a joke- basically its only if you have been out of the workforce for 9 months after that you are removed from that %- but you still don't have a job, so there are still a lot of people looking for work, so in the spirit of the season we wish all those in tought times that they find the employment they need.

Action for today: I would love to see TCK drop to fill the gap at just below 50, this would give me a chance to sell the puts at 5+, and re-buy calls. I think a 5% pullback is possible, I know I've been calling for it and it just keeps going up, but today- maybe today (crosses fingers) I'll be watching TCK and ANR today with an eye at IO and DIGIT to see how they hold up. It should be pretty red everywhere; this is ok, even good. Happy Hunting!

Disclaimer; I own or plan to own all stocks/options called out here, this is in no way a solicitation to buy nor a suggestion. The material provided here is for entertainment only, and should not be taken out of that context, Stock have inherent risk and they can decline in value (duh) be smart.

The Wave

Sorry I had to use the title after seeing a book plugged on Colbert Show the other day, I'm looking forward to a pretty quiet day today, the futures have been slowly dropping, and the day should end down 50-75pts. I'll be browsing on a few stocks especially on dips. ANR TCK MSFT TSL. We should now be in the trough, and I expect a slow slide down today- which is fine.

I'm hoping that DGIT will continue to rise today, yesterdays action was pretty disappointing. I'm still looking for that 4.3!

IO also continues to look strong but I don't have a good feel where it will go so I'm in watch and wait mode. It seems to have finally broken out of the channel (on the high side) so 'technically' I view that as a good thing- but I've never claimed to understand chartists.

Again the plan for today is any -5% move by any of the 4 mentioned and I'll be looking to get back in at slightly in the money calls- preferably ones with potential high return, low premiums on the option pricing.

****Afternoon update- Well sometimes you guess wrong, as both TCK and JNJ options would have grabbed higher gains if we held into today, however no one ever complained about locking in gains which I did yesterday. I'm surprised at the strength of the market today, so I'll push off my projections by a day or two. I feel there is a gap at 49.50 that needs to be filled, so I'll look for the correction around that point, hopefully tomorrow!

****3:00PM Update, I have sinned and broke my rule but I could not resist, I bought a handful of TCK 55 Puts at $2.8 everything in my logic says tomorrow can not continue this rally. Looking to get out at 3.5-4 tomorrow hopefully at the open. Looks like I might even get my DGIT 4.3 today

Disclaimer; I own or plan to own all stocks/options called out here, this is in no way a solicitation to buy nor a suggestion. The material provided here is for entertainment only, and should not be taken out of that context, Stock have inherent risk and they can decline in value (duh) be smart.

Let the bulls run

....And out of the gate it looks like we got the bump we were looking for. Some nice PMI data out of China and Europe and a good jobs report could be just the sense of security we were looking for. Its looking like a sell day- for me. I picked up some JNJ DEC 60 calls yesterday afternoon at 1.95. I would be disappointed if we can't move those today at 3, (or higher, 3.5 would be nice). The important move will be at the open, a spike up and quick retreat would not bode too well, but if it settles quickly I'd feel good about a small rise the rest of the day. I think anywhere between 3.2-3.5 will work just fine.

I also will be looking to sell the DGIT MAR 25 at 4.3 (still haven't printed at 4.3) and maybe trim my stock position on a 5% move.

Finally, our TCK DEC 48 options which we (hopefully) picked up either Friday or Monday at sub 1.60, looking for 3.5-4 today(get greedy). I think regardless at the end day however its a sell; TCK has been hot recently and needs a day to establish a local low.

Good luck and enjoy today!

***Update TCK DEC 48 already printed 4 by 10AM, Sell placed at 4.1 JNJ looks very weak, looking now for 2.5

***End of day update, We got both prices we were looking for today. TCK continues to look strong into the close, however I already got my $4.1 and JNJ at 2.5 for a +100% gain (depending where you got in) and 25% gain respectfully. Unfortunately I think we will not have many options tomorrow as I expect the market may start positive before closing down on profit taking.

Stocks I'll be watching tomorrow to buy: ANR, TCK, TSL, INTC, JNJ