Tuesday Turns the World

There is a popular belief that you should enter into local holidays on the short side.... that would have worked today! Down big in the premarket and floundering all day. But thats ok- in fact it might be great, because we are buying the dips! Why the positive attitude because now is the time to make money because that money won't be worth what it was yesterday, today. Inflation is here! The illustrious FED has led us down the path, and there is only one way out, and that is up. On the plus side the low mortgage rates that were hopefully locked into could look really really good in the next year or two. We as a nation have no recourse to the current predicament. With interest rates already too low and can't go lower, and the inevitable QE3 coming this summer to a bank near you, your money is devaluing before your eyes- so I am getting out of money.

Commodities are taking a beating today with the exception of oil as Libya prepares to tear itself apart. I'm getting into 3 positions today;

5 TCK Mar 19 2011 55.0 Call @ 1.41 (both the *imaginary 4k portfolio, and I'm actually doing it to)

ANR Mar 19 2011 50.0 Call @ 4.05

DGIT Mar 19 2011 30.0 Call @ 3.2 (might have jumped this one too early!)

Looking for a nice move on them tomorrow. Depending on the action I plan to either sell the Call above (ie 60, 55, 35) or just sell on a 20% move.

Tuesday Recalibration

It was a interesting day today DGIT started the day flying high on some great earnings and proceeded to tank from those early highs the rest of the day. Based on the early action I am looking to get back in long in the next day or two once it reaches a localized 'bottom' 32.5 is looking good right now. I'll look to go in for 4 Mar 30 at 3.5, and look to sell 4 Mar 35 at 1.2 (GTC) giving me a cost of ~1000 after trades. I feel this could be flipped quickly but I've tried to lower my risk by selling the 35 call. I think we have now tapped out on the 4k portfolio.... however.....

Going back over to our ANR trade we picked up last week. I sold the ANR FEB 52.5 for $4.1 and covered my FEB 55's for $2. Yes I do think the ANR will drop before the end of the week which would lower my cover costs- perhaps even eliminate them entirely, but the goal of this is try and profit quickly, and though we may not be maximizing we are trying to profit while lowering our exposure. Lets go to the math: Bought @ 522.24 sold @ 1217.73, Net Profit=695.49..... Now our short- remember this was to LOWER our actual cost if the stock went DOWN, but we like the stock so we would have bought it (or sold the option we were left with-at par value to the stock, and we assume our short expires worthless which, again, lowers our purchase price). In this case as the trade went UP, we lost on our short, but we were ok with this. OK sold our short for 158.75 now we had to buy it back to cover at 612.24 for a loss of 453.49. So our final profit is 242 on a cost basis of 363.49 for 67% profit. Whew... Now just a few more of those and we'll be back in the game.

Another one for Friday

Just wanted to take advantage of a little lull. And yes I'm still waiting for that big fall which is now looking less and less likely as INFLATION takes hold- yes its here and its here to stay. Don't believe me? Check the rapidly rising interest rates (and oh the little detail about nations rioting due to high food prices) On the commodities line we'll hop back into ANR FEB's (yes its a bit risky but low cash value) And we need to recover more from the QID fiasco! So eventually I add that into our portfolio (or detract) we put in 800, and got out 100 =) Nice! so our 5k is in jeopardy. But we press on because its interesting. I'm actually getting into this one myself so here's the purchase:

So the exposure is $360

Have a great weekend!

Tuesday Bluesday

So after a lot of Reagan-isms and reminiscing, I decided to chase down the poem he used so eloquently after the Challenger disaster, it is entitled High Flight:

Oh! I have slipped the surly bonds of Earth

And danced the skies on laughter-silvered wings;

Sunward I’ve climbed and joined the tumbling mirth of sun-split clouds, – and done a hundred things

You have not dreamed of wheeled and soared and swung

High in the sunlit silence. Hov’ring there,

I’ve chased the shouting wind along, and flung

My eager craft through footless falls of air...

Up, up the long, delirious, burning blue

I’ve topped the wind-swept heights with easy grace

Where never lark, nor eer eagle flew –

And, while with silent lifting mind I’ve trod

The high, untrespassed sanctity of space,

Put out my hand and touched the face of God.

-John Gillespie Magee

I still get a little chill when I hear it-

In other news the 4-5 challenge has not gone well! The ANR trade should be covered now at 1.14- it could have been even less over the past 2 days, so that netted a very nice percentage over 70%, but due to curiosity the QID trade is an absolute disaster =) Again this is the reason for normally trailing stops, otherwise you lose your shirt! The C trade continues to look good heading towards its 44% goal, need to hold for a couple months still however. I still feel that the market is due for a nasty day or two- but whether it will allow us to turn a profit on the QID at this point is doubtful. However, I still need a down day before I jump into another position. Ironically even with our QID fiasco, we are on track to be up 10-15% if it all ended today. Or if I'd tailed the stop to 20% we'd be up that 20+% that we need to meet our 3 month goal.

Goes to show you that there is gold in them hills- you just need to know where to look!

Tuesday Troubles?

It was a busy Tuesday! Some moves of note: Sold half my IO at 10.05. Earnings are in two weeks but the stock has run very nicely for the past 2-3 months. It was time to take some off the table. I was honestly shocked that the market responded so well today, so I'm treading cautiously. With the turmoil in the world I did not expect such a strong move up today. We shall see if it holds.

Well day 2 of the experiment and its already been a rocky road! The QID pick was a major flop but as its all in fun we're going to let it ride a bit more, I'm counting on a return to sanity tomorrow, though it will take a few down days to get us back in the black on that one.

On the plus side the ANR pick already topped out in a few hours, so I'd have sold the call at 6.5 plus and held the short call, see if we can't get it to go down tomorrow and skim a bit more off our profits. As it was if we covered today we sold the 3 at $6.5 for 1950 minus our short (currently sitting at 2.9) or 870 subtract 20 for commission and after one day our 790 is now 1060, or 34%. Not to shabby for 1 day (Discounting that QID fiasco- thats why you use trailing stops!)

To be continued!

Monday Funday

Introducing my new aggressive 'mock' portfolio! The goal is simple; I want to virtually turn 4k into 5k in 3 months, so by the end of April, we'll see how we do! I thought this might be a bit of fun as its not a totally unrealistic 'play investment' but it'll keep me honest and I may learn something from it as well. I got the idea from a lot of these ads saying Joe Shmoe had 10,000 and bet on penny stocks to get to 1mil. Riiiiiight. I'm going to try and make my bones on real stocks and companies that are solid names, but use some leveraging strategies to try and squeeze a lot more out of it. Shall we begin? This should in no way be considered a good idea to do for real! This is risky! Thats why its PLAY

I'm going to kind of cheat here and place the C trade I mentioned last week here. For simplicity we will use the 10 options used last week. Remember, we bought the $4 option for April for $.89 and sold the 5 for $.21 so for our first $900 (the extra 10 is commission) we bought 10 Apr, 4 calls, then we sold 10 of the 5's for $200, so 700 of our 4k is in play.

Today's move is to try and get some leverage on ANR's purchase of Massey (you might remember I thought this would go through in Dec) Well ANR's drop today should be an overshot, so I'm buying the Feb 50 for 4.6, and selling the Feb 55 for $2.0 (lets do 3 of each) this will cost us 1390 and we get back 590, so $790 more is in play.

Finally a hedge lets do 20 FEB 11 calls of QID at .37 for a cost of $750

We are now 2240 of our 4k in...

Good luck and have fun!

12000 Here we come!

Grab the mo-mo and moooooove! Pretty much the word of the day today, will it(Dow 12k) break? Will it hold? I'm going for yes and yes, so its a good day to play the momentum (tomorrow will probably be a bit of a carryover too).

I'm a buyer today of C April calls at $.89, I'm also a seller of C April 5's at $.21. Here's the twisted logic (follow at your peril) Based on ~1k share purchase (10 options), I have essentially purchased(I have placed an order to buy) 1000 shares at 4000 (1000shares x $4)+1000($.89)=$4890, NOW I SELL 10 options of C $5 call for $.21 which nets me 210, This part is a little tricky. I have just sold shares I technically don't own yet, but that I have already agreed to buy at $4- so now I have control over 1000 shares which I have then agreed to sell at $5. Its kind of a covered call on crack.

What does this do for me? Well now my basis price for C (currently trading at $4.86) is 4890-210=4680, and YET I have only put in $680 dollars! Excluding transaction costs, if the stock sits where it is for 2 months the sold $5 options expire worthless netting me $210 - .03 x 1000 shares, or $30 which means I 'made' $180 on a $680 trade which is a cool 26% for owning a stock that did nothing.

In case you were curious, if the stock goes up we obviously do better, sadly we are capped at 44% once/if the stock goes above $5. That would be a tough day.

I'm going to try and use this strategy a bit more in the upcoming weeks. I hope it made some sense.

Good luck and be careful!

Snowin' again!

It has been a while since I last posted, probably due to the increase of work I've had, plus i haven't really seen any 'screaming' buys and maybe after the PCLN debacle last month I'm a bit more cautious. I don't normally do it but ASML dropped 8% after blowing away their earnings, the basis was they failed to discuss future bookings beyond the end of 2011. I found this a great opportunity as all analysts were upping their targets to 50, so I said thank-you-very-much to $37.10 and bought. Currently its sitting back at 41+ three trading days later and up a healthy 11% Placing a sell at 42 for today which in all likely hood won't hit today. As the Euro strengthens their cash (which is in EURO) looks better and the share price gets a built in hedge.

TCK is failing over the past 10 days, so its starting to look like an opportunity to rebound a little, but I'm still looking for more direction from the materials sector before I hop back in. IO has risen nicely, look for a .50 fallback tomorrow per its usual trend. If it does, I/m a buyer of the $9 Feb call.

Not much else going on.... good luck!

Snowed in

WE finally managed to extricate one lane out of our driveway, I'd say we got 16-19 inches last night so shoveling was fun. Now its off to work for a few hours, then back home to shovel out the other half!

Moves today, the market got some broad based good news from Portugal about their bond sale, so everyone is super happy, oil prices continue to climb despite as I read the futures are sitting on close to 400 unsold barrels in March. Waiting for that bubble to pop.... TCK continues its irrational climb on the back of the even more irrational price of Copper which continues to go through the roof. Again speculation (like oil) is driving these commodities, and when the music stops, you do not want to be holding it. (on the long side- as a short term/near term it could be very good, I'm looking for an in at the end of the month, and I'll keep it posted)

Put in sell orders of our two momentum trades from last week, INTC and GLW, I'm asking 1.34 on INTC 20's for Jan, and .64 on the GLW 20's. The Intel should net ~20% while the Corning a nicer 68%.

Look to the close for clues to tomorrow, I expect earnings reports to be good (again) but this will be the end- costs have been slashed to unsustainable lows, yet these efficiencies will be expected for at least 2 more quarters, and I don't see too many making that stick.

***Update GLW got hot around 2 so if you are still in the option is over 1 now (which is when I bought it originally what I was shooting for. I'm out at .82 missing .20 on the up move. Bummer)

Sometimes you are the windshield, others the bug

Ouch... So my PCLN guess took a nasty turn when expedia was kicked out of the house by American Airlines, this then resulted in an assumed increase in traffic from expedia to Orbitz, Travelocity, and Priceline, both of my Put calls got stopped out at 50% loss- not good. The Russel passed 800 so my bearish views seem lost. I'm all bull now (not really) but am more optimistic again for the short term. With ADP reporting a ton of new jobs last month the jobs report tomorrow should be very very interesting, if it re-iterates ADP's report yesterday tomorrow will be so green it will raise the spectre of the dot-com days, and money will be flowing in the streets. I am expecting the report to be good-after all if a payroll company says it must be so, I think it must be so. So I'm betting heavy on an up day. As nothing I have is particularly market friendly and nothing I'm following really appeals right now. (Coal is too high to fast, TCK/ANR) DGIT I'm too heavy, NUAN is moving slowly but I've lost interest, QXM is absolutely on FIRE this past week (now up 60%) and STILL under a $1.7 if the deal (when) (another 30%) it goes through. Smarts say to buy more, and I may look to improve my position.

Moves today; I got into Jan 20's of INTC at 1.01, (pure market momentum play) a good day is a gimme 25% I also got some Corning ( GLW) at .38 for Jan 20 again a momentum play. The latter move is already up nicely at 37%, looking for a double to recoup the losses on Priceline.

Bring the jobs, I'll bring the champagne

Happy New Years!

Happy new years everyone! I hope it was happy and healthy and the new year will bring happiness and good fortune to all. We spent our evening in a small (tiny) Scottish bar in VT which was... interesting, and yes it was fun too. I want a kilt too now.

The stock market got off to a rocking start (sure why not?) today so things are continuing the trend of up up up. I just don't buy it, even if I am gradually enjoying the ride. Copper continues its red hot ride up, so if you didnt sell your TCK 50 options last week (like I did, for a modest 35%) You are sitting on +100% so congratulations- sell it already!

I sneakily ran some trades last week after usually waking up at 11. I bought some Puts on NFLX (Netflix) because I don't see the price justified, and yes everyone loves Netflix, but that just means there is a larger retail segment priced in to that, and the financials don't quite make it for me. I bought at 3.3 and sold at 4.5 so that was nice. On the flipside I bought some calls for Priceline- another in-my-opinion overly bloated price, on Wednesday which was up 30+% at the end of Friday, but I failed to put the expiration date for good-to-close, so on Priceline's nice move up today that 30% gain is now a 30% loss (on paper) Its how the cookie crumbles- I still think its a good trade that I can wring some dough out of, in the mean time I bought 390 PUTS for 3.8 (already up 5%, with the ask up 15%)

I expect the good times to end soon, I have a order out for covered calls of DGIT 30 for 1.2 (Jan) which will provide some insurance, and better reduce my position should they close about 30.

Good luck!