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!