USO Update

The market opening today provided a bittersweet condition. The good news is that USO opened above our stop, lowering our exposure to assignment. However, we had been stopped out, buying to close the June 38 puts at $0.65. This produced a loss of $0.25.

Lessons learned, many! First, dropping down to the next lower strike price may have kept us in this position, and lowered our risk of assignment. Although we would have received a lower premium, we would have more likely made a profit.

Second, when we opened this position, intraday trading appeared to be pivotal, in that our intraday trending was on the verge of changing. Although the rise in volatility at the time may have contributed to higher premiums, I feel we should have taken a more conservative approach.

Lastly, and I think this should be a new rule for me, DON'T TRADE WHILE TRAVELING! I did not have access to all my tools, and this is a severe mistake.

I would like to explore more cash flow plays for USO, provided it finishes it's current retracement and continues its up trend.

I am on my way to Hawaii for my honeymoon. I will write again next week.

John
Sent from my Verizon Wireless BlackBerry

Long time no hear?

Hello everyone. It has been a while since I've posted anything, so let me fill you in. I just married my beautiful wife, Melissa on Saturday. We are heading to Maui tomorrow.

The market has been interesting lately. We have seen a good rally, but now lately we have seen retracement. This is interesting for this week since June options are expiring soon. Therefore it has been hard to find any items to sell puts on.

Nonetheless, I had sold the $38 June puts on USO for $0.40. Realizing that the chance of assignment within the next 3 days is possible, although unpreffered, still leaves us with an option with creating a nice covered call play in an overall uptrending ETF.

Overall, this position is managable and I feel confident in making it profitable.

Until next time.
Sent from my Verizon Wireless BlackBerry

We're at support...Again.

DJIA MARCH 30, 2009

Here we go again!

Most stocks opened today at a GAP - when there is a gap between the last candle and the present candle. This is interesting since the market has been on a rally lately.

Now we have this gap, not present here, but all over the place everywhere else.

DIA ETF MARCH 30, 2009

Now check this out, the DJIA ETF, the Diamonds. Classic gap. I can list all the examples I want, but a lot of EVERYTHING looks like this.

Now I'm not Cramer, but I would wait a couple of days before I'd do ANYTHING. Generally gaps have a habit of returning to the original level, but after that......who knows!

The Bull Market Comback?

Are we in a comeback? After what we saw in the market today, I'm sure a lot of people are hope full. After all, $1 Trillion is a lot of money. Is it enough to stimulate out of recession?

We are seeing signs of comebacks, but I wouldn't say 100% we're out of the woods. Keep in mind that I speak technical, not fundamental analysis. When I think something may occur, it's usually from what I see in a chart and not in the papers.

First, I made the assumptions that the market would go down due to a few indicators:

1) We saw consistent rally for several days, bouncing off a new low, in an existing downtrend. This was confirmed by a sell off last week.

2) We were between 20 and 50 day moving averages, and appeared in a great spot to sell off.

3) Secondary indications of an overbought condition.

4) Price was hitting an established ceiling.

However, as we saw, the market went UP. First rule of trading, know you are not perfect. Check. But now we know this information, let's see the case for a bull run:

1) Breaking the new barrier. That ceiling we were testing is now being broken, and we could have entered a new price band.

2) Commodities. I notice how commodities are looking like they are struggling to maintain their trends. This could indicate confidence flowing back into the markets.

3) Volume. Generally positive volume, and not really decreasing.

Although I think I made some valid points, I feel overall that traders are still undecided. The next few weeks may establish where the market may go. If we see a trend change, I'll be sure to tell you.

At Least I'm not Cramer!

This weekend I mentioned that the market may go down, and looking at the market this morning, I am obviously wrong. But hey at least I'm not Cramer. Although I failed to remember Obama's unveiling of the bailout when I made this speculation, I'm still going to hold to my guns this week and say that the market is still bearish.

I should probably say that if you are trading off my advice, DON'T. I'm mostly wrong about a lot of speculations, and I'm protected with my plan most of the time from this. I am not Cramer, please don't blame me if you lose money.

Rant about nothing

Well well,
Nothing much to talk about here. I look forward to seeing what the market does tomorrow. Is the S&P doing to drop tomorrow? I think so. I see a lot of stocks dropping tomorrow, but hey, I'm just speculating. I know I said that I though we were at bottom, and we may be. After all, we have been consolidating so much, I don't think the market would go much lower.

So here we are, consolidating, riding a channel. We'll probably drop again, but not real far (considering the past). But hey, we could CRASH again too, or even go up.

What do I know?

Bill Gates Looks Funny

I'm sitting here watching an interview with Bill Gates on CNN and I ask myself, "With all that money, should Bill Gates look better?" My answer is obvious, but maybe I am wrong. Maybe with all the money the Czar of Microsoft could "splurge" a little and get a nice looking wardrobe, maybe a cleaner haircut, who knows what he could do! My point is that he really looks like he doesn't get out much; I guess that is the case with most billionaires? Gee I sure hope not, but maybe that is the case. Oh well.

Nonetheless, the world has been to say the least interesting the last few weeks. I don't know how many AIG stories I have read in the last few weeks. My opinion, let them fail, and that bailout money for the institutions that would be in trouble if AIG failed. But that is my opinion.

Sooner or later I am sure that this fiasco will blow over, but when is a mystery.