Wow, more panic selling and it doesn't appear to be letting up anytime soon. People are pulling there bank deposits and most likely moving 401k's and IRA's into cash. That is not a good sign for the markets. On top of all that, the markets are waiting for the politicians, the same ones that promoted this mess the past few years, to bail us out...scary thought.
I try to stay away from the politics when it comes to trading but when I heard Nancy Pelosi's speech, I thought..."What the hell is she trying to do?!". I thought that was a horrible time to bash the Republicans. She should have used the speech she gave post-vote which was much more bipartisan. That may or may not have been the difference but better to stop the bleeding now and blame later. The bailout plan is not great by any means but it is not good for America or the world economies to have a systemic break-down of the capital markets. Here's a decent article on how the shippers are affected:
http://www.forbes.com/2008/09/27/shipping-china-closer-markets-equity-cx_ra_0926markets37.html?partner=yahootix
Anyways, I want to lean short but these gap-down days with the threat of a rally on bailout news have made entries tough to find.
OIH/UNG - I'm still holding. The gap lower means I'm down over $2.00 on each position but there's still a lot of time premium so I'm willing to wait on a rebound to get out of those bad trades.
SMH - I sold half for $0.30 loss when the stock broke below 24.50.
C - I sold the calls in the AM for $0.50 profit. I then re-entered as it broke out of the base on the 5-min chart @ 20.20 and picked up another $0.50 on the shares.
APA - I tried bottom-fishing with a small position as it bounced off the 101.00 level but later got stopped out for $1.50 loss.
AAPL - I picked up $1.00 on the Oct 130 Puts as it broke down from 105.00 to 103.50.
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7 comments:
go APPL puts! we went long in the AM, lost money, then bought puts as it broke down.
cheers.
OE, sounds like you didn't get hurt...I did the same on SMH, then bought the bloody things back 5 minutes before the close-all 700!...also doubled up on FNM calls-1000 now- (nuts). Bought xhb calls towards the close as well.What saved me was my XLU which I closed as well. Had been eyeing KEY & AMR /UAUA but never got on board as things happened too fast(or I was too slow). FNM has already been bailed out/no bk, so any FED/PPT should pop these-I wish! I was on the floor for Black Monday in 87'-this was quicker and seemed to have more velocity which is why I think we could get double velocity/panic "upside"...before we head back down in earnest. Hit'em straight tomorrow buddy.
BOTD, nice work on AAPL puts. I wish I caught more of that move.
D, you must have accounted for nearly 80% of the volume on the day! I think you're okay with FNM. The downside is limited and FNM/FRE have been holding up well. I think you're right on the market velocity...maybe even 4x. With the short-selling ban, the moves off bear/bull flags have been much more extreme. The Fed may have to cut rates between now and the next House vote.
OE, shoulda, woulda, coulda on the airlines...I did drink koolaid this morning before buying 400 Wachovia 5 Calls @ 25Cents-I'm hearing funny workings on this one-what is this one really worth? $7 hmmmmmmm. Gambling man I am!
D, I know you would have loaded up on that AMR. I picked up some UAUA 7.50 Puts this AM but it is not breaking down like the others. Funny, I was just researching WB. Nice entry. UBS estimates $2:
"The firm starts with earnings of ~ $1 bln for retail brokerage and $200 mln from asset management. They also account for WB's $9.8 bln of preferreds which leaves them with $200 mln of net income to common shareholders. If they assume a P/E of 10x and add the $2.2 bln WB got for its bank from Citi they find WB shares are worth ~ $2 per share."
OE, planning on rolling out of WB on any follow through tomorrow..I think the Airlines are getting ready to move lower & lower. I did buy a 100 AMR Oct 8 puts with the plan on buying 2-300 add'l tomorrow on any strength. Everyone seems to be setting up on the short side into continued strength...that bothers me, again. Tell me your thoughts on XLNX...if u get a chance. Thx
D, I wish I had the patience. I blew out of the UAUA puts this afternoon. Those WB options looked good all day. XLNX looks decent on the daily but I may wait for a consolidation day before entering unless you're okay with the 22.60 area as a stop.
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