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On the whole, my puts and equity shorts are doing pretty well in the face of a softening crude oil market, but my index puts are doing definitely not-so-hot. I've still got puts on the $RUT and $NDX, but I get could stopped out of those in a day or two if things remain strong. So far this morning I've been stopped out of ABT, ALB, BLK, MON, RJF, and ACL.
Here are a few of my holdings that I'm feeling pretty confident about:
The last couple of days have been kind of disappointing on the short side, so this post will be simple and to-the-point: I just want to show the major index charts and my "uh-oh, this isn't going to work out very well" points. A violation of these price levels would be pretty detrimental to the bearish argument.
Oh, and for those of you not in California, let me give you our latest neighborhood gas prices. Only 9 years ago, my friends and I would make a game out of how cheaply we could find gas – – I think 79 cents a gallon was the record. My, how times have changed.
I am re-entering my NDX short position this morning, using 2015.23 as my contingent stop. I've taken a stab at the Elliott count below (learning, learning……..)
As I mentioned on Friday, I took my profits on my index puts and decided to bow out and wait for a bounce. The equity markets were pretty strong today, aided in large part by the weakness in oil. I never thought I'd refer to $128 oil as "weak", but everything is relative.
Gold was weak as well. I had puts on $XAU, but I sold them (at a profit) for two reasons. First, I hate being in these things. The bid/ask spread is atrocious, and even though the spread is so wide that you could drive a truck through it, I always have to take the bid price, so I always feel ripped off; and second, the price was touching that Fib fan line, and I was happy enough with my profits (up about 40% on the trade).
All the indexes marched higher, and what's crucial, of course, is that they don't push past the highs set a little over a week ago. I'll be re-entering index puts as this climb continues, with stops set at the aforementioned highs.
Interesting, the S&P 500 closed at precisely its Fibonacci line. This suggests this line may represent resistance, whereas before it was support (the oft-mentioned 1385 level).
I have a smattering of long positions on issues that had been battered to pieces. Some of them are doing pretty well, such as symbol CPY.
I don't focus much on the FOREX, but my conclusion from this chart is that the U.S. dollar is going to get a lot stronger soon, which is going to punish oil accordingly.
I'm off the "nothing but options" bandwagon and have a mix of (a) puts; and (b) short equity positions. I've been pushing increasingly into straight short positions of a larger size, since a lot of these downdrafts are taking a while to unfold, and I'd rather not risk the time premium loss. You can see all my holdings, as always, on the right column of this blog, but here are a few selected items; as you can see, I am hoping to take advantage of the softening-up of the formerly red-hot commodities and agricultural sectors.
I don't have much else to say, since I've returned to "wait and see" mode with respect to the broad index markets. All three remaining days this week feature an important economic release one hour before the opening bell, so there may be some interesting fodder forthcoming.
The solar stocks fad – – and that's what it was, a fad – – is becoming a gerund with an "-ing" suffix. If FSLR, already weak, cracks below $250, look out below.
