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.
