My recent thoughts

Hi Joe,

Glad you are doing well. Sorry I haven't had a new post lately. I have been too busy. But let me update you about my views and trades:

I think market is in an undecided point. Shorts are selectively and aggressively shorting specific stocks and are gaining some confidence. But I think they will be squeezed soon. Here are the things I consider for trading:

1) First Coverage Sentiment report: They have a real time sentiment which has proved to show the mood of the market short term. Now they are calling to be long, so I am back to business. Their stock picks aren't really reliable as it reflect the past weeks activity. If they are bullish on a stock and I see the stock has been beaten, I consider selling out of the money puts. I am also considering neutral trading or writing closer to the money put spreads on bullish stocks. This way, I have a higher risk portfolio but risk less money too. Unfortunately, whenever I tried bearish or neutral spreads, I got caught. In case of DELL, I managed to get out with minimal loss. I also had a neutral spread on POT (sold 110 calls and 75 puts, bought 115 calls and 70 puts). That trade was good, but I got panic when POT rallied 10% in one day and close it the bearish side. Now that I am trying to be bullish, things seem to be turning bearish for me :) Seems I am out of phase a bit these days. Despite all that, so far my portfolio had been steady with small gains, so no major complain yet.

2) Here are the open positions I have:

- GMCR 55-50 bullish put spread (it is down after hours but I am going to hold on to it probably)

- MOS (45-40 bullish put spread)
- POT (80-70) bullish put spread
- SNDA (45-40) bullish put spread

- I own THLD (wish I added more when it was 1.10, insider bought it long time ago at 1.50)

My plan is to take profits when possible and keep the capital 1-2 weeks before expiration to sell neutral box spreads. Time decay should be killing both calls and puts.

It is a good idea to buy some insurance in case of market crash. I have a feeling that US dollar will go higher. The best deal for that I found are UDN puts since it has both time decay and UDN goes down if dollar goes up. I was looking at December 26 puts. As soon as I watched it, it got some volume the day after :) But I want to get it for less that $0.2/contract. We will see. I was thinking of some neutral ideas: for example something that takes advantage of dollar + gold trade...

The real time sentiment from first coverage is good although stocks are tanking. So that is a good short term sign to me. I am still concerned about the whole economy testing its past lows again and possibly tanking further. So, it is good to prepare for that (just as a small possibility)