STOP DAYTRADING!
Someone please remind me to do the above. I’m not an options day trader. I’m losing too much money trying to day trade. Sigh.
Trades taken: 2 (Visa puts)
P/L: -$50
Today appears to be a better day. First, my deposits into my account have cleared. Our tax rebates have finally come in as well. Overall, I have a bit more firepower to play with so in terms of being properly capitalized and diversified, we’re one step closer.
On that note, I may dip my hand at trading the NQ futures. I’m still on the fence about it but we’ll see how the day’s actions go.
Oil topped $122 yesterday before settling near $121. Oil is currently sitting at $121.80. Goldman Sachs is predicting oil near $200 within the next 6 to 18 months which is scary in and of itself. Note that a couple of years ago, Goldman predicted $100 oil within the next two years. Look where we’re at now.
Stay sharp today!
No action taken on Visa so far with today’s selloff. The strength of the selloff actually concerns me so as a result I have yet to take any positions on it. Here’s what I have for Visa right now. Be back after lunch!
Over the past few months, I’ve seen my portfolio whittle away to almost nothing. Granted, I started with practically nothing (in the market’s view) but still. After trading for nearly a year, I still have quite a bit to learn. However, some folks at thinkorswim have given me a task in order to refine my trading skills. In short, in order to be a great trader, it pays to be a specialist. That is, if you want to become an options trader, trade only options and nothing else. Futures trader? Same thing.
There’s a twist to the homework assignment. Now that you’re focused on being specialized in a vehicle, take that one step further and specialize in a single underlying and just that single underlying. Learn how it moves, how it trades, what items affect it. Learn it for an entire year. While that seems somewhat excessive, it does appear to be a good exercise in focus and trading refinement. That’s why I’ve decided with the transparency of my trades, Visa will now be my project. That’s right. Visa will now be my bitch.
I will try my hardest to trade Visa exclusively. There will be times I will deviate, if only because some setups out there are so blatantly obvious or the Option Addict is on a tear (when is he never?). So starting tomorrow, here’s the game plan for Visa now that I’ve sold what May calls I had left on it.
There’s the short term game plan for Visa. I’m waiting for a short term pullback near the $83 region. With the recent $15 run-up in 48 hours, I’m expecting some sort of a breather. The other alternative is to buy on a breakout of $87.50, or today’s 52-week high and maintain a tight stop. With May options coming close to expiration, I will most likely be looking at June calls, somewhere in the 90/95 area. I don’t forsee Visa heading below $80 any time soon to be quite honest.
Let’s see how the game plan works tomorrow. Good night!
Earlier this morning, crude oil finally rose above $115 a barrel (CLK8). With oil rising at a rapid pace once again, commodities are soon to follow. Some analysts such as the Option Addict feel commodities will push
higher as it did about two months ago. In anticipation of a potential breakout, I’ve jumped into the bandwagon with a small position in DBA, the PowerShares DB Agriculture Fund. Note the level of support around $39. Here’s how I’m playing the ag game. I’m currently in DBA May 40 Calls with a stop right under $39 and a price target of $42. The two bottoming tail hammers also bode well for a bullish position.
With oil, gold, gasoline, commodities, and everything else rising at a rapid pace, perhaps it’s the best time to jump into the oils such as Exxon (XOM) and others? Actually, I may have found a stock to short. Take a look at Petroleo Brasileiro, also known as PetroBras (PBR). For those keeping up with recent news, PBR may have found new patches of
drillable crude in Brazil and as a result spiked about $12 Monday. But take a look at the chart. Note the action from the past couple of months. It appears that a double top may be in the works on PBR. A double top is normally a major reversal pattern that’s found after a extended run up. In order to confirm, PBR would need to bounce off the $125 resistance and break $97.50. However, working in that channel alone can net about 25 points. It’s an interesting play and something I’ll be keeping an eye on over the next few days.
Life appears to be grand for the bulls the past couple of days. Yesterday’s action appears to be strong in terms of closing prices, but was it as strong as everyone thinks? A year ago, I would have been excited to see such a rally. Today, I’d like to analyze it just a bit before waiving the all clear flag.
From a simple resistance/support view, it does appear by a healthy margin that the S&P 500 has broken above the 1330 level and is making a march potentially to 1400. The markets gapped open yesterday and never looked back.
Let’s take a look at a daily SPY chart since it typically follows the S&P.
On face value, it appears that the SPY too has broken above resistance and is headed toward the 139 - 140 level. But I’d expect a pullback, and potentially a sharp one at that. Take a look at yesterday’s volume for the SPY. A couple of things to note. First, yesterday’s volume was lower than the 20 day moving average volume. Next, look at the past three trading days. There appears to be a steady decrease in volume which may signal some tired out traders. The lack of volume might be a cause for concern. In any event, before the all clear is sounded, I’d like to see if this rally does indeed have legs. The first step in seeing if this rally is valid I think is to have a retest of that 1330 level and having it hold. If it fails, it may just be one of these two to three day sharp rallies nested in a bear market. Then again these markets have been very news driven the past couple of weeks it may be that no one has much of a clue about what’s going on.
Futures are marginally higher this morning. Let’s see if they can hold through the opening.
