Slight Pull Back

A .5% loss on the Q's today after some big movement of Friday and Monday. I'm not surprised, you are not going to see lots of sustained momentum in a primary downtrend. It is always possible that we are forming a bottom, but I can't for the life of me call one. I have friends who have called the bottom of the markets, oil, etc sold naked puts only to get caught in the proceeding plunge, fail to stop it out and end up excercised. That's not the position I want to be in.

I have put on some paper trades on the QLD, and XLF to see how those go this week, but otherwise I am taking a holiday, after which, I am going to step up my trading another notch.

Last week, E*Trade, for my efforts, offered me lower commisions. I take them gladly. Also, E*Trade is now offering access to options on the VIX and VXN, which should make for some great spreads. I am going to paper trade those this week to test the waters. Look for some of my plays to come, and happy tradding.

Frustrated

I am frustrated with myself, I let my emotions trade. I felt weary about a possible bounce on JPM, so next market morning, I decided to take my 60% profit. Only to watch JPM continue to plummet, and watch what could have been a 300% profit walk away from me.

My frustrations continued to mount, as I was stopped out of a play on the Q's. I took losses on that, but ended the day with a 30% gain. I have never had such a frustrating day of gains before. Next week is a holiday week, so I am going to try and ignore the world and relax.

Set to Open Lower

Things appear bearish. The SPY is seeing some pre-market volume to the downside.

The Q's are gaping lowers.

JPM is gaping lower.

I expect this trend to continue, but I am ready to snap up profits on my JPM puts if buyers decide to show up. (I am long OTM Dec Puts).

There seems to be nothing out there to stimulate the economy, certainly not the government, and economic news continues to slowly become more pessimistic, pirates certainly don't help matters. Hang on, because it's going to be another choppy day.

JPMorgan

JPM came out with some bad news today, and it's down trending stock made new lower lows, so I took a risk and went long a put. So far it's still trending lower, and even broke through some early support.

Pre-Market Activity

The pre-market activity has been interesting: dropping below 28.00 almost down 1% and then back up to positive territory up 0.5%.

Futures are still lower. It looks like things will open higher though.

Both HPQ and YHOO are opening higher after adjusting earning and CEO stepping down, respectively. HPQ is up quite a generous amount--15% and climbing.

In other words, this could make for an interesting day.

Mixed Messages

Too many mixed messages to make to make any trades on the Q's. The key is to be patient and wait for the setup. Right now, my signals say no--long/short.

However, this is options week, so there is likely hood that we will see some increased volatility and selling as the week comes to a close. Keep an eye out.

Downward Momentum? Just Down

The NASDAQ is gaping down this morning (is anyone surprised after Friday's sell off?). It looks as if it is going to test the lows again. I don't know if it will find support or find anyone to rally it this time.

I am going to wait to jump into the market--wait and see approach. Watch price action and see what it tells me for the week. I'll start posting some of the setups I find, and more details of which options I am trading and why.

Taking Profits

After the gaping down, the NASDAQ made a slow pattern of lower highs and lower lows, bottomed and began to make a nice rally, once that rally started to fail in the last hour of trading, I closed out my long position for a 30% gain and called it a week.

My original plan was to buy out of the money, with just enough delta to see some movement on large swings, like we've been seeing. It was not as effective as I had hopped. I am going to modify, by moving in towards the money, and closer to expiration.

Hopefully the increased delta, and decreased time value will even out, and make larger returns on short term movements.

The Boomerang

Drudge had it best: boomerang!

I had liquidated my long puts yesterday for a modest gain, but I was less that pleased. I decided to move my next trade to an out of the money trade and increase contracts and time to expiration to capture a larger move.

I put that on this afternoon, not to long after the failed beak out to the downside. 30 minute time frames looked good enough to go long, so I bought out of the money calls.

Then the market really took on a rally that was absolutely incredible to watch. I am going to stay long and as long as the market looks like it can maintain this bounce, let my profits run.

Also, E*Trade upgraded my trading status, I know have access to cheaper commissions, and other tools. Hats off to them. If you are looking for a broker, they have my business and recommendation.

Pre-Market

Pre-market points to a lower open, despite the fact futures are up a hair. The Q's found support yesterday at 29.80 area and rallied to end down a modest amount. The trend is still down, and I don't have reason to believe otherwise; it still looks like it wants to test the prior low support near 28.

I opened a global trading account with E*Trade last week, but I haven't funded it. It's there just in case, though.

Broken Support

The Q's continue to break all prior support and are looking to test some lower lows at the 28.90 stage. No good news out there to contradict otherwise. Charts look bad on all time frames.

I opened a small long put on the Q's at the money.

Gapping Down

The Q's are gapping down today, after yesterday's gap up (and subsequent sell off). There is generally no good news out there. Earnings are looking bleak for several companies, bailouts around the world don't seem to inspire confidence, except in Germany. The primary trend is still down.

I had mixed signals over multiple time frames yesterday, so I remained out of the market. I am going to wait it out, and see if the Q's will test support from their prior 52 week lows. An important level to watch--if it holds, we will eventually be in for another tradeable rally to the upside. If it fails, another wave of sellers will emerge and things will slide, making for a good short position. I am going to stay disciplined and watch for the signals from the market, and trade them as they hold up.

CPSL also has earning today. They seem to remain in a good financial position. I'd like to see more movement to the upside with them. My covered calls are set to expire this month, and will continue to write them until I get assigned.

Friday: Headed Down

Looks like more bad news for Friday, but futures are up slightly. I'm looking at trends continuing downward, but I am not making any trades headed into the weekend. I'll still have my eye on price and volume though.

We will see what Monday brings and with it a new trading week.

Have a good weekend.

Taking Profits

My position made a 50% return, so I closed out my position.

Total time in market: 4 hours and 15 minutes.

It was possible to see this one run more, but support looked like it was forming at 31.10. Since I was trading the front month, I wanted to keep the trade short. Had I traded Dec or Jan's I probably would have let them test and try and break below on another trend.

Dead Cat Bounce?

A ball is dropped, gravity takes over; it hits the ground and bounces, and momentum takes it upward, but the balls over all trend is downward.

That is what the markets are doing.

Yesterday, the markets started the short term trend back down, and broke prior support. The second it did, I went opened long puts on the front month of the Q's. It's continued down, and the sellers are back in control as economic news pulls on the markets.

The Q's appear to be gapping down, and the futures are down over 2%. I'm looking at downward movement today and tomorrow, and then will close my position.