Tuesday, April 30, 2013
Except the pop due to the Twitter fake bake, it's been 0 for the past 10 days...
This morning, I woke up to a smelly puddle of leaking orchid fertiliser courtesy of Amazon.com. Unfortunately, the organic stuff comprised a curious combination of kelp and fish. You can imagine how fun it was to clean up. Even after setting off the smoke alarm, steaming everything at least four times, and using half a bottle of Method Lemon & Ginger Squirt & Mop, I can still smell it. I fear one of these days, the greedy bulls that haven't already taken profits will wake up to a similarly fishy situation.
This potential SPY market top appears just as fishy - particularly the Volume Accumulation on the 10-day 15-minute chart, which is completely - and I mean completely - flat. Who's to say a bunch of Happy Shiny High Frequency Traders (HSHFTs) aren't the ones driving the market up with the same puddle of money over and over and over again? Volume Accumulation is good evidence this may be occurring and clearly, the same money is fluffing up the market.
Of course, this is coming from someone who purchased UVXY -42% ago, VXX -23% ago, and TVIX -24% ago.
And still no 5-10% correction... I'm not proud, but when it happens, we're talking a move down to SPY 151.73 at the least and perhaps 143.75 if things get really Bwahaha... This could take out the guys who bought in November and December 2012!
+1.25% Roth IRA (It pays to be SLT-ty... SLT +7.43% today)
Earnings season almost over...
No one's expecting Bernanke to do anything drastic tomorrow and yet the DJT can't seem to move any higher, signaling strong resistance is in place...
Who knows? Maybe I'll get dinged by Bernanke again, but it can't be long before profit-taking prevails...
Monday, April 29, 2013
Swords continue to thrust and the Battle of Trading Egos is intensifying as my SPY puts at 154 and 155 get burned to the ground.
The bulls can continue to wear their rose-coloured glasses, but during the final few minutes of trading, 6 figure blocks of selling on the SPY resulted in a rejection of the 159.65 level, and the bulls once again failed to drive the market above the previous SPY 52WH formed at 159.71.
At the same time, VIX has found a new level of support just above 13. If there is indeed cause for celebration, DJT would be overtaking its previous high of 6292 and VIX would be back at around 12, but we remain at DJT 6150 and VIX 13.77, indicating signs of caution!
There is no shortage of economic data this week:
Consumer Confidence & Chicago PMI on Tuesday
Bernanke will be centre stage on Wednesday with the FOMC Statement whilst ISM Manufacturing PMI and ADP play second fiddle
ECB, US Trade Balance, US Unemployment, and US Challenger Job Cuts on Thursday
Non-Farm Pay Day, Unemployment Rate, and ISM Non-Manufacturing PMI on Friday
+1.10% SBA (thanks to LYG calls)
+0.81% Roth IRA
Friday, April 26, 2013
Hitting one bird with two stones is just not fun anymore, especially when the only one to sue is to sue yourself...
2.5% GDP vs. 3.1% expectations and still:
-0.53% Roth IRA
Thursday, April 25, 2013
It wasn't easy being the Queen of Mean today as the bulls continued to roll in the dough and reach for the upper echelon of the SPY today, trampling over the semi-bears in pursuit of any remaining low-hanging fruit.
I'm ready to throw in the towel on being a semi-bear, but tomorrow's GDP figures will hopefully be the catalyst that puts the conviction bulls on the chopping block.
If this is indeed a classic double top, today's high of 159.27 would fit the bill as it failed to match the previous all-time high of 159.71 - briefly touching, then pulling away to close the day at 158.52, right below the day's 50% Fib retracement level. Plus, DJT closed nearly flat.
It's promising, but there isn't a sign of the naked call sellers just yet. A MACD bullish divergence on the 10-day 15-minute VIX chart has been secretly forming and boy I'm hoping it has an underlying Bwahahahahahaha tone to it.
I'm ready to try out some new moves! I want to sell all levels of SPY resistance when The Moment I've Been Trading For All My Life occurs. I want to sell all the SMA bulls down and cause big red candles knifing downwards all over the SPY chart! Band-aids and Kleenex boxes will be everywhere.
Yes, I want financial repatriation too and I shall get it when the SPY 154 level finally breaks... But I'm nearly running out of patience. I've been hitting one bird with two stones for far too long now and I don't want to keep missing...
+1.60% Roth IRA
+1.19% SENSEX (WOW!)
... they would first get rid of the press embargoes that enable journalists to get an insider preview on NFPs, Unemployment Claims, GDP, Fed Beige Book, etc...
I used to work for a PR firm and we used to send out press releases with 'Hold for Release Until (A Certain Date).'
I would bet my subsistence farm that journalists are trading on this information...
P.S. And The Regulators are probably doing the same!
Wednesday, April 24, 2013
A flood of selling hit the markets during the final few minutes of trading and a few psychological levels were hit:
Rejection of SPY highs, closing below 158
Rejection of VIX lows, closing above 13.50 and ending in the green
DJIA closed in the red
Nasdaq and S&P nearly flat
DJT broke above and maintained 6100 level
Is this the calm before the storm? Tomorrow's Unemployment Claims and Friday's GDP figures will hopefully be directional.
I was enamoured with Rick Santelli and Bob Pisani's interpretations of the markets today - particularly with Mr. Santelli. The interest rate environment is artificially low. There are divergences forming.
It would be interesting to see US GDP figures on Friday as all month, economic barometers from Retail Sales to PPI to Durable Goods Orders not only missed expectations, but were negative. And the bulls are still expecting 3.1% GDP growth quarter over quarter!
+0.02% Roth IRA
Financial Stability Oversight Council = Tails I Win, Heads You Lose price fixing??
Many stocks lose 50% of their value without the help of high frequency traders. Take my perennial favourite, JRCC.
Who's there to fix my losses?
I don't agree with this Financial Stability Oversight Council. Everyone invests at their own risk and some people just don't want to take losses, then go out of their way to rig the market in their favour with excessive regulations.
A free market is a free market.
Let the HFTs run some stops for Heaven's sake...
Pretty soon, they will outlaw put buying...
Finally! I figured out a way to calculate risk:reward more accurately when trading options. Delta is apparently the expected move on a particular options issue.
So I'm going to use it to my advantage from now on...
Yes, yes, yes!!
P.S. Using the Greeks To Understand Options...
Tuesday, April 23, 2013
Sadly, both my portfolios got hit hard today as the bulls continued to run with momentum and took out stops both ways - first by sending the bears covering their shorts all the way up to SPY 157.93 and then by cooking the bulls with a full-throttle reversal that fully recovered within 20 minutes. 180,000 front-month Treasury contracts were reportedly executed within a span of 3 to 4 minutes as a phishing attack of an Associated Press Twitter account deceptively rattled up investor nerves once again.
Other than getting knifed, I got in on none of the fun, but DJT convincingly closed below its daily 50% Fib level, so I'm expecting profit-taking to come my way very soon.
SPY calls are just not popping enough, but if I had held onto those SPY $154.50 calls from last week, I would have tripled my money by now.
Alas, there's no turning back.
I have a tonne of calls on at least three banks with some sort of government backing, including Japanese banks such as MFG and NMR and now LYG, where the BOE is expected to extend its Funding for Lending Scheme. Will my new LYG calls spike the punchbowl and cause massive inflation within my SBA?
I'll continue to keep an eye on the 12 level on the VIX, but I may as well be flipping a coin with the way my portfolio has been performing.
This move up was designed to trap both ways: trapped the bears who bought $2 puts (myself included) + trap the bulls on the way back up.
-0.77% Roth IRA
Monday, April 22, 2013
Since I had such a profitable week last week, over the weekend, I decided I could convert my quote unquote luck into sustainable profits by utilising the VIX + SPY potent combination to uplift my portfolio - perhaps even everyday.
Unfortunately, my timing is still not precise enough. One thing I'm going to have to stop doing is to avoid buying $2 puts! I obviously haven't learned that this is a bad entry level - having been dinged by this level several times over the past few months. Just as stocks get too expensive at certain levels, so do options. In hindsight, I've clearly overpaid for two SPY issues this month as these could be had for dollars less today.
Do the bulls have more room to run?
What we now know is that many investors got assigned on the recent SPY options expiry to the tune of tens of millions of SPY shares - mostly buyers of the SPY either in the form of naked call sellers who were forced to purchase, downright bullish call buyers who decided to purchase and put sellers who had no choice but to purchase.
The key question is: When will they all sell?
I'm watching for signs of very large ask blocks for confirmation and if we get definitive upside action tomorrow, I'll either add to my existing SPY puts or join the bulls by buying some VXX puts - perhaps even both...
Margin calls apparently prevailed in the gold market last week and those that escaped getting chopped last week may yet get their chance over the short term. So I'm going to watch for a bounce to pounce and perhaps buy GLD puts or puts in gold miners...
Such a shame, but I've got no one but myself to blame:
-0.74% Roth IRA
+0.81% SENSEX (Will we see 2010 highs, Maharajas?)
Flash Manufacturing PMI + New Home Sales + Richmond Manufacturing Index tomorrow...
From the 5-year chart, SLT is either going to touch 2009 lows or it'll dead-cat-bounce very soon...
Risking $0.20 for the potential bounce is pretty good from a risk:reward perspective right now.
Annual 50% Fib level = $7.56 and next earnings announcement on 29 May 2013...
A few drivers that could lift NTI prices:
Ex-dividend date of around 19 May 2013
Earnings announcement date of 13 May 2013
We could see a pop to the upside before then and if not, my losses are limited to the premium I'm paying today!
Plus, I'm controlling a lot more shares with a lot less capital outlay...
... people who thought they purchased a stock at a P/E of circa 9 will suddenly be left holding a stock with a P/E of circa 17 and rising...
Talk about automatic budget cuts across the board...
Friday, April 19, 2013
The SPY $156-$158 Put Sellers weren't the only ones who got dinged by the Market Making Kings. Though I had a highly profitable week, my SBA ended the day deeply in the red as VIX ETFs were abandoned in today's trading frenzy.
The G20 pledged to shore up global growth, fueling a bullish coup that left my SPY puts in the dust.
I've got to make it a point to give it my all and accelerate my profits. And this involves less mistakes and risking more. The cash in my account is essentially non-productive.
Next week should be an exciting week... I'll use any continuation upwards to add to my SPY puts as I still expect that the party will not last through April, though for now the bulls seem to have taken back the reins.
I'm watching 6050 on the DJT...
+0.21% Roth IRA
Thursday, April 18, 2013
This week, as the bullish uptrend threatened to end, BFFs quickly turned into frenemies, with last-minute put buyers jumping in to cover their assets. But strangely, the dynamics feel a little bit different now.
Commodities quietly crept up today, with WTI, Brent, and gold all finishing firmly in the green. Losses at the DJT were truncated and the VIX closed with a much smaller gain.
I must say things were a little bit more fun when puts were less expensive and people were a little less prepared. The semi-bear trade seems a lot more crowded now, which means profits are a little harder to come by. Perhaps I played it wrong by jumping in and out, but I've pocketed quite a bit of profits this week, so I shouldn't be pouty.
I've increased position size on the TVIX and decreased position size on SPY puts. I also added an experimental issue of SPY calls in the event the Market Makers decide to ding the naked call sellers rather than put sellers.
Why not ding them all?
+2.17% SBA (after a little bit of profit-taking, but far less fun than yesterday)
+0.18% Roth IRA (TVIX profit-taking + share buyback)
+1.52% SENSEX (Is it too late to be SLT-ty?)
No major forexy moves
New issue of SPY calls that was sold down today...
If my current bias is wrong, then just on the basis of profit-taking, the naked call sellers will have to get out and buy back these calls...
I asked if SPY $156 will become the new $157 and all the bulls laughed in my face...
I dare to ask again: will SPY $156 be the new $157?
It will depend on whether we can close below SPY $154 today...
We pushed and pushed lower, but the $154s have been clawing back. With IBM, MSFT, and GOOG reporting earnings after the market closes, it's a very close call...
This level seems difficult to break, but we're still forming lower lows and lower highs, so this could be the moment the semi-bears have been waiting for: The Decisive Break...
Another 2% downwards would bring us to around SPY $150.92...
Wednesday, April 17, 2013
Fast Money: Dr J (Or His Brother?) Said That Someone Made $16 Million In One Shot By Buying FXI Puts...
Whoa + gasp + mouth open...
Hold the FBI handcuff jokes and don't send me any ricin... ForexDiva is no longer the market's laughing stock - at least not today!
If only every trading day could be so productive with beautiful left and right profit-taking...
I'm going to have to strategise and figure out a way I can do this time and time again. So far, I must admit my options trading strategy has been very hit and miss.
Selling volume on the SPY was very strong with 217 million closing volume vs. the 134 million 10-day average. DJT failed to close above the day's 50% Fib level and VIX closed above the day's 50% Fib level - bullish for the VIX and bearish for stock indices. A continuation pattern to the downside is what I'm positioned for.
Will tomorrow's US Unemployment Claims + Philly Fed + G20 Meetings headlines cause further profit-taking? Or will the bulls continue to buy the dip?
+4.76% SBA (after profit-taking)
-1.76% Roth IRA (after profit-taking... TVIX was here)
+33.46% FWM (Fairway... IPO)
Please, please continue higher, VIX buyers!!
Tuesday, April 16, 2013
I definitely wasn't the smart money today! When 'puts' come to shove, we've got a President who's more passionate about raising taxes than fighting terrorism and I'm still getting hammered by VIX ETFs + SPY puts, a concoction that proved to be more lethal than magical today...
If only I had taken profits yesterday, I thought to myself today... perhaps in several weeks, the conviction bulls will be lamenting the same to themselves.
-2.54% Roth IRA
+2.11% SENSEX... Whoooooooa, Maharajas...
Kind of feel bad for the VIX ETF investors who bought at the market top, but if you sold, you definitely struck gold...
YTD Market Cap 2012 Market Cap
VXX $6.076 billion $1.2 billion
UVXY $13.35 billion $342.9 million
TVIX $6.39 billion $188.2 million
Monday, April 15, 2013
Boar's Head Ham... Roast Suckling Pig... I had the menu all planned out and the day I had been long awaiting finally arrived, but unexpected tragedy struck in the form of potential terrorism at the Boston Marathon, which led to at least two casualties and injured another 24 victims.
A terrible incident indeed, but certainly not the initial cause of the sell-off. The market had gapped lower with the rest of the global markets and as Art Cashin had stated first the previous Friday, was most likely the result of "deflationary winds."
Gold led the rest of the market down, decelerating by over -9% whilst the VIX spiked +43.20%.
I will be accused of being unpatriotic, but you knew what an awful, bigoted woman I was anyway, so there's no point in trying to hide it.
All in all, a major resurrection of my portfolio, but not in the way I expected - and I strangely find it hard to be happy about the day's profits... Perhaps I do have a heart after all?
+0.38% Roth IRA
Like you didn't know it would happen!
Friday, April 12, 2013
Once again, the downslide I'd been hoping for failed to materialise - disappointingly, frustratingly, annoyingly. The only intriguing market action today came from gold, which broke below $1500 for the first time in years.
There are so many reasons the market should have gone down a lot more, but didn't. Perhaps the only thing that matters is Money Flow, which remains disturbingly overbought and overextended.
One of these days, I'll get tired of buying puts and predictably, that's the day the market will knife down as it should have done today.
But I'll keep trying...
-0.22% Roth IRA
Thursday, April 11, 2013
Welcome to Day 11 of the Lame Duck ForexDiva Blah Humbug Monthly Casino, where I insert dollars and end up with pennies by buying SPY puts. What makes me, The Economiss, so convinced the market will go down? Have I lost my mind?
I don't know, but the charts are really starting to point to a turn and the prospect of selling the S&P triple top or H&S on the one-year charts drives me to rather obsessive-compulsive double down behaviour matched only by the conviction bulls' buying fervour.
I'm kind of regretting the SPY $152 puts right now. My strategy right now is to keep the SPY $155 and SPY $158 puts alive. As long as these two issues end up being profitable enough to cover the SPY $152 losses and then some, I can make money either by the grace of profit-taking or an outright turn of the financial tides in my preferred market direction.
The momentum is clearly starting to slow down:
1. DJT closed in the red, failing to make new highs in sync with the DJIA and S&P
2. Big blocks of selling on the SPY with Money Flow on the high side and MACD heading down on the 10-day 15-minute charts with increasingly bigger red candles starting to show up at the higher levels
3. VIX is starting to bottom
4. Oil is not rallying and WTI hasn't seen the $100 level for about a year
5. No major currency moves
-0.78% Roth IRA
$0.31 per share haircut, or 44% gross...
Wednesday, April 10, 2013
'Inadvertent Early Release of the Fed Minutes' aside, stock market heretics like myself are getting burned at the stake as markets continued to defy gravity, spinning every piece of economic data that comes out into yet another reason to buy the dip.
NFPs weaker than expected? No problem... this just means the party's not ending anytime soon and Bernanke will keep on spiking the punchbowl...
Whilst everyone else seems to be enjoying the Kool-Aid, my portfolio continues to sink deeper into the financial grave I've 'put' myself in.
Don't look... I could be swimming naked fairly soon, but strangely, I don't feel one bit ashamed. Who's to say that The Market Makers won't hit all the April 20 2013 calls from SPY $154 through to $160 and then turn around the next week and break those support levels - especially since there's very little put protection in place the following week?
For now, I still want to average in, but am waiting to see if we actually hit SPY $160...
-5.51% SBA (a real punch in the face, I might add...)
+0.34% Roth IRA
+1.03% SENSEXyyyyy (Is it time to start being SLT-ty again?)
FOMC inadvertently released to members of Congress yesterday...
I'll be the first to accuse the FWFOCH...
Tuesday, April 9, 2013
Amidst alleged 'Sketchy' insider trading with a slightly 'Herbal' undertone at KPMG and an ouster of JCPenney's CEO, the DJIA managed to flex some more muscle whilst S&P just gained 5.5 points.
The Fed Minutes are tomorrow, so will Bernanke hit us one more time? Or will the market get some more clues as to when the tapering will begin?
I'm personally hoping for an unexpected shift in sentiment that will send the SPY put sellers quivering with fear once more!
Interestingly, whilst the market appeared bullish on the surface, DJT reversed course after hitting 6112, closing 16.86 points off its daily low and well below its daily 50% Fib level of 6084. Gold surprised by closing higher.
USD/JPY appears to be pulling back ahead of the 100 level, currently trading slightly in the red.
+0.22% Roth IRA
-1.15% Not so SENSEXy
Monday, April 8, 2013
My portfolio totally got karate chopped today as conviction bulls rushed to buy the SPY, and in the same breath, sell corresponding December 31 2013 $158 calls to instantaneously pocket $6.07 per share. I'm going to watch this issue to see if open interest spikes as when it does, our market buddies, The Market Makers, will start paying extra attention.
Right now, the whole April 20 2013 options food chain from SPY $154 all the way through to $158 must be looking awfully tasty.
In the meantime, they've taken a bite out of mine:
-3.39% SBA (no LOL here)
-0.06% Roth IRA
Looks like mini bull flag formation on both DJT and SPY 10-day 15-minute charts are failing to reach target, a potential sign of imminent exhaustion...
Price action on AA before its earnings announcement today after hours also lacking conviction...
If the Nikkei continues to run like this for the rest of the year, MFG should be able to follow suit and break above $5 between now and October under Abenomics, potentially the year's hottest trade. If momentum continues, this could potentially be highly profitable for Japanese banks, including MFG. If it doesn't then all I lose is $0.30 per share...