Danger In the Water...........

There is danger in the water. The S&P is trading at 1699.25 and the Dow is at 15,477. There is lots of complacency in the market right now but do not discount this. As we have learned from all year complacency can be very dangerous on both sides of the market. So, at this point it is dangerous on each side of the market as in the market is very high again; however, there is absolutely no fear. Hence I am long invid stocks (that I prefer) and short indexes. I covered some short stock in SPY (that was a hedge) and I am once again long delta. However, please be on the lookout for toppy action. I don't like indexes here because some long vol trades look appealing. Bonds I still think are a short (rising interest rates), gold is looking to be more of a long as it seems to have lost it's steam to the downside. I am also long a little yen mostly because of the impl volatility situation and I think the situation in japan is likely to get worse (for stocks). I also have a few skewed iron condors in HPQ and EWW. Most of my positions,again, are directional because of the low vol. So my main positions delta wise are long MSFT, Long AAPL, Long JCP, Long FB (getting rid of soon),Short Bonds,Long NEM, Long GLD, Long SLW, Short SPY, Short QQQ (getting rid of), Short IWM (getting rid of), and selling a put spread in GOOG. I want to make this clear though. I much prefer trading indexes versus individual stocks. Stocks come with large binary event risk versus indexes; however, invid stocks often have higher implied volatility. I usually play macro trades, but right now I have a lot of stocks in as premium plays.

The Markets are "Randomly Predictable": Volatility percentile add in study1) Start...

The Markets are "Randomly Predictable": Volatility percentile add in study


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1) Start...: Volatility percentile add in study 1) Start with eyedropper icon located in the upper right first icon of the chart screen.  ...

A Few Different Trades than Usual

I actually have been doing a few things that I haven't usually done in the past six months. I have traded naked stock (EWC and DBA), I traded AAPL (Apple Computer), and I got long some SPU's. First of all, I rarely trade stock by itself. I usually prefer to have several different options or offsetting positions such as stock pairs  involved . Next, I rarely trade AAPL. In the past several months AAPL hasn't been that interesting. It had low vol and ranging action which stinks. However, AAPL just fell down on that Iphone news, so I couldn't resist selling some premium. However, the volatility in it stinks right now I still couldn't resist. And then, I got long S&P's. I haven't done that in a while! However, I primarily did it through selling Vol as the VIX is now grinding lower again. So, I think at this point it is likely to keep falling just from the current market conditions. At the current time, the S&P keeps blasting upward and all fear has gone away. This is scaring me on the short side, so I am selling vol, trading a lot, and staying as mechanical as possible. As for my other general positions, I have short delta in oil, long delta in the yen, short bonds, long a little emerging markets, short vol in Mexico (EWW iron condor, long delta in individual stocks with high vol percentile (BBRY, XLU, JCP, EEM). I also have a wide butterfly in XLE which will be a position that will sit until very close to expiration. Another iron condor was in HPQ when the vol was a little higher, but right now I am just sitting and waiting in there. As for the major market opinions I have I think oil is over extended because the "war risk" isn't that great, gold/silver/miners might be some good longs as we have seen gold fall, I , and bonds are still crappy as we continue to see interest rates rise and more people liquidating.

Global Opportunity

I am seeing lots of opportunity on the global scale. Right now my positions are short "risk off assets" and long a lot of "risk on assets". As in I am short lots of commodities as in agriculture, bonds, natural gas, gold, silver, and the outlier is short oil. I am also short stock indexes, but I am long mostly stocks. As we see interest rates continue to rise it should continue to have a bad effect on these risk off markets especially as money is still flowing out of them. Today was also a key day as the short term sentiment flipped back to bullish and the bears are back in hiding. However, I am also long VIX as I still think volatility has room to expand. As for my global stock market positions I have some shorts in Canada (one of the two positions I have not using options), and I have several Latin America longs. So, right now I am looking for theta decay, and I am hoping to find some crappy stocks I can find some trading interest in on the short side. The only currency position I have is the euro. I think it was a interesting dip to buy on good sentiment in the area. My personal favorite trade right now is short puts in MSFT or short wide verticals. I will be adding some risk in MSFT along with some short delta in the Russel and NASDAQ.

Interesting and Healthy Action

We have been seeing some really healthy action for traders of late. We have had two down moves in 2 months, higher vix, and lots of opportunity. I have been trading a huge amount with lots of positions, short delta, and good profits. I have sold lots of premium, shorted the markets, and I have gotten paid for it. However, what you guys don't read is how flexible I am with my positions and all the little trades that are done in between. However, as for a general opinion on the markets I like short S&P's on any rally, short premium in individual stocks, a mix of bearish and bullish delta positions in stock sectors, short bonds on every rally, short euro on every rally, long yen, long dollar, short oil, and short metals. As you have probably noticed there are a lot of shorts in there, but the long delta in my stock positions hedge stuff out, and they also generate good theta decay. So. my positions basically follow those opinions, and I am not going to get into those in depth. However, I will say that the S&P 500 has some way to fall as long as fear keeps coming into the market from news and volatility not pulling back much . So, again short the market on any rally, but I will be careful depending on the market moves. As for bonds, interest rates should continue to rise as fear rises and QE has less and less of an effect. The basic idea is the world is long bonds, but bonds have gone down and now everybody is trapped. Also, if you would think stocks should go up for this this will probably not be the case because the traders and investors in bond positions are probably a little shell shocked and unlikely to take much risk.So, obviously the buyers of stocks are in the stock market, but if we continue to fall it will be nasty.

Hey Look at that!

Ah! Isn't this wonderful with the vol pop. Vix up 1.69 at 14.73 Vix futures up .90 at 14.25 and the ES  (S&P 500 futures) down 25.75 points or 1.47%. Along with this Russell trading at 1025 down 20.6 points down 1.99%, nasdaq futures down 50 points and Dow futures down 233 points. So, finally several of my trades are on the dance floor or profitable after waiting a while. So, I have covered many of my shorts, but again I even have put on more short positions in different stocks. I have left my longs however as in BBD to give myself some theta decay, and I want to keep it as a hedge, hopefully the stock goes nowhere. So, traders I would recommend covering shorts in anything that is profitable, and I have closed several positions for a scratch. However, this down move seems harsh, so I dont know if this is just a dip in the uptrend but if we get another short rally, but then die off we are likely to see another wave of selling. Not selling as in a crash but a good amount, and hopefully we get to 1500, I hope. If you guys are wondering why? The reason is a want a vix pop to sell some vol, and hopefully get some good profits out of that. Otherwise, I am still technically long vix and hopefully we can continue to pop. So I don't usually do this but I will give you guys a list of my current positions. FYI I usually have more stock trades in and I am so heavily in verticals because of the low vol in the market...otherwise I am very non-directional with higher vol.


Portfolio:
BBD:
Long 100 shares
Short 1 call  Semptember

BBY
Short  32/24 call vertical spread September

 BRCM:
Short 27/26 put vertical spread September

CLF
Short 24/25 call vertical spread September

 DAL
short 12/19 put vertical spread September

FB
Short 36/34 put vertical spread

FXI
Short 50 shares of stock
Short 35/36 vertical spread September

FXY
short 99/98 put vertical spread September

GLD
long 125/124 put spread September

HPQ
short 27/29 call spread September

JCP
 short 12/11 put spread in September
short 14/13 put spread September

NEM
short 33/35 call spread September

QQQ
short 73/75 call spread September

SLW
short 26/28 call spread September

 UNG (my least favorite)
short 18/17 put spread september

USO
long 37/39 put spread September

VXX
 short 14/11 put spread September

WLT
short 16/14 call spread Semptember

XLF
21/20 long put spread September

XRT
80/82 long call spread September

Slow Market but Lots of Trading

The markets were really slow today. As usually we pretty much opened down and then had the 10:30 reversal and markets went up and then just chopped. Again, it kinda feels like we have been in this range for many years, but I assure you this is not the case. However, even with the markets being choppy like this they is some interesting trading in gold, silver, bonds, currencies, and individual stocks. Right now many of my 22 positions are options positions in ETF's that are not US stock ETF's. For example, interesting action might be in bonds because bonds were down around 1.5% today (which is very interesting action for bonds) along with that emerging market equities, gold, and many individual stocks today were showing action. The big stocks were AAPL shooting up due to Ichan's comments and BBRY shooting down after being up around 10% and closing up 1%. So due to the recent action I have done 12 trades today which is a little above the norm for me, and possibly looking to do some more pairs trades. I had a pair on this morning, long SPY-QQQ pair because of a reading one of my models had, but I closed it for a small profit. So, right now I am looking for vol in individual stocks and other assets while still staying short the major indexes....hence long vix, and hopefully we can get some action.