AprWk3 - SPY Thursday Market Update

AprWk3 - SPY Thursday Market Update - As projected, last night was a drop. Now it is still a weak bearish drop, which suggest that it could be a long in coming correction, and perhaps it is so. The two moving averages of the Tenkan Sen and Kijun Sen are still moving together for the moment. How long will this collaboration last? Let the market decide tonight.

Yesterday's SPY closing came to a screeching halt at $153.14 after having dropped $0.97 with an intra-day low of $153.55. My estimated trade of a Put Spread for $149/150 at a premium of $0.05 did not materialize. I guess the drop last night was no deep enough.

So my next question naturally would be, is there going to be another drop tonight? If this is a minor correction, then the SPY is likely to recover, and get back on track to its all time high. If however, the market should decide that this is the end of the bull-run, then we might see the weak bearish sentiment become a much stronger one. If the SPY were to drop another dollar, we might see the SPY threatening to pierce into the Kumo (Cloud).

So what's the trade tonight (Friday US time morning)? Well that remains to be seen, if there is a drop, which I think it might be quite unlikely, then I will sell a Put Spread, however, if the SPY were to recover, I might try hunting for a trade in GLD. ;)

FebWk4 - GLD Market Summary

GLD (gold) has been in bearish territory for a while now, there is just more downside to that, it doesn't seem like there is going to be a breakthrough anytime soon.

Last week's opportunity presented itself, and I sold a Call Spread for GLD $155/156 for a premium of $0.05 and the option expired worthless. :)

Based on the performance of GLD, I think there could be another selling opportunity this week. :) Let's see what the market offers for us tonight. :)

FebWk2 - Monday Update

FebWk2 Monday for SPY is really an interesting movement. As they say what goes up must eventually come crashing down. Maybe it is coming and crashing down tonight.

It is a bearish sign because price has cut through the candlestick. If it drops anymore tonight, it should be a very good buying opportunity.

DecWk4 - SPY Market Summary

As predicted (I know I am using that word a lot!), the SPY entered into another bloodbath last night. The ichimoku charts this morning showed a huge bearish candlestick. OMG (oh my gosh). Sorry, I had to say that.

It is now officially into bear territory. The closing price for the SPY has pierced below the support that I was talking about the other day. I was hoping that the price will not cross below 1410 but unfortunately the terrible has happened, and it is now officially into the Kumo (Cloud). The Kijun Sen and the Tenkan Sen is trending towards convergence, and if it does indeed converge, then it is a strong bearish movement, and could possibly pierce below the cloud.

However, historically, it hasn't drop in this manner all the way, so in a sense, I have a strong feeling that come next week, it is likely to be a sideways movement, at least until JanWk1. The SPY closed at 140.03 with a drop of $1.532 USD. Hope nobody got assigned this week. :)

Blessed New Year! Let's look forward to a profitable 2013! :)

DecWk3 - SPY Bloodbath

If anything, last night's SPY Ex-Dividend action was a bloodbath for many Put Spread sellers. Look at the thickness of that candlestick? Just as I suspected something was amiss, this has to happen. WOW.

I lost money, but thank God, I managed to have the presence of mind to cut loss when the trigger hit my criterion. Sometimes upon hindsight, you just thank God that you made that decision, but just a day before, others could be saying, "why did you do that? it was a safe trade!"

Well, I know this much to know that there is no truly safe trade. Especially in last night's market. It was a can of worms opened, and I am sure a lot of folks couldn't have made it out in time. :(

Market trends is still a strong bull movement. Although the Chikou Span has dipped into the historical green cloud. This is an indication that the market might be heading downwards if on Monday the market dips further. For that, we will have to watch what happens over the weekend.

From the looks of the ichimoku charts, I think it will likely be a downward movement until it touches the support of the Kumo (Cloud). Probably a good time to sell a Call Spread next week Monday maybe?

It may not be the end of the world yesterday, but it was like a near end of the world scenario for those who are heavily invested and had to cut loss. Again, Warren Buffett's two golden rules of investments. Rule number 1 capital preservation is most important. And Rule number two is don't forget rule number 1. I suggest we do likewise in a volatile market such as this.

Blessed Christmas and see you all next week! :)

DecWk3 - Cut Loss!

Last night's market performance by the SPY was indeed a uncertain one. It dipped further, and it hit my 4 times of premium sold criterion and I decided there and then to cut loss for peace of mind. :)

ROI for my loss is -18.12%. Ouch!

It amazing how once you have cut loss, you feel much much happier. I felt that last night. I know this week's trade is a little tricky just simply based on the way the premiums shot up and downwards. It's a sign that there is something special that is going to happen for this week's trade. I am not entirely sure what though.

In any case, I can enjoy my Christmas celebrations and I don't have to worry about/or whether if I will be assigned come Friday because of sudden gaps upwards or downwards. :)

As Warren Buffett once said, "I don't trade what I don't know". I think that's good advice, and especially if the market movements are so erratic, I won't want anything silly to happen and destroy my Christmas moods. :)

I woke up this morning, and guess what? The SPY after dipping and triggering my cut loss criterion, has gracefully increased and went up $0.83 to close at $145.12. Upon hindsight, it kind of matches my earlier prediction that it might burst the $147 trend line. I was looking at selling the $147/148 spread earlier this week.

So did I cut loss for nothing? *LOL* Well I try not to second guess my cut loss criterion. I put it in place for a reason, and if it triggers it, then so be it. I will cut loss, because the last thing I want is to worry about some kind of massive gap down on Friday market opening. Which could possibly happen since the candlesticks for the last 4 trading days have been rather long. :)

Looking at the SPY futures now, it looks like the SPY is gonna gap down at least $2.5+ which means it would probably trigger my strike price for the Put Spread $141.5/142.5!! Oh My Gosh. I can't imagine the horror of that happening tonight at market opening when my trade get assigned or if the buyer decides to exercise the option and I have to buy it back! I would probably incur a huge loss. :( 

This just solidifies my trading methodology and my firm belief that if you sense something amiss, cut loss and then come back another day. There are 51 weeks left to trade. :) 

Blessed Christmas people, see you next week. :)

DecWk1 - No Trades

Looks like there is no trade for DecWk1 tonight. The results of the non-farm payrolls was not too bad considering, but somehow the market just doesn't show the price movements. It's frustrating especially since having just recovered "emotionally" from a technical cut loss.

I reckon I could still put in a trade, but I am too tired. To eye-ball the market till the wee hours of the morning, is just not happening for me in my humble opinion. Of course if you have the energy, then do it. But as for me, I am gonna hit the sack.

Now coming to think of it. There were definitely selling opportunities which I could have leveraged on this week. But the reality was I didn't have the guts to do it. One critical reason was that there wasn't enough buffer from the current strike price. Secondly, in a flat market, the price movements can be going in any one direction. Which makes it all the more risky and exciting.

But thank goodness, I decided to sit out this trade. Nevertheless, it is always good to monitor.