Friday, February 27, 2009

Hey Now

Watching Dr. Doom on the CNBC. Doesn't he remind you of Yul Brenner in the Ten Commandments?

Other significant research shows that since Tiger Woods went off the PGA Tour, the DJIA has lost 40%. The 25 or so years that he has played golf (since age 2), the DJIA has gained about 1000%. Things look to be picking up with him back on the course!

Speaking of commandments, Thou shall not try to pick a bottom seems to be the one most broken around here.

Enjoy the weekend. Its 88 and sunny here in Tejas. Time for some BBQ and Beer.

Thursday, February 26, 2009


Looking at the 10 min SPX chart, perfect reverse head and shoulders. Measured move from 780 to 818. Stops around 754. About a 2 to 1 set up, but pretty reliable I think.

Friday, February 20, 2009

Ding dong the witch is dead.

Looks like an all clear signal. I guess we can attribute this to the Oscar's.

Had a bad day.

Two things. Kind of had my dates crossed with today being expiration, so got whomped on any Feb trades. With that, we have a expiration/nationalization selloff. Remember the good old days of 2008 when every Friday we saw huge out of the money put buying on financials? Well, we are now just seeing long capitulation. Hey, if the common is going to zero, no need to hedge, just sell it. No body want to go home long on Friday to wake up Monday with C, BAC, WFC as part of the Fed.

760 looks like the target on SPX chart dump. Long term bullish, but you got to respect the trend.

Thursday, February 19, 2009

Running with the Band

Bears trying so hard to push this puppy down, but the markets got some left. Kind of like Rocky vs. Apollo Creed. The numbers look too good, but the underdog just outlasts the champ.

Remember, you got to eat lightning, and crap thunder.

SPY FEB 80 calls for .50 look yummy.

Wednesday, February 18, 2009

Hotel California

Markets making a digestion day. Hopefully we can keep the bad news in our stomachs and get an expiration Wednesday pop. Charts look like garbage, need a close above 798 on the 10 min SPX to make anything look good. Large gap 818-826 good target for bulls this week.

Large cap growth (tech) looking mahvalous. Time to play the QQQQ's here as they are the best of the breed out there. For a trade it looks like $1 up with a .30 stop.

Stay cool.

Tuesday, February 17, 2009

I heard it on the radio....

Well not quite 3 to 1 on SIRI, but I'll take it in this lousy tape.

VIX soaring over 50, SPX under 800, end of the world scenario again. Using this pullback to roll some buywrites out 3 to 6 months if possible. .90 on the SPY 80-82 call spread looks like a good trade for the week.

Would hedge some of that GLD here at 95, looking for a pullback to 88-90 to add to positions.

What's with oil? I just paid $2.00 for gas and we don't even have a $40 on crude. Damn crack spreads.

Saturday, February 14, 2009

I'm on WKRP in Cincinnatti

In this world of 0.25% money markets and $950 gold, any type of risk is avoided. For instance, SIRI is already trading as it is in bankruptcy. ENE traded for .05 before that puppy was settled. Buying SIRI this week was a free call on someone out there with financial acumen besides the government. The odds are low, but the risk reward lines up. I'd say at .10 you have a 3 to 1 upside/downside. Pretty good if you are willing to take that leap. More news and Les Nessman.

Thursday, February 12, 2009

Golden Slumbers

Well a lot has changed since I last posted on this blog. A few new rules, first of all, I am going to do less market analysis and more on specific trading strategies. Think of it as reading the manual in your glove compartment as opposed to Car and Driver. I am more about when to change the oil than whether the V8 is a better buy than the 6 cylindar.

Moving from one of the major wirehouses to a regional B/D, has given me the freedom to allocate assets in across a wider spectrum of risk profiles. In order to do this, I attempt to capture market inefficiencies using my knowledge and tools.

An example of this is available in the WYE/PFE transaction. Because of the decreased use of leverage across hedge funds, we have a wide arbitrage spread. Buying WYE at $43 is effectively creating PFE at $13.10. This is a great way to pick up a large pharma with lots of cash at a 8% discount to market value. Using the large edge in the spread, you can effectively hedge market risk with a put on XLV (about 14% combined of PFE and WYE).

Of course, we would add this to an already allocated portfolio to create some alpha. With assets at a huge discount to fair value, it is important to manage the volatility of the overall portfolio. I currently do this with ETF puts and calls.

Told you about Brett Favre, what a maroon.