Siegfried and Ben pull it off

Today was interesting. I was expecting a crash today. At least 500 points. The futures last night actually 'locked' and were stopped because they fell too far....

Then....

Tah-Dah!!!

Ben Bernanke pulls off a great magic trick. 0.75% Rate CUT!!! and before the bell too. This never happens. The last time we got a rate cut that happened between Fed meetings was 2001 (and that took an act of Terrorism)--and to this magnitude, 1984. Easily a once in 25 years occurrence. Good, bad? Well, it prevented a crash in the market. We were down almost 500 points on the Dow in the first minute of trading. We were all over the place today. -465 to ~ -30. We ended at -128.11.

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Quite a ride.

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Saved by Bernanke. Although, I think Ben may have screwed himself. This is only going to delay the inevitable. The Market will inevitably turn on Ben 'a la Roy' style when he can no longer give the cuts the Market demands. Soon there will be nothing left Ben can do to save the Market and things will start to get back to normal around here again. And by normal I mean realistic stock valuations and transparency into businesses' books....but we still have a long, painful way to go.

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I bought a few BAC puts along the way while we were heading up, just in case we flipped. Going into the close I was thinking I may have made a mistake. I figured I might be waiting a month or so for my puts to come back to value after a huge run up. I do have one man to thank though--tomorrow we are going back down. I thank Mr. Jobs and his overpriced, underperforming, yet attractive laptops.

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Apple gave warning on future earnings. The Street did not like that at all. Over a 10% drop in after hours alone!!!! Why does this save my shorting butt? Easy. Apple is a huge tech bellwether, and the last bastion of hope for folks long in this Market.

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Also I would like to mention that the banks went up across the board today. Even after BAC's earnings shit the bed. Thanks Ben, I will be reloading my puts on banks across the sector. Looks like I'll get another paycheck soon.

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Now my trades:

I got into BAC puts for May 32.50 for $1.60, $1.95, $2.10, and $2.30.

I also bought SPY puts for Feb 116 at $0.75.

I'm hoping to flip these tomorrow.

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I'm also going to look at continuing to buy puts on BAC, MER, and C if we continue to go up. I'm also going to look at puts on CFC if it continues to rise. I also have my eye on the other 3 'Horsemen of Tech', GRMN, AMZN, and GOOG to see the AAPL effect on them.

I believe we will have a drop in the morning and then up until the earnings releases hit go sour for the companies reporting tomorrow.

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Futures already suck.

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Also, one last final thing....if you haven't rotated your 401(k), Roth, etc out of stocks into Bonds and other defensive plays, consider today a gift and an opportunity to get out. People are just catching on to the fact the Market is starting to suck. There are still many opportunities to make money on the upcoming crash realization' by the public.

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Have fun tomorrow.

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-Rocketshoe

Crash

Tuesday=Crash


The world markets are down. The futures are way down.

http://www.bloomberg.com/markets/stocks/futures.html

Tuesday is going to be UGLY.

I will probably sit this one out.


Yikes.

-Rocketshoe

All in Cash

Hello Folks,

What a wild last few days! The market has been on an elevator straight down! I am almost all in cash (very few open options) as I wanted to take my money off the table before we go into a rebound. There are so many things at work here, but I believe we will be getting a rebound based on technical indicators and the fact that there is a Fed meeting coming up in a week and a half. I imagine we will get a rate cut, and a big one at that. It won't help the market, but it will sure shoot back up before it comes back down again--my prediction is prob 500-800 point climb in the Dow the next week or two with a crash right after rate cuts. Yours truly will be waiting for that bounce to reload my puts!

I'll have my eye on mostly indice plays and the financials as they will rebound the most.

Ok, now my trade history:

Sold the $62 SDS Calls on 15 Jan:

bought Feb SDS Calls for 1.80, sold for 2.60, a gain of 44%

I finally sold my Mar $30 C puts...I missed out on about $0.75 more, but I will shut-up and take my cash.

Purchased at $2.55, $2.70, $3.15, $3.30, and $3.35 and sold all of them at $5.00 for an average gain of 61%.

I also sold my Mar JNS $25 Puts:

bought at $1.20 and sold at $2.00, a gain of 67%

I also took out a few dumbass lottery tickets ($0.10 contracts) on Jan calls. I really wasn't thinking straight when I did this, but they are for a small amount:

bought Jan $26 XLF puts for $0.9 and sold for $ 0.15 A gain of 66%--I'm actually ashamed of this one, I got cold feet and ultra conservative, they ended up going for $0.40 at the end of the day--you may be saying, "Rocketshoe, they were lottery tickets and you got 66%, no big deal!'", Wrong. I about broke even because of the brokerage fees. I could have had a four bagger, but I was afraid to get greedy.

I also have some crap MER puts I bought on Wednesday. They may actually be worth something tomorrow:

$45 Jan MER put at $0.10

I'll probably set a quarter stop on them since I'm travelling tomorrow and just take what I get. Darnit.


Get rich.

-Rocketshoe

The Big C that's missing a lot of B's

Hi Folks,

The market rallied today on news of IBM's earnings and a possible Fed rate cut in the future. It definitely leaked into the Financials and especially C.

Tomorrow before the opening bell, C will release earnings. There has been a lot of spin about the information to be released in the earnings call.

Estimates are for -$1/share earnings, $10-24 B in write downs (yeah, that's a freaking B for billion), a cut in the dividend (one of the main reasons many people hold this stock), cut in employment and approx ~$10B of cash loans from outside sources (see earlier post on C as to why this is bad, look at what it did to CFC).

That's sounds awful to me. This is why I am positioned to take advantage of the call tomorrow with puts.

There is one kink in my strategy though--the Market is a bit goofy. There is the belief that with a new CEO (the old on got canned for all the housing investments) ,this will be the worst of the write-offs (and with all the spin, if we get anywhere under $24B, it will be a good thing) as he will want to get everything into the open and blame it on his predecessor. After that ,things are only up from here with all the changes being made. This could lead to a pop instead of a drop in the price. It makes no sense, but everyone wants a rally and it could happen tomorrow. There is no IQ test to be able to trade in the Market. *sigh*

There is other data coming out as well that could add to this--PPI and retail numbers.

I believe we have one of two things happening, but before I share, let me say that I believe this stock and company are broken in the near-term, and the long-term is questionable.

1. C reports crap, but not as bad as everyone thought it would be, stock pops $5 and a week later tanks $10

2. C reports really bad crap and stock tanks $10 now and more next week.

Two choices and both work in my favor. Let's see what happens tomorrow. BTW, these two cases can be affected by the PPI and retail numbers tomorrow.

A few trades to add:

Friday Jan 11:

$30 March C Puts at $3.15

$32.50 May BAC Puts at $1.25

Today:

$30 March C Puts at $2.70

$62 Feb SDS Calls for $1.80 (Ultrashort on the S&P, I bought calls into the spike today)

-Rocketshoe

Trades 10 Jan 08, or We can play both sides...

Well, that CFC gamble paid off today. I put a 2x stop on my CFC calls since I was going to be in meetings all day. It paid off. I would have caught a 3x had I been near a computer, but I will shut-up and take my double.

I sold my Feb CFC 7.50 calls today for $1.70. Caught a double in two days (did I mention that already?) on the news Bank of America was planning to purchase the rest of Countrywide. So many rumors and stories leaked--I'm sure after this is all said and done, someone will get popped for market manipulation!

I'm going to play the other side tomorrow--I don't think this deal will go through. After doing a bit of research and thinking, I can't imagine why BAC would want all of this Piece of Crap...I mean, why not wait until they go bankrupt, and just cherry pick the good stuff in the company since they have first dibs (part of their deal last year when providing a $2B cash infusion). There are a lot of unknowns and potential land mines on CFC's books.

The Jan $5.00 puts are going for 0.35 and the Febs are at 0.60.....this could be a big one. Stay tuned and make money.

Oh yeah, and I added to my March $30 puts on C, I managed to double my stake at ~3.15 a contract when the Market spiked today.

-Rocketshoe

Trades, 9 Jan 08

Today was a good day...I dumped the following Jan Calls:

sold my TWM calls for

$10.50, paid 5.50, gain 0f ~91%

sold my SLF Calls for

$5.50, paid $4.00, gain of ~38%

I'm happy to be out of all my Jan calls...January options expire next Friday on the 18th. The week before options expiration (OpEx) can be a beast if you are out of the money--the time factor sucks a lot of your price too.

A question to think about...will the Fed attempt to intervene before their meeting at the end of the month? Last time that the Fed adjusted the target rate (the Fed does not control interest rates, it only sets a target) was Sept 17, 2001.

Stay tuned and be ready to short the pop!

-Rocketshoe

Uh-oh

Hi folks,

I hope everyone has had a great holidays and New Year. We've both been gone enjoying our holidays.

A warning for everyone. The Market is bad. Really bad. A majority of technicals on all the indices have been busted. The financials are busted. Housing is busted. Unemployment is up. I'm going to go ahead and call it--2008 will be very painful for folks long in the Market (somebody call me on this at the end of the year?). The Market could potentially be in free fall. We will have a few bounces and a few re-traces, but in general, the 1st Quarter of 2008 is going to result in a lot of people losing a lot of money.

What can you do?

A few things....You can wait for a bounce and sell what you have and move into more conservative plays like bonds, CD's, high interest savings accounts, or just plain cash. You can play a few Ultrashorts (these are ETF's that run 2 times the inverse of the market--for example: TWM is a Russell Ultra short: every point the Russell goes down, TWM goes up twice as fast). My fav Ultrashorts are SDS, SKF, and TWM--you can see more at http://www.proshares.com/ . You can just ignore everything and rely on 'dollar cost averaging'--which I hope you weren't planning to retire in the next 5 years... or you can make money shorting this crappy Market.

I'll be posting my trades over the next few weeks. Feel free to play along and keep score. I'm currently invested in:

TWM Calls
SKF Calls
C Puts

I put on a Feb 7.50 CFC call at $0.85 today--CFC took it on the chin today. Hard. Big reason was a rumor of Bankruptcy--I believe there will be a few $ bounce back on this since CFC denied the rumors. (Risk Level: Very Risky)

I put on a Mar $25 put on JNS today for 1.20. JNS broke the 200 MDA and as a financial, will prob bomb. (Risk Level: Average)

I'm looking at maybe an S&P put and maybe a few puts on AMZN and RIMM and also reloading on my MGM puts (I made 28% last week on an option trade on MGM). Stay tuned, and I will print my scorecard in the next few days.

Warning: Something I had to learn the hard way....a bear market does not go straight down...it respects technicals (btw, fundamentals easily trump technicals) and can easily pop on you leaving you high and dry at OpEx.

Hang in there and make some cash.

-Rocketshoe