Yesterday I spent the day accumulating OEX puts and hedging them with SSO longs. Made money on both sides. Only problem is, I sold the puts at the end of day thinking we were in a choppy market that would eat up my premium (I was using weeklies that would expire this afternoon). I kept a small SSO position. Futures are down 12 points this morning. Ugh.
I call these cute trades. They happen when I get "too cute" and think I know what the market is doing. I don't know why I call it cute, I just do.
Last night, I watched a little of Larry Kudlow's show. We've gone up in a straight line since mid-December and he was calling for an 8% rally. Blackrock's Bob Doll, Citi's Tobias Levkovich, and Chicago trader Jack Bouroudjian were all in agreement. I knew then that I was doomed.
I still do not think the pattern counts well, meaning I feel there could be another high yet to come. I started to make allowances for this yesterday and marked the 1336 area on my charts. I could see the S&P basing there and then making another run for higher highs. In fact, that's where it looks like we'll be today.
At this point, only below 1292.66 would be a clear indication to me that the game has changed for real. I hope to narrow this as conditions change.
I'll add that there is one pattern that is very clear, and that is that when I take the time to post all my trades on Twitter, for whatever reason (probably fear of being wrong) I seem to become timid, hesitant, and second-guessing. For me to dump a nearly free put position is inexcusable. Trading is hard enough. I don't need to make it any harder.
The bright side is that at least I wasn't buying because I was bullish. As I've said before, the time to be bullish was back in October.
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