A Clear Wave Pattern

I stay up way too late with my friends here in the Chicago area. And being an hour behind the NY open just makes it worse. At least it's a lot of fun.

This morning I've got one thing going for me: a clear wave pattern. If 1407.16 breaks, I will start looking for rallies to short. Already the overnight session has broken that area, but as always it is the cash S&P index that matters. So it will be important for me to see what happens at the open.

Yesterday I legged out of SSO at 1410 which paid for my SPY 134 puts. Near the close I added a smaller amount of SPY 141 calls against the puts. We'll see which way the market goes now.

I may start doing a similar thing with Apple. I'm looking for April 505 puts under $2.00 and will hedge them 1:3 with QQQ as a proxy for AAPL (which basically IS Apple at this point -- why bother buying a $600 stock). If AAPL breaks hard like I think it can, the puts will be worth $7 or $8 pretty soon. 1:3 means for every 100 shares of QQQ you would have 3 put options against them. The Qs would fall from about 67 to about 63, a $400 loss vs. a $1800-$2100 gain. Nice work.

I've been trying to finish a post about our paintball game this past weekend in between goofing around with everyone. It should be finished today.