Lessons

1. If VIX is under 26, buy the dip. If VIX is over 26, sell the rip.

2. Always trade in the direction of the larger trend. Find the strongest trend in your time period.

3. Nothing as bearish as a failed breakout. Nothing as bullish as a failed break down.

4. Don't worry about the last dollar. Take your money and go to the beach!

5. No more than four positions at a time. Preferably 2-4. Scope out others. Pick the strongest.

6. Buy the strongest; sell (short) the weakest.

7. Nothing is guaranteed. Nothing.

Wednesday, July 15, 2009

JULY 15 Update

1. Bought August and September QQQQ and IYR Puts, sold July Puts against them but am losing money because market jumped much more than expected.

2. Last night, INTL blew earnings out of the water and upped guidance.  Real quality company and is a bellwether.  AAPL, GOOG, BIDU earnings still ahead.  Q's hard to predict -- will go up today.

3. Qs should rise to 36.5.  I will get out of my Qs August-July Put spread in the a.m. and look for a bounce to short with longer term Puts.

4. IWM and individual smaller Techs may be best shorts.  GDX may also be a good short as deflation will kick in after Tech earnings.  GDX daily chart looks terrible.  IWM, GDX, individual miners?


Wednesday, July 8, 2009

July 8 Update

1. Equities are in a LT downtrend. IT trend is also down.  ST downtrend.  VST uptrend up to 885 or so, may be 890.  BIDU shows massive negative daily RSI divergence.

2. Lower highs on the daily Qs.  H&S on all other indices.  Negative RSI divergence from previous low.

3. Qs daily RSI (14) has a buy signal today.  Qs still have RS relative to SPX and strong, up trending OBV.  SPX no buy signal on daily (14) RSI.

4.GOOG earnings 7/16; BIDU earnings July 20; Apple July 21.

5. AAPL and GOOG were strong all day today.

6. TLT should go up to 100 at least (38.2 percent retrace of fall from 120 to 87.5).  Short TLT via LT Puts at that level.

7. Near-term scenario is confusing, but we should get a nice bounce here.  TLT is already at 96.50 and had a high of 96.8 today.  I think this should go down to 94 or so.  Which means SP could come up to 890-900.
   
8. We may fuck around until earnings and fall dramatically after GOOG, AAPL, BIDU earnings, like Jan 2008.  

9. Semis getting lots of upgrades because of smart phone market.  LT picture no longer so bearish.  Administration is smart.  Soros is bullish.  666 - 950 - 866 - 900 ( HS negated - Goog, Aapl 7/22) - 820 - 1000 (September)?
  
We go up today and nice chance to buy Puts.  Sell QQQQ July Puts on fall tomorrow?

9. Most likely scenario is a lower high on the Qs ($35.50?) and a high around 885-890 on SPX.

10. Futures already at ES 883 (+10).  Alcoa earnings were not terrible.  Implies SPX 885.  Sell the open?

11. Joe says get bearish now, but real bearish around July 22.  The last Joe top was actually close to a bottom (July 7).  Implies that next bottom (July 22) might be a top?  Up until July 22?

12. Buy longer dated Puts  (Sept, Oct) on strength and forget about it.  Add on more strength or weakness.  

13. Puts on IWM, Qs are most liquid.  You can get more leverage by buying Puts on CROX, TQNT, etc., but not as liquid. 

14. Bonds will go down to 94-95 then up to 100 at least.  Deflation will win until November.  Short TBT at TLT on $94-95?