Trades 1/29/10

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We finally have a positive open.  But do we believe it?  As I said before, I am completely out of the market.  The current holdings below are not generally moved by where the Dow or S&P are going.  In fact, QTWW has a tendency of moving opposite the markets and opposite regarding good/bad news.   The last time they were cited for non-compliance, the stock ran +0.20 or more if I remember correctly.

So.  It's time to take a look at buying some puts on this slight rise at open.  Regarding options, it is not wise to buy them when the underlying stock is already headed in the direction of your strike price.  We want to buy them cheap and, again, total investment should not exceed what you would normally lose on a sell-stop of the same equity. 

Take TS for example.  This one has been performing very well for a very long time.  The dow is up 75 points today and TS is up 1.20

If we believe that there is room for further downside in the markets. then we can set a limit buy for TS puts, strike 40, Feb or March (Feb. will be cheaper).  When today's peak falls apart or at a positive close, we get in.  TS will drop with the Dow or any other index.  current Feb, 40 puts are trading at.  0.36 - symbol TSWNH.   Let's set a buy limit for .25 as the market climbs today.

Symbol	Security	Entry	Last	Change	Exit Plan
QTWW	Stock	1.02	0.79	-0.2309	N/A
SSN	Stock	0.276	0.26	-0.016	N/A
UALNO	Option	0.10	0.05	-0.05	N/A

If you have a large amount of margin equity to play with you can also look at setting buy stops just above current price for the following short ETF's.  as they are dropping related to the rise in major indexes.   

SRS, SKF, QID

I regularly trade SKF and have been since just after it hit 188.00 per share last year.  If things fall apart, a small quantity of any of these can really pay off.

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Trades 1/20/10

The Dow dropped 100 points in the first six minutes of trading, eliminating that long crawl up that we had yesterday.  It is as if Tuesday never happened.  With all the positive sentiment related to the two major buy-outs yesterday, today those who bought in, are dismayed.


UPDATE 1-Fitch downgrades Kraft, Cadbury on takeover plan
Wed Jan 20, 2010 8:00am EST

A few stocks that have been gaining this morning.

UAUA - United Airlines - gained 0.25 in the first half hour
RDN - Radian - broke out hitting 8.11
C - Citibank - climbed to 3.60

I usually buy performing stocks when the market dips, as was my strategy for C yesterday.  The market didn't dip yesterday and C gained some ground.  Today C dropped a bit but is gaining in spite of the gap down and downward trend first hour.

RDN broke out early on, in spite of the gap down, and may be worth buying if this is truly a dip.

If this is an extension of the downward trend we had seen last week, then we should be joining the crowd, looking for a good candidate to short.

I already own puts purchased when the Dow neared 10,700 a week or so ago..
UAUA, February, strike 8
TS, January, strike 40