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Last night the europeans all opened lower but then regained to put in pussy figures. Their ups are hardly anything to crow about.

USA did similar… on bad news! Curiously things that used to rock the markets now pump it? Makes little sense but we aren’t in Kansas anymore.

I expect that the Australian market will open a little stronger and because of the decline in metals overnight its more than likely weakness will be in the miners as well.

Have a noice day.

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Sometimes I find it exciting to read the economics news and wonder if that makes me an economic geek?

Its almost numbers porn to see how bad it really all is and then unnerving to see a new phantasy rally appear and clearly gain the hopes of a generation one more time before they are shaken off the bandwagon.

Its a fools ride at the moment… the only place I want to be is options as they offer the strategies to be able to profit from this doom time there by adding financial security during a time that financial security is very worrisome for all of us.

Now I am not talking from a perspective of someone very experienced in options when I write that. I am only new in the greater scheme of things but also acknowledge with the little that I know that this method is probably the only way to be safe! I wish I knew about options before share investing… again… hindsight is always 20/20 sadly.

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Today there were pizzly gains in the banking sector giving false faith to the world probably fuelled by them all doing rate cuts to appease the people whom invested way outside of the means. This will only fend off the australian mortgage crisis that little bit longer. BHP ended up a whole 78c *gasp*! Now thats what I call a gain.

The rest of the top companies bled horribly…. sad to see RIO in the dumps but hey… this is where all of them will end up before you can honestly say this IS the bottom! I am still of the thought that its going to be June/July next year and then imagine it skipping along the bottom for at least 5-12 months.

The turn is coming soon and I am favoring NCM and MQG as I stated in an earlier post in paper trades. Lets see how they turn out!

Scanning the world markets that are open tells me that they too are having modest gains in Hong Kong and Japan… Europe is yet to open and I suspect that this will only lead to more sideways and a little up and a little down action over there too.

This one step up and three steps back makes everyone uncertain. People are so desperate for this share raping to end that any rally is viewed as THE ONE! When its clear that this MEGA BEAR MARKET is just beginning!

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Considering the way the market is looking I have some paper trades I am putting on today.

MQGB97 Feb P Strike 26.00 - Opt Price about $4.00

Why MQG and why now? … its looking severely oversold and I believe we are in for a downturn soonish so this looks very promising for a nice ride down. Also considering my recent paper trade on this one going up makes me think… yeah… this company is a payer

SO yeah why NCM?

Well NCM is also looking over sold and in for a downturn. I would get in now on paper and check this for a run. The only thing that could be detrimental to this thinking is if gold had a huge breakout as that would propel the price of this company upwards… I don’t think that is going to happen till early next year so I do believe in this one.

Lets see how they turn out.

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What rollercoaster are we on?

The markets are up and down and up and down…. but mostly….doooooown.

So my current trades are all ok essentially. Lots of time value left for them to come into good money positions.

I prefer not to get to looking to deep into the markets during their operational times because of this…

Its painful to see your investment going up and down and up and down and I sympathise with people that bought stocks. I did and they are all bleeding badly for a very long time now. I didn’t set stop losses because I was a dumbass to say the least. I also didn’t buy protective puts because I didn’t understand them. NEVER AGAIN!!! I say as hindsight rears its ever so introspective and intelligent head.

Markets looking mildly strong again today…. so I bide my time.

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Amazing downer for the NYSE … the second most horrid downer in history apparently as I read on another blog.

So my intuitions pricking me to make that buy last friday was right. Well, hindsight is ALWAYS 20/20.

This also means that my previous calls are now deadies and should be sold. I will drop some of the calculations here on how much I would have lost/made if they were real here:

QBEE5 - last was 2.35 - hmmm broke even discounting trading costs… this was a put so i will keep it for a little longer… i have over 60 days left of trading on this one.

WOW40 - no movement on this one either… so this is a hold still too as it is a PUT and this is a MEGA FUCKING BEAR MARKET!

ANZG1 - last 2.30 - so this was a call that i entered at 2.04 hmmm this was a bad idea considering 1. Its a financial institution 2. financial institutions worldwide are insolvent and pretending to be okay with hefty loans from daddy reserve banks and guarantees of their abilities to ‘do their stuff’ by their country statesmen. I would pull this trade for sure…. in theory I would have had one contract on this one considering its on the ASX and the contracts are 1000 shares. I would then have made $250 less commissions for trades. Oh joy… not!

SUNCT7 - hmmm it fell rather quick… 1.20… now considering I paid 1.055 i broke even on this one. It looks like a lot of these paper trades were a little risky considering the nature of the market being very downer.

MAPSBS7 - didnt move sell sell regain liquidity

AMPBM7 - again a sell sell… what the hell was I thinking?? This is a bear market and I am buying CALLS ON A FINANCIAL ORGANISATION? Sounds like russian roulette to me in hindsight!

NABSZ - lets not talk about it… sold sold

WBCD37 - crapola… again… dont say anything

MQGFI7 - This was my WONDERTRADE of the group last review time… i would probably have sold it with all those gems a shining but didnt because it was only paper to see what would happen if i was ‘greedy’ with it.

So now its 8.44… … still a nice trade I would be pocketing 2.65 per contract This WOULD most definitely be a sell now being a CALL… a mad CALL but still a payer.

OSH73 - This is a put… so I will hold. In review though its current price is now .90 So we are climbing

In Review….

The PUTS are still on and the CALLS were mostly break even and one pay. The ratio was maybe a little to risky to get into CALLS on an upmarket fantasy in a MEGA BEAR MARKET. I will keep this note in my head and here for next time as I can then track the payers and compare against the current market before making any hasty decisions that will lock up liquidity.

Last Friday I was looking at BHP and thinking… this is going to turn. Its reaching up near its oversold region. Its also climbing close to its previous happy top. The option I had my eye on was BHPMO and it was only 1.40 at the time… I didn’t put it on as i wanted more confirmation of my heartfelt intuition on this one.

Monday was sideways and a little down. This was a stronger signal but still not strong enough. The turn though pumped up the value of the puts… the put I had my eye on was now 1.90!! Farky! I was starting to kick mysel and being conservative made me hold back and not jump in. Then last night all hell broke loose worldwide as all the markets opened severely down and then continued the cliff diving until close.

You couldn’t get a stronger signal! I put on a $ trade today on a BHP put. By end of day it had already made money. I do realise however that if i had put money on the one I had my eye on on friday I would already be up $2015! Damn conservatism to hell!

Hindsight tells me to buy into my directional trades at earlier times when I get the strong signal even tho the charts may not be fully reflecting my intuition technically.

Hope you are enjoying reading.

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I spoke to a human broker this afternoon and it was relieving.

He totally understood my exit errors and said it was a common mistake. He also noted that he was advising a lot of his clients to erase their stop losses and put them closer the the last resistance or support positions as the market is so volatile you can hit a stop loss in a day.

This relieved me a lot to hear as I was exiting on my stop loss all the time and thereby scaring myself out of the markets… seems like I wasn’t so wrong all this time!!

Thanks to Tejay!

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I noticed today that open interest for feb09 for LGL has spiked in a few places.

One is LGLP9 Call which has a strike of .01 since friday there has been over 8.5M spent on this call!! To date 10373 open interest reads as someone is seriously thinking that the price is going to be going upward.

As of today 116 have piled on top of LGLG1 which is a Call with a strike of 3.00.

The total open interest on this one is 6654.

Curiously this seems to reflect the idea that gold companies will spike as things get worse economically.

Something to keep an eye on.

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Starting with today we more than likely will have a market rally day again as the last of the DOW was euphoria.

There is a bit more trading range before an expected fall at the moment so its time to sit back as far as I reckon.

Tomorrow we have the RBA interest rate cut. Its going to go down which again will be good for market sentiments. People are easily fooled in believing all this is good for them when essentially it debases the value of their money in the greater scheme of things imho.

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Using my new method I put some trades on… on the 19/11/2008 and thought Id review them here.

I am doing long strategies as I don’t feel comfortable with shorting at the moment. AFAIK its a little too risky considering I am so green to this avenue of trading.

So here they are for review:

QBEE5 - P - Jan 09 - 22.50 - I paid $2.55 - now $2.35 > This one is clearly yet to pay and may be killed for liquidity but considering this is a paper trade… idgaf and will let it run.

WOW40 - P - Jan 09 - 25.50 - I paid $2.085 - now $0.90 > Again….. a phizzler. I would have clearly dumped this if i needed liquidity. Again… considering this is paper… idgaf.

ANZG1 - C - Jan 09 - 13.00 - I paid 2.085 - now 2.04 > Another phizzler… the banks have not been very good to me lately. Again… lots of time to expiry… so this is a holder all things considered.

SUNCT7 - C - Jan 09 - 6.75 - I paid 1.055 - now 1.41 > Success!! Still its only a small move simply because its a financial institution and they have been notoriously weak during this major bear market all due to their potential exposure to extra losses. Looking at the chart I see that it isn’t a time to sell so I’d still sit on this one.

MAPBS7 - C - Jan 09 - 1.90 - I paid 0.215 - now .185 > ?? WTF ?? the price is up on the stock yet this one is down ?? This MUST be the time decay thing that options have…

AMPBM7 - C - Jan 09 - .65 - I paid 0.65 - now 0.52 > Again… hardly any gains here… Calls in a major bear market hard for making money on.

NABSZ - C - Jan 09 - 19.50  - I paid 2.48 - now 2.09 > Ow

WBCD37 - C - Jan 09 - 16.00 - I paid 2.215 - now 2.745 > Success!! small steps small steps

MQGFI7 - C - Jan 09 - 20.84 -  I paid 5.79 - now 9.53 > Very nice!! I would pull this one if it wasn’t a paper trade. Because it isn’t I will still ride it until I see a reversal signal.

OSH73 - P - Jan 09 - 4.75 - I paid .69 - now .45 > This one was in the money this week but I didn’t exit as I am expecting a bigger down between now and Jan.

So all up… one big winner and lots of small losses but arent real losses luckily.

What I learned: Doing Long Calls are a lot harder in a major bear market and Calls signals are probably better used as exit points rather than entry points.

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