Monday, November 9, 2009

Bookkeeping: Selling Half SPY Calls Purchased Friday

Friday morning as we said

Again, I am not really being facetious when I say "bad things" could actually be good news for the speculators of the US of A.  More money printing, more stimulus, more handouts, more programs, more anything and everything All these things hurt the dollar and until these relationships change and people begin to ask at what point does firing a great many of our consumers matter - I guess we "celebrate" by buying anything denominated in dollars.

and we entered some index long positions; one of which were a 5% allocation into SPY Calls

I've replaced the TNA short with a 5%ish allocation of TNA long and 5% exposure to SPY calls (November 106s) SWGKC which I will hold as long as 1060ish is held on the S&P 500.

There are really only 2 resistance levels to the upside from here, S&P 1080 and 1100.  I am going to let the first half of the SPY calls go here as we hit just under 1080.  Despite very poor timing Friday (I bought at the highest price possible for the entire day) on my purchase this sale will generate a 30% gain on 2.5% of our portfolio in under 24 hours.   Another 2.5% of the fund has the same 30% gain but we will let that ride since it's the houses money... I'll move up my "mental stop" on that half from "1060ish" to 1070.  By doing that we can participate in any upside over and above S&P 1080 while assuring we make money on that batch of call options as well.

At 1080 on the S&P, this would begin to fill out the "right shoulder" of any potential head and shoulders formation we pointed out Friday.  If we blast right through it, the bears last chance is a creating a double top at S&P 1100.  Above that the bears are castrated by the knife of Ben Bernanke.

This weekend the G20 nations met and effectively said... we're going to stimulate until the cows come home.  Effectively we have a "eat your cake and eat it moment"... if news is good, than its good ... buy stocks; if news is bad, than its ok too because it means more free money... buy stocks.
  • U.S. stock index futures followed the lead of overseas markets, which rose after officials from the Group of 20 countries agreed to keep their economic stimulus measures in place. 
  • The dollar fell against other major currencies.  <--- that's really all that matters nowadays.

After all politicians have elections to win and paper money is free.  Wait... I thought it was the chicks that were free?

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Long SPY Calls in fund; no personal position

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