Today was an interesting day to say the least. We started out on the positive side and shortly thereafter we went ballistic as Ben Bernanke intoxicated the markets with his commentary which led to multiple rumors of QE3. During the day, I believe we were up as much as 165 points on the Dow, but that was short lived as the afternoon brought some pessimism into the market around discussion of the debt ceiling, more Euro crisis chatter, all mostly led by the anchors at CNBC that just seem to be relentless in their attempt these days to aid the shorts in bringing down the markets. As the markets came to a close we actually had to fight to stay positive, wavering back and forth between the high teens and where we closed at 44 point to the positive. My viewpoint, an absolutely dismal day for the markets which continue to show a lack of commitment by the bulls as nobody wants to stay long for any more than a day's trading period. As previously discussed, I am sure the markets will continue to be choppy at least until this debt ceiling issue is resolved, and it will be. Now on top of the Euro crisis, debt ceiling stuff, Moodys came out after the close and put the U.S. on credit watch in the event that the debt ceiling issue does not get resolved by the August 2nd deadline date. Reaction... the S&P futures which were basically flat at the point fell hard by about 10 points to the downside. I have no clue if this will hold, worsen, or improve overnight, but will probably depend on how the news is tolerated by overseas markets which are yet to open. At the end of the day I am still a believer that the big down days should be bought especially when you can find companies that offer great value for the long haul.
So, what did I do today? Well I sold a position on $NE Noble Corp that I have been holding for a while. I bought it in the lower 30's and sold it today after watching it run to the 40's a month or so ago and back to present levels. I took a very small profit (better than a loss) as the news lately for $NE has been very short term bearish but positive for FY 2012. Regardless, I sold out my position and replaced it with shares of $RIG (purchased yesterday) because I think the forward metrics for $RIG are better and it pays a much nicer dividend. On another note I sold August 95 $CALLS on some shares of $V that I own in my portfolio for a nice premium. By the end of the day those options were 20% profitable compared to where I had sole them earlier in the day.
I am watching some interesting moves in the options markets. $GLW Corning Glass has seen some heavy duty volume in the August 19 $CALLS day after day now having more than80k open interest. The same strike/expiration has been hit week after week and since the market has pulled back my feeling is that the same player continues to add at lower prices. I am getting tempted and will probably get in at some time. $MT Arcelor Mittal also has seen some continued buying over the past couple of weeks at the Sept 35 $CALL, hit once again today. Whenever I see repeated options action in the same stock day after day, consistent expiration and strike, the antennae always go up. I am typically not a speculator and try to reserve myself to only selling options, but in the case of repeated large concentrated volume I sometimes can;t help myself but to take a stab every once in a while. I did buy calls in $MT yesterday as disclosed and will look at the $GLW options tomorrow after confirming increased open interest.
Ok folks, that is it for today. Please feel free to comment on anything I have mentioned in this post or any previous posts. I would also love to hear any of your comments if you have the time as I am always interested in other people's trades.
Sincerely,
TraderJive
Follow me on Twitter: @TraderJive
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