Commercial Foreclosures are on the way

Today I toured several commercial properties in Miami. All were recently foreclosed on, or about to be foreclosed. Soon these foreclosed properties, or what I like to call them "value bombs" will be all over the place and apt. units that were 70K per unit in 2006 will be 25K. I continue to think the commercial real estate disaster and deflating rents will take a couple years to fully play out, similar to residential real estate....My timing has certainly been off, as I anticipated commercial real estate to fall MUCH MUCH QUICKER, however, I remain confident that what lies ahead will be ugly. I don't take any particular gratitude in the doom in gloom predictions (I would much rather be flippn properties at 40K a pop). Its just what I see, and in commercial real estate it ain't pretty!!!!!

Still hanging in there on SPY puts. Market showed some weakness today, but same old thing at end of the day. The market just doesn't want to go down. Jobs report should be interesting in the morning.

Everyone is Bullish

Cash for Clunkers, $8000 for first time homebuyers and stimulus, these are the programs that are driving this economy, and for good reason. However, my theory is 3 part:

1. When this stimulus runs out, our poor consumers won't be able to continue to spend.
2. We will be fighting the headwinds of a rising interest rate environment & our government will have MASSIVE amounts of debt.
3. Commercial Real Estate

I still believe its just a matter of time before we revisit lows, and this giddy bullish climate goes back to being bearish. But for the time being, my opionions haven't made me any money.

My Aug. puts aren't looking to hot, but I still have faith in the Oct's SPYS and am trying to add to position now, but so far haven't been filled. I think Oct. will be just enough time for the weakness to creep back into the market.

Shorts

Added to shorts today, and purchased some Aug. SPY puts in addition to the Oct. SPY puts I already own. Obviously, with the Aug. puts I am looking for a pullback very soon. I purchased the 97's at 1.98. In a perfect world I would like to see a nice pullback to the 950 area and will sell the AUG. puts, and let the Oct's run.

BACK IN

Back in the market, and back short. Bought SPY OCT 92 PUTS at 2.62. There are no more bears in this market, and I think its a good time to get back in. Just shaking off the rust a bit here....

Close to coming back in

I am getting very close to opening up new short positions....I would love to see a big up 100+ day tomorrow or Friday, so I could buy some puts going into the weekend.

To me stocks have come to far to fast, and the bears are no where to be found (for good reason). I do think there are still serious headwinds facing our economy, its just a matter of time until they materialize and the market accounts for them.

950ish

I will likely get back into the market and will shorting as we get closer to 950 on the s&p. I think we may break above 950 if earnings are strong, so I will watch that area closely before doing anything.

TIME

I am still out of the market as it continues to screw around around 900-950. It's just a matter of time until the roll over is complete. I think we will get another bounce or two into the mid 900's before the eventual collapse, but that could easily be in the fall or even the end of the year. Another bounce up to 950 range, and I will likely step back in and short the market.

nowhere

I've been away from market recently, and haven't placed a trade in 2+ weeks. In addition to being busy with other things, I don't feel comfortable going long as I don't trust the green chute theory and couldn't make any money going short.

We've been spinning are wheels for weeks now, and are still playing around between 900 and 950. It's anyone's guess how long this will last, but I will likely stay on sidelines until we get a meaningful move, and the vix elevates.

Market Lull

The market has become downright boring. Today we are sitting at -11. Not getting involved here, especially with options, because the market isn't moving.

However, what I do know is that interest rates are creeping higher. Higher rates will present another challenge to housing prices and other assets. People that think their homes are going to jump up in price again are crazy. Not only are we facing an inventory problem (which is getting slightly better at the low end), we will soon be in a rising rate environment, which may be even more destructive than the supply of real estate on home prices. Home prices aren't going anywhere, and neither are asset prices. Stocks may continue to drift higher, for lack of new bad news, but WHEN growth proves to be absent and asset prices resume constricting in a higher interest rate environment, this rally built on hope will come crashing down.

GOLD RUSH!!

Gold is looking strong, and my calls will likely explode higher this morning. It seems like it's only a matter of time until gold exceeds 1000. I currently own July 93 calls, so hopefully I will have enough time to enjoy some significant upside. Other than that, the market is chasing its tale and going no where. Looks like a quiet Friday on the trading front, and the end to a very quiet week. Until we break out of this trading range, it seems we will continue to whip between 880 and 930.

DON'T OVER TRADE!!!

PATIENCE pays. I am glad I haven't done much trading recently. Rather, I continue to wait for the market to figure out its direction. I would have fared much better in April if I would have used patience and not have continued to throw good money after bad....

My two most exciting positions are FITB and GLD.

FITB is looking good, and it finished just below 7 which is good. That said, it's just moving back and forth between 7 and 9. Which way will it break?!?!?

GLD is on fire, and I am really excited about the prospects of this position. It looks really strong, and I am feeling good that I was able to spot an opportunity on the long side. This has definitely been one of my weaknesses, as I've been primarily benefiting on the short side. April has definitely taught me to keep a more open mind and to trade the charts, not my opinions....

Pause

I am waiting to see where this market is heading. Yesterdays close above 900 was bullish, but I just feel like we are going to fall back down to the 850 area in the next couple weeks, so I am not in a hurry to make any moves right now. There is just so many times we can rally on Goldman returning TARP funds.....It will most likely be a quiet day here.

FITB bounced back up to 8 yesterday. Still no news on how they are going to raise a few billion, but I would think something has to happen in the next couple days or weeks. As I suspected, its going to be tough to get a break below 7, but if/when it happens, my puts should explode to the upside.

GLD

I really like the action in GLD. A few months ago there was a media frenzy regarding gold, but the frenzy subsided as other issues stole headlines - BANK STRESS TESTS. Gold has quietly broke above its base at 860 and is now above its 200, 50, & 20 day ma., on a clear uptrend. I will hold until the uptrend is violated, which I hope doesn't happen until north of 1000.

When the music stops

Will all the banks be able to raise equity as easily as Goldman?? I don't think so....I think some of the lower level banks will have difficulty raising money, as investors may/should scrutinize bank books with more skepticism than the government stress tests. I think Fifth Third will be one of these banks left out in the cold.....I haven't done any heavy analysis of their books, I just think their run up of 700% in a few weeks was WAY over done. Also, they were a BIG Florida lender, with a lot of HELOC exposure. I am confident that most of their HELOC's are worthless. On a personal basis, they are one of the banks I was still receiving mail from advertising their HELOC's in early 2007 when it was clear the housing market had already went bust. I also know one specific case where they clearly lent money to a straw buyer, and will take a at least a 350K loss on a 500K loan on that 1 particular transaction. In other words, this bank is no Goldman.

I added to my FITB this morning. Watching 7 closely, and need a nice break below, to get to my target of mid 5's.

FITB & GLD

I couldn't ask for better performance from these two positions. Gold looks incredibly strong on nice volume and FITB looks incredibly weak. It's still early though, so hopefully they will both continue to perform.

The past few days many banks have sold stock to raise capital. Selling to (in my opinion) dumb investors. A sign of strength in the market would be banks buying their own stock, not selling it. However, they don't have the capacity to do so. They are taking advantage of the latest rally and selling at the peak while they can. Obviously, they wouldn't have been able to raise money in March when the market was at 6500 and optimism was 0. Anyway, I don't think it will be as easy for all banks to raise capital as it was for Goldman, Morgan, etc. I think FITB will have trouble raising funds. And they better hurry to market before we deteriorate further. When they do offer, I know they will have to do so at a discount to the market which should further depress their share price and enhance the price of my puts! I see FITB heading back to the mid 5's very soon.

BUYING GOLD

Support at the 200 day ma looks formidable. GLD is now trending higher above both its 50 and 20 day. If Gold can gather some strength here, it will likely challenge 1000 again. If it breaks above 1000, this position will make me $$$ hand over fist!

Commercial Real Estate

The dam holding the commercial real estate market from tanking is weakening. I say this because I have stepped up my research on foreclosed commercial property the past couple weeks, and I am noticing mounting inventory of foreclosed & short sale lower level commercial real estate beginning to hit the market.

Similar to the way subprime homes foreshadowed the collapse of residential real estate back in 2006, the increase in foreclosed lower level commercial properties is indicating that a similar scenario will soon play out through all levels of commercial real estate. I think this commercial collapse will become more prevalent in the coming months, and will continue for the next 2-3 years. It's only a matter of time until SRS is back to at least 55-60, and there are abundant opportunities to acquire hard assets.

The recent run up in IYR, and the fall of SRS has been due to the market rally, and the fact that many REIT's have been able to raise equity. However, for those of you with short memories, many of the Financials rallied on their first time raising equity in 2007, and every financial that rallied eventually rolled over and continued the slide lower. The same will happen with the REIT's. There are just WAY to many headwinds.

Here is a clip from today's South Florida business paper.....



We're just getting started here in Florida, as these properties are just beginning to get foreclosed on, and the process is complicated and takes months. However, when these properties do begin to hit the market, that is when the destruction will begin. That is when the foreclosed assets will depress every other piece of commercial real estate around them. (Just as subprime homes decimated entire neighborhoods).

We are quickly approaching the days where land is all but worthless. The epicenters are MIAMI, LA, and VEGAS, and the rest of the country will soon feel the ripples.

This is a pretty gloomy post, but unfortunately the collapse of commercial real estate is inevitable.

Feeling good about our economy?

What is really going on anyway? I don't think anyone knows....this video is shocking!



And below is today's comments by Merdith Whitney.....I couldn't agree more with her stance on our current market.

FITB

FITB is up 60% today alone....I wanted to short this one at 5, and am glad I didn't. In the high 8's though, I thought it was worth a shot. I bought Aug. 10 puts, which will hopefully give this position enough time to become profitable. This stock is up about 700% in 3 months. 700% in 3 months!!!!! In addition to a large amount of commercial real estate, FITB also holds huge amounts of Florida based 2nd mortgages. These loans are currently holding their value only because of the Obama modification plans and foreclosure moratoriums. However, these 2nd mortgages, the last 20% or so lent on houses in 2003-2007, are all but worthless.....

Buyers not coming in.....

However, 900 on S&P holds...Stress test results tonight.

Top is Near

The past two days we opened up 50+ points in the morning, to immediately sell off. It's clear that traders are beginning to take advantage of the recent run up and selling in the morning after the rise in futures.

Yesterday, at about 10:30 buyers came in and bought the market back up. To me, this is dumb money, the one's late to the party. Today we have sold off once again this morning. I am interested to see if traders are still willing to buy the market back up today (2 days in a row), or if this rally has overstayed its welcome.

TGT up big this am, but selling off now. RCII doing the same.... I am still in both positions. Depending on where TGT trades throughout the day, I may close position.

Subprime mess is OVER!

The subprime mess is over....here in Florida, the houses at the bottom of the market, the houses involved in the Sub prime crises, are being snapped up left and right by long term investors. When you can buy a house that sold for 200K in 05, for 40K now, and rent it for 700/mo., it just makes sense for a small real estate investor to make the purchase. It's a decent long term investment which will throw off some cash. It's this type of transaction, and only this type of transaction, that has created the increase in sales activity the past couple of weeks.

In addition to real estate investors buying low valued foreclosed properties, the government has more or less turned off the flow of foreclosures by instituting moratoriums and stepping up modification efforts. However, if jobs losses continue, the government will have a very difficult time holding off the second wave of foreclosures that I think is looming.

More expensive residential properties (that can't be rented by an investor for profit), and commercial property, have yet to be affected by the next wave of foreclosures that I think is coming. Unfortunately, I don't know when the next foreclosure wave will arrive, but from the increasing supply of more expensive residential property coming to market, and a VERY noticeable increase in short-sales and foreclosed investment properties coming to market, I am confident the second wave IS well on its' way.

If I have learned anything over the past few years its the importance of TIME! What looks great today, may not tomorrow, and vice versa. I believe we are at a crucial period right now where bullishness is rampant, and many are proclaiming the worst is behind us. However, I think the abundant "green chutes" and current bullish sentiment is a short term phenomena, and that our real estate crises has not yet run its' course.

Deja Vu

I've seen the same pattern day after day....Strength in the morning, a small dip in the early afternoon - which is bought, and the strength continues throughout the day. Over and over again.

While I have recognized this pattern day after day, I have yet to take advantage of it, which is definitely a flaw in my trading. While I was able to take full advantage of the bear market over the past year or so, I still have not been able to adjust to this rally, which has been VERY frustrating.

Anyway,

RCII did well again today

TGT is lagging which is good, and failed again to close above 41.

IWM - The strength is unreal. All I am looking for now is a retest of the 20 day, and I'm out.

TGT, RCII, IWM

I am sticking with my short TGT, IWM, long RCII trade.

IWM jumped up strong today, but seems to have rolled over. This position is currently a loser, but I will hold this one as long as we don't get a meaningful push with volume above 50. Speaking of which, volume is becoming anemic, which doesn't bode well for this rally continuing.

TGT keeps flirting with 41 and then falling back. It has closed above 41 once at 41.26, but I held on to the position. TGT crossed above 41 again this morning, but has fallen back again. The position is currently at a loss.

RCII is a winner so far. But in this market, anything long has been a winner. Today this one crossed above 19.50, but hasn't yet made the move to 20-21 that I am anticipating.

May Day

The first day of May was a good one, and hopefully today will foreshadow the rest of the month. I managed to take a 4% winner on a FAZ day trade. Also, my TGT put/RCII call trade is currently showing a profit. Not bad for a boring and slow Friday.

Unless they delay it again, next week our government will FINALLY take its' finger off the pause button and release the results of the long awaited stress tests. I anticipate more unanswered questions, not a resolution, but we shall find out next week.

Until Monday....

April Showers....

I am glad April is over. BY FAR, my worst trading month to date. It left me battered and bruised with a lot of work ahead to make back the losses....Even though my puts on GMCR were about worthless already, today just added insult to injury, and was just another example of how wrong I have been this month.....

I decided to hold on to my TGT puts for now, and am still holding my RCII calls. At some point, I am looking for RCII to get above that 19.5 area, back to 20-21 at which point I would sell. I also own IWM puts. These are my 3 largest positions at this point.

RCII & AAN

First things first, RCII was downgraded today, and at one point was down over 20%. AAN on the other hand, shot up like a rocket, and is currently up 15%.

It's actually very interesting, the AAN numbers were great, while RCII were a little lackluster. I listened to the RCII call, and some of the analysts were disappointed with RCII performance compared to AAN (and we can see it in the stock movement today).

However, RCII is calling for one of their "better Aprils", which is promising. So, I held my nose and bought the dip, pull back, debacle, or whatever you want to call it...I purchased RCII June 17.5 calls.

So my pairs trade, short TGT, long RCII is currently in affect....

Going Long

To hedge my puts on TGT, I will be looking for an entry into either RCII, rent a center, or AAN, Aaron rents CALLS or outright stock.

Both are a play on the lack of credit, and trend to rent rather than own. Both reported earnings today, and both upped their guidance. AAN is looking to break above resistance at 30 (Resistance that has been in place since 2007).

I have not played a break out play yet on the long side, as I fought breakouts in AZO, GMCR & PNRA and lost.


I like the story behind these RCII and AAN. I will listen to the AAN call in the morning, and look for an opportunity to take one of the two companies long on a dip.

TGT

I bought July 39 puts in Target. Stop is 39.99. The market continues to be unable to break below earlier lows....strength is unreal.

CKEC

The reason I originally decided to trade options was for the leverage. The ability to utilize small amounts of money for large 20%+ returns in days. Even though I wanted to keep this blog strictly options, I want to look at a stock I sold on Friday that traded like an option, CKEC, Carmike Cinemas.



I purchased CKEC as it was headed south at an average of 2.02. On Friday I sold all but a few shares at 4.51, a 123% return in a few weeks. Take a look at the chart, the stock went like a rocket from 1 to 4.5.



There are a couple reasons I am mentioning this trade.

One, I have learned recently that stock does allow for large quick return. But even more important, this type of move shows the type of moves that beat up, $1-5 stocks, have experienced during this rally. In my opinion this is another example of why this rally has become way over extended...

I actually like this stock, and will buy some more if we get a move down into the 2's or low 3's, but after such a run, i thought it was time to take some profits (not to mention, I haven't had profits on anything in a while and needed to re-familiarize myself with the concept)

FAZ update

I am moving up my stop on FAZ from 7.99 to just below today's low at 8.09. Being Friday, I don't want to hold onto FAZ through the weekend.

I was stopped out of FAZ as I was writing this....

FAZ

FAZ feels like a bottomless pit. I am not sure why I am so enamoured with this one. Maybe because its gone from 120 to 8 in a month.....After nearly taking out my stop at 7.99, I bought a few more shares at 8.23.

Patience DOES NOT Pay

With a failed cup & handle formation on FAZ, my paper profits quickly evaporated. My 13% profit of a few days ago is currently a 2% loss, and I put in a stop at 7.99. The market is STRONG and just keeps slogging higher. Stress tests at 2pm should add some fireworks to relatively calm Friday afternoon.

IWM too keeps powering higher. I am still anticipating a break below 46, but am not counting on it with the current market strength.

Skeptical

Its no secret I am skeptical of this rally. CNBC's webpage really makes me question what this rally is all about. The theme of Q1 earnings season has been: earnings are down, but beat analysts estimates, market goes higher. Over and over again. AMZN, AXP, MSFT do the same in after hours today.....



Coming off of Q4 08, and the panic that ensued, it does make sense to me now why we have rallied. The bar was set low, very very low, and I definitely didn't consider the effects low analyst estimates would have on propping up the market.

FAZ

FAZ failed to cross above 10.25 4 times today. Whether or not we cross above 10.25 or fail again will likely be reconciled tomorrow when the stress tests are revealed. I have decided to take the risk and hold overnight again, but the sell off in FAZ at the end of the day was nasty, caught me by surprise, and doesn't give me a good feeling going into tomorrow.

Also, IWM failed to break below 46.20, which I really need to happen. This position is currently profitable, but a break below this line would be huge! This short term line in the sand will also likely be reconciled tomorrow.

Publish Post

I spy....

I spy a short term cup with a handle forming in FAZ. This could be very bullish for FAZ if we get a break above 10.25. If we do get a break above 10.25 with some volume, I anticipate FAZ will follow my blue line higher.



The risk of the FAZ trade is tomorrows reception to the stress test results. So for now I am undecided as to whether I will sell FAZ today or hold.

Nice Afternoon

Ok, this afternoon's action was encouraging. The action on FAZ was great. I am taking the risk of holding on to this position overnight. The position is currently up 13%, but I think we may have put in a bottom here in the 8.50-9 area, so I am going to try to exercise some patience and see if this one can run a bit.

I also established a position in IWM May puts. The chart of IWM below shows a break of the blue trendline, and a retest, also a nice little double top (circled in green) at around 48.



As per my last post, the bulls did buy the afternoon dip, but we FINALLY sold off at the close. I haven't seen a day like this in a while, so maybe the bears have some fight left after all.

FAZ

My last FAZ trade was a good one (after being stopped out on a previous trade), so I am sticking with what is working. This morning I reentered FAZ at 8.75 and so far we are looking good, currently up 5%.

After shaking off the lows at the open and heading higher, the market appears to be rolling over. This is a HUGE day in my mind, especially after the big down day on Monday. If the bulls do not buy this dip, as they have bought every other one the past few weeks, I think we are in for some more down side - possibly back to 800 on the S&P!

Back to work

There is no sugarcoating it, April has been horrible, my worst month of trading in over a year. I certainly have learned the affects of being short in a bull market, and after hearing people say for months "the market can remain irrational much longer than you can remain solvent", i finally REALLY understand the phrase. The good news is that I am still solvent, the bad news, is that my good Jan., good Feb., and great March have been wiped out by my April losses.

So, I have a lot of work ahead of me to rebuild my account.



One thing I did realize is that I had WAY to many positions in APRIL for me to monitor, I got blown out of positions like COH, GMCR, and PNRA which all proved to be bad, no horrible, trades....

My stance on this market remains bearish. With jobs losses growing, commercial real estate looming, asset depreciation continuing, I still contend the market will at least test the low's, if not violate them. The bank stress test, in my mind, have been a clever way to basically push the pause button on the crumbling market. However, the economy around us continues to deteriorate. That said, I MUST remain open to the fact that the market may go higher before we going lower. And the market may zig and zag - so I must zig and zag with the market rather than fighting it. I fought it in April and ended up bloody....

Another Stab at FAZ

I got stopped out of FAZ yesterday at 8.89, and am taking another shot today....I'm in at 9.11 with a stop at 7.99.

Strength

Market strength is amazing again today. Every dip, and I mean every dip is being bought. Tomorrow I will finally be able to get my toxic assets (April puts), off my screen. Unfortunately it looks like the banks will be holding their toxic assets indefinitely.

Commercial real estate 3x bear, SRS, continues to fall....It amazes me as commercial real estate will (javascript:void(0)eventually) be a disaster.

COH & FAZ

I couldn't resist....This morning I purchased some more COH puts as it bounced off of 19. I am watching this one close because earnings are next Tuesday, and I can't afford to take to big of a position into earnings. I also just purchased a starter position in FAZ just to test the waters. I am in at 9.55 and will put a stop just below the lows on 3/14.

I likely will not be trading the next couple day's as I will be away from the triple monitor setup, but I should be back trading mid-next week.

Sitting on Sidelines

I'm staying on the sidelines until the current strength (which is very strong) plays itself out....We can't even get a close below the previous day's lows, so no more shorting or buying puts until I see some weakness.

For example, COH keeps bouncing off of 18. It doesn't seem to want to break below that line.....

Similarly, it looks like were trading in a range on the S&P between 860-820, so I plan on waiting it out to see which way out of the range we will move.

Today

Are my eye's deceiving me or is this market actually showing some weakness today?? It's about time....

Blah

Today has been a slow day. With options expiration this week, and GS reporting tomorrow, the rest of the week should prove to be more interesting. I will likely hold capital, and refrain from investing further in PUTS until I am able to see material weakness in this market or a catalyst to drive the market down. I did add to a COH PUT position on Friday, and it is now my largest position.

Worthless

Talk about a rough week....Next Friday April options will expire, and unfortunately it looks like a will have a handful of options that will expire worthless....The following are all April, and unless something drastic happens in the market next week, these April put options should expire worthless:

IYR
CBRL
EEM
QQQQ
RTH
SPY
XLF

I do still own QQQQ, RTH, SPY, CBRL later months (primarily MAY and JUNE), and although they have lost value, they do still maintain considerable value. I will update my current positions over the weekend.

The market is closed tomorrow, so I will have time to think about the past couple days....I plan of reviewing my trades, focusing on my mistakes, and moving forward so I am prepared for Monday.

Giving it a GO

I bought SPY 85 MAY PUTS at $3.90 a few minutes after the open. We just hit S&P 850 which should act as formidable resistance, but who knows because this rally has been NUTS! These are MAY puts, not APRIL. Learning from my mistakes, I need to be quicker with the trigger this time, and if I get the profits I am after, I am selling and moving on! (and if they are losses, sell and move on).

Options

I've given many examples of the power of options, and how they can produce 100%+ returns in a matter of hours. The problems with options is that they can expire worthless, and unfortunately I am running into that problem with my April put options. I have some April puts, and obviously, the market has gone completely against me the last 3 weeks. All of my April Puts will likely expire worthless.

What I did wrong here, is to hold onto front month options to long, in HOPE that the market would turn, rather than taking my losses quickly and move on.

For me, March was great, but April, so far, has been very bad. I have given back much of my March profits, which is discouraging. With the market closed tomorrow, and futures already up 150 today, I will likely wait until Monday to resume trading.

Concern over Jobs - Why we haven't bottomed

It's pretty simple, jobs = economic growth. Our last few jobs reports have been horrendous, but the market continues to look past the data, moving higher in anticipation of economic recovery. When asked about the dire jobs situation, I continuously hear analysts say jobs are a lagging indicator, and that the market will lead us out and the jobs data will follow. Rather than accepting their "lagging theory" as fact, I did some quick research on jobs data and market history, and I think I found an interesting relationship between the market, unemployment rate, and job losses.

Below is a chart of the DOW from 1966-1987. I highlighted in green the periods of greatest job loss. In each period I indicated the month of the highest number of job losses and the month of highest unemployment rate for each period.



It's clear that the month of the highest unemployment rate clearly lags the market turn around. However, the month of the highest job loss clearly DOES NOT lag the market turn around, in fact, it actually seems to mark the bottom or close to the bottom of the market downtrend, prior to an uptrend.

So, I will be keeping a close eye on job loss data. I will not position myself for a market turnaround until I see a decrease in job loss, and according to the data, there is currently no indication that job loss is easing.

Below is the last few month's of job loss data:

AUG. 08: -175
SEPT. 08: -321
OCT. 08: -380
NOV. 08: -597
DEC. 08: -681
JAN. 08: -741
FEB. 08: -651 (preliminary)
MARCH 08: -663 (preliminary)

If FEB. job loss data is finalized and is materially less than the job loss in Jan., than it would show me that the job market is getting better, and that the worst may indeed be behind us. However, if the FEB. numbers get revised upward, above JAN.'s number of 741., it will be clear to me that our job loss data continues to worsen and so will our economy and market.

Tops and Bottoms

Calling a top to this rally is just as stupid as calling the bottom. And although it doesn't seem like this rally will end, I know it will. It's just a matter of time, and market sentiment. While its clear I have to idea when the rally will top or when market sentiment will change (as indicated by my 100% bearish slant), I do know that history shows that just because we rallied 25% does not automatically mean our market has bottomed.

Time for my favorite chart:



The enormous government action has undoubtedly turned sentiment positive. And even certain economic indicators have begun showing slight gains. Although, i do think it is a step in the right direction, we are coming off horrible jan./feb. statistics, and a slight uptick in home sales, for instance, is not a trend, or indication our economy has bottomed.

For instance, in Florida, I have noticed an increase of pending home sales. But at the same time, I have noticed increasing inventory and no stability in housing prices. For example, if a house closed for 150K in a specific neighborhood in March, there are still 5 others just like it for sale for 150K in the same neighborhood at the present time. This shows me that people may have started to dip their toe into the water to buy homes, but there is NO GROWTH. NO APPRECIATION.

In addition to housing inventory, housing prices must also battle a collapse in the rental market. Landlords are just now coming to grips with the affects deflation has on their rental rates, which I think will keep housing prices low for an extended period of time. I think this story has yet to be told.

Without growth, without appreciation in asset values, our economy, our market will not continue the current V shaped patten upward.

Boring

Not to much excitement today. This morning, sellers tried to push the market below yesterdays open, but failed. Buyers quickly came in and have bid the market up from down 70 to flat as of now. Buyers are still firmly in control, and every dip continues to be bought.

Barring the unexpected, it looks like I will be coasting into the weekend....

ALL IN!

The last two days were demoralizing....As we hit S&P 840, I purchased LARGE amounts of PUTS today in IYR, COH, QQQQ and SPY. However, this thesis of mine that we are going to revisit the bottom of a few weeks ago has torn my put values to shreds. I am hanging on tight here and hope to whether this BULL storm.

After a day like today, I am reaching for positives....One positive is that the SPY 82 Puts I purchased this afternoon are currently up 10% in a just a few hours. The problem is is that I have been in this situation for the past couple weeks, and the BULLS continue to turn my 1 and 2 day profits into losses.

As I am writing, the market continues to sell off.....Also, the VIX has risen all day long and is now above 42. I don't think the bears are done just yet! I'm ready for tomorrow and the rest of April.

Time to come back to EARTH!!!

Ok, this has been fun and all, a 300 point up day, but it kind of reminds me of the grand finale at a 4th of July fireworks display. There is a lot of crazyness at the end for the last minute or so, and then it just comes to a stop. The S&P is up 26% in just a few weeks....Its time for our market to come back to earth.

I have been buying PUTS hand over first....SPY puts, COH puts, QQQQ puts.

Taking it on the Chin

We continue to power higher and my puts continue to lose value. I feel like I keep repeating myself over and over again. Anyway, I want to see where this rally goes today, before adding to S&P puts. I guess 850 is realistic at this point, but I am not sure what is going to drive us higher, now that g20 and FASB are behind us. I guess next up is the employment report and of course Q1 earnings.

All of my purchases the past couple days - RTH, SPY, SRS, FAZ, were obviously premature. This morning the QQQQ's broke past resistance, and I'm assuming the DOW and S&P will follow.

I did purchased COH puts today - COH May 17.5 at 1.6. Unfortunately, these are already worth only 1.3. So far all this put buying has brought nothing but pain.

Sticking to the Plan

Recently I moved away from my originally plan of shorting high end retail, banks and commercial real estate, and established a few positions in lower end consumer products/retail/food like PNRA, GMCR, and AZO and CBRL. This was a mistake and I currently maintain a loss in each position. I am going back to shorting the high end sector. This morning I have my eye on Coach, COH May 17.5 puts and will likely purchase near the open. I have traded COH in the past and have done pretty well, so I am going back to what has worked. COH has moved from 11.5 to 17.5, over 50% the last couple weeks, so I anticipate this one is ready to trade down a bit.

Futures

Futures are up 150 and in retrospect it didn't make sense to establish long positions in FAZ and SRS prior to G20 and the FASB announcement. I will likely get stopped out of FAZ this morning because my stop is at 17.99 and it's currently trading at 17.40 in premarket. SRS is trading at 50.20 and my stop is 47.99, so I am safe in SRS so far, but I wouldn't be surprised to be stopped out in SRS as well.

We are in an obvious good news cycle right now, and we are even getting better than expected economic data including housing sales, retail sales, and even better than expected car sales (even though they were horrendous). The improving economic data has caught me by surprise and has supplied a nice foundation for our current rally. Today at 10 we will find out if the better than expected economic data continues when factory orders are reported.

Anyway, with g20 and FASB decision soon behind us, I will likely begin adding to my shorts, particularly around the 840 level on the S&P. I will likely take it easy this morning with the FASB announcement at 11, and will hope to get out of the week without too much damage to my put positions.

Surprise

Today's action is a bit of a surprise. The futures were down big last night and this morning, but the market started moving higher at the bell, and hasn't looked back since. With tomorrow's mark to market and g20 coming up, I can assume bears are covering to limit risk. However, there is also some good volume today, so it looks like the market will continue its uptrend and will move higher.

Yesterday, was a great day as I lowered my basis in a RTH, SPY and a few others, but as of now, an entry today would have been even better. I have been fighting this tape for the past couple weeks, and although I am holding my own, I am not taking advantage of this good move up which is frustrating.

I added to my FAZ position today, so now my average purchase price is 19.89. I have a stop at 17.99 to limit losses. I really like this position here, because there seems to be a base building at 18, and I have an easy exit and limited risk if we violate that number.

I also repurchased SRS at 52.1. Similar to the FAZ base, there seems to be a base here around 48-50. I have a stop at 47.99 to limit losses.

Yesterday, I said that I could see SPY hitting 81.50. It made it to 81.08 and then fell away. Today SPY is charging back toward 81.50. I will likely buy more puts on SPY at 81.50 if it makes it to that point.

BUSY!

Today turned out to be a real active day for me. My day trade went pretty well accept for a mistake on my part. I ended up putting in a limit order, not a stop market order, so I sold my full 20 contract prematurely for 1.00 rather than letting this one run. At one point it hit 1.11, so I left some money on the table, but considering I bought the position on average for .755, I am happy to take profits and move on.

The same RTH I sold today at 3.80, I bought back at 2.55. These were the best prices of the day so far for each, so I really nailed it. However, time will tell if it was wise to reenter this position so quickly....

Also, I repurchased the SPY puts that I sold yesterday at 3.30 (break even) for 2.51. I sold them yesterday to take some money off the table after the big move down, and this position was showing a pretty big loss the past couple days, so I was happy to sell at break even. I think I will fare much better with a 2.51 basis rather than 3.30.

The same goes for FAZ. I closed out my entire position yesterday, but reestablished a position at 20.20 this afternoon. I will likely buy more in the low 19's/high 18's, but am setting a stop at 17.99 to limit my losses.

I see both sides of the market right now....We have the bulls who anticipate the mark to market talks on Thursday, and the G20 meetings over the weekend will propel the market higher. The bears, on the other hand, are nervous to be short with market moving information ahead the next couple days, but anticipate horrible job data later this week and poor April earnings to push this market lower.

I remain in the camp of the BEARS, but remain nervous of the possible affects the mark to market talks and the pending G20 meeting may have on my good friend Mr. Market.

Bottoming Process

Have you noticed how everyone on cnbc has switched from calling "the bottom" and now says "were in a bottoming process".....that should give them just enough time to be right this time....

S&P - Where are we going?? UP or DOWN?

I sold my RTH puts this morning. I bought these for 2.80, watched them go to 4.40 that same day, back to 2.20, and just sold them for 3.80. I had had enough and just wanted to take profits and move on.

I also sold my SRS position at the open, so now am out of my 3x stock, and am only in options. I will definitely go back to these instruments though when the time is right, as I made a few good trades.

I am undecided about which way this market wants to go, but I can definitely see SPY heading back up to 81.50 today, before moving back down. So, I actually bought some SPY calls this morning for a day trade. I bought SPY April 85 calls, 10 for .72 and 10 for .79. If S&P can get above 800 today this one may run!!!! OOOH, looks like this may be happening now.

Great Day

I sold half my DF position, sold all FAZ position, Sold some SPY.

I lightened up on some of my puts today, but not to much. I was considering buying some calls, but didn't pull the trigger because I want to see how the Case Shiller numbers affect the market tomorrow morning.

How low can we go?

We are at a tricky spot right now. It's impossible to determine whether we are going lower to retest our previous lows, or if this is just a pullback as we continue to move higher. If it's the former, its wise to hold my puts. The later, well I should close most of my put positions and start buying calls in anticipation of further upside.

I have read that many are expecting a pull back to 750-770 before heading higher (and technical analysis seems to indicate the same), but at this point, I am undecided. My decision will likely dictate the direction of my account for the remainder of the week. For now, I'm staying put in my puts....

Beautiful Morning!!!

Waking up at 5am and seeing futures down 180pts was a pleasant way to start the week for an owner of numerous put positions. It turns out that despite the recent run up, everything in our economy isn't so rosy after all. GM bankruptcy talks this morning, and Geithner's admissions that the banks will need more money (UH, really?!?!) have the bears feasting on our most recent bear market rally.

I haven't done too much today so far. I did sell half of the FAZ position I bought last week at the open. Other than that I am sitting tight and just watching the market fall. Depending on how low we go today, I will contemplate taking some profits....

My favorite position is DF puts. What a beauty!!!! Also, GE puts seem to be shaping up nicely!

Ready for the weekend

The bulls really put up a fight at the end of the day today to hold up the S&P. I'm glad the week is over because it wasn't a good one for me.

On the positive, although I usually stick to options trading, I had a couple successful trades in SRS and FAZ this week, to help offset some of the beating my puts took.

As far as the market, this has been a powerful rally, but I remain confident that this is only a bear market rally, and that its only a matter of time until we resume to the downside and make new lows. I will leave you with this interesting chart I found posted on another blog.

Position Update

Notice I purchased GE puts (today), RTH puts (yesterday), SRS (i have been trading this and have been in and out, but currently own it), FAZ (bought this today). I should probably add the dates of when I purchased these positions, and may start doing it moving forward.

Not exactly the portfolio you want to be holding the last 10 days, but it's what I got! Until tomorrow....

WRONG WRONG WRONG WRONG WRONG

I have been very wrong lately, over and over, and it doesn't feel good. This market just keeps moving higher, to the detriment of my numerous put positions. I am carrying big losses right now in many positions. CBRL is absolutely driving me nuts, and PNRA today rocketed higher. All of my current put positions for that matter are currently showing a loss (accept, DF, currently my only put position in the green).

Its pretty apparent the sentiment is all positive right now, but I know its just a matter of time (it better be soon) that an unexpected event will ultimately upset this market rally.

I purchased FAZ today, which is a 3x financial Bear ETF, and am holding over night. I trimmed a couple positions yesterday, including an IWM put position and sold some SRS, only to reenter a position later in the day.

Ironically, March is going to be a great month of profits for me (i had an excellent first two weeks), but unless this market turns down, April is shaping up to be a bit of a disaster.

On a limb

I am going out on a limb here, but I think today will mark the high in this recent trend higher. I think we will start to move back down below 800 on the S&P moving forward.

I say this because there are so many stocks bucking up against there resistance right now. For example look at RTH. I bought puts this morning.



Let's hope this proves right, because I am carrying a boat load of puts at pretty hefty losses right now.

BUSY

I wasn't in front of the monitors most of the day yesterday. However, I did have time to purchase some SRS yesterday morning at 48.55. I am currently waiting for new home sales this morning which will likely indicate today's market direction.

I am still sitting on large put positions that aren't faring very well. I need a break below 800 on the S&P, to get out of some of my put positions and to go long with calls. I am trying to be patient with the puts, but they are losing time and value as I wait.

Quick post

Just a quick post before I destress from this horrible day....How can the FDIC claim that that they can be very profitable, the private investors be very profitable, and the banks benefit from the Geithner's toxic asset plan??? All parties benefit from the toxic assets?? I don't see how this is possible. I would think some entity, the FDIC/government, the private investors, or the banks will have to suffer for the others to benefit - that's what happens in every other distress sale. It's not possible for everyone to benefit, that's why its called a distress sale. Also, the plan still doesn't address the issue of pricing.

What's next, our government figures out a way to turn trash into gold??

Another plan, a BIG bounce

Burned by the government news again.....I'm in a difficult situation right now because I do not feel I can go long at this point because the S&P is very extended up 666 to 810+ in just a few days. And I am not ready to get rid of my puts, because I do not believe in this rally.

I will continue to hold onto my puts (its painful), and am waiting for a pullback to go long, and to sell off some of my put positions.

The only positive I can take out of a day like today is that the Dow and S&P are both above their 50 day ma for only the second time this year. The last time they both were above their 50 day ma, was an end to a rally, and the beginning of a long downward move.

FEELING GOOD

WOW!!! What a difference 2 days can make! I must admit I was sweating a bit on Wednesday after the Fed announcement when the S&P rocketed to 800. However, since that point, the market has moved straight down.

I am going into the weekend holding very large put positions, and hope our current market weakness will continue next week.

Have a good weekend.

RUSSIA

This morning I bought Puts in RSX, a Russian index.

Loading Up

While yesterday was pretty horrible, today was much better for my account. I added some more puts yesterday and today, IWM, more SPY, more IYR and more KRE. Needless to say my account is filled with puts.

The sooner we get out of this options expiration week, the happier I'll be and I think we should resume to the downside next week. I would like to see the market fall back to 730-750 next week, at which point I would lighten up on the puts and think about buying some calls.

Step Right Up....

Our government continues to flood our economy with dollars. In their latest program, the Treasury will now provide $5 billion to support auto suppliers.

I'm sure team Geithner is already working on this, but how about every American gets a minute in one of these:

PAIN!

Not much to say today except that it was a very bad day to be a bear. Mr. Bernanke stepped up again and with his words helped the market move even higher. My puts are suffering, and of all of my numerous put positions, only DF is currently profitable (and that's only good for a week of groceries). Unfortunately, as the market continues to move higher, the red in my account grows.

My only solace is that I have seen these type of violent moves before, I just hope this one isn't the "real thing" that some bullish analysts are calling for....The S&P did smack up against 800 and fell away, but that's about the only glimmer of hope I saw today for a bear.

I am trying to hold tight on all of my put positions because I know the market will not go up forever, but its tough watching the market go against me the past couple days. I will likely have to sweat it out during the rest of the week, as options expire Friday, and hopefully we'll revisit some downside next week.

CBRL Revenge

I'm not one to stand in front of an oncoming train, but CBRL has come to far to fast! Today it was upgraded by Argus, and its up another 5% this morning.

I am already holding June 17.5 puts at a large loss, but this morning I just couldn't resist and purchased CBRL April 25 puts for $1.00. I decided to buy April, because this stock has rocketed higher recently and I am looking for some weakness NOW!! It has been up 16 of the last 19 days, and during those 19 days has gone from 17 to 28 or 65%. That is WAY to much, WAY to quick for a company like cracker barrel.

This should be an interesting trade, as I am basically just jumping in front of the CBRL train....

Ugly Day

Not much to say except this was an UGLY day for me and my puts. Its clear I have been on the wrongs side of the trade the past couple days as I have been accumulating puts while the market continues to move higher.

I bought IWM puts at the end of the day and currently own lots of puts!!

AIG Distraction

I think the AIG bonus controversy plastered all over the news is simply a distraction from what is really going on in our economy. I understand the arguments for and against reclaiming the AIG bonuses, but I really don't care one way or another. We're only talking about 125 million in bonuses, and have lost site of the fact that we're spending trillions of dollars in an effort to stimulate the economy.

Today was a very bullish day, and my puts continue to lose value as we move higher. I don't read that much into today action though, as its options expiration week, and we have only reclaimed the gains that evaporated yesterday at the end of the day.

I didn't do much today except buy some more QQQQ puts. I have a very large position in QQQQ puts (probably my largest position so far), both April 27 and April 28. I need to see some weakness soon, to turn these losses into profits.

The Run is Done

The market rolled over nicely today, from up 160 to down 8. My puts did well. My XLF puts purchased this afternoon (outlined in my last post) are up 40%+ since I purchased them at about 1pm (this is why i LOVE options).

Coincidentally, my last post about buying XLF puts was published at 1:49PM, the exact peak, TO THE MINUTE, of the XLF today - FREAKY!!!!

Let's see what tomorrow has in store to figure out if this afternoon's action was just a little pullback before heading higher, or if there's more weakness to come and I can cash in on my 100% put positioning.

Trading XLF

A couple days back I posted my profitable trade of XLF calls. I made the trade because of the downward trendline on the XLF. I purchased calls at the lowest green circle at 6.11, and I got the bounce I anticipated (even though I sold the calls too early).

Now, I am playing the reverse trade. Last week I purchased Puts on the XLF, and today I added to the position (even though I said I wasn't going to make any more moves today). I did this because of the other trendline on the XLF. Notice the Blue circles this time (instead of the green). I anticipate the XLF should pull back SOON as it has reaches the top of its trendline and downward sloping channel. Also notice, the XLF hasn't pierced its 50 day moving average (in Red) since last September, and I have no reason to believe it will now.

Too Early

It's pretty apparent that I closed my bullish positions way too early. I was perfectly positioned for this bounce, but got nervous holding calls, and sold them days early leaving thousands of dollars on the table.

For example, my large position in XLF calls that I purchased for 1.17 and sold on average for 1.90 are now trading for 2.90. That's about 4K sitting on the "table" right there, not to mention my numerous other call positions....ANOTHER LESSON LEARNED!

Fortunately I am holding mostly May and June puts, so their value hasn't been that affected by this recent run up. I added to my position in EEM puts this morning, but will likely sit the rest of the day out, as I have other work to take care of.

PUTS GALORE

I am filled to the brim with puts, and added a large position in EEM (Emerging Markets ETF) puts this morning.

I think I am done accumulating puts for the rest of the day, and will just watch the market. My put positions have become very large as I have continued to add to them in anticipation of a pullback, or even better, a retest of the low on the S&P.

Mistakes and Losses

I have two positions that have gotten the best of me. AZO and CBRL. Since I purchased puts in each of these positions, their stocks have run away from me, and so have my losses.

Originally I wanted to sell AZO if it got above 150, its now at 160. And I believe I wanted to sell CBRL if it got above 22, its now at 26. So, I didn't follow my rules, and the value of my AZO and CBRL options reflect my lack of discipline.

At this point the options have lost enough value that it really doesn't even make sense for me to sell. I will continue to hold each as a reminder of what not to do....

OUCH!

I definitely left some good money on the table by selling off my calls yesterday. I wish I hadn't been scared out of my bullish positions, but hind site is 20/20.

I sold the last of my calls today, and am currently 100% in puts. Today I added to my QQQQ and SPY positions, and also added puts in Panera Bread (PNRA) and Green Mountain Coffee Roasters (GMCR).





This rally has me a little on edge considering I'm 100% in puts and financials seem to be going straight up.

Buying Puts

I am VERY short! I sold my IWM calls for a profit this morning, and am now only holding IBB calls. ( I will likely get rid of these before the end of the day).

I am loading up on PUTS! I added to my put position in QQQQ and SPY.

Looking at the banks specifically, my XLF puts are currently at a loss. I am slightly impressed with the strength of the banks thus far, but I am holding on to my puts. I am interested to see how the XLF reacts when it reaches 8.

Running on Empty

I'm now about 7:1 puts to calls. I added to my position in QQQQ puts and added to my position in DF puts today.

This market looks pretty sick again (even though there was a little strength around 3pm), and it will be interesting to see if it has anything left in the tank to move higher in the remainder of the week.

The only calls I have remaining are IBB (currently a loser) and IWM (currently a winner).

Shuffling!

I've made a few moves this morning. I don't really know if this rally can sustain itself, so I decided to take some more profits. I sold most of my bullish positions, and bought some additional puts to slant my holdings more BEARISH. Today I:

• Sold my full OIH call position at a small loss.

• Sold more SPY calls at a profit. I am still holding a small position.

• Sold my full MET call position at a profit.

• Sold the final 1/3 of my XLF call position at the open. I actually reversed this position and just purchased XLF puts.

• Added to my ADM put position.
  

My account is currently 2:1 puts over calls. I am back in the BEAR camp!!!

Anatomy of a Trade: Making 50% in the Banks via XLF

I want to go over my trade in XLF. It started off rocky, and I definitely had to stomach some pain, but it turned out to be one of my quickest and best trades of the year. I want to review why I chose this trade.

I have been short of banks for a very long time, so I was definitely taking a risk in going long XLF calls. I actually put a trade trigger in Ameritrade a few weeks back to buy a large position of calls if/when XLF was less than or equal to 6.11. Lets look at the chart:



I drew a trendline from the bottom of July lows through Nov. lows, and found support in the low 6's in March, which I though would provide a good opportunity for a bounce. I purchased the calls on Thursday, which was a couple of days early. The XLF continued down from my buy point of 6.11 to a low of 5.88. When the XLF made the move lower, my calls got crushed, and I felt the stress, but decided to stay long calls, as my trendline wasn't materially violated. I am very fortunate I did not sell, because the bounce yesterday and today made my calls move quickly to the upside, yielding a 50%+ gain in just 4 days. Of the 35 contracts I originally purchased, I sold 24 today, and am holding 11 contracts to see if XLF will move higher.

Worth the Wait

Today was one of my most profitable days as a trader. The market FINALLY got the news it needed to sustain a rally, and the value of my numerous call positions soared. This morning Citi came out with news that they were profitable, and then later in the day news that the uptick rule would likely be reinstated carried the market higher throughout the day.

On a side note, not to rant on an optimists day, and go against all of the analysts lining up to call the bottom on cnbc tomorrow, but WE HAVE NOT HIT BOTTOM. First of all, lets briefly analyze the fact that Citi is profitable. Well, of course they are profitable. If you borrowed money at 0% and lent it out at 7%, you would be profitable too. The issue isn't profits right now, its the muck and toxic waste they are carrying on thier balance sheet that their new found profits must carry. It has become apparent that the Fed's solution for the banks is for them to grow out of their problems. The plan goes like this: give the banks money so cheap, that their profits should be able to support their toxic assets until the market steadies and turns. However, I ask two very simple questions:

What happens when rates go up?
What happens if the economy does not improve, and we continue to be affected by deflation?

Ok, back to trading.....I made a lot of moves today. I took alot of profits on my call positions. Not to say that this rally doesn't have legs, but I think there will be better opportunities to buy into this rally if we sell off a bit.

Today I:

• Sold my IWM call position that was purchaseed yesterday for a profit

• Sold part of my SPY call position for a profit (these were March 69)

• Sold part of my SPY call position for a loss (these were March 72)

• Sold my IYR call position for a profit

• Sold 2/3 of my XLF call position for a profit. (I will focus on this trade in a later post. This was a great trade, and I want to analyze it further).

So you can see I lightened up my bullish stance quite a bit after today's rally. All of the calls above were March, so it was definitely time to sell with expiration approaching next week. I still have many calls with April, May and June expiration.

I did buy some puts today to even out my account.

• Purchased ADM puts

• Purchased QQQQ puts

• Purchased IYR puts (shorting commercial real estate is probably my favorite position. I am probably a little early purchasing these, but I had to jump back in after today's 13% rally).
  

I tried to get into RSX puts, but didn't get filled, but I plan on buying these tomorrow.

Enjoying the SQUEEZE!!!

The past couple days were difficult, but today's rally has made it worthwhile. It's important to remember that timing this market perfectly is not possible. From today's action, it seems like my decision to sell my puts and scale into calls over the last week was correct, but the markets action over the next couple days will be the tell.

I am positioned very well and taking advantage of today's rally. I am currently considering whether this rally has legs and if I should let my winners run, or if i should start taking some profits.....

I would like to say right here, even if this market does enjoy a formidable bounce, I DO NOT think we have hit bottom, and I plan on buying PUTS hand over fist to take advantage of the downside when this rally subsides....

Not easy being a Bull

The market can't sustain any rallies, but I am staying long - for now. The market popped up after opening down this morning, and then headed down all day long.

Watching the market go against me is difficult. But I do still feel we are EXTREMELY oversold, and need just a little bit of news to ignite a fierce short covering rally. I think the anticipation of the mark-to-market hearings later in the week may act as a catalyst.

I added IWM calls at the end of the day today.

Puts to Calls

This week was a week of metamorphosis. I sold almost all of my put positions at the beginning of the week, and bought and added call positions in the later half.

Today I added to my position in SPY calls.

Its obvious I closed my put positions and entered my calls at least a couple days early. Next week will determine if it was a mistake, or if I correctly anticipated an upward market move.

Owning calls the past couple days was rough and watching the market continue to trickle down was painful. However, the little rally at the end of the day, even though it was only some short covering, allowed me to close out the week on a positive note, and has renewed my optimism that we will get a more sustained rally next week. I have already learned the hard way that sentiment can change on a dime, and I anticipate something will change market sentiment for the better very soon.

I'm putting on my rally cap, and will be ready for next week.