Thanks for the updates. I have been out for awhile, twisted my back reaching for a beer!!! It sucks getting old!!! Been building my positions on UNG and DBA substantially. I can’t say that UNG has me overly confident although I continue to buy more contracts. The price is just too cheap!! DBA just keeps picking up a point here and a point there. I am in for July on both although I am going to buy more for October. My shorts are not working well, numerous contracts on FXY and HOT are both out of the money although I have time (Sept) for them to make up ground. I bought 500 shares of CVI and its moved nicely in two days—thanks! I am long on PCX (patriot coal), July 7.50 calls and short on GS (Goldman Sachs) July 140 puts. Any thoughts? These Treasury auctions are interesting. I appreciate your insight on them because the bond market can leave me a little confused. When do you think the pending inflation will begin? In 2009 or next year?
Entries under the ‘Options Investing’ Category
A Letter From One Of Our Traders
Cracks in the Foundation
It’s a little funny watching market commentators and stock analysts on CNBC and the likes. It’s like making lemonade out of lemons as these silver lining experts look for reasons that the market will continue this breathtaking run. We’re already starting to see reality come back into play.
The market indexes are weakening and looks to be rolling over on it’s side. The dollar is starting the long and irreversible slide I’ve talked about for months. The bond market (those guys are the smartest money on wall street) have already begun to notice problems with the dollar as the reckless bailouts have moved the nation toward hyperinflation. We’re also seeing the rates on Treasuries increasing daily. There is not a single event that will stop a stock market advance in it’s tracks like a spike in interest rates.
Option Trading YTD Score Card
The year-to-date portfolio tracking of “Hyland Financial Option Traders” has been pretty impressive if I don’t say so myself. Here’s the list, you decide.
UUP (U.S. Dollar Index) March 26 puts closed 1/8/09 …… +38%
QQQQ (Nasdaq 100) Jan 30 puts closed 1/12/09 …… +62%
XLF (Pro Shares Financial ETF) Jan 13 puts closed 1/12/09 …… +140%
SA (Seabridge Gold) May 15 calls bought 11/26/08, closed 3/10/09 …… +124%
BBY (Best Buy) March 25 puts, bought 12/23/08, closed 3/6/09 …… -45%
FXY (Japanese Yen) March 14 puts, bought 12/18/08, closed 3/17/09 …… +287%
VE (Veolia Environment) July 25 calls, bought 2/8/09, closed 5/11/09 …… +62%
QQQQ (Nasdaq 100) May 29 calls, bought 3/12/09, closed 5/7/09 …… +293%
Options Update
“The market hurts as many people as it can as often as it can.” -unknown
It’s been a while, hope all is well. Let’s get right to it.
1) DBA (.DBAG) July 24 calls are up 100% since recommended 3/12/09 @ $23.23. Today we closed @ $27.63.
As I’ve mentioned many times, we put on the trade and the fundamentals catch up with us. The breakout point was @ $27 and we ripped right through the resistance. On a small interday pullback on 5/20 I added to the position with the Oct. 28 calls for 1.85. Agricultural commodities are in a long term bull run, when you get an opportunity to extend your maturities on pullbacks don’t hesitate. DBA is going to be a great trade. Every nation on the planet is experiencing drought conditions, financing for equipment and fertilizer and fresh water irrigation (not to mention a population explosion). The collapse of the USD is only adding to the situation as all commodities (except gold) are traded in dollars. We’ll get to the dollar later.
Short S&P Now – Take The Summer Off
I believe the 40% rally is over. No one believes it (yet), but that is what makes it such a compelling trade. With all the imminent dark clouds on the horizon there is absolutely no reason to think the economy is in recovery. In fact, if you believe that, I’ve got a “bridge” you might want to buy.
Forget the 40 trillion dollar derivatives market, forget the “Fed’s” currency debasement policy (sorry, they call it quantitative easing), contracting GDP, rising foreclosures, rising unemployment and the $400 billion writedowns in the commercial real estate market (which no seems to want to address). In fact, just the other day I heard an analyst recommend buying REITs!!!
