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Tuesday, February 5, 2008

Airelon's Thoughts: February 2008

Challenge Accounts:

Sharebuilder Balance: $131.14

optionsXpress Balance: $583.49 ($100 Deposit inbound)
ING Orange Savings Balance: $2.06

The stock market seems to have rallied from our strong seasonal date of January 22nd, but these last few days the volume seems to be falling off, and we are approaching a 1.28 reversal day (A Larry Williams tool), as well as stalling below the 45 day EMA. Therefore, as I stated before, this may have been the first wave in our bear market. If this proves to be the case, then the market will begin to fall anytime within the next 3 days, and lower prices will ensue.

Therefore, I put in a bid to buy one March 2008 E-Mini S&P 500 1090 put at 1.75 Limit ($87.50 before commissions). This option has 44 days until expiration. This is not the February option on the March contract. This is the March 2008 option on the 1090 put that currently is showing as a bid / ask spread of 1.70 x 2.10. This order is now active, and I'll edit this post if I get a fill. My $100.00 deposit for the month of February is inbound. If we have a loss on this option, the total risk appears to be about $87.50 after commissions. The account equity would then be around $595.00. Which again, is still higher than our current balance. If we have a gain, I will look to take profits at around $178.00 - depending on market conditions and my established trading plan, that takes into account time, price and volatility; and would increase the account balance to around $775.00

Edit: Market slammed down. No fill. Cancelled the order. Nice to be right. Not so nice to not profit from it. But no worries, plenty of more opportunities.

* * *

Sharebuilder Balance: $131.14
optionsXpress Balance: $583.49 ($100 Monthly deposit inbound)
ING Orange Savings Balance: $2.06

Total Trades and Investments: 1
Largest Inter-trade Drawdown: $86.51
Consecutive Losing Trades (Drawdown): 1
Average Drawdown: $86.51
Accuracy Rate: N/A
Average Reward: $0.00
Risk Reward Ratio: N/A

This is not an investment or trading recommendation. The losses in trading can be very real, and depending on the investment vehicle, can exceed your initial investment. I am not a licensed trading or investment adviser, or financial planner. But I do have 12 years of experience in trading and investing in these markets. The Challenge accounts are run for the education of other traders

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