Monday, 18 May 2009

Hit and Miss

For better or worse have taken a combo -selling 4700calls to buy 4000 puts, on the basis that this was a big up day and this level may be the high- traded at F=4444.
This morning, and this is my lack of faith in myself, I failed to enter the opposite trade-more or less- the 3850 put/4650call which was a credit of 6 to enter and 35-40 to close. I 'missed' this, as I was not prepared, according to my new pilot's check list.
Rule 1. Market expectations- be prepared.
I needed to have in place a plan if market went up down or sideways- and NO trade is also a position. F opened down and 4300 is my idea of support and it duly obliged- I certainly didn't see such a big rise- and would have closed out very happily for a credit of 12, and joined my chums at the pub!
I do not intend to be married to these trades- they are short term- 2-5 days at most, but my first thought about this week is that Vix has dropped to what for me looks like support, and the relentless flow of total BS financial news has to take its toll soon, and the market is not pricing in anything as yet. Another bank boss gets the heave-ho and everyone starts foaming at the mouth, as if it makes a difference- and as the market gurus are so fond of pointing out, they are looking ahead 6 months( yeh right and I'm batting at 3 for England in the first ashes test). I wonder if anyone can be bothered to backtest the market moves based on this claim? I seem to recall the Chronic Investor making pronouncements which were 100% wrong in the ensuing months.
Let's have that Vix back where it belongs, where the eagles fly etc.

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