“Gotta Buy That Fear”

I’m buying into this puke. Based on a study I’ve run I’m guessing QQQ will test around ~91.5 and SPY to test 185 so I don’t think the low is in yet.  Statistically a swing low arrives around Thursday or Friday of this week.

Let’s dive into some charts.

Put/Call… everyone has moved to the back of the bus…that will be corrected
2014.10.14[08.06.00]_http___Chrome Legacy Window_$CPCE - SharpCharts Workbench - StockCharts.com - Google Chrome

2014.10.14[08.06.33]_http___Chrome Legacy Window_$NYMO - SharpCharts Workbench - StockCharts.com - Google Chrome

2014.10.14[08.06.43]_http___Chrome Legacy Window_$NYMO - SharpCharts Workbench - StockCharts.com - Google Chrome

2014.10.14[08.06.50]_http___Chrome Legacy Window_Fear & Greed Index - Investor Sentiment - CNNMoney - Google Chrome

2014.10.14[08.07.04]_http___Chrome Legacy Window_$SPXEW - SharpCharts Workbench - StockCharts.com - Google Chrome

2014.10.14[08.07.09]_http___Chrome Legacy Window_$SPXEW - SharpCharts Workbench - StockCharts.com - Google Chrome

Monthly chart is now broken….

2014.10.14[08.07.18]_http___Chrome Legacy Window_SPY - SharpCharts Workbench - StockCharts.com - Google Chrome

2014.10.14[08.07.40]_http___Chrome Legacy Window_QQQ - SharpCharts Workbench - StockCharts.com - Google Chrome

2014.10.14[08.07.47]_http___Chrome Legacy Window_SPY - SharpCharts Workbench - StockCharts.com - Google Chrome

VXX…  a short on rips

2014.10.14[08.07.56]_http___Chrome Legacy Window_VXX - SharpCharts Workbench - StockCharts.com - Google Chrome

Europe et al.

2014.10.14[08.08.04]_http___Chrome Legacy Window_$DAX - SharpCharts Workbench - StockCharts.com - Google Chrome

2014.10.14[08.09.49]_http___Chrome Legacy Window_EFA - SharpCharts Workbench - StockCharts.com - Google Chrome

as a side note IWM has been outperforming SPY for a couple days and I expect IWM to reverse the trend of underperforming SPY and start outperforming into the end of the year.  Good luck.

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A Few Individual Looks

TWTR not sure what to make of it but below 60 and consolidating appears bearish to me.  I’m ready to pounce on weakness.

TSLA incredible relentless move today.  I caught about $6 of it with decent size but never expected the rampage we saw.

Implemented 1x passive SP500 position today using covered calls. I was thinking of allowing up to a 5x multiplier but I’ll leave those types of swing for options if the market reaches an very oversold position and I feel it’s worth the risk.

This market certainly proves over and over and over how strong it is.  Swinging BMRN long.

Image

 

FB has a bullish slant to it at the all time highs. Earnings Wed, 1/29 AMC, Fed day.

2014.01.14[18.57.55]_TC2000 ®

Semi-Passive Returns w/ Low Volatility and Drawdown (SP500)

I’m going to begin implementing and tracking a discretionary but mostly passive investment strategy using covered calls and the SP500.

I will be move between 0,1, 2, 3x size in the SP500 (SPY or mini contract) and use covered calls at all times in equal proportion.

I will use various analyses and experience to increase size during pullbacks in bull markets.  At a time like right now on the first vertical development in the markets since 12-18-2013 I will stay in cash (zero, no covered calls).

Instead of using monthly options I will use weekly options in SPY 1/2% to 3% away from market price depending on volatility and where the market is.  When I decide the market is oversold I will sell option strikes  further out (3%) in order to capture more price movement.

This is not to be a trading strategy but a passive strategy with a decent amount of discretion in order to increase absolute return and in all likelihood reduce worst drawdown.