Wednesday, August 18, 2010

Yes I'm still here!

Ok I'm back from my blogging hiatus. I had to complete a financial analysis assignment due yesterday. I know it sounds like fun but in reality it was heavy going. At least I learnt a few things such as how to analyse financial statements but don't worry I will not be applying what I learnt on this blog (not yet anyways).

Right, back to the markets and in both Monday's and Tuesday's session we had positive 60,000 cumulative ticks. A/D lines and breadth were very positive on Tuesday but somewhat mixed on Monday. Overall Monday's positive ticks should have been a clue that selling power was drying up and we would bounce which we have done so. Volume has been reasonable but still coming in somewhat below average. At this point, the market is likely to consolidate. I think it's still hard to say which way it's going to break but until it does break this narrow range of 1120 to 1070 on the ES, positions should be kept fairly light. I'm just not in love with the idea of intiating income trades at this point because the market could move.

Trade wise, I've taken a pounding over the last week. I've had to adjust my OEX Put BWB twice, I've had to buy back my short bond call spreads as well as adjusting (have they moved or what??!!) and I completely exited my NDX position (last Thursday of course). Overall, I think I really need to cut down the amount of time I'm actually in this market and just be more patient and discipline and wait for the opportunities like last Wednesday and Thursday. The payoff structure for income trades just isn't worth it at the moment (ie you make 1 but lose 8 if the market moves against you). I'd rather play something more symettrical like the e-mini futures if you want to trade day in day out or actually spend a little and buy some premium (long gamma, short theta) to take advantage of the sharp movement in either direction.

Well more on this later and I will post snapshots of my trades later tonight (Perth time).

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