Trade Entered: XHB 14/15 May Vertical Call Spread

Yesterday, it was a fairly week day, and I saw an opportunity to get a May trade in. When XHB was trading around 13.65, I sold 2 XHB 14 calls, and Bought 2 XHB 15 Calls. I entered the spread order for .27 and it instantly filled for a credit of $42.20 to my account after commissions.

XHB has been strong lately, and has run into very heavy resistance at 13.75. Even after the boost today, it could only close at 13.71. Best case scenario for me is XHB stays under 14 for the next 16 days. I've got a little protection into 14, due to the credit, and if the market really rallys hard (the S&P couldn't close above resistance at 875 today) then I may close this trade for a small loss.

Day Trades: 2 losses in two days.

After a great run of day trades, I've hit a wall and can't seem to time the market right. I've entered on what look to be strong trends, and they were both reversed right after I entered. I'm looking into the reasons and am trying to put together a lower risk entry. In both the trades, I was right about the overall direction, but wrong on the timing, so that's something to work on.

I'm on the fence about day trading, since I have less than $25,000, I can only make 3 day trades in 5 days, so I can't really actively trade and monitor reversals with better trades (because when I get stopped out, I'm pretty much out of day trades until a day or two). Talk about keeping the poor man down.

Still looking for options for May Expiration, I can't figure out this market so I'm trying to play it safe (trying).

April Options Expiration and Update

Today both my SSO 20 Apr Put and my POT 60 Apr Put expired worthless. The POT play was a fairly conservative OTM put that was placed after POT had a large drop and bounced off its 50 Fibonacci Retracement. SSO was a fairly aggressive move, betting that the market would either stay flat or move up into the first round of Q1 Earnings reports.

I'm now looking for some new positions for May expiration. I've been putting off selling some puts until we get a decent pullback in the broad market, and raising volatility a little. If I wait too long, or can't come up with an idea soon, the time value will decay too much and no OTM puts will be worth it.

I'm also considering a bullish play on USO, say selling a LEAP that is a little OTM and buying a call with the profits. Oil can't stay this low forever, and if the amazingly positive earnings reports continue, demand will take off as we 'clear' the recession.

Day Trade: FAS In @ 7.79 Out @ 7.9

I made another day trade (and the last one until tomorrow due to NYSE rules) that again involved FAS today. I did not execute this trade well at all. I made money, but everything including hitting 'Buy' was a mistake. The setup wasn't good. FAS made higher highs and higher lows, on a rising TICK, like the other trades, but I noticed that the upward momentum stalled longer then it should have. I decided to jump in anyway and got lucky to make any profit.

The momentum stalled because 7.84 was FAS's close price yesterday, which means other financials were near it's close yesterday. I didn't do the due diligence marking price targets and key areas before trading today, if I had, I wouldn't have made the trade. Open's and Close's are choppy areas and hard to read.

I'm glad I made another gain, but the execution need to be much better (not trading just to trade).

Another Day Trade: FAS in @ 9.22, out at 9.34

Almost the same setup as the FAZ trade last week, only in reverse. Financials gapped lower this morning and began to rally shortly thereafter. TICK was up and FAS made higher highs and higher lows, I bought on a consolidation minute and was out 3 minutes later for a pre commission win of $120.

Day Trade: FAZ In @ 17.86 Out @ 18.00

Yesterday I saw an opportunity arise when we couldn't sustain higher marks in the TICK. I was ready to set an order for FAS (on a pullback) but when I kept looking at the lower highs on the TICK I decided to make a quick play on FAZ instead. Before commissions profit of $70.00, after commsissions profit of $55.00...

SPY Weekly Chart

I was looking at the SPY weekly chart today and thought it warranted some thoughts. The blue line is the 20 week MA, on the three attempts before this rally, it failed to cross the 20 MA, after coming very close to it and dropping. The recent rally actually closed above it two weeks ago, but has been unable to continue to rally above it. Today's close actually placed the weekly under the 20 MA, so it will be interesting to see if we continue to hover around this level, or break up or down.

I also noted Williams %R in the picture, recently, breaks into Overbought/Oversold have been choppy, except for recently. We're actually heading into Overbought.

I'm not sure what this market is going to do, earnings are due, but the pricing is low already. We've rallied into a consolidation area as far as I can tell, if we rally off of 800 on the S&P 500, my forward look is very bullish.

Ignore the volume for the most current two weeks on the chart, I'm not sure why it's wrong, but it is.

Trade Entered: Sold 1 Apr 19 SSO Put

Yesterday around 11:15 I sold to open 1 SSO Apr 19 Put for $.70, and received $67.05 after commissions. I couldn't pass up the chance to capitalize on the last two weeks until April Expiration. When SSO (and SPY) were unable to retreat lower than last weeks highs, I took it as a bullish signal. I've marked up an SSO chart to the left, noting my breakeven at just below the 30 MA, and in a consolidation area at the end of February. I was going to sell the Apr 20, but the 19 had a decent premium as well, and had a little more protection. Since the S&P rallied in the afternoon, this put is already at $.5, giving me a $20 profit in one day.

The TOS margin requirement is only $273.10, giving me a ROM (70/273.10) of 25.63%, and an annualized return of 99.61%. I'm currently about 14% OTM, with 14 days until expiration. I'll let this expire, or if chance happens, take the assignment.

EDIT: I sold the Apr 20, not the 19. I thought I sold the 19, so now I'll be triple checking to make sure I sell the right strike (because double checking has failed).

Monthly Update for March

It's been a good month, a lot of activity, and of course some wins.

Beginning Cash: $6,160.09
Current Cash: $6,123.56
Income for month: -$36.44
Although techincally I have less equity then at the start of the month, my positions are solid now, after taking a fairly large loss from ERX. I've recovered that loss and have only two positions open now, one of which is SSO, my protective index put. This month has been good for me and the stock market, and I'm on target for my 10% increase to $6,600 for the year.

PCLN
Sold 1 Apr 55 Put for $.70 on 3/12
Bought 1 Apr 55 Put for $.30 on 3/20
When PCLN crossed below it's 20 MA on close (by dropping 7%) I sold to open this stock. It bounced off its 50% fibonnaci retracement so I didn't hesitate selling an OTM put. I could've sold one that was closer in price, but this was the most comfortable with the best premium.

SSO
Bought 1 Jun 12 Put for $.55 3/16
This is my idea of portfolio protection. If the entire market collapses, this may actually make me money, but not a lot. It's Bid is at about $.30 now, which is a little from the market going up, and a little from the VIX going down. I may sell this for a small loss and look at some other means of securing the portfolio.

FSLR
Sold 1 Apr 70 Put for $.70 3/18
Bought 1 Apr 70 Put for $.05 3/28 (no commissions paid on $.05 and less from TOS)
When I sold this, FSLR had dropped like 8% the previous day and this was 40% OTM. FSLR recovered and surged with the rest of the market. I bought to close to free up the margin, and begin looking at other trades.

QLD
Bought 100 Stock at 27.56 3/24
Sold 100 Stock at at 27.95 3/25
On a fairly weak day, I bought QLD trying to take advantage of a potential upside move the next day. Well the move up was weak, and I actually got stopped out after I moved up my Stop Loss to 27.95 to make sure I locked in some profit. After the stop loss hit, the market continued lower for the day. This was my first pure equity trade. I had a stop the entire time, and am fairly pleased with the result.

POT
Sold 1 Apr 60 Put at $.55 3/25
POT has shown good strength lately and when it dipped I sold on weakness. This was 30% OTM and seemed safe. It still is, this and SSO are now my only open positions.

FAS
Bought 200 Stock at 5.8 4/1
Sold 200 Stock at 5.94 4/1
This is the first post on this trade. The market looked poised for a breakout and I bought FAS (the 3x Financial ETF) at 5.8 with a tight stop at 5.7. The market immediately pushed FAS to about 6, then hovered in the 5.8 to 5.95 range. I had a limit sell at about 6.1, but FAS never even got close. I finally sold when it became clear this was a range day for a small (very small) profit of $28 (only $18 after commissions).

Overall, I've won on all the closed positions so far. Although, with the market heading up on a strong rally, I won't take all the credit. Looking for May positions soon, I'll keep you posted.