I was stopped out of my calls on the Q's since they broke below the $33 level. This represented an almost 10% loss on this trade.
The short side is still in control of this market and over sold indicators are not worth much these days.
You would think I would learn, but I'm trying the long side again. This time I'm going with November contracts since October closes next week and time is not on my side if I'm wrong. I'm also still sticking with my very conservative strategy of small money and less than 10% of the portfolio on each trade.
I purchased 5 contracts of the QQQQ Nov 35 Calls (QQQKI) at a cost basis of $1.75.
I'm keeping this trade on a short leash and will stop out if we break below $33 on the Q's.
I missed my chance to close my open position for a nice profit yesterday for a decent gain. The Q's gapped up on Tuesday morning and spent the rest of the day falling.
Last night the Feds announced the anticpated rate cut but the markets have a mind of their own and have spent most of the day in the dumps. This afternoon we started to see some green and I made some headway back up. So I took my chance to get out with less of a loss than I had this morning.
I setup my trading plan to be out by Wacky Wednesday (this is the last Wednesday before options expiration week, this is also the day you generally have the most volitility in options since many people try to get out of current month contracts by this day.)
As we head into the last hour of the trading day we are starting to see the strength in the afternoon start to wane so I decided to take my money while I could.
For recap I was in 5 contracts of the QQQQ Oct 36 Calls (QQQJJ) with a cost basis of $0.95. I sold at $0.60 which represents a greater than 36% loss on this trade.
We had the bailout last week on Friday and the market sank like a rock. This morning we have the Q's trading down over 5% this morning and we are in oversold conditions.
My indicators are telling me that we are at a near term bottom and we should see a small bear market rally from here in the Q's. I'm not saying this is a bottom to the current downtrend. This is just going to be a short term bottom back up to the $37 level in the Q's before we start heading down again.
So I purchased 5 contracts of the QQQQ Oct 36 Calls (QQQJJ) with a cost basis of $0.95.
I don't want to be greedy so I sold my quick 30 minute trade with a greater than 55% gain. There maybe some more downside, but I'm taking what I can and moving on. There is now talks and rumors of a rate cut on Monday, so I'm out.
I was in QQQQ Oct 36 Puts (QQQVJ) with a cost basis of $0.80 and sold at $1.25.
The congress is in the middle of voting,and my indicators just flashed an over bought condition so I just bought 10 contracts of the QQQQ Oct 36 Puts (QQQVJ) at a cost of $0.80.
I'm back from my meeting and the congress still hasn't voted on the bailout plan. I'm very tempted to buy some puts on the Q before the vote.
If it doesn't pass we are heading down big, if it does pass I think we will have a slight bump up but we will still close on the lows of the day.
I have to head to a meeting today that will not allow me to follow the markets during the bailout bill vote at 12:30 today. So I'm taking my profits here on the open call trade I have.
So for recap I had 5 contracts of the QQQQ Oct 38 with a cost basis of $1.10 and I sold at $1.45. This gave me a greater than 30% profit on this over night trade.
The Q's have had a big move down today to continue the downtrend I saw forming a couple of days ago. We have reached the lower end of my trading channel and we are in extreme oversold conditions.
So I'm buying some calls here at the close.
I purchased 5 contracts of the QQQQ Oct 38 (QQQJL) with a cost basis of $1.10.
The charts are telling me we will see a bounce up tomorrow, but I don't expect anything higher than the $38 range. I'm basically treating this as an overnight trade and plan to be out before the close on Friday.
Well alot has happened in the last month.
In August I had an open position of 40 contracts of the QQQQ Sep 40
calls (QQQIW) with a cost basis of $0.80. I started this trade and it
basically fell out of bed. I ended up closing the trade with a greater
than 87% loss when I sold the contracts for $0.10 at the beginning of
September.
This was well before the "Black Monday" we had this week. Before this
trade I was up over 40% on the year and after the trade I was up 12%
for the year. That type of hit was hard to the portfolio and the main
reason was I took my eye of the ball on an open trade. You can't wish
and hope a trade into profitability and you have to take your losses
when they hit your stops.
Then some family issues came up and I had to take all of the funds from
this trading portfolio out to pay for some unexpected expenses. So it
looked like my experiment of trading $10,000 this year was over. In addition
to this my day job we went through a major reorganization that took a
fair amount of my time.
The good news is that all of my money was out of the market during this
massive downturn in the market and I didn't loose anything. The bad
news is all my money was out of the market and I was unable to profit
from this massive downturn.
Last week I was able to refund this account with some additional funds
(roughly about $5000.) So I'm starting to trade again, but with less
money than before. Today I made a quick day trade to get my feet wet
and purposely invested less than 10% of my portfolio so I can get the
feel of the market back.
I expect that we may see a retest of the lows from Monday this week,
but with various bailout bills and attempts by the government I have to
stay nimble with the trades.
The market had a nice downturn this morning and I played this move for a quick 16% profit.
I sold my 5 contracts of the QQQQ 38 Puts at $1.40.
I will recap where I have been the last month in a later post, but for now I'm just posting that I purchased 5 contracts of the QQQQ Oct 38 Puts (QQQVL) with a cost basis of $1.20 at the open.
We are currently over bought and my indicators are saying we are probably heading back to retest the lows on the Q's in the low $37 level.
