Intra-Day Update: Go trading bots, go!!

UPDATE 11:00am EST: So, right at the open we cut through the 890/86 RL like a hot knife through butter. I think the important lesson learned here is that RL percentages lose a bit of their luster during holiday weeks. I’m not complaining mind you – 900 is in reach right now and I couldn’t be happier. Give me 20 more points, Santa, I’ve been so nice naughty all year, after all! What? I have to wait another year now? Craaaaaaaapppp!!!!

Otherwise I have not much to report – I would recommend keeping your exposure small. Yes, I know I sound like a broken record and we have rallied quite a bit since the 850s but let me remind you all that we’re not running a casino here. As traders we need to realize when market forces reach a level of randomness that exceeds our ability to predict our edge. We had a nice run to the upside – the Zero called it – let’s take profits if you’re long and call it a year. 2009 is going to be fun – that’s for sure. I personally am pumped – how about you guys?

UPDATE 11:30am EST: Ding Ding Ding Ding!!!! 900 reached and VIX is below 40 – smashing, baby, yeaaaah!!!!

UPDATE 12:13pm EST: I just checked the medium term stochastics on the averages and boy, are we overbought.

Maybe – just maybe – I should not be greedy and start loading up on long term options right here. My greedy little reptilian brain tells me to wait for 920 but looking at those stochastics I think a drop is imminent.

UPDATE 2:25pm EST: Sorry for being quiet in the past two hours but I had a long conversation with Berk on whether or not to grab our long term puts at 900 or not. We were looking at SPY June 65 puts and while we’re debating the issue, flipping through charts etc. those buggers suddenly change from 2.20 to 1.95 (has pushed back up a little since). And I’m asking Berk – what the heck just happened – did we rally or something? And sure enough – seeing the SPX at 908 changed the equation.

Thing is this – we have breached the 903/94 RL which posed massive resistance – maybe we have not breached it permanently but it shows that it’s vulnerable. The next RL is 923, which is light years away. In between is some strong resistance based on our TA around 911. Berk and I are watching that level like hawks as we are ready to pounce. I doubt that we hit 923 today but 910 might be in the cards assuming we get an EOD rally.

Either way, the odds are that this rally will complete either right here, at 911 or 923. We might see 957 next week, but does it really matter if we grab June puts at a VIX sitting below 40?

BTW, in other news – crude just rocketed 12%+ today.

UPDATE CLOSING BELL: Well, Berk and I crossed the rubicon and started to load up on those June SPY puts – we got them at 2.09 – damn market had to drop at 3:59 – LOL. Now, I think this is a pretty defensible play. If we hit 911 I’ll scale out again and re-grab them at 923 – same game if we breach that one – re-load on 957. BTW, in case you don’t know – it’s 4:05pm right now and the main index puts (QQQQ, SPY, IWM, DIA) trade until 4:15pm – good to know if you change your mind about loading up.

Anyway, Happy New Year to all of you leeches – it’ll be a great year for us, I’m sure – just make sure you stick around. I’m off to the strip joint to get my favorites booked for that NYE party 😉