Sub Zero Monday Rub Down

For a POMO day today’s tape was extremely weak – especially into the close:

We basically stayed below the zero mark all day. I expected an EOD spike due to today’s $7 Billion POMO auction but we didn’t get as much as a whimper. So, after much internal deliberation and consultation of my tea leafs I decided to say ‘fuck it’ and bought a healthy chunk of my March puts for about a 30% premium over last Friday’s closing prices. Yes, there’s a 50/50 chance I’ll take it up the ass for a week or two if we bust higher from here but the odds at this point are not looking so hot. Plus I also know how to hedge myself in the futures if I see the ‘old trading patterns’ we’ve come to enjoy in the past few weeks re-emerge.

Program Trading Update:

geronimo/ES: -2.5

This trade was actually the reason why I was waiting to bulk up on puts today – but it also was the reason that I took a big risk and loaded up into the close (which is something I rarely do – I always buy the rips). Looking at the underlying geronimo pattern it seemed to me the bulltards tried to bang the tape higher but were incapable of doing so. Not a good sign – but again, it could have been just a ruse – perhaps we rip higher from here – I’m giving this 50/50 as we have not breached any major support lines yet.

Alright, I’m actually worn out – will chime in later.

4:50pm EDT: Prechter bonus clip: