Freaky Friday Rub Down

Calling Dr. Mole! Dr. Mole please report to Emergency immediately!

Great day for the Zero again. The PZI licked it in the morning as it gave us a long ETA and stuck with it through all the craziness that ensued. The Lite was extremely interesting as we saw a huge early morning spike which then was followed by a complete flatline all day. Subs were asking me the ‘is this thing on’ question repeatedly. I’m calling it the ‘mother of all divergences’ – just look at it. Obviously I legged into delicous Fujisan approved Cubes spreads all the way up – they are looking good now.

What’s really curious is that the ES futures started to move up after 4:00pm EDT while the NQ was dropping. You know what the old mantra: a disconnected market is a sick market (or something along those lines). Let’s see if all the fun pays off on Monday.

Alright, I’m off to bigger and better things (i.e. taking a nap and petting my sick cat – yeah, I’m such a player). I’ll be in touch on Sunday – as usual. Until then – relax and enjoy a nice spring weekend with your loved ones. Because on Monday – WE DINE IN HELL!!! Yes, it’ll be that time of the month again – OPEX week. Oh joy….

UPDATE 7:50pm EDT: I just watched a very cool video over at INO on ‘The Art of Morphing‘ by Ron Ianieri, which really blew my mind. This is great material for option addicts like us – if you think you understand options in and out – well think again as this guy can teach you another thing or two. Ron not only explains the concept of synthetics very well, but he then takes that to a whole new level and explains how you can ‘morph’ from one positions into the other without throwing commission into the greedy paws of your brokerage firm (sorry TOS).

Now, this is not an attempt to turn a losing position into winning one – which never works and should never be attempted. This is simply about elegantly leveraging options to their fullest potential so that you don’t get stuck on the losing side. The added advantage, psychologically I believe, is that you also are able to ‘switch sides’ a lot more painlessly, thus you might not get married to your own analysis. Anyway, go and watch the clip and you’ll know what I mean. It’s free but a pesky first time signup is required if you’ve never been at INO (only email address + name, so I think it’s tolerable). Once you are in you’ll find the clip on the bottom right under ‘The Art of Morphing’ – fascinating stuff but it’s not a short clip, so bring a cup of your favorite brew.

Enjoy!

Mole