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Sell Into Strength

Sell Into Strength

by The MoleJanuary 6, 2009

UPDATE 10:00am EST: I think the title is pretty clear. We’ve got ourselves a nice open and your mission, should you choose to accept it, is to sell into strength – in terms of options that of course means buying long term options. You know the drill – use this rally.

UPDATE 10:20am EST: So here I am at 944 shopping for puts –  while Berk and I were arguing about which month to pick we drop to 937 – grrr. Anyway, I was filled with SPY June 70 Puts and I intend to grab March 85s if we somehow manage to reach 954 (the new 957). In case you want to know – I will hold the Junes if we rally up to 954 or higher. This is a long term investment – you buy and forget – unless of course it reaches a treshold which is price/time related. If this statement confuses you please go back and read my Sunday post and look at the chart.

UPDATE 11:00am EST: Berk and I just grabbed Feb CCJ Puts:

UPDATE 12:21pm EST: I just had an Internet outage which has been resolved. My apologies for any Zero watchers for the inconvenience. I actually have a wireless backup but for some reason it wasn’t able to make it work from the system I serving the feed from. I can however serve it from a different system if an outage persists, so no worries.

UPDATE 1:53pm EST: Site was down for like 10 minutes – not my day today I guess. My apologies but I’m on a shared server – don’t want to plunk down the monthly fee for a co-hosted box.

UPDATE 2:35pm EST: I’m happy to see the SPX back at 937 – since most of you leeches froze like a deer in headlights – here is your 2nd chance. Maybe we’ll even see 944 or 954 – I’ll just keep adding puts going forward.

UPDATE 3:00pm EST: Mr. VIX now at 37.8 – are you kidding me? Loving it and I just added some March puts to my Junes.

UPDATE 3:28pm EST: So, I could call you guys a bunch of girls for not grabbing puts the first time (or even 2nd time?? ;-)) around, but I know how it feels to freeze in the headlights and not make a move:

While I debated with myself on whether or not TLT would bust just a little bit higher it peeled its tires and left me with dust in my face. Not sure what I was thinking – maybe it was a mixture of greed and fear. It all gets us – the ones who survive in this business are the ones who learn their lesson and make a move the next time an opportunity represents itself. We might see 117 or so in the coming days – if we’re lucky – especially if equities start descending as we are anticipating. That’s when I plan to scale into some nice short positions.

The tape in the past two days has been extremely flat, which tells me that a big move is developing. The odds increasingly point to the downside, although I do hope we see 954 before it happens. I gladly take a bit of a loss and load up on even more as the triangle would look best at that level.

About The Author
The Mole
Mole created Evil Speculator amidst the chaos of the financial crisis in early August of 2008. His vision for Evil Speculator is a refuge of reason, hands-on trading knowledge, and inspiration for traders of all ages and stripes. You can follow him and his nefarious schemes at the usual social media waterholes.
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