New ZB Trade

ZB Scalp

Yesterday I didn't have the courage to short ZB on a gap open and I missed the trade. So I set my trade alert for yesterday's high near 144'20 and was prepared to short today if we hit there. I was able to follow through this time and took it off later today for a very small scalp of $340. I wasn't sure if I wanted to short outright or via a put spread so I ended up doing both. I bought (2) 145/144 put spreads at the same time for 0'32 so felt comfortable taking some profit now and I've got until May 18 to possibly make or lose $1,000 more. My tentative plan is if we finish over 145 and I lose 100% of the debit spread then I'm ready to short outright at levels near all time highs. We were at the top of the channel on the daily chart at the time of execution and the blue lines are my entry and exit on today's trade.

WFM Earnings Play

http://screencast.com/t/Tin11d7l

AMZN: Good trade gone bad

http://screencast.com/t/ldR5JjzTqHIq

I got long (4) 390/385 AAPL put spreads on 3/14 and was under water immediately and then all of the next four weeks, was betting that it wouldn't break $600 on the upside and would sell off if it did. I was way wrong.  Early this past week on expiration I finally had a close under my short strike at 385, but because volatility increased on the $50 sell off I wasn't able to even scratch the trade for a push. I got lucky and at the open on expiration Friday I was able to finally scratch the trade for a few pennies profit. Right after I sold when we were at $584 I watched it go to $590 and was feeling good, then it ended up finishing in the green, but at $630 with a week to go I needed a miracle and got it, so happy to not lose on this trade. The blue lines are the strike prices.

I took this screen shot right when I got filled to close the trade and was feeling gracious, we hadn't been under my strike for more than an hour any time in the last few weeks. I think my drawn line is $585 or maybe my cost avg of $587. I was using it as a visual the previous few days looking to break even.

ZB Roll

I have posted in the past that in the roughly 18 months that I've been trading ZB I've never seen a gap not get filled. This goes for anything from the 5-minute chart to the effect of the roll. So after watching this phenomenon many times from the sidelines I finally decided to jump in. It felt uncomfortable as hell going long ZB at these levels but I did so last night and woke up this morning to find my target hit. Below is the screen shot of my email confirmations, net of $777. Looks like we're in a range until broken so I'll continue to short near 146 and go long near 140. We've still got three weeks to go but I'm short the 485/490 APPL call spread which will be a loss of about -$1300. Other than that I've just got about four small $500 max risk/reward spread trades I'm playing with.

Rolling Futures

Jason,
I am currently short ZB and got an email from TOS saying I need to close or roll the position next week. I want to roll - exactly how do you go about doing that? Obviously I could just buy to close my March contracts and sell the next cycle but that might result in bid/ask slippage and random fluctuations in the price between the closing and opening of the positions. Alternatively I could try to outguess the market and close March at a perceived low and then sell the next cycle higher, but this may or may not work. My question is if I just want to maintain my same position, is there a more efficient way to roll it out at my same prices and avoid the scenarios above?

AAPL

http://screencast.com/t/XTs0zi0Iz

POT Calendar

http://screencast.com/t/Jh5VNMq5

Hedging NQ

As I stated in a different post, I wanted to hedge part of my short NQ position and I thought this 3 year chart of ES-2NQ was interesting. Even though I think both are overextended, ES-2NQ is at the lower end of it's range. By buying ES versus the short NQ position I am hoping to hedge myself against further increases in NQ but gain if the relationship reverts back to the mean. I went long ES at an average of 1314.75 last night which was near the high, and this position is losing now but the overall position is improved as NQ has also come down a bit from it's highs last night. If bonds increase I plan to add a short there as well as an additional hedge.

IWM Trade Update

Trading ES/ZB

Swing trading the ES for the bigger moves has been working okay (at least better than the tiny scalps for a net loss after commissions I had last time I posted). I was able to ride 3 contracts from 1250-1279, sell two of them, and then buy them back a little under 1265, so right now sitting on 3 long ES again.

I want to add short ZB to the mix but not quite sure how to do it. I want to be short ZB, but if I am short ZB and long ES then I am afraid I might be getting too big and setting myself up for big swings in the P/L. If stocks and bonds offset each other then it would be best to be either long/long or short/short - but I have no interest in ever being long ZB at these levels. That being the case, it seems that I need to wait until I want to go short ES to short ZB, which probably won't be until ES gets to 1300 or so (if that happens) - but if that happens I presume ZB will be a good deal lower than it is now. Any thoughts?

January Trade Updates

Will be closing out a bunch of January positions in the near future - started today by closing the short JPM Jan 27 puts when price came down to a nickel. This trade worked well,started as the short Dec 29 puts which were rolled down to Jan 27 for a credit, so in the end it was good for about $2800.

GLD

GLD looks ugly and spike in volume today. Taking the contrarian trade:

Short GLD Feb12 130 Put for $0.75. Tried to do 10 contracts, only filled on 7.

ZB ES Charts

According to my charts I've got bonds at likely support and the ES at resistance. Vol is down 50% the last two weeks, that can't continue so the combination of risk/reward on the board right now leaves me in the neutral wait-and-see camp. Of course if these patterns break they should break hard, but I'm playing the odds and taking down my short ZB here at 143'08 in after hours for a loss of around -$335 or so. The Friday before Xmas is historically slow and we're closed Monday, so I'd just assume clock out and turn off my mental radio until Tuesday. I will however set my alert and if I get lucky and stocks fall and bonds bounce then I will gladly reenter my short ZB. See you next week.

Update: Ouch, couldn't have been more wrong. Stocks didn't break through resistance but bonds fell out of bed and cost myself a point. Lack of patience and wanting to take a four day weekend off mentally cost me. I find that when I check the charts every few minutes my time frame for patience gets smaller. If I can stick to checking 2-3 times a day its easier for me to relax. I would like to say lesson learned but this experience has been a cyclical one for me.