Fully detailed real life credit spread on CMG

The is a real life credit spread inspired by the writings of Fujisan.
Read the details right on the multiple collage chart.

I think it will bring it home to you...how to make money on options, and capture some of that theta burn for yourself, without taking absurd risk.




Let me know if you like this. There will be some butterflys and condors coming up. In fact I did on on condors a while back...check it out, pretty funny, an Iron Condor on /ES.

http://oahutrading.blogspot.com/2009/06/iron-condor.html

Have we ever been more interlinked?

In your daddy's or grand daddy's depression or recession, it was pretty much confined to a country or countinent. Not this one. Its the world all rallying up together. Now will be the race for everyone to have the weakest currency, so that one can sell to others.

Odd race that. But it fit s the view of rampant deflation before severe inflation.

This time around, It is all countries in a funk not just a hand full. When its just a handful the weak countries get an advanatage of selling to all the rest because of their currency and things kind of stabilize out.

Not so this time.

Failed bank list was updated -- 5 More Banks Failed

I had to update my failed bank list link. The old one stopped working and the new one had 5 more banks on the list after the close Friday. Colonial bank was the 6th biggest to fail recently.

How much you want to bet, futures is down on the open on Sunday....I bet. Well I wish I bet, my short holdings are fairly small. Futures, none.

http://www.fdic.gov/bank/individual/failed/banklist.html

Thanks Leisa, Powerful statistics, It shows half the number of banks that there used to be, but 3 times the money in each.



And kudos to rhae, who contributed this link to the "Implode O' Meter".
Cut and paste, sorry, link insertion not working, its worth it.
http://ml-implode.com/

Currency Reserving the Right to Change My Mind

What with all I have been writing about how the Ol' Buck should strengthen, this just doesn't look bullish to me. Sure the IHS is there, but it's also a diamond pattern which is often a continuation, downward. Conflicted and tricky, like the overall market itself.

My overall level of blogging and blog partcipation has gone way down. In a way that is a good precursor to a market top -- exhaustion of the mind and the tape.

I am thinking that most of the big drops will occur at night, like the big ramp up, most of the profits were taken at night. This means futures. But don't jump in to futures when the real battle starts...the increased leverage will play on your emotions, you best do some practice before 3 down starts.

5 minutes to showtime

When future start trading again in 4 minutes, the ES may take a plunge since the USD has broken out of a triangle, getting stronger.

EUR USD Short FX

Took a short position in EUR/USD based on the bounce off this trendline, and fundamentals.

This should also help the market choose a direction, which USD gets stronger, stock prices drop.

Just an interesting chart below.

Spitzer and the Pimp

If anyone has any doubt that Spitzer was setup, well, consider this. Spitzer was one of the few people in the world who understood the system enough and had the power to reign "them" in.   Them being the corrupt finacial instituitons and those whom they bought.   So what to do about "Mr. Clean"....take him down hard and shut him up at the same time.  They set him up with a hot prostitute posing as a starving artist.

Why did he resign, threatened with jail time me thinks?

He wasn't just targeted with additional observation. He was set-up from the get-go. A sexy starving artist....I wonder how they met.  But who would go to this extent?  Could a couple of old boys get together and plot the plan, or would they have to much distrust for one another?   And if not a group, what one party would have so much at stake that they would go to this length to set someone up.

http://rawstory.com/08/news/2009/07/25/spitzer-federal-reserve-is-a-ponzi-scheme-an-inside-job/

Hal 9000 going after currency

Since the USD and the S&P500 seem to be so interwtiwned, I opined in weeeks past that perhap the Huge Banker Brokers would turn their Hal 9000 Computers on to gaming the Forex markets.

Seems like that happened today. Maybe I am just paranoid. I think once the market reaches a level of Euphoria and Disgust that the timing for a major correction will be right. That time is near.

Socioeconomic Observation

People, at least in Hawaii, have hit an extreme. Driving around today, I noticed extreme wackiness 5 times. A guy running down the middle of the road, exercising. But in the middle of the road for no apparent reason. 2 car broken down, 75 feet from each other, people working on them, and one withthe wheel gone and resting on drum. People driving erratic...fast slow fast. Weird, real weird.

Hurricane was supposed to arrive today, my birthday. It fizzled, but we will see tomorrow. Even a tropical storm out here can pack some punch.

We are getting an interesting mix of visitors. I hope people enjoy some of my rantings and chart ideas. FOMC is hardly talked about. Maybe Big Ben shot his bullets and is done.

Euro -- by Permission of Elliot Wave International

Elliot Wave International gave us permission to re-publish this view of the Euro / USD. I had this short, and held short today, but likely to switch the trade.




I wonder if the boyz at GS are going to turn their Hal 9000's on to gaming the FX market....since they have pillaged the equities market--if they don't back off, it could cause some serious opposition to their control of the government and financial markets.

ES 990 Seems to Be a Line in the Sand

Hanging Man on ES Daily

Bullish Percent as High as 2007 Before the Crash

This is just one indicator, and you can use this in conjunction with Tim Knight's OTIS indicator. Be sure to look that one up, it gives an important perspective into the human condition. Greed is fully in play right now. I wish I had the analytical tools, and resources, to see cash flows on the Huge Banker/Broker side and the retail side...I bet HBB is selling, and printing more stock, and retail is lapping it up and talking about it at the water fountain and BBQ.

Credit Spreads, XLF, SCHN a short, and ES play of the day

Entered a few credit spreads, just posting for now. Will analyze with expected max profit, expected max loss (based on executing a stoploss if trade starts moving against the position).

Notice how I said moving "against the position" as opposed to "against me". Thats because me and my ego have no relation to the little mouse clicks that I make that we call trading or investing. You have a trade idea, and if it was wrong, suck it up and take a manageable loss.




XLF seems to be a good measure of a blowoff top, just guessing that it would want to tag the 38% Fib, and that is many percentage points away, like 20% of the ETF current value. Just keep that in mind for how crazy these valuations could get, esp if J6P rushes in to avoid missing the rally, ouch.

SCHN -- well looks like a short.

Last chart, just ES during the night and day. I played the H&S for a nice move and covered at the expected bounce point.

VIX is up, UUP (dollar) is up (no pun intended).

Media is getting more insane on how "Big Gov has fixed the world". Seriously folks, is there one living organism in the universe that possibly thinks that the Gov having more of our money to spend, and trying to run things, can possibly be a good thing?

Money Issues

The game of money itself is going to take increasing importance.

$75b of Treasury auctions occur this week (3, 10 and 30 yr maturities), Treasury Secretary Geithner will undoubtedly be doing his best song and dance to make sure there are plenty of participants.

China was mixed, although they are being pounded by a big typhoon, Hongkong up quite a bit around 2.5%,and Japan was a solid over 1% gainer.

China could be settling into a double top. They are speculative, gambling spirited, and havent been worked over as badly as the American public.

In my book, any gain or loss under say .8% is "noise".

The US market does not follow the asian or European Bourses, never has. Might some day.

Boatload O' Charts

Looked at a bunch of charts this weekend.

Many, most in fact, are not near a Fib. That means in an increasing market, that I expect further upside.

Will Joe Six pack show up and chase this rally? They are afraid of missing the boat, again.....The heavy short stock like banks and homebuilders have had the big increases. Bears are being beat on.

These charts are all shorts. I am not a financial advisor, and I am not YOUR FINANCIAL ADVISOR. It might be best to just go surfing or hiking until the market tips its hand.

Credit Spread CMG example

Finally, I spent the 1.5 hours to get this simple stuff into my head and make these decisions. Being an option seller makes "sense". Having someone pay you for premium is a good thing, but you are providing leverage so you better have an exit plan.

Good Ole' Buck

It's time for the buck to have a little snap back rally, or a big one, since if that rally comes to fruition, there are gonig to be ALOT of people on the wrong side of that trade.

ES Shortterm Short and Credit Spreads

After reading Fujisan's great educational posts on thing that can really make you money...I am going to place a credit spread in tomorrow trade. Chart of CMG is below, I postulate strong resistance and will sell a call and buy a call above that resistance.

Details will be posted later.