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Updates

COULD HAVE BEEN WORSE

HAVING TROUBLE PRINTING?
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Wasn't a huge surprise that the jobs number sucked. Jobs are disappearing as fast as homes are being foreclosed. That's not a surprise either. What was a surprise is that the market didn't sell off harder.

Actually, it was kind of weird that the market moved into positive territory in the morning before giving way to selling pressure, and then mounting a bit of a comeback in the late afternoon. When all was said and done, the S&P was down less than 11 points on the day. , especially since those who are supposed to know were looking for the capitulation day.

Tough Love?
It's hard for me to work up a lot of sympathy for those who took out those no (or low) down payment mortgages or interest only adjustable rate loans. They are behind in their payments and find themselves upside down in their loans. They owe more than their house is worth. If they can scrape together another mortgage payment, paying feels like pissing in the wind. Should they pay or just walk away? Tough decisions.

The fact is that many people don't know how to live within their means. If they have an extra $1,000 of credit available, they'll find a way to spend it. The problem is that they have to pay it back at some point - often at an 18-22% interest rate. Then, when a job is lost, they wish to hell they had that $1,000 back. All of a sudden, those two $400-$500 monthly car leases seem overwhelming. Keeping up with the Joneses doesn't seem like such a good idea, even though the Joneses may be having the same problems.

We're in the midst of an economy changing bursting housing bubble. A car credit bubble is likely next. The masses have to re-prioritize their spending. Instead of $10/pound steaks, the $3/pound chopped sirloins are starting to look better and better. Instead of spending $3.95 for a can-opener, they can be had for $1 at a Dollar Store.

Too many are still suffering from life on that river in Egypt - DE-NILE. They think, oh, that can't happen to me. Well, wake up. Chapter 7 doesn't come after Chapter 6 - not the Chapter 7 you'll be facing if you don't get your act together, and fast!

Where's The Defense?
Many are still living on that river in Egypt - DE-NILE (denial). They think, "Oh, that can't happen to me." When it does, there's chaos. And, we know that you can't make intelligent decisions in the midst of chaos - too many emotions are involved. Where are those cash reserves to get you through the hard times? What is your plan?

All offense and no defense does NOT win championships. In life and in your trading life as well, you have to have a plan for those "what if" scenarios. That's what we go over in depth at my two-day seminars.

It's survival of the fittest - psychologically, financially and emotionally. Will you survive?

April Positions
We're still on the lookout for more April positions. I'm going to be very selective. Will the S&P test the 1270 lows? Probably. But, before, during or after the tests of the low, it's not unusual for some rather dramatic upward spikes. Right now the VIX is at 27.49. When the market put in recent bottoms, the intraday VIX hit about 38. If that pattern continues, we may still be a long way from a bottom. However, in the past, bottoms have been made without the huge capitulations. Time will tell.

Where will we look? Based on Friday's closing prices the SPX April 1110/1100 bull put spread (or that area) looks like a possibility. The 510/500 levels on the OEX bears watching. And, the RUT 550/540 area is worth a look. You have to start somewhere.

A Reminder
If you don't like the way the market looks, there's nothing wrong with stepping aside. In the very volatile February cycle we had only one position - and it worked out just fine. If there had been a problem, our exposure would have been limited and we would have had only one adjustment to make. Hopefully, you're not relying on your trading profits to pay the rent and buy your Banquet TV dinners. Life goes on, and so do the markets. Feel free to chill out and wait for an environment in which you are more comfortable.

Also, if you need to free up some maintenance dollars, you might be able to close the March 530/520 bull put spread for a nickel.
New Seminar Date
I will soon be announcing a new date for my next two-day advanced seminar. Stay tuned.

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Next Weekend In NEWARK - March 15th & 16th
There is still time. I will be presenting a two-day advanced CPTI seminar next weekend in New Jersey (Newark) on Saturday and Sunday, March 15th & 16th. There are still spots remaining. Contact me (Contact Support) to get your spot reserved.

Join us as we discuss non-directional strategies, trade selection, entry points, exit alternatives, premium negotiation, maintenance alternatives, taxes, and much more - all subjects necessary to enlighten and to maximize your trading business. Don't procrastinate! The seminars often sell out.

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S&P 500 Support & Resistance - Closed at 1293.37
Resistance:
1305 to 1302 from an August 2006 peak and matches a range of support from March and April 2006.
1317 is an ancient trendline
1317 is the early February low
1325 from May 2006 peak prior to the summer 2006 correction
The 10 day EMA at 1330
1368 is the high in this recent lateral consolidation
1370 is the August 2007 intraday low
The 50 day EMA at 1372
1374 is the March 2007 closing low
1396 is the January 2008 peak
1406 is the August and November 2007 closing low
1417 is a longer term trendline from the August 2003/September 2004 lows
1430 from the August interim lows
1440 - 1437 from January and March peaks
1459 is the February peak
The 200 day SMA at 1466
1475 is the June/July 2006 up trendline
1475 from peaks in December 1999 and January 2000

Support:
1294 from the January 2006 peak
1288 from June 2006
1280 from June and August 2006
1270 is the January intraday low
1255 from June 2006 lows

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CPTI MARCH POSITIONS
CPTI March Position #1 - RUT Bull Put Spread - 660.11

On 1/22, with the RUT at about 670, we sold 20 RUT March 540 puts and bought 20 RUT March 530 puts for a credit of $.60 ($1,200). Maintenance is $20,000. We will look to put on a bear call spread in the future - IF it makes sense.

CPTI March Position #2 - SPX Iron Condor - 1293.37

On 1/28, with the SPX at about 1330, we sold 10 SPX March 1150 puts and bought 10 SPX March 1140 puts for a credit of $.50 ($600). Then, we sold 10 SPX March 1490 calls and bought 10 March 1500 calls for a credit of $.55 ($550). Total net credit is $1.15 ($1,150). Maximum profit range is 1150 to 1490 (340 points). This is the first part of what we anticipate will be a 20 contract position.

CPTI March Position #3 - SPX Bull Put Spread - 1293.37

On 2/6, with the SPX at about 1342, we sold 20 SPX March 1140 puts and bought 20 SPX March 1130 puts for a credit of $.60 ($1.200). Maintenance is $20,000. We will look to put on a bear call spread in the future - IF it makes sense.


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CPTI APRIL POSITION
CPTI April Position #1 - RUT Bull Put Spread - 660.11

On 3/5, with the RUT at about 674.50, we sold 20 RUT April 560 puts and bought 20 RUT April 550 puts for a credit of $.55 ($1,100). Maintenance is $20,000. We will look to put on a bear call spread in the future - IF it makes sense.

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ONGOING STRATEGY - THE ZERO-PLUS Strategy
In the past, I outlined a strategy based on an initial investment of $100,000. At that time, $74,000 was spent on zero coupon bonds maturing in about seven years at a value of $100,000. The principal $100,000 investment is guaranteed. We're trading the remaining $26,000 to generate a "risk free" return on the original investment. We are not compounding our profits by dramatically increasing the number of contracts we trade. With the July profits, our new cash total is $58,660 ($56,560 $2,100).

ZERO PLUS POSITION - SPX - 1293.37

On 2/6, with the SPX at 1342, we sold 30 SPX March 1140 puts and bought 30 SPX March 1130 puts for a credit of $.60 ($1,800). Maintenance is $30,000. We'll look for a bear call spread to complete the Iron Condor - IF it makes sense.

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SEMINAR DATE -

NEWARK, NJ - MARCH 15 & 16

Take your trading from a "hobby" to a profitable "business." You need the information you'll learn at my CPTI seminar. You'll learn more than the "how to's" of trading our strategies. You'll learn a new lifestyle - one that can last a lifetime.

DO YOU HAVE PROFIT-ABILITY?
It's always a challenge (and a pleasure) for me to have a roomful of bright people who have a passion for, and are excited about, learning. We go over everything imaginable - from the non-directional strategies to the psychology of trading. We cover a lot more than the mechanics. Inquiring minds want to know the whens and the whys -- not just the hows. That way, they're prepared for the best (and the worst) - and know the best way to handle either situation. Contact me and I'll personally call you with all the details.

If you're a SERIOUS options trader, you want to learn the nuances of our advanced non-directional trading strategies and hone your trading skills. Contact me ASAP at mparnos@optioninvestor.com. Send me your phone number. I will personally call you with all the pertinent information. The price is a bargain - ONLY $995.00 -- less than the profit from one Iron Condor trade. Take advantage of the "early bird special" and save $100. You'll have a two-day experience that you'll remember, and profit from, for a lifetime. I limit my CPTI seminars to ONLY 25 ATTENDEES. And, as a bonus, if you attend one of my CPTI seminars, you are entitled to RETAKE the seminar a SECOND TIME at NO CHARGE!

58 OUT OF 63 PROFITABLE MONTHS!!
WANT TO ACHIEVE SUCCESS WITHOUT STRESS?
OF COURSE YOU DO!!
USE OUR CPTI WEALTH-BUILDING TECHNIQUES!

You should definitely attend one of my seminars. With what you learn, you'll see a substantial increase in your trading results. Contact me at: mparnos@optioninvestor.com. If you've already signed up, I'll see you there. If you haven't signed up, what are you waiting for?

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Couch Potato Trader Disclaimer
All results reported in this section are hypothetical. While the numbers represented here may have been achieved or beaten by our readers, we make no representation that any individual investor achieved these exact results. The tracking for the plays listed in this section uses closing prices for the day the newsletter is published and it is not meant to imply that any reader actually received those prices (though many often do) or participated in these recommendations (even though many do). The portfolio represented here is hypothetical and for investment education purposes only. It is only an illustration of what type of gains a knowledgeable trader might receive utilizing these strategies. If you don't get close to these results, guess what. It isn't the fault of the strategies.

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