S&P 500 SPDR ($SPY) weekly puts trade completed.
For those new to options, a call is a bet that a certain stock will go up and a put is a bet that it will go down. So by buying a put option in this post I was looking for a move lower.
At the time of this writing I have taken a 56% profit after commission on some weekly SPY 127 puts that expire today. Entered in at 0.16/contract and exited at 0.28.
As you will see in the chart included, I have placed my entry and exits with yellow stars and my ideal target exit with a green star. The yellow dots in between some of the candles are times where I created an order to exit the trade and cancelled. I wanted to exit twice when I had generated 20% profit and once when I had over 25% loss.
(Click Chart to Enlarge)
My Entry (first yellow star) was just where I wanted it (below the daily pivot). I am still working on my exit execution and controlling of emotions. I usually write out how I feel about the market action or trade via either sharing with another trader via text, chat, twitter etc. When those aren’t my preferred choice I write it down on a notebook. It’s not foolproof but it helps me personally stick to my strategy and most of the time a trade.
I will provide more info about the chart for the curious ones… The purple dots represent the daily pivot point. The red dots represent resistance levels and the grey dots are support levels. The two red lines represent yesterday’s highs and lows so I would have an idea when that tight trend that developed yesterday would be broken. Also the chart is 5 minute to show the entries better but I prefer to use 15 minutes when day trading.
This is mainly on here for me to reflect on as an online public journal, they say when you publicly share something you are more committed to keeping it (in this case sticking to my strategy that works for me and just working on getting better at exits and emotions).
Update: As of 11:35AM Eastern it looks like my ideal exit has been hit and the put options were worth 0.49 a contract. Had I executed that the profits would have been 187% after commission but that’s in an ideal world. Another influencer in my premature exit (pun intended) was that Obama was set to speak around 11:35AM and I wanted to avoid any spikes that would ruin my trade.
As of 12:50PM SPY hit lower than the second support line in my chart. Emotions got the best of me and I did exit too early indeed (would have been 400% since my entry). Its hard to think of it that way. If i had exited at -25% loss (as mentioned earlier) I would be devastated for the day.
As the new InvestingFreak tag says: See it, Call it, Trade it, Bank it.
I Saw the potential for a down day, Called it by texting a fellow trader (will work on tweeting realtime to share ideas), Traded it, and well... Banked it.
Make some moneyyy!! 
-K
Investimonials Inspiration for InvestingFreak
I would like to take a few short minutes to Thank all the Freak-y readers for their support.
You can check out Investingfreaks' Investimonial page and leave a review for others to see so we can get more visibility.
There are currently two 5 star reviews and one email from a reader that found us through investimonials as well.
Here are what is being said about this blog.
Danny: "funny, sharp, witty blog and really timely notifications"
the creator of this blog warned his subscribers to be extra careful a couple days before the flash crash! check it out. go to the website and go back to may 6th and before! its a really funny blog too.
theres a nice little community of sharp traders at investingfreak. they share their trades and other speculations. really cool site, i love it
Tommy: "I bookmarked this site!"
This blog is great. The few traders that write for this thing are on point and comedic. That really helps keep the reading light and interesting. I wish they updated the blog more, but with all the market action that has been going on since the start of September. I can't blame them for that. When you find guys that are willing to share great information, take advantage of it.
Fetcher (via email)
You have to know that I truly enjoy using your blog. it's very useful and really effective tool for everyone! Actually I found it via investimonials.com, according to it your blog has few reviews but I think your blog deserves to be rated higher. So it would be a big step to ask your readers/visitors to leave reviews in investimonials.com.
Again I appreciate the voiced opinions because as much as I ask for comments in order to improve the site and content many just don't want to be bothered and pitch in.
One last thing is an update and apology. The last blog post before this was back in October and that is unacceptable but as Tommy mentioned about the market he is correct. (By the way I am long Blockbuster $BLOAQ, a January 165 Netflix $NFLX put which I acquired when Netflix was up at the $205 area a few days back)
I should begin posting more in the next few weeks. But if you are a reader you are urged to go to investimonials.com and write a review if you have something good to say. 
-K
When ETF’s don’t work ($VXX, $VIX)
We are all caught up in the new bubble that I would like to call the Great "Enron Task Force" (ETF).
Basically ETF's are usually set up to mimic indices that we cannot directly buy. That is a great way to stay invested and diversified if you believe the stock market in general will do good or bad. The number of Enron Task Forces is now reaching the gazillions and "investors" are so drawn into them that they are getting bigger and bigger and bigger (can you guess already?).
Here is SPY ETF compared to the index that it tries to replicate. (Click To Enlarge)
As you can see the mirroring effect is almost so perfect that by owning SPY shares you will make nearly the same percentage as how the S&P 500 has performed. Thats GREAT! It takes pain away from doing individual stock research. Of course if you still want to invest in specific stocks with minimal effort and AMAZING returns I would recommend Bear Sterns. After you have made millions in Bear Sterns get your attention back to this useless post.
Hey I have an Idea! I believe Volatility will increase and VIX index will keep going higher again. Hmm "Google Google on the wall whats the best ETF of them All?" Google: VXX for the win! So there you have it, if you want volatility there is an ETF for that. Alright time to cut to the chase because its nearing midnight. Click Below to Enlarge the Comparison between VIX and VXX.
Notice a Difference between the SPY comparison and the the VXX comparison? Gosh I hope so or get the FREAK out of here! They don't mirror each other AT ALL. They Barely did before last august and from then on its a whole different story. Speaking of stories... Thanks Dan for the heads up in the comments about the "VXX Reverse Split 1:4" story.
For those that are new to stock splits a quick search can yield a lot of information but I will spare that for you by explaining in my own words what will happen here.
When VXX reverse splits in the first week of November (lets assume its at $13 on that day) it will start showing up as a $52 instead. How can they just change the price? Well If you owned 4 shares of VXX now you will own just 1 later thats how.
Ok finally getting to the finish. A reverse split is bad because instead of increasing the amount of shares outstanding, the company is making this move to make the stock look like it has more value when in fact is the same crappy thing. I will not be playing VXX but seeing the "oh so perfect" mirroring effect it has done so far I congratulate those who will keep shorting it via whatever method works for them and reaping profits until VXX slashes in half once again.
Thats it for now and I hope that helped clear your question Dan. Volatility will not get a spark just because Barclays "Enron Task Force" will have a "higher price". If you're still confused or stumble upon other interesting things that you would like to share, the boxes are right below the post most of the time.
Happy Trading all and to all a good night!
-K
SPY’der Pig Spy’der Pig!
Well it surely has been a lifetime (one month) since I last posted but don't blame me much because life has become much busier and time consuming. Don't worry though I won't leave fellow freaks without some delicious charts before I return to the freakishly busy life of mine .
First off for some humor Here's my Inspiration to the awesome title.
Ok so without even mentioning any recent news because I really don't care if the Economy officially came out of recession last summer or if Larry Summers will finally leave his post at the end of the year because I am a technical trader and I like to trade what I see rather than what I hear. If I traded what I heard then I would be a BOOOYAH Cramerica Fan which would have made me millionaire by now if I had invested billions.
Lets start off with an hourly chart for the past 20 days of the SPY so we can see what happened while the blog was inactive.
I will not reveal the indicators of lines used in the chart but with some trial and error you might be able to figure it out . As you can see starting September 1st the market broke above the blue line while at the same time volume picked up and a special indicator went from red to green. SPY at the time was around 107 and today it reached a high of nearly 115.
Thats great and all as we see what happened in the past but what about the "Freak"ing future? I am not calling a market top yet but I must make my intentions known that if either 115 or 113 are broken on the hourly while the volume is there then that will determine the future. If I were to call it? I would say the volume increased the last two hours of today's trading thanks to Ben Balloonhead and the special indicator below is heading downhill (but still green). My ideal trade would be when SPY cuts below 113 and the indicator turns red. Remember that even if what I am preaching does not happen at least it is a more informed decision than pressing a "Buy Buy Buy, Sell Sell Sell" button. (Click Image below to Enlarge)
Next up we will visit something I like to call the Bollinger Bands and again I will not reveal the inputs but I hope you are understanding (you can always figure it out with some hard work), as you can see I have also shown the signals my system has given to me. I am awaiting for that Sell signal which might send SPY to 110's at the very least if it displays me that lovely red "S". of course there have been times where the market just consolidates along the blue lines and then moves up in which case I wouldn't enter until I see my system print the signals while I also evaluate the chart already posted above.
Are you falling asleep yet? If so you aren't a real Investing Freak because only the elite know that without doing your homework you will go into the market like a headless chicken and come out a loser. Now Time to introduce the updated Investing Freak special chart which I last displayed back in June. If you click on the link and go to that post you will see a "price line" drawn near 1152 (it's really just a bit over 1150 if you get microscopical), I mention that because today the market reached up to 1048.59 and retreated a full 10 points! 10 points is a sweet intra-day move which you can make a killing on if you play it right. Anyways here is the updated chart since I can see you falling asleep. (Click below to Enlarge)
Recap: I've been busy, market has been behaving according to plan and is not showing more negative signs than positive but no definite reversal has been noticed so just use the charts above for reference. If they are helpful, you are welcome to post comments so we can liven up the blog again.
Until next post.... Enjoy Making money!!
-K
Sell Any Day and Go Away
Yup. You don't have to sell just in May and Go Away. Investing Freak sold today (BP 26 july puts for 20% profit), and is going away. Thats right, 100% cash not 98 or 99.
It will be a long going away and I wonder if I will come back to find BP bankrupt haha.
I hope to find the loyal freaks back and richer in August.
Tropical Storm Alex to BP’s Rescue
I Want my life back! I am not the only one as plenty of fishes, birds, and people also want their life back that BP plc (ADR) has taken away. Not to Worry because BP feels sorry, so sorry that it is donating oil spill revenue to charity (the National Fish and Wildlife Foundation). BP said it would provide $5 million to the group immediately, Based on a current futures price of $77.83 a barrel, the collected oil is worth about $1.2 million. BP hopes to cap the well by August.
With the CEO now out of the picture time to get back to work and stop this drilling insanity. Hmm maybe not thanks to a federal judge who has overturned the Obama administration’s 6-month moratorium on new deepwater offshore drilling projects. What's the reason for overturning the decision?
The Interior Department said it needed time to study the risks of deepwater drilling but U.S. District Judge Martin Feldman said in his ruling the Interior Department assumed that because one rig failed, all companies and rigs doing deepwater drilling pose an imminent danger.
Come on there has to be more to this story and thankfully there is. Like many judges presiding in the Gulf region, Feldman owns lots of energy stocks, including Transocean, Halliburton, and two of BP’s largest U.S. private shareholders — BlackRock (7.1%) and JP Morgan Chase (28.3%). Here’s a list of Feldman’s income in 2008. How can he stop drilling when his heart is fully soaked in oil? He can't because Industry ties among federal judges are so widespread that they are beginning to endanger the courts’ ability to conduct routine business.
More great news! We don't need to head to Italy to see the amazing Leaning Tower of Pisa because BP pipe is tilting more.
The Deepwater Horizon riser package that sits on the seabed a mile below the ocean surface weighs over 450 tons, including the 48-foot-tall failed blowout preventer. National Incident Commander Thad Allen announced that the riser package is tilting “10 or 12 degrees off perpendicular (On June 10 it was only tilting by about 2 or 3 degrees). Engineers and geologists fear the stack atop the well could tip over if the well integrity further degrades, leading to the “unlikely, but not implausible” scenario of “oil gushing through the sea floor.”
Hey you say, its unlikely and worst case scenario and BP will get things rolling before something worse happens. What else coulg go wrong? everything is already factored for the worse.
Oh wait! More Great news just arrived! Tropical Storm Alex comes to the rescue (or not) of BP. The ECMWF model is the most aggressive in developing this system, taking it into the Gulf of Mexico as a hurricane next week. The NOGAPS model keeps the storm weak and farther south, predicting that 93L will bring heavy rains to northern Honduras as a tropical disturbance or tropical depression on Friday and Saturday. But either way this will be fun to watch.
Here is the graph of Invest93 (Tropical Storm Alex)
Check out some previous BP Posts:
BP Cares about the small people June 17
BP now stands for Bad Publicity June 14
Thats all Folks,
-K
Capital Gains Tax Rates to increase in 2011
President Obama has publicly said that he will let the Bush-era capital gains tax cuts expire on schedule this year, so it’s important to know how they will affect your investments.
If you're in the 10-15% tax bracket long term cap gains will go from 0% to 10% so if you have investments that you've held long term you might think of selling this year to avoid paying 10% to IRS unless you are making a loss in which case you can hold and pray forever. For more detailed brackets visit Bargaineering
I always felt that the speed at which the TARP money was getting repaid was extreme for such a crisis. Major players paid big bucks back in order to possibly restore confidence in their institutions and the economy (of course so they could use more money to pay their CEO's bonuses as well which was forbidden under TARP). The latest headline didn't shock me one bit.
After a string of profitable paybacks from Goldman Sachs, JPMorgan and 59 others, the list of deadbeats is growing. In May, 91 banks missed their dividend payments to taxpayers. Two big banks already look like serious zombies. Pacific Capital Bancorp , with $7.4 billion of assets, and Anchor Bancorp Wisconsin with $4.5 billion, have each missed five dividend payments and appear incapable of surviving without taxpayer cash.
This is so awesome and so unworthy of mentioning (since we know news always gets factored in before its published) but since my Celtics lost I had to create a new blog post.
Make money tomorrow and be careful if you're messing with options as its options ex day.
-K
World Cup Friday
If you notice lower volume during the next 30 days you can bet that the World Cup is affecting traders (or maybe just me) with matches at 7AM 9:30AM and 2PM every day. I guess this would mean that soccer fans would come back for the last 30 minutes of trading during the "Adult Swim" hour.
The Data is out and during Q1 household debt contracted 2.2% annually while State and local government debt expanded at 4.25% annually. The financial sector "shed" ~$1.3 trillion in debt (on an annualized basis) in Q1. Is anyone surprised the federal government added almost that same amount? -EconomPic
From 8:30 to 10 am some exciting news come out such as the retail sales data and consumer sentiment. You can check up on them at the Economic Calendar.
Retail Sales Fall, But Not As Bad As Reported Demand plunged at building-material stores, reflecting the end of a government appliance rebate, and sales fell at auto dealers, in contrast to industry figures which showed a gain. Subtracting those outliers we still have a decline, which shows weakness. Just not as weak as early reports would indicate.
The BP Oil Disaster has become large enough at the moment to cover Albania which now makes Albania the New Frontier for Oil Investors.
Keep in touch using the comment box and even make your pick for the World Cup Champion to be crowned July 11th.
I hope you like the new speed of the website thanks to our seamless move to a new host.
Make some money and think before you hold into the weekend.
-K
1077 Proves to be $SPX resistance again.
Going into the open today 1077 was on the radar as a heavy resistance. It will now try to become a death cross of two averages i use that can be seen as the blue and red lines in the Special Investing Freak $SPX chart.
As for what happened today I decided it is best to sum it up using this image and text. (Click To Enlarge)
I bought Puts early on then called top of 1077 in a comment at around 10:50 with the top on the market coming at around 11:30 where I decided it was time to make true to my preaching and sell my calls. Sold puts at end of day and am flat for the next day opening so i can sleep well 
Keep checking the comments for latest news and talk and feel free to participate (dont be shy)
-K
Let's just say
Its another Manic Monday
Without going into many links I will summarize what I read. BP can't stop leak still, Hungary is the next Greece and this time it might not be bailed out since the G20 meeting was all talk about Fiscal Policy (bailouts) are not sustainable and austerity measures are the way to go. to top it all Iran is not willing to take the next Gaza aid ship to its destination by providing naval escort (Read: Israel can't attack without starting a war)
Here is an Update of the InvestingFreak Special SPX chart the Red Line (250MA is broken for now so lets see if it holds broken and turns into resistance. to the downside i see 1040 and to the upside a retest of 1104 at least is possible although not all this action might come monday. (Click Image to Enlarge)
So there you have it. Fun week ahead but lets all make money whichever way it goes.
Also visitors are always welcomed and encourage to comment and participate in daily market discussions, your posts wont be deleted or censored unless they contain inappropriate content and links.
S&P futures are down 9 points since the open. On top of the page in the "Economic Calendar" tab you have easy access to the daily calendar happenings and live commodity futures.