[Weekend Summary]
Dear Member:
The close today (Friday) puts the indexes in one of the most interesting positions I have ever seen. Talk about uncertainty -- here it is. The Dow, S&P 500, and Nasdaq Composite each closed at a level of significant support. The Dow and S&P each closed just below the low close in January, but not quite as low as the January intra-day close. The Naz opened right at the January intra-day, dipped, and wound up closing just above that January intra-day low level. Meanwhile, volatility moved back and forth through the day and finished near resistance as measured on the VIX, VXN, and VXO. Market direction is now so uncertain, all I can say is that I am really glad I have refrained from trading very actively. I see no directional edge at the moment though if I were to guess I would guess in the down direction, but without much conviction. I don't think we are very far from getting a clear message of where we go from here in the short and possibly medium term as well. I want to emphasize how important it can be at times not to trade and be ready when the move begins or there is a clear continuation. I think it is time to be ready.
This week, I did close the put legs of my condor on Lehman (LEH). The call side of the condor looks like it should require no action and could close worthless at expiration thereby yielding maximum profit on that side. The put side so far was a loss making the trade a fairly minor loss overall. However, with time to go before March expiration, I may reopen a spread on the put side depending on market conditions and a profit may still be salvagable.
I have been working the calendar spread on SPY pretty actively and gaining more and more profit by shorting near month calls and then closing them for a profit. So far so good there.
The short leg of the calendar spread on Blackstone Group (BX) is doing very well and setting the overall position to be significantly lower risk than when I initially entered my play.
The Sirius Satellite Radio (SIRI) spread still has a year and 3/4 to go and is doing fine for now.
Comphania Siderugica Nacional SA (SID) has been moving sideways since I bought my puts and I am continuing to look for a breakout in the downside direction. It is OK for now.
It is hard to be patient when I want a trade, but patience can be an important key to ultimately winning in this trading game.
Have a great weekend.
Bill
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