May 4, 2012

XLE - Energy sector

With the large drop in oil today (down 2.5%-4% depending on whether you are looking at Brent crude or WTI crude), I decided to take a look at an energy sector long.  The XLE has been beaten up almost as much, currently down about 2.4%.  However, it bottomed today about 68, and as you can see on the hourly chart below, that's become a recent support level.

However, if you notice, the bollinger bands have gotten very wide the last few days (higher volatility), so I didn't want to just buy a call.  Considered a put credit spread, but I only want to hold that a couple weeks (to May expiration), and I'd like to stay in this trade a while longer to catch some upside.  So I bought the June 70 call and sold the May weekly 70 call (expiring next week), and I will continue to sell weeklies as long as I'm not assigned (or XLE drops considerably).  My target is about 72, near the recent hourly high above, and more importantly, the resistance level on the daily chart below.

I'll try to do better with my updates and keep you updated on this trade.

Another Disappointing Jobs Number

The market is down hard today after this morning's disappointing jobs report.  Currently the S&P500 seems to be holding at 1370, but it also paused earlier this morning at 1375, moved back up, and then reversed right back lower to its current 1370 level.  I am considering putting long money to work here (SPY vertical spreads), but will wait to see if this is another fakeout like what happened between 10:30 - 11AM.

April 3, 2012

Update On Sectors

So here's an update and comparison to my last post on sector weightings.

By market value:

3/23 post Today
Tech 17.7% Tech 16.0%
Gold 6.2% Gold 6.4%
Telecom 10.1% Telecom 9.8%
Consumer Staples 16.2% Consumer Staples 16.6%
Energy 6.2% Energy 5.4%
Industrials 5.1% Industrials 3.8%
Materials 6.8% Materials 7.0%
Health Care 0.5% Health Care 0.6%
Financials 6.7% Financials 6.7%
Trading 0.6% Trading 1.9%
Cash 24.0% Cash 25.7%

No major changes there.  Now by "risk" as outlined in prior post:

3/23 post Today
Tech 5.2% Tech 3.6%
Gold -0.4% Gold -0.4%
Telecom 15.1% Telecom 15.5%
Consumer Staples 29.3% Consumer Staples 29.9%
Energy 15.2% Energy 16.7%
Industrials 16.1% Industrials 6.0%
Materials 5.9% Materials 6.0%
Health Care 1.1% Health Care 0.3%
Financials 8.9% Financials 8.6%
Trading 3.7% Trading 13.8%
Cash 0.0% Cash 0.0%

2 items stick out.  The large jump in trading "risk" I will explain in another post.  The other item is industrials - I dumped my long calls in Boeing (BA).  BA has not been trading well and I was stopped out.  My rule is 50% loss in premium on long options that are designated as investment (time frame is weeks and/or months).  Perhaps what I mean by "investment" should be explained in another post also.

March 23, 2012

Here We Go Again

Well, I've fallen flat on my commitment to post more often this year.  All I can do now is try to improve going forward.

So where do I stand right now?  By sector:

Tech 17.7%
Gold 6.2% (been taking a beating here, but staying put)
Telecom 10.1%
Consumer Staples 16.2% (higher than I'd like)
Energy 6.2% (would like to get longer as oil has dropped somewhat)
Industrials 5.1%
Materials 6.8%
Health Care 0.5%
Financials 6.7%
Trading 0.6% (very short-term plays and hedges)
Cash 24%

However, I consider that somewhat misleading.  My positions are made up of a combination of common stock, calls, and spreads.  So in reality what looks like a very small weighting may be much higher relative to the risk I'm taking in that position.  I haven't figured out the best way to measure that yet, but what I'm trying is looking at the risk as the current market price relative to my stops.  Pictured that way, I get this:

Tech 5.2% (most of this is AAPL, and at this point my stops are above entry point)
Gold -0.4% (all stops above entry point)
Telecom 15.1%
Consumer Staples 29.3% (this concerns me when I view it this way)
Energy 15.2%
Industrials 16.1%
Materials 5.9%
Health Care 1.1%
Financials 8.9%
Trading 3.7%
Cash 0% (no risk of loss, but yes there is an opportunity cost)

Still not perfect, but at least it gives me another way to view my weightings.  For example, it makes me think twice about adding to energy and industrials when I view the risk, and then compare that to a larger weighting in financials but a much smaller relative risk.  It's a work in progress.

January 5, 2012


Added to VZ long this morning after a few down days.  The purchase now makes it my largest position ahead of AAPL.

What I'm Holding

These are my current longs, in order of largest to smallest size (based on Tuesday close):

That's more positions than I'd like to have.  Most likely candidates to get out of are DE into continued strength, and CLX and HAL as both are January options close to expiration.  I'm also likely to trim some WY and AAPL exposure as both have had a nice run recently.

Back For The New Year

Long time no post.  Just didn't make it a priority to keep up with this last year, but since it's time for everyone to make their resolutions, trying to be a regular blogger will be one of mine.

Quick recap of where my view was at the end of the year.  Slightly bullish with a variety of long positions, but hedged with XLF puts and QQQ and SPY put spreads.  Not a lot of capital was committed to the hedges, only about 1-2% of my total account.  Got washed out of the QQQ and SPY spreads on the big up day on Tuesday and have not put any back on yet.  Both ETF's are holding above their 200-day moving averages, so I'm not ready to go short on them yet.  Also got washed out of some of the XLF puts on Tuesday.