The Money Tree

Safely Generating Income in Retirement

What Others are Trading – January 2012

Posted by mounddweller on January 1, 2012

Fellow Traders,

Good morning and happy new year!  I’m starting the year off right by not procrastinating.  Usually, as many of my long-time readers will attest, I’m late in getting this monthly message posted.   This message is your vehicle to letting the rest of my readers know what you’ve been trading.  What’s been working well for you, what’s not?

A special callout to ‘dealmakr’.  We haven’t heard from you in a while.  Hope all is well with you.  Let us know what you’ve been trading.  Also, a special callout to Rich whom I believe is one of my very first readers.  How did your year turn-out?  Any change in plans as we move forward into 2012?

One final note.  This post is the first as I begin my fourth year of blogging.  I received an email from WordPress yesterday with statistics from the past year.  In the past year ‘troymoneytree’ was viewed over 19,000 times by people spread across 6 continents!  That is truly amazing to me.  People all over the world are interested in what I have to say about investing.   I hope and pray my words and ideas continue to inspire people to learn more about the world of options trading for income and about being self-sufficient in managing their financial assets.

Best to all in 2012.  HAPPY NEW YEAR!

Regards,

Troy

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7 Responses to “What Others are Trading – January 2012”

  1. Rich said

    Happy New Year from South Carolina! Gotta say I’m looking forward to 2012. 2011 was below par for me. I had several deep in the money cash covered puts on Alcoa exercised and put to me before I could roll them. Thats the first time I have ever had puts exercised on me. Anyway, I made a lot of cash off of the AA puts in 2010 but gave it all back in 2011. I was trying to catch the perverbial falling knife, ouch! Starting in August I began selling weekly puts on HD, WFC, RSH and MSFT. When they finished in the money I then started selling covered calls. Have had a lot more success the past six months. Will continue this into the new year. Also trying to sell puts at strikes that have imp vol between 17 & 27. This seems to be a sweet spot. A trading buddy on the Scottrade forum mentioned this to me. I’m focusing my attention on the DOW 30 stocks. I’m using an SMF add in spreadsheet to track data, and I have it sorted with current price in relation to the stocks 52 week low. Then looking for strikes near support levels to sell puts on.

    Looking forward to following your new strategy. Will be adding the stocks you track to my spreadsheet as well and seeing how they compare with the DOW 30.

    Glad you have gotten some great stats on your blog. I know you put a lot into your research which you always share with everyone.

    Best of wishes in 2012

    Rich

  2. dealmakr said

    Hi Troy,

    2011 was an ok year for me with all of that volatility. Ended up about 10% ahead on the year after the 3Q swoon and still see a lot of bumps in the road ahead with plenty of opportunity for writing puts. GE was my best trader last year with the ability to write weekly and monthly premium on both sides of the trade and using the puts if exercised to write CC’s. Opportunity for getting some good deals takes place often with this volatility and one thing that I would stress is having the cash available at times to take advantage of things when they happen. A few updates on some of the positions that I have working and a few new ones

    Updated position XRX 12/17/11

    11/30/10 Sold 50 Dec 11 Put .16*
    11/30/10 Sold 30 Dec 11 Put .15*
    12/06/10 Bot 3000 XRX 11.74
    12/06/10 Sold 30 Apr 12 Call .82*
    12/31/10 Sold 25 Jul 9 Put .30*
    01/21/11 Sold 30 Feb 12 Call .12*
    01/27/11 Sold 30 Feb 11 Call .16*
    02/09/11 Sold open 30 Jul 12 Call .32*
    02/22/11 Bot 1500 XRX 11
    02/22/11 Sold 15 Apr 11 Call .46*
    02/23/11 Sold 25 Oct 9 Put .52*
    03/14/11 Sold 15 Oct 12 Call .40*
    03/16/11 Sold 15 Jul 11 Call .30*
    03/16/11 Sold 25 Oct 12 Call .30*
    03/22/11 Sold 15 May 11 Call .16*
    03/25/11 Bot 1500 XRX 10.68 (16020)
    04/11/11 Sold 20 Oct 12 Call .47*
    04/12/11 Sold 30 May 10 Put .14*
    05/06/11 Bot 1500 XRX 10.35 (15525)
    05/06/11 Sold 20 Jun 10 Put .23*
    05/23/11 Sold 30 Jul 11 Call .11*
    05/25/11 Sold 25 Jul 9 Put .16*
    06/08/11 Bot 1500 XRX 9.47 (14205)
    06/08/11 Sold 35 Oct 11 Call .17*
    06/29/11 Sold 25 Aug 9 Put .12*
    06/29/11 Sold 25 Jan 9 Put .52
    07/22/11 Sold 40 Sep 9 put .11*
    07/22/11 Sold 55 Sep 11 call .12*
    07/29/11 Sold 25 Oct 9 Put .40*
    07/29/11 Sold 25 Oct 10 Call .30*
    08/01/11 Sold 25 Oct 10 Call .21*
    08/02/11 Sold 20 Sep 9 put .40*
    08/05/11 Sold 25 Aug 8 Put .18*
    08/17/11 Sold 25 Sep 8 Put .24*
    08/17/11 Sold 25 Oct 8 Put .44*
    08/19/11 Sold 25 Oct 7 put .43*
    08/19/11 Bot 1500 XRX 7.51 (11265)
    10/03/11 Sold 25 Oct 7 Put .43*
    10/22/11 Bot 2500 XRX 8 (20000) exercise
    10/25/11 Sold 50 Jan 10 Call .12
    10/26/11 Sold 50 Jan 10 Call .12
    11/28/11 Sold 15 Apr 6 Put .27
    11/28/11 Sold 25 Jan 9 Call .10

    Closed Trades Profit/Loss

    12/18/10 Expired 80 Dec 11 Put 1250
    12/29/10 Dividend .0425 on 3000 shares 127.5
    01/21/11 Bot close 30 Apr 12 Call .28 1620
    02/13/11 Bot close 30 Feb 11 Call .13 90
    02/19/11 Expired 30 Feb 12 Call 360
    03/25/11 Bot close 15 Apr 11 Call .05 615
    03/25/11 Bot close 30 Jul 12 Call .14 540
    03/29/11 Dividend .0425 on 6000 shares 255
    04/11/11 Bot close 25 Jul 9 Put .13 425
    05/21/11 Expired 30 May 10 Put 420
    05/21/11 Expired 15 May 11 Call 240
    06/08/11 Bot close 45 Jul 11 call .03 645
    06/08/11 Bot close 20 Jun 10 Put .59 (900)
    06/28/11 Dividend .0425 on 9000 shares 382.5
    07/01/11 Bot close 25 Oct 9 Put .18 850
    07/15/11 Expired 25 Jul 9 Put 400
    07/22/11 Bot close 60 Oct 12 Call .07 1870
    08/02/11 Bot close 55 Sep 11 call .03 495
    08/05/11 Bot close 25 Aug 9 Put .70 (1450)
    08/19/11 Bot close 25 Aug 8 Put .53 (875)
    09/18/11 Bot close 60 Sep 9 Put 1.18 (5840)
    09/12/11 Bot close 25 Sep 8 Put .75 (1275)
    09/28/11 Dividend .0425 on 10500 shares 446.25
    10/19/11 Bot close 25 Oct 9 Put 1.39 (2175)
    10/22/11 Expired 50 Oct 7 Put 2150
    10/22/11 Expired 50 Oct 10 call 1275
    10/22/11 Expired 35 Oct 11 Call 595
    10/22/11 Exercised 25 Oct 8 Put 1100

    Total Return P/L on closed trades 3636.25

    Long 13000 XRX avg/share 9.9 (128735)

    Stock closed 12/16/11 7.97

    Short 25 Jan 9 Put 1300
    Short 25 Jan 9 Call 250
    Short 100 Jan 10 Call 1200
    Short 15 Apr 6 Put 405

    Net Position Exposure

    Covered Calls 12500 shares
    Naked Puts 4000 shares

    Now a year into this trade and it hasn’t worked out well. Premium and dividends received have not kept pace with the capital loss of about 2 bucks a share if the position were to be closed. I am still hoping for an exit from this trade near the breakeven point at some time, but even with the metrics of the company showing a low PE and good earnings potential, it looks like the street doesn’t place much faith in the future. Will be watching the next earnings release for clues about where to go from here.

    This trade has been a loser and using naked put options has increased the losses when it broke down from 9.

    Good Trading

    dealmakr

  3. dealmakr said

    Position updated SVU 12/17/11

    Decided to close the short puts before expiration as I could get out of the Dec 8’s for a flat trade and couldn’t write any Jan 8 Calls at that time to offset. Closed the Jan 7.5 puts for a small profit and will go to the sidelines for a time before entering any new short puts. Underwater from original entry on the capital side, but if premium and dividends were added back into the price would be ok. Still think that if the company can reduce the debt load it may come out of this swoon.

    07/27/11 Bot 4000 SVU 8.70 (34800)
    07/27/11 Sold 40 Aug 9 Call .30*
    08/01/11 Sold 25 Aug 8 Put .25*
    08/10/11 Sold 25 Aug 7 Put .40*
    08/10/11 Sold 25 Aug 7 Put .46*
    08/10/11 Sold 20 Oct 9 Call .2*
    08/12/11 Sold 20 Oct 9 Call .31*
    08/12/11 Sold 50 Aug 6 Put .06*
    08/19/11 Bot 2500 SVU 8 (20000) exercise
    08/26/11 Sold 20 Sep 7 Put .46*
    08/31/11 Sold 25 Sep 8 Call .35*
    09/29/11 Sold 25 Oct 8 Call .10*
    10/24/11 Sold 20 Nov 8 Put .36*
    10/26/11 Sold 40 Nov 9 Call .15*
    11/04/11 Sold 20 Jan 7.5 Put .75*
    11/10/11 Sold 20 Dec 8 Put .50*
    11/17/11 Sold 40 Jan 9 Call .35

    Closed trades Profit/Loss

    08/19/11 Expired 50 Aug 6 put 300
    08/19/11 Expired 40 Aug 9 Call 1200
    08/19/11 Exercise 25 Aug 8 Put 625
    08/19/11 Bot close 50 Aug 7 Put .05 1900
    08/30/11 Dividend on 6500 SVU 568.75
    09/17/11 Expired 20 Sep 7 Puts 920
    09/17/11 Expired 25 Sep 8 Calls 875
    10/22/11 Expired 25 Oct 8 Call 250
    10/22/11 Expired 40 Oct 9 Call 1020
    10/24/11 Sold 2500 SVU 8.10 250 (bot 08/19/11 @ 8)
    11/19/11 Expired 20 Nov 8 Put 720
    11/19/11 Expired 40 Nov 9 Call 600
    11/29/11 Dividend on 4000 SVU 350
    12/16/11 Bot close 20 Dec 8 Put .50 (0)
    12.16.11 Bot close 20 Jan 7.5 Put .50 500

    Total return P/L on closed trades 10078.75

    Long 4000 SVU avg/share 8.7 (34800)

    Stock closed 12/17/11 7.49

    Short 40 Jan 9 Call 1400

    Net position Exposure

    Covered Calls 4000 shares

    Good Trading

    dealmakr

  4. dealmakr said

    Updated Position HBAN 12/17/11

    03/04/11 Bot 8000 HBAN 6.53 (52240)
    03/04/11 Sold 80 Apr 6 put .12*
    03/04/11 Sold 80 Apr 7 call .13*
    03/07/11 Bot 2500 HBAN 6.68 (16700)
    03/07/11 Sold 25 Jul 6 Put .33*
    03/07/11 Sold 25 Jul 7 call .45*
    03/08/11 Sold 25 Jul 6 Put .30*
    03/09/11 Bot 5000 HBAN 6.77 (33850)
    03/14/11 Sold 50 Jul 8 call .16*
    03/18/11 Sold 50 Oct 6 Put .48*
    03/23/11 Sold 30 May 7 Call .17*
    03/28/11 Bot 3000 HBAN 6.67 (20010)
    04/21/11 Sold 40 Oct 6 Put .36*
    04/21/11 Sold 40 Oct 8 Call .15*
    04/21/11 Bot 4000 HBAN 6.57 (26280)
    04/28/11 Sold 80 May 7 Call .07*
    04/28/11 Sold 25 Oct 7 Put .68*
    05/23/11 Sold 50 Oct 7 Call .27*
    06/01/11 Sold 60 Jul 7 Call .06*
    06/06/11 Bot 2500 HBAN 6.04 (15100)
    06/06/11 Sold 25 Oct 6 Call .50*
    06/07/11 Sold 25 Oct 6 Call .60*
    06/07/11 Sold 25 Oct 7 Call .21*
    06/08/11 Sold 50 Oct 7 Call .21*
    06/14/11 Bot 2500 HBAN 6.36 (15900)
    06/24/11 Sold 50 Aug 7 Call .06*
    07/21/11 Sold 30 Sep 5 put .05*
    07/21/11 Sold 100 Sep 5 Call .05*
    07/21/11 Sold 50 Oct 5 Put .07*
    07/21/11 Sold 50 Jan 5 Put .20
    07/26/11 Bot 2500 HBAN 6.03 (15075)
    07/26/11 Sold 25 Aug 6 Call .18*
    07/27/11 Sold 25 Aug 6 Put .20*
    08/04/11 Sold 25 Oct 5 put .20*
    08/05/11 Sold 40 Aug 5 Put .09*
    08/11/11 Sold 10 Aug 5 Put .28*
    08/11/11 Sold 40 Sep 4 Put .15*
    08/11/11 Sold 10 Sep 5 put .47*
    08/11/11 Sold 25 Oct 6 Call .21*
    08/19/11 Sold 50 Oct 4 put .26*
    08/19/11 Bot 2500 HBAN 4.68 (11700)
    08/26/11 Sold 100 Jan 2.5 put .09
    08/26/11 Sold 50 Jan 7.5 Call .08
    09/20/11 Sold 40 Jan 4 Put .24
    09/20/11 Sold 40 Apr 7 Call .20
    09/20/11 Sold 50 Apr 3 put .15
    09/21/11 Sold 75 Nov 6 Call .08*
    09/29/11 Sold 50 Nov 6 Call .07*
    09/29/11 Sold 50 Nov 4 Put .14*
    10/04/11 Sold 40 Apr 7 Call .21
    10/12/11 Sold 40 Apr 4 put .35
    10/12/11 Sold 20 Apr 7 Call .30
    10/21/11 Sold 75 Nov 5 Call .24*
    10/22/11 Bot 7500 HBAN 5 (37500) *
    10/22/11 Bot 2500 HBAN 7 (17500)
    10/25/11 Sold 50 Dec 6 Call .07*
    10/26/11 Sold 50 Dec 6 Call .06*
    11/02/11 Sold 25 Dec 5 Put .26*
    11/02/11 Sold 50 Jan 6 Call .14
    11/02/11 Sold 40 Apr 4 Put .28
    11/11/11 Sold 25 Dec 5 Put .20*
    11/17/11 Sold 75 Jan 6 Call .12
    11/17/11 Sold 25 Apr 6 Call .37
    11/25/11 Sold 25 Apr 6 Call .22
    12/05/11 Sold 40 Jul 4 Put .32
    12/09/11 Sold 25 Apr 5 Put .45
    12/09/11 Sold 50 Jul 7 Call .14
    12/13/11 Sold 50 Apr 6 Call .17

    Closed trades Profit/Loss

    03/16/11 Dividend .01 on 15500 shares 155
    04/16/11 Expired 80 Apr 6 Put 960
    04/16/11 Expired 80 Apr 7 Call 1040
    05/21/11 Expired 110 May 7 Call 1070
    05/23/11 Bot Close 50 Jul 6 Put .17 725
    06/07/11 Bot close 85 Jul 7 call .03 1050
    06/15/11 Dividend .01 on 27500 shares 275
    07/07/11 Bot Close 90 Oct 6 Put .19 2130
    07/15/11 Expired 50 Jul 8 Call 800
    08/05/11 Bot close 25 Aug 6 Put .60 (1000)
    08/19/11 Expired 25 Aug 6 call 450
    08/19/11 Expired 50 Aug 7 call 300
    08/19/11 Bot close 50 Aug 5 Put .34 (1060)
    09/13/11 Bot close 40 Sep 5 put .31 (620)
    09/15/11 Dividend .04 on 32500 shares 1300
    09/17/11 Expired 40 Sep 4 Put 600
    09/17/11 Expired 100 Sep 7 Call 500
    10/04/11 Bot close 125 Oct 7 call .01 2800
    10/22/11 Expired 75 Oct 6 Call 3275
    10/22/11 Expired 40 Oct 8 Call 600
    10/22/11 Expired 50 Oct 4 Put 1300
    10/22/11 Exercised 75 Oct 5 Put 850
    10/22/11 Exercised 25 Oct 7 Put 1700
    11/19/11 Expired 50 Nov 4 Put 700
    11/19/11 Expired 125 Nov 6 Call 950
    11/19/11 Exercised 75 Nov 5 Call 1800
    11/19/11 Sold 7500 HBAN 5 0 (exercise of 7500 bot @ 5 on 10/22/11)
    12/09/11 Bot close 50 Dec 5 Put .04 950
    12/16/11 Dividend .04 on 35000 shares 1400
    12/17/11 Expired 100 Dec 6 Call 650

    Total return on closed trades 25650

    Long 35000 HBAN avg/share 6.41 (224325)

    Stock closed 12/17/11 5.09

    Short 100 Jan 2.5 Put 900
    Short 40 Jan 4 Put 960
    Short 50 Jan 5 Put 1000
    Short 125 Jan 6 Call 1600
    Short 50 Jan 7.5 Call 400
    Short 50 Apr 3 Put 750
    Short 80 Apr 4 Put 2520
    Short 25 Apr 5 Put 1125
    Short 100 Apr 6 Call 2325
    Short 100 Apr 7 Call 2240
    Short 40 Jul 4 Put 1280
    Short 50 Jul 7 Call 700

    Net Position Exposure

    Covered calls 35000 shares
    Naked Calls 2500 shares
    Naked puts 38500 shares

    Bot in the short Dec 5 puts for a profit so not to worry about exercise and will look to buy in the short Jan 4 puts hopefully for .01. Another stock underwater with capital invested considered and the DCA a lot higher than the current price. The plan was to trade the position for a monthly 1-2% return on capital while open, but hasn’t worked out so far with the stock dropping so far from the DCA. Earnings next month and the under currents in the financial areas of the market will see how this trade works out for the future. FMER & KEY short puts expiring in Dec helped a bit with returns, but not enough. Will be looking to open up some short calls and puts in the Feb series soon.

    Still like the story here and will trade around it. Options can be closed early depending upon market conditions.
    Good Trading

    dealmakr

  5. dealmakr said

    HCBK position 12/17/11

    After looking deeper into this one , have decided to take a longer term play. Book value north of 10 with tangible book over 9. Bank was overleveraged on the asset side and in delevering the stock got crushed. Still a premier franchise in the metro NY area yielding north of 5% on the dividend with some fairly decent premium available for writing options.

    On expiration Friday news hit of another writedown on deleveraging another 4+billion from the balance sheet. With the company reaffirming the dividend policy the stock rose quickly above 6 and by the end of the day closed right on the money. In trading this past month I found myself a bit overleveraged as far as having too many short 6 calls uncovered near expiration and had to buy in some more stock along the way. Will use the FI/FO (first in/first out) to determine the cost basis for the position along with the Dec exercise and profit.

    10/26/11 Bot 5000 HCBK 5.75 (28750)*
    10/26/11 Bot 5000 HCBK 5.81 (29050)*
    10/26/11 Bot 5000 HCBK 5.84 (29200)*
    10/26/11 Sold 100 Nov 6 Call .15*
    10/26/11 Sold 50 Dec 5 Put .15*
    10/28/11 Bot 5000 HCBK 6.29 (31450) (1200 exercised @6 Dec / balance 3800 shares)(23902)
    10/28/11 Sold 50 Dec 6 Call .475 avg*
    11/01/11 Bot 5000 HCBK 5.9 (29500)
    11/01/11 Sold 100 Nov 6 Call .15*
    11/02/11 Sold 25 Jan 5 Put .25
    11/02/11 Sold 20 Apr 7 Call .25
    11/09/11 Sold 25 Dec 6 Call .25*
    11/09/11 Sold 25 Dec 6 Put .45*
    11/14/11 Sold 25 Jan 6 put .60
    11/16/11 Bot 5000 HCBK 5.75 (28750)
    11/15/11 Sold 75 Dec 6 Call .15*
    11/17/11 Sold 50 Dec 6 Call .15*
    11/25/11 Sold 100 Jan 6 Call avg .108
    11/25/11 Sold 25 Apr 6 Call .31
    11/28/11 Bot 2500 HCBK 5.24 (13100)
    11/29/11 Sold 50 Jan 6 Call .10
    11/29/11 Sold 25 Jul 5 Put .75
    11/30/11 Bot 2500 HCBK 5.32 (13300)
    12/01/11 Bot 2500 HCBK 5.61 (14025)
    12/01/11 Bot 2500 HCBK 5.68 (14200)
    12/02/11 Sold 25 Jan 6 Call .25
    12/06/11 Sold 25 Jan 6 Call .30
    12/06/11 Bot 2500 HCBK 5.97 (14925)
    12/07/11 Sold 25 Jan 6 Call .30
    12/08/11 Sold 25 Jan 6 Call .25
    12/12/11 Sold 25 Jan 6 Call .21
    12/13/11 Sold 25 Jan 6 Call .25
    12/14/11 Bot 5000 HCBK avg 5.895 (29475)
    12/16/11 Bot 2500 HCBK 6.05 (15175)

    Closed trades Profit/Loss

    11/02/11 Dividend .08 on 25000 shares 2000
    11/19/11 Expired 200 Nov 6 Call 3000
    12/14/11 Bot close 25 Dec 6 Put .25 500
    12/17/11 Expired 50 Dec 5 Put 750
    12/17/11 Expired 38 Dec 6 Call
    12/17/11 Exercised 162 Dec 6 Call 4875 (includes expired)
    12/17/11 Sold 16200 HCBK 6.00 2652

    Total return P/L on closed trades 13777

    Long 33800 HCBK avg/share 5.81 (196352)

    Stock closed 12/16/11 6.00

    Short 25 Jan 5 Put 625
    Short 25 Jan 6 Put 1500
    Short 300 Jan 6 Call 5480
    Short 25 Apr 6 Call 775
    Short 20 Apr 7 Call 500
    Short 25 Jul 5 Put 1875

    Net position exposure

    Covered calls 33800 shares
    Naked Calls 700 shares
    Naked puts 7500 shares

  6. dealmakr said

    New position 12/28/11 MWW

    12/27/11 Sold 25 Jun 6 Put .56
    12/28/11 Bot 2000 MWW 7.66
    12/28/11 Sold 25 Feb 6 Put .21
    12/28/11 Sold 20 Feb 8 Calls .60

    End of year tax loss selling nearly done. With unemployment looking a bit better decided to dabble a bit here.

    dealmakr

    Using margin to attain leverage, will GRPN flameout 80% in the next 6 months?

    Took a small looksee on GRPN

    Short 25 Jul 4 Put @ .25

    200 days left in the timeframe and I sometimes put on a small position just to keep an eye on the stock.

    Max amount at risk 10000 – prem of 625 =9375, but the margin amount to do the trade is very small at only 1000 so a nice return on capital if GRPN remains above 4 at expiration using margin.

    From the CBOE site using the margin calculator

    Position
    Short 25 Jul 4 puts(s) at $0.25
    Underlying stock at $19.00
    Minimum applies in this case

    Initial Margin
    Margin requirement: $1,625.00
    Proceeds from sale of short put(s): $625.00
    Margin call (SMA debit): $1,000.00

    dealmakr

  7. dealmakr said

    Some thoughts about 2011

    Looking back in 2011 and ahead for 2012

    Relecting upon the past year, it comes with a variety of themes.

    My Big Fat Greek Portfilio Shredding. When it was looking like it could all fall apart during the late summer because of problems here and over in the European arena, the markets started to look like a recap of the 2008-2009 rush for the exits. I guess when the butcher’s bill comes due and your finances are in the same state as the Emperor not wearing clothes, the fallout can be tremendous when the collections agencies are looking for their money. It kind of makes me think that when you loan out money to those who have no way of paying off the loan someone has to take the hit and the markets took a nosedive in a very rapid manner. Kind of reminds me of the theme that “when you owe the bank a million, your in big trouble, when you owe the bank a billion, the banks in big trouble”.

    The rescue plans from the bankers to prop up those unfortunates who are consistant overspenders just kept rolling out one after another with the markets rising and falling upon each new proposal, but the simple answer is that the problem still remains here and abroad. Even with things appearing a bit less gloomy in the US, mind you just a bit now, volatility still remains elevated. After watching the portfolio swoon during this tempest, risk management becomes a paramount concern. Where you can get hurt is in having an investing bias that is too one sided either perma bear or bull as the markets can make mince meat out of your positions on a short term basis.

    Adjusting your risk profile accordingly will keep you in the game for the long term duration. It doesn’t mean that an underlying bias for where you think the market direction is going won’t be right, it just means have a plan and trade it based upon where things are in the macro (the whole sum of market & world events), the sector (the business area of your stock along with its peer group) and the micro (stock specific). Each area will have its pros and cons in decision making for trading.

    There is a saying that “you buy your portfolio every day” and your trading decisions if you are an active investor should make you take a look at your positions on a daily basis for clues about where things are heading. If you are the Ron Popiel type of investor where you just “Set It and Forget It”, just one thing to remember and that is that things can change and mostly never remain the same.

    Looking at where the S&P 500 ended the year 2011 at 1257.60 and year end 2010 at 1257.64 where did we go? The intraday high for the year was at about 1370 with the low at 1074. It to me was like the old Moody Blues song “Ride My Seesaw” playing over and over again in my head, with emotion at times quite moody and blue and for 2012 I see much of the same. A lot of companies are coming into earnings season with good momentum and a grundle of cash on the balance sheets, but a lot of the same macro forces are still in play here to be able to cause volatility and angst to your portfolio.

    Good Trading to all for the New Year.

    dealmakr

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