Last weekend, I said
“The failure of Bear Stern will be weighing on the market on Monday, and the market is likely to finally get the capitulation. So, for the new week, we’ll have to see how the market handles the capitulation below the January lows. On Tuesday, the Fed will come out with its rate decision. Is it gonna be 0.75, or, a full-point cut? Again, the support levels that we’ll be looking at is SPX 1225-1250 and Nasdaq 2100-2200.”
On Monday, the market saw a lot of pressure right from the opening and went below the Januray lows. But, it managed to rally back in anticipation of big rate cut. The Dow even closed green. On Tuesday, the Fed cut the interest rate by .75 and the market recorded its largest one-day gain since 2002. On Wednesday, people took quick profits, especially with options expiration manipulation going on. On Thursday, the market rallied back and made solid gains, with the Dow jumping more than +260 points!
I was not around much on Thursday, but, did catch a good trade on MA:
I actually traded these same calls on Wednesday. But, as the market slid, I closed them before the market close at a loss. After seeing the market demonstrating strength on Thursday morning, I jumped back in. I placed a limit order in to hopefully take profits, just in case I wasn’t there to catch market’s every movement. The order went through, and I locked in a good +54.1% profit. But, it looked like MA was much stronger. Those options went as high as $13.1 and closed at $12.5. I’m still “happy” with a quick intraday +54.1% profit, though.
Another decent week. Here are the closed trades:
LEH
LYHDI, Apr 45 calls, at $6, +30% (all out)
AAPL
APVDG, Apr 135 calls, at $6, +20% (all out)
BTU ($49.82)
BTUDK, Apr 55 calls, at $1.5, -53%
MA ($208.3)
MALDD, Apr 220 calls, at $6.7, -21.1% (closed)
LEH ($42.7)
LYHDI, Apr 45 calls, at $3.6, +12.5% (partially out)
LEH ($44.40)
LYHDI, Apr 45 calls, at $4.5, +40% (all out)
X ($118.9)
XDC, Apr 115 calls, at $10, +17.6%
LEH ($45.85)
LYHDI, took some profits at $5.3, +15.2% (partially out)
AAPL ($133)
APVDG, Apr 135 calls, at $5.6, +12% (partially out)
LEH ($30.6)
LYHPF, Apr 30 puts, at $7.6, +2.7%
LEH ($27.8)
LYHPF, Apr 30 puts, at $10, +9.9%
The only trade left open this week was a trade on XAU, which got clobbered by the quick sell-off this week. I was too eager to “nibble” back in after last week’s awesome gains.
XAU ($206)
XKUDB, Apr 210 calls, at $10.5 (open, nibbling)
Friday close: $1.05; unrealized gain/loss: -90%
Hope you’re enjoying your weekend! I’ll be back later with my Market Forecast.
Happy Saturday, HappyTrading! ™
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