GM vs FB, and new FB trade Sep/10/2012

Trade update (Sep/22/2012):
Both puts expired worthless giving us 55c for approx. 122% profit
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GM's price today $22 (IPO high price was ~ $40)
FB's price today is $19 (IPO high price ~ $40)
Although the post-IPO results of Facebook have been similar to GM's, the FB debacle is considered horrendous while our president calls General Motors a success story. Related link.


Chartwise GM may look more attractive to the upside, I want to play FB to moderate upside on how it formed a kicker pattern a few days back and has held the previous lows. Although there are no guarantees, but I think it has formed an intermediate low and is trying to come out of oversold conditions. I have stop loss in place in case this goes against.

 










TRADE:
Sell 1 sep/22 $19 put
Buy 1 sep/22 $18 put
(Got a credit of 55c on Sep/5)
 

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Watch for a fakeout in SPX. Time to short again Aug/13/2012?

Watchout for a fake run up followed by a close like this (img below) to capture more pigs. High chances that this occurs just a few days before options expiration. I am looking for tue/wed for a reversal. Looking to get into a put spread going into 1380 for coming weeks.

SPX candle possibility going into tue/wed

VIX showing high levels of complacency?

Last time we saw VIX this low was in mid march after which markets started to wobble a bit and we got a nice correction. RUT and BANK index starting to show some weakness in images below.

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Cover your shorts Aug/02/2012 ?

Markets made a good move to the downside from our alert few days back LINK. This may be a time to cover shorts and take profits or to atleast cover some shorts. I covered a few shorts, mainly indices and went long into tomorrow at close today to hedge myself. These are the positions I will be closing during the day tomorrow or might keep until next week. I do believe there are chances that the markets will fall soon, but it just needs to breathe first. High TRIN reading of 2.19 suggests a possibility of short term bounce too.

SPX daily chart

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Go short July/29/2012 ?

Here's a similar chart as from last week mainly showing RSI resistance, and some possible weakness in coming days again. RSI is again approaching over 60, and I think there are some chances we retrace yet again from here, like we did last time (check old post). I am starting to get SPX spreads, but will initiate more in coming days if we start to curve downwards from this range. If we slow down and create a high base at these levels for atleast 2 days, I may start initiating some bullish positions for the coming weeks.

SPX showing possible RSI resistance

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Go short July/19/2012 ?

Here's a chart showing some possible weakness in coming days. RSI is again approaching over 60, and I think there are good chances we retrace again from here. I am starting to sell SPX spreads, buy VIX spreads and will initiate more short positions if we see any weakness in the markets starting today.

SPX daily chart (mainly RSI)

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Boeing Co, BA trade for Jul/02/2011

The Boeing Company (BA)

Buy 1x (Aug $67.5 put)
Sell 1x (Aug $62.5 put)

Paid: $0.50
Google finance link

Looking to see how the stock behaves in the next few days before we decide to add more or close the position before the earnings.

*Please do your own research before buying any stock listed here. Disclaimer.
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SLV trade for June/20/2012

SLV july puts at $0.81

Bear flag breaking the trend

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FB bear call spread trade for the week june/22/2012

FB just made a parabolic move to the upside and it may be starting a descent. Since the daily strength is to the upside and all major moving averages showing strength in FB, we didn't wanted to buy outright puts as we might get hit by decay. Instead, we initiated a bear call spread to collect premium if the stock stays below 31 for this week. We may also have some good time to close the position if the stock goes against us.

Trade:

Sell (1) 31 Calls

Buy (1) 32 Calls

5 min chart showing some weakness in the stock today and how it closed below 23.6 fib level.

Hourly chart shows weakness at close. Need confirmation.

Have a good day, trade smart and let us know your thoughts.

*Please do your own research before buying any stock listed here. Disclaimer.
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