2:45 Update
Things were rolling along pretty good until yesterday when our plays went 0-4. 0-2 in the NHL and 0-2 in the NBA. Our setup in college football lost. My first pick in the hilton contest went down. Pretty miserable!
Lets see if we can turn it around today.
In MLB
Tor
KC
Betting is 53% on the road favorite Toronto with the line moving from -130 to -134. Models are neutral. Variables favor KC.
Bet or Pass
KC +124
Two college football games tonight:
Memphis
Tulsa
Betting is 69% on Memphis with the line move against the betting from -11.5 to -10. Variables favor Tulsa Models favor Memphis….a pass
Utah State
San Diego State
Betting is 59% on Utah State with the line moving from -5 to -4. Models favor Utah State variables are neutral. A Pass
Friday NBA Plays
Orlando +4
Phil +6.5
Minn +4
Friday NHL Plays
Boston +152
Thats most likely it for today
9:10 Update
The market has settled back now since the open. It looks like there is a chance of a reversal today as the advance decline line is now hovering just above 0. Quite a bit lower then the +1200 shortly after the open.
More importantly things have changed quite a bit in the overall picture of the markets. SPY is now just above the 200 day MA. If it closes above it that will be a shift in market tone. As important the NASDAQ is leading today by quite a bit. Almost enough at this point to have it lead on a weekly basis. If that happens then my plan starts going into place for the next 5 trading months. Initially I am going to buy 10 stocks for a 5 month hold. In addition I will be aggressively taking swing trade longs ( I have put those on hold for the last few months because of market conditions)
It would not make sense to initiate this portfolio at this level however but to wait for a oversold market to jump in. Or at the very least a neutral market. Thats my plan and its getting closer to a trigger. I do not know about you but I find it fascinating analyzing the markets and making trading decisions based upon the analysis.
So next week could possibly be the week to jump in! We will see:)
These have really been historic times in the markets. This market now is about as overbought as I have seen it. Fortunately my mean reversion trades signaled to exit my shorts on Tuesday. Now we are at a point already where we may be close to putting on the spy 50% short again. Usually it takes quite a bit of time for the market to get to a point where that trade is put on again. But we are almost there! One the short side.
I made an earnings trade two days ago where I sold short 5 puts in Amazon. at 1.02 the oct 23rd 470 contract. Amazon was trading at the time at around 580 so the stock would have to drop below 470 before the end of the week to lose on the trade. Thats 110 points in 3 days.
The updside to the trade is that you make 510 dollars in 3 days unless that happens. It sort of like being the house at the dice table. The downside to the trade is that you have to put up as margin on 5 puts 235,000. The other downside of course is if the stock trade below 470 you own 500 shares of it and are going to take risk of it trading below. So lets say the stock closes at 460 today your out 5,000.
I was hesitant to put it out as a trade as its something you do not want to do unless you have quite a bit of experience as a trader. On the other hand you do not have to trade 5 puts you can trade 1 or you can put on a spread which has less capital requirements. If your knowledgeable in investing there are many of these opportunities that come up. But these are trades you need to know what your doing in case things turn against you. And occasionally your going to take a loss. But the win rate is very high on these trades if you are selective in the ones you take.
In any event with Amazon having positive earnings last night the stock is up 10% and I will be making 510.00 in two days.
One other thing to note before throwing caution to the winds in this market is we have still not closed over the 200 day MA and the nasdaq still lags.
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RickJ
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