Thursday, December 13, 2007

Short term bottom?

The Qs finished a few pennies higher than the open on strong volume. For most of the day the action resembled paint drying. At a couple points I rapped my laptop to make sure it was still working. As surmised in yesterday's post, my end of day bravado holding long calls turned out to be misguided, leaving me .14/contract poorer at the open. I managed to gain back a few pennies before dumping the position and going short. That position held for about 90 minutes before I bailed and went flat. About 13:45 TICK action started to pick up, all my indicators turned up and my Q tracking stocks turned positive, prompting me to buy the 53 calls. That turned out to be good trade as the Qs inched up into the close on increasing volume. The fact that the DOW turned around pretty impressively from -100 to + 40s was also encouraging. I'm again net long, trusting that I won't get caught in ringer overnight. The TICK was surprisingly bullish for much of the day. I have alerts set that sound a tone when the TICK hits 525, 800, -525 and -800. The majority of alerts were bullish going into the afternoon session, although the mean TICK readings stayed firmly at the PP pivot. The NYAD went upslope for the last hour, which added further encouragement to my maintenance of the long calls into the close. Tomorrow's Friday and with the current extremely negative mood about the financials, real estate, retail, etc. . we may see a risk management sell off into the close (I may join the crowd to avoid paying the weekend premium decay).

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