2:30 pm EST
Trades
Buy ABX Feb 30 call, Sell ABX Apr 27.5 call (Barrick Gold)
Buy/write BAB, buy stock, sell Mar 60 call (British Airways)
Some day I feel smart, in tune with the market--just yesterday, I felt that way. On other days, the opposite. Today is one of those days when I don't feel that smart. Days like today remind me to stay humble. Arrogance and ego have been the demise of many, many a trader. A very few sloppy trades can wreck what it took a long time to build up.
I roll out the ABX (Barrick Gold) calls at what may be near the low of the day for the stock. I find it easy to second guess myself. Some might call this panic. I was also tempted to buy some puts again on PAAS, NEM or AU. The temptation to swing for the home run and buy out-of-the-money puts can be strong. When I get that feeling, usually that means the market is about to move the other way.
As I mentioned in my earlier post, transports are up, oil is down. Rails are the strongest, however, all the railroads I looked at are extended and seem too risky to buy at these levels. Airlines are problematic as most of them don't make any profits and most of their charts do not inspire. BAB (British Air) has been making money. The chart, especially the long term chart on BAB, looks terrific. One downside to this kind of stock is that the options have a wide bid/ask spread. So usually a person has to stay the duration if selling calls.
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