Wednesday, October 13, 2010

Buy GDX, SPY (sell puts)

I had technical trouble, so these trades are a few hours after the fact.

Buy SPY via selling Nov 104 puts, SPY@117.9. As the stock market rallies, the puts I am short provide less and less exposure, the delta goes down. I already am short Nov 91 and Nov 95 puts, as well as some Octobers.

Buy GDX via selling Nov 47 puts, GDX@58.5. GLD continues to run higher. I had a notion to short gold yesterday, but there hasn't been even one signficant break in the rally from the summer lows. The chart looks like “elephant tracks,” or big money flowing in. Don't stand in the way of the elephant.

Bonds (TLT) look weak and likely to get weaker. Treasuries are suffering the brunt of the decline. Corporate bonds (BND) and junk (HYG) are holding firm.

Long AAPL, BRKB, GDX, GLD, SPY, TLT

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