Friday, May 17, 2013

12-3 for May, grade C+

I count 12 winners, 3 losers for closed option trades during the May option cycle. The losers include AMZN, SPY, LEN. It is a coulda-woulda-shoulda kind of month. Call buyers hit mammoth home runs and hedgers like me fell further behind the roaring bull market in stocks. Both Boeing and Telsa were mammoth home runs for the call buyers. I wasn't a call buyer, I was a seller, and took losses on the calls I sold on BA, LEN, TSLA. Only Lennar Homes counts for this cycle because I closed the other trades last month. 

Some like to paper over their losses. Some never seem to report any losses. Beware of anyone that never loses, the vast majority of the 100% winner on the Internet are liars or paper traders that don't even have any money at stake. I tend to be hard on myself and thus the grade of C plus even though in dollar gains this is by best month of the year.

I can be thankful that I avoided trading gold or silver, or bonds, as those markets were treacherous this month.

Going forward, I have have smallish short put positions, less than usual. Like I have been saying the stock market is on red flag warning. There is the Schiller PE10, the Value Line Appreciation estimate, a bull on the pogo stick on the cover of Barrons are the main factors. On the bullish side, is that there is no chatter at the coffee house or at church about the stock market. More people seem interested in gold than the stock market. Again, this points to more pain for gold bulls.

Again for gold, averaging down during a major bear market is the road to the poor house. Gold has had 12 straight up years. If this is a down year, it may be the first of several.

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