Saturday, March 04, 2017

Weekly: Was that the top?

Will the big rally day mark an intermediate top? My guess is nay, no top yet. Transports are still confirming the highs. Financials, semiconductors are still leading groups. Most of the major averages are moving together to new highs. Other signs of a market top are an inverted yield curve, bullish sentiment infecting common people. 
Today's anecdote is from the local coffee shop about someone saying the market has to back down, because it has gone up too far too fast. This isn't the chatter at major tops. At a major top, people are bragging about their huge profits and looking forward to making a lot more money in the next leg up. Now, there is a hint of that, but not the exuberance, the naive excitement that is often seen at tops, not yet.

The stock market was up this week, my trading account down a bit. So it was a frustrating week for me. I covered sold calls in BA BRKB DIA for huge losses. It stinks, but it is what I do, I take the loss when my mental stop levels are violated. There is always the risk of a whipsaw, the market reversing immediately after you cover. Rule #1 is to live to trade another day.

Here are the trades for my frustrating market week: (p = puts, c = calls, sell means sell-to-open, cover means buy-to-close, number at end is price per contract):

Mon Sell BRKB Apr 165 p 144
Sell DIA Apr 194 p 69

Sell BA Mar 170 p 42

Sell TSLA strangle: 
Sell TSLA Mar 210 p 55
Sell TSLA Mar 287.5 c 36

Tue Cover BA Mar 180 c 345 for a 1200% loss vs. premium collect. Crunch. I gave it as much rope as I was willing to give it.

Wed I am blown out of the water with the gap up open and cover some sold calls for huge percentage losses.

Cover DIA Mar 208 c 305 for a 1800% loss
Cover BRKB Mar 165 c 1018 for a 240% loss

Sell TIF Mar 82.5 p 50
Sell COST Apr 160 p 63

Sell RCL Apr 85 p 42
Sell TLSA Mar 220 p 45

Fri Costco lower on earnings news.
Sell COST 185 c 28
Sell COST Mar 180 c 10

Sell DIA Mar 214 c 14
Sell BA Apr 210 c 11

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