anyer - re: Risk Management.....
Well it looks like everyone got "lucky" today... from the Shorts, to the French Quarter (vbg).
- we both emerged with only a few dings & dents.
I did end up covering about 1/3 rd of my Short Position, but I also unloaded all of my LEAP Calls bought earlier this spring when I put on an Options Straddle covering around OSX 125-130... so I'll consider myself luckier, than good - today...and +30-35 points on those LEAPS created a little mad money that can be put to good use later... hopefully on the commodity side next spring.
I mainly covered on the E&P side this morning and will let the remaining 2/3rds ride short here.
I'll consider re-adding into continued downside momentum, but I do have tight mental stops on the entire position.
This isn't a Home Run Swing for me here.... it wasn't earlier this Spring either....although, this spring - there were some major hits in a few stocks.
This Spring I thought Crude Prices were ripe for a retracement and we did rollover down to the mid $40's for Crude (before GS made their $105 Oil call) and I caught $10-$15-$20 on the Short-side in stocks like ATW & BRY for a very nice short-sided raid. I bought Calls & LEAP Calls when I covered my Shorts ... instituting an Options Straddle and closed out all of my "calls" a couple weeks back when I entered "SHORT" again... and now cut loose my LEAP calls 35-40 OSX points higher here to give me some "air cover" on covering 1/3rd of my shorts.
Still holding some decent gains like +$4 in SLB, $3-$4 in DO, ATW & RIG, $1 in DRQ... on the E&P side - out of my largest position with +$5 net in KWK, got $2 in VPI & BRY, about $1 in RRC... all the E&P's closed out now... riding short on the OSX names only here.
Given that this was a helluva opportunity to really squeeze the Shorts here and it didn't happen... it looks like the OSX may continues it's correction, hopefully towards OSX 150 as imho, that longterm Resistance Level really needs to be retested as new support imo. When I cover my shorts... I'll once again take a "portion" of my short profits and buy some out of the money - outlying Calls & LEAP Calls to reinstitute the "straddle" as I still think that's the way I want to play the Oilpatch here - as "Volatility" is the best Risk:Reward bet I see... ala the NASDAQ 4000 speculative environment of the Oilpatch.
The "HOME RUN" Swing on the Short-side against the Oilpatch for me is going to hopefully come with "House Money" made from this Spring's and this current Short Raid.
Matt Simmons has backed his Peak Oil Supply:Demand Shock Thesis into a Q4 corner here imho.
The Market may give that untill Q1 2006 to play out ...but, by Q2 - when the US Economy will be slowing imo, and the "R" Word will be being used daily... I think Oil could really take a hit if Inventory Levels hold the mid-point of trailing 5 year averages and if the US does rollover into another Recession - then the mid $30's for Oil is very realistic.
Ultimately, the real leverage will actually be in Shorting the Commodities directly ... and hopefully with the profits from this Springs short raid... and if this retracement continues here in the shareprices... I can roll those profits into a more levered downside pureplay bet on both Crude & Natural Gas themselves on the Commodity side...
- that's the plan anyway.
My Homebuilder Shorts are doing well and are now 2+ x my Oilpatch positions... if WLS would just rollover...
Glad I did "not" cover too early on TOL (vbg).
Airlines Red Today... still not a bad day to be Short:
finance.yahoo.com
Goldstocks still basing... hopefully, I can pick up a nice chunk of change on these Short-trades while Gold sleeps.
Looks like Prayers were answered on Katrina... could have been a lot worse.
Later,
PS: Off Topic... is anyone familiar with a guy named - Jay Abraham ? (you'll know who he is and what he does - if you are (vbg).
PM me... if you are.
Thanks,
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