How about Selling Puts here as the best of both worlds play...
I know for many that ''Selling" a ''Put'' - is not a normal trade; however this strategy is perfect for this enviroment currently. I can mitigate my risk and capital, and retain some nice premiums (participating in the move) if the move continues; or I have to buy stocks I am long anyway; but get to offset the strike price with the premium. Seems to be the ''play'' here for Bulls who are a little less than confident that this run continues...
I keep looking at the charts from last winter; Big run in Oct - turned in Nov. & blew off in Dec to mid Jan; where the wash sale time limits from tax loss selling (?) began to end and we moved nicely from Jan to March; then tanked again in March; rallied through June; then tanked in July... talk about a ride !
Has RON just went nuts or what ???? !!!
I guess we were owed a little irrational exuberance here as we've had more than our fair share of irrational negativity.... I just can't get it out of my head; when crude really turned the corner in September - we just suddenly sold off on a turn on a dime...? Now, with relatively poor earnings (excepting RIG ) and with crude falling and definitely breaking a trend; we start a huge run up ? - this in the face of a November OPEC meeting and in the face of Venezeula & others breaking ranks potentially...?
It allmost seems like ''ALL'' the Institutional/Fund money on the Street moves in unison here in the patch ? Short together, now Rally together ? Cude Oils behavior lately is incomphrensible imho; now the government doesn't even trust the numbers... how the hell are we ?
...Train Keepa Rollin ! - sometimes 'tis better not to ask why, just hold on tight for the ride...
PS; After riding out the storms here and living and trading through the lowest of the lows here; Do stocks like RON & RIG now seem expensive ? They scare the hell out of me - because just weeks ago (when crude was moving up strongly, not down...) I dumped RON in the low $20's - thinking I ain't going to the teens.... Traded it only because of this double bottom of late, which turned on a dime twice...
I'm holding only a small, small amount of oilpatch stocks here. I am just trading, but not much here...
Lately, I have bought and traded many financials; mainly S&L's, Daytraded BT etc. and an interesting concept exists; I enter these downtrodden sectors ''fresh'' and see the incredible decimation and super values and buy strongly into these sell offs and make great money on the bounces and their run up of late.. However in the oilpatch, because I lived through the carnage; the stocks actually look expensive and I keep waiting for the rug to get jerked out from under us again, because it has continually; and now, there aren't ANY fundamentals to support this move ??? At least in the S&L's I have strong, strong EPS growth and the Fed Rate Cuts are a definite factor... There, the Babies (S&L's) did get thrown out with the Bathwater (the BT's & MER's, CCI's, USB's)... here in the oilpatch; It just doesn't ''feel'' right ... not yet, not now.... |
