A Frustrating February

February 2015 was the month of coulda-shoulda-woulda...

I SHOULDA stayed short TLT, it would have been big profits. I SHOULDA gone long AAPL after the ATH breakout, it would have been huge profits. I SHOULDA liquidated my positions at the beginning of the week, I WOULDA been up $160, and now I'm down $230.

The TLT and AAPL trades were good set-ups, everything else, not so much. XLU looked like a good setup, and yeah, at one point I was up 50% on that position. But I got greedy: I wanted to leg out and make big $$$ but should have taken what Mr. Market had to offer. I've been punished and am now down $18 on it.

I made a couple good earnings trades, but I should have been more "awake" to place more of those. February was still profitable, and I didn't do too bad in the first week. Marking to market (since I haven't closed a few positions), I've made $868 gross, and $688 after commissions, or +2.29% ROC. The S&P and the DOW beat me this month, my worst since November.

What have I learned from Fuck-You February? Swing trading doesn't always work; you need a directional market to trade directionally. When the market just chops around, nothing gets overbought/oversold and nothing quite hits support/resistance. There's no momentum to drive anything anywhere, and volatility comes down too.

While I will still stick to my directional trades, going forward I'm going to focus more on smaller profit, better probability trading, because being directional and using debit spreads just isn't working right now.

January was a superb month, February was disappointing. It's my goal to get back on my horse in March. Historically, Q1 of any year has the most "jitters." I guess the cold not only makes people apathetic to venture outside, but also to venture out in the markets. Let's hope the Spring gets us moving again - up or down!

Update on Positions

Current Positions:

• +4 STX 57.5/60 Apr puts @ 1.00, now 0.64 -$144 (entered 2/6)
• +8 INTC 34/35 Apr calls @ 0.50, now 0.52 +$16 (entered 2/13)
• +6 XLU 45/46 Mar calls @ 0.50, now 0.60 +$60 (entered 2/18)

STX has been breaking my balls, and now its time to get serious. Down $144 is not what I want, and the modifications I made to cut losses in TLT certainly did not work. I ended up closing that one down $60. Although STX has not broken out of the gap resistance, I'm losing a chunk of cash. If it breaks out, I will just close it and take the hit.

Going long INTC is the opposite of STX; both charts look very similar. I chose to go long INTC because it is in a multi-year uptrend, and after gapping down has had some upward momentum, as shown by the MACD/CCI crosses. In the past two days, however, INTC lost some of that momentum, so we'll see what happens. With my luck, STX will break out and INTC will break down. What a crapshoot month it has been. My plan is to leg out once it passes gap resistance.

XLU hit a good support level and took off on Wednesday, helped by the Fed comments on remaining patient with a rate hike (ya'll know what I think of that...) This is a utility stock ETF, and utilities are kind of used like "stock bonds," meaning that investors usually buy them for their yield, not capital gains. It too lost some upward momentum off that support bounce, but I liked the price action on Friday, where it recovered from being down 1.5% to lose green 0.05%. Because there were no April calendar options available, I had to go into March, giving me a short time for this to play out. My plan is to have this position closed by mid next week, regardless of where XLU is at, due to theta decay.

TLT You Frustrate Me...

Back on January 28th I posted about my hedging adjustment in TLT. TLT has since come down, just as I had suspected it would:

So, one would think that my spread would now be making some money, right?

INCORRECT. I sold the March 125p for 0.55, its now ~1.00. My original put spread, the 130/131, stands at 0.65, meaning I'm actually losing more money than I should be.

The chart on the left shows the original debit put spread, bought @ 0.50. On a $1 wide spread, this means that I can either make a maximum of 0.50 or lose a maximum of 0.50.

The chart on the right shows the current spread, with the short 125p. The red line shows how it would play out upon expiration. As long as TLT stays above 125 on March 20, then that 125p would expire worthless, netting a 0.55 return. Additionally, if TLT remains below 130 on March 20, then the 130p would expire worthless too. The original spread would net 0.50 and the expired 125p would net 0.55, rendering a total possible 1.05 profit.

The orange lines suggest where the spread should be trading currently. Even though I wouldn't be making 1.05, I should still be in the green, above the gray zero line. But, it isn't. I'm down 0.30, which doesn't make any sense.

So, is there a price anomaly in TLT options? This is the last time I will probably ever trade them, because I'm in 12 contracts. -0.30 x 12 x 100 = -$360, so I'm down a good chunk of change!

This is beyond me... I don't know what to do. Sit and wait and let the loss get potentially massive, or exit the trade soon and write this one down as some mo bullshit?

Watchlist and STX short

What I'm watching:

• YHOO / BABA - approaching support. looking to go long debit call spreads
• BIIB - becoming overbought, waiting for capitulation. short debit puts
• LEN - approaching double-ish top resistance. looking to short debit puts.

I got into a short bear put spread with STX after seeing it fail at resistance today.

In 4 Apr 57.5/60p @ 1.00. Not looking to leg out, will instead exit if it trades down to that support level. Not enough "room" to leg out... should pick up enough delta on the spread to make $

TSLA woes and other news

TSLA had a big two day rally after oil finally rocketed off the bottom and Obama said he wants to extend the solar energy subsidy. Why does that matter? SCTY, Musk's other company, makes solar panels, and the robo-traders correlate the two stocks. Plus, it broke out of that down trend resistance, with volume.

But what does Bflakaz do? Just take the hit and close? No! Now I have an iron condor instead of just a bear call, hedging my losses. If TSLA can move back down to 205 before earnings on the 11th, I'll exit then.

I've also opened a small butterfly position on AAPL, hoping to pin it around 120 for a few days. Seeing as that WFM butterfly I traded a few months back was a great success, I decided to take another crack at it.

And GMCR reports earnings tonight - you know what that means. 2 SD strandle! This one's for the 98/148, ~20% away from the market and 4x the expected move. Three for $0.50.

TLT is still on, and it's showing some weakness - finally. I need TLT to move down between 126ish and 128ish to exit my trade for a profit, its around 134 now.