Phantasmix Stock Blog

I covered (PWE: 19.51 -0.76%) yesterday, for a total gain of 0.24%. Would’ve covered for +2.2% but believe it or not, because I posted the trade on the blog I thought “Well, I should execute my plan since it’s public!” That’s like reverse noise. I won’t let the blog control my trades, I won’t let the blog control my trades

Decided against holding the short, because:
- it’s very boring
- wouldn’t have made much anyway
- the stock was up on a day when oil was down (very uncharacteristic, worried me)

Boring and profitable would’ve been okay, better than exciting losses, but this was just blah.

Click charts to enlarge

(DGP: 29.45 +1.03%) — Short @ $16.90

Though RSI(3) indicates that gold is short-term oversold, I’ve highlighted 2 recent occasions when it was oversold and kept dropping further.
As of this moment, US$ is moving up and gold is dropping.
My target is still tied to GLD, but I’m guessing it’ll be around 50dma on DGP as well, or $15.

(PWE: 19.51 -0.76%) — Short @ $13.24

50dma is lower today, overall PWE behaving as expected with all the indicators starting to correct.
Stock went down on slightly higher volume today, but not significantly.

SPX — S&P 500 Index

Well… I have Jan $75 puts, as insurance against a dramatic plunge, because I’m still slightly paranoid. I have that TZA which is a 3x Small Cap Bear ETF. And I bought Feb $92 SPY calls (that I sold yesterday, re-bought them cheaper today). So though overall I’m net short the market, I’m slightly hedged. Saw a “signal” indicating that SPY should be at $91.50 at some point tomorrow, we’ll see.

RSI(3) worked off the overbought condition pretty fast.
Volume was slightly lower today.
Closed at support. Should it break, SPX will go to 50dma.
Pivot points for tomorrow:
R1 921.98; S1 896.90; R2 937.25; S2 887.09, DP 912.17

• Bought TZA
• Wrote a covered call on TZA – if called, 11% profit, 22.5% downside protection
• TZA for a quick trade, bought and sold
• Shorted SSO twice
• Shorted SDS

Holding overnight:

Short (DGP: 29.45 +1.03%)
Short (PWE: 19.51 -0.76%)
Long (TZA: 31.85 +0.63%) with a sold covered call (Feb $40)
Short (SDS: 32.56 +0.96%)
Short (FSLR: 135.50 -1.12%) Lord help me

Edit: I covered SDS and opted instead for two Feb’09 $92 SPY calls.

I will post DGP, PWE and SPX charts later.

Though I dislike trading oil and natural gas, PennWest seems like a fairly low risk short trade. TSX ticker is PWT, but I prefer NYSE-listed (PWE: 19.51 -0.76%).

Trade: short PWE
Entry: today’s close or on morning pop
Target: $12.15, once reached, I may move the stop to this level and let it go to maybe $11
Stop: $0.50 above entry
Risk: $0.50
Potential profit: $1.30-$1.80

Why:

• Barely touched the 50dma, but couldn’t break above it, even on fairly strong volume
• Bumping against strong resistance at just under $14
• Unfilled recent gap up from $12.15
• RSI(3) – short term – is at an extremely overbought reading, 96
• Stochastics also showing it’s overbought

I’m hoping for a quick and simple trade. The stop is tight as oil may take the stock above resistance in a flash.

Wouldn’t mind buying this back for its insane yield but not yet.

Click charts to enlarge

It’s pretty obvious that SPX is overbought and should correct any day now. That’s in addition to the negative news out after hours (Alcoa, (AA: 11.02 -0.18%), cutting capital expenditures and employement), which no doubt is just the beginning.

The question is how low will it go on this correction?

920, 887, 850 or lower?