08/04/11 Watchlist

Ok, who am I kidding, a watchlist?  Come on.  This was one of those transcendental kind of days that you just have to sit back and observe.  There aren’t many days that I can remember when the market drops over 5% in a day. 

Like I mentioned in previous posts, as a discretionary trader that seeks to buy reversals, I need to have a plan with strict rules in place.  I took some pretty bad losses in my $QQQ options trade earlier in the week.  Without a plan, I could have held onto those calls, hell I might have even added after yesterday’s encouraging session.  Most likely, they would be expiring worthless or my losses would have been much greater. 

On that note, I sold my $KO Sept 67.5 calls at 1.20 (1.57) this afternoon…it was a really small position, so no biggie.  More on that in a bit. 

I find it kind of ironic that when I get the itch to start writing and sharing information, the market swoons by over 10% in that time frame.  But what the hell, what are you gonna do?  Just keep moving forward, there are always opportunities. 

The watchlist has been decimated err ‘pared’ down two stocks from last nights list, and I doubt there will be many new additions (I haven’t started to look at any new charts yet).  Anyway, for the sake of continuity, here is tonight’s “watchlist”.

The following stocks have been removed from the watchlist (reason): $ATVI (closed below 63 EMA and lower BB…looked good early…not so good late),$CVX (poleaxed), $HOG (murdered, Good thing I didn’t trust that shitty industry group: automobiles), $KGC (I would have been stopped out of this trade with a loss when it broke 16…and it looked so good just yesterday), $KO (dropped below 67.  I saw prices break 67 around 10:30, and wanted to wait and see how it would react.  My son had just gotten up from a nap, and we were busy trying to eat some food.  Next thing I know it’s trading at 66.5ish [with the market down almost 4%] and I said: “fuck this” and sold my Sept 67.5 calls for a loss of 0.37…the losing streak continues.) $LLY (ugly ugly break of 37), $MOS (destroyed, like I said last night…I’m not good with stocks just coming out of a bottoming pattern), $POT (Blew right through 57, 56, 55, 54 and 53 before “catching a bid” in the mid 52’s to close at 53.38…yikes), $SLE (well, 19 finally gave way…you can only go to the well so many times).

That leaves us with:

$D: Barely hanging in there…but it is.  Utilities were a relative safe haven today, with $D ‘only’ shedding 1.83%.  Nevertheless, it never breached the sell zone around 47.5, so I remain in my rather small Oct 50 Call position.  This is one of the only charts I look at that bears some semblance of normalcy.  In times like this, I don’t know if that’s a good thing or a bad thing.  Other stocks I was saying the same thing about just yesterday look broken a day later.  Who’s to say that $D isn’t the next stock to leap into the abyss.  Maybe utilities just aren’t speculative enough to generate that kind of volatility?  I’ll be watching 47.5 tomorrow to see what happens.

D 2011-08-04

$MCD I almost pulled the trigger on a trade in $MCD about an hour before I sold my $KO calls.  I said: no, wait until the end of the day to see how things shape up.  I’m glad that I waited.  This isn’t pretty, but it’s not ruined either.  A day or two of calm would make this look a lot better…but who the hell thinks tomorrow or Monday will be calm?  I’m won’t be holding my breath, but I will be watching the 84 area closely on $MCD to see what happens.

MCD 2011-08-04

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