<p>Econ news this morning was marginally better than expected. First time claims was a tad higher than estimates but income growth was better than expected which resulted in net savings for consumers. I need to dig into the details though.</p>
<p>I had a look through a jobs site for all kinds of jobs (didn’t limit the type) and there were a ton of openings for all kinds of things but finding an exact match or a close match might be tough. I can understand when employers say that there’s nobody out there that meets their needs even though a ton of people are looking for work.</p>
<p>Dudley’s comments today are the correct way of interpreting what the fed has been saying. The reaction to bernanke’s comments were either foolishly misinterpreted or purposely misconstrued and manipulated so that those hedge funds that have been way behind could catch up.</p>
<p>Based on similar thinking, I’m considering opening a small position in GDXJ and writing Jan. 15 calls with a striking price of 8. The etf is trading at 8.45 and the calls selling at 2.45, so I would have a basis of 6 and a 33% ROI if called. If the etf goes down, the plan would be to generate income by continuing to write one year leaps at 8 to generate income until the etf comes back (because GDXJ is so volatile, even relatively far out of the money leaps sell for a significant price). Of course, if GDXJ goes to 2 or 3 and stays there for a long period, I would get killed.</p>
<p>PS Given the structure of this trade/investment, I would be remiss if I did not send kudos to dstark for his consistent position on gold.</p>
<p>If you kind of like gold, that trade looks fine. If the etf really got crushed to 2 or 3… </p>
<p>And you wanted to roll to the 8s…you wouldnt get much premium for the 8s. Just for a guide check out the jan 15 leaps with a 14 strike price. As a guide, what are they trading for? That would give you an imperfect idea what the 8 leaps might be trading for if the etf was 2 bucks. </p>
<p>What you can do though is buy more of the etf at 2 when the time comes and sell the 4 or 5 strikes against that 2 purchase and that 8 purchase… </p>
<p>This would lower your breakeven quite a bit…</p>
<p>Just an idea…if the etf ever drops to 2. There are multiple ideas. Some will work and some wont. ;)</p>
<p>I am trading extremely sh… the last couple of days and what is saving me is I am trading extremely small. I would like to blame this on manipulation by others but I think I will blame myself instead. ;)</p>
<p>I am doing trades with zero probability of profitablity and chances of losses. Not a winning recipe for success. :)</p>
<p>What I am doing is buying stock… Watching the stock go against me… So then I sell calls at crummy prices and hope the stock is stable next week so I can get out even. The gamblers prayer. </p>
<p>I could just take losses but I dont feel like it. I am thinking next week will be an ok week. Then… Time to reevaluate. </p>
<p>My trades overall are up for the week but the week is not over yet. That could change.</p>
<p>I could see by the recent action that I should hedge my bond risk eventually.</p>
<p>Because even the smartest guy in the world has to know if rates rise bond prices fall.
Doesnt take any manipulation.</p>
<p>MUB would be a perfect vehicle to hedge for me except the options dont trade. Bummer.</p>
<p>My take on the market this summer is that it’s a sideways market which means buy the low of the trading range and sell near the top of the range. Unfortunately this can be a lot of work. I think buy (or sell) and hold means your account churns.</p>
<p>Earnings season may change this. I don’t expect great earnings but I don’t expect terrible earnings either. The outlook for the rest of the year may be more important than quarter results.</p>