100% Return Barrier Broken

So I didn't do an entry yesterday, with the late day rally in stocks yesterday I had a decent gain on the day and ended up back at a 90% return. I cut my 2 losing put positions and held on to the remaining weak ones.

Today we had a huge gap up at the open thanks to Wellsfargo which essentially started my account back at previous highs which was nice. The two new longs I had taken were working out nicely as well as my previous long positions. I closed out my remaining put positions although I possibly should have held my LMT puts as it was not participating in the rally at all but I assumed it would. overall it finished about where I got out so it wasn't a huge loss.

I closed all but 2 of my positions at the end of the day and will look to get back in on monday after the holiday. I could have taken the new positions ahead of the weekend but I would have suffered needless time decay and also had the risk of bad news coming out over the weekend. The other side to that is we could have good news come out and it gaps again without me participating too much. My hope is that we open flat to slightly down and then I get the opportunity to get back into a few stocks with higher strikes so I lock in profits and can keep participating in the trend.

I obviously can't participate in everything but I regret not getting into MS when it was down yesterday, I had thought about it but there was some definite risk of uncertainty, would have been a nice gainer today though. As usual I'll look to get in on pull backs.

If we get confirmation of good earning and the reflation story is still solid I think the next big gainers could be the Agriculture names more than they already have been. The market is acting very bullish with the VIX breaking its 200 day moving average finally, treasuries are nearing the 3.00% mark which would be very bullish if that is broken.

Breaking 850 is a big deal, and if we finish higher from here that will be a good confirmation signal. In the short run I think we get to 875, then pull back and resume higher to 900 eventually.

More than my return performance I am excited by my discipline. I am positioned ahead of these moves and take profits or partial profits and am patient to re-enter on pull backs. I am still a ways off from recouping my learning losses of the previous 2 years however, I am very confident if I maintain this mind set I can do it fairly efficiently.

I contemplated taking only partial profits simply because I didn't want to be out of the next gap higher if people took this as confirmation of a break above 850, however that would have doubled my commissions which is already eating up 6.8%. I need to see if there is a better way to handle things but as of right now I am not extremely concerned. I am sitting in 90% cash looking for some good opportunities going into next week. If we see options getting cheaper in the future I may go back to the old strategy of selecting one strike out of the money but I think we may still be a ways off from that. We'll see what happens on Monday, expectations may be getting slightly ahead of themselves now, we will see how the market reacts to Goldman Sach's earnings on tuesday.

Total Return for 2009: 106%