The ACH That Got Away

My decision to sell positions yesterday appeared smart early in the day as we opened lower. However, I noticed that pre-market trading ACH was up a dollar and I thought, "damn". What happened was news was released that they would possibly be taking a larger stake in Rio Tinto with a loan and this was positive news. The gap held and it went higher ending up two dollars on the day. This would have translated into another 10% gain in the account and likely a 100% return on the option itself. I am upset because it always sucks to see something go higher without you but in reality I have no idea that news is coming out and in reality the stock likely would have pulled back as expected without that news. This just makes it a bit harder to be patient and wait for a pull back but I must wait, probabilities are in my favor to not have it run in exponential fashion higher.

One concern is PCU which I re-entered today on a pull back. It traded poorly all day even with copper futures hitting new highs. I am sitting with only a small loss at the moment but it didn't participate as much in the rally into the close as did other stocks. I'll watch it and if it continues to trade poorly I'll cut it loose. I did get into some steel which was my only saving grace today, it looks poised to continue higher as it finished on its highs at the close.

My tech play in AKAM traded down to support today which is also testing my patience, with the VIX breaking down it is pulling the option premium down as well so even though its higher than where I got in I am losing money due to the decay in volatility and time. It is only a small loss though, and if it breaks support i'll hop out, GOOG could be the catalyst for it to move higher or lower tomorrow with it's earnings.

At the end of the day we did stage a fairly impressive rally especially in financials to finish right back at 850. I only was up slightly on the day which is better than the losses I had earlier of course. I did buy some puts on the S&P at the close as a hedge against poor earnings tomorrow sending us back down. My thoughts are, if earnings from JPM and GOOG are good with good guidance on JPM then we go higher, possibly much higher to 875. If they are poor then we may have a significant sell off. I am still long biased but am more comfortable since I have my hedge on. We'll see what happens.

Total Return for 2009: 129%