Whiplash Wednesday

Wednesday was fairly frustrating as I got out of pretty much all my positions. IPI gapped down 10% on a downgrade from GS which at the time was not really public knowledge so I had no idea why it was happening, the general rule of thumb is if you don't know then sell, which I did. The stock then rebounded but finished right where I sold it originally so overall it wasn't a huge deal. PCU broke down below support and was already pushing past my 2% loss limit so I cut that loose, it rebounded but broke down again at the end of the day, again making my sell alright. I sold my puts as we started to rally which was genuis when we hit highs but dumb when we came back to the lows. CHK also broke down below my line in the sand during the day so I sold as natural gas does continues to trade down.

As of this writing CHK is higher, I will wait for it to close above 20 again to get back in. I decided to sell some calls ahead of both AAPL and AMZN earnings. Seems like a stupid plan to sell calls on two of the strongest stocks of the year right? Maybe, but I went with a conservative option, the probability of the stocks gapping to my strike prices is very unlikely. I sold 135 calls on AAPL and 90 calls on AMZN. In Apple's history of the past 2 years the most I have seen it gap is 14 dollars and that was in a bull market without a run up before hand. Apple is up 40% this year already going into earnings so I assumed any reaction would be muted and the volatility decay would be in my favor. So far it is working out, we'll see what happens with AMZN. I only have 3 positions, my remaining position was my only recent remaining profitable one in DSX.

I am thinking I'll sit on my hands for a while as I have been off a bit lately and given back some money and I feel like this volatility could be a sign of a pullback. I am really wanting a significant pullback to occur to get back into the market but I don't know if it will happen, like a move down to 800. I'd like to get back into energy and materials at lower prices. ANR is looking good but has moved about 15% in the past 2 days so it's hard to buy it up so high.

We'll see how the day finishes out, I'd like it to finish lower, or at least below 850, maybe have a large down day after the stress test info, the next day gap down to 800 then reverse higher would be ideal and likely what others are watching for as well.

Total Return for 2009: 124%