I’ve been pretty disconnected from the markets for the last two weeks.  I’ve of course checked my account everyday via mobile, but haven’t had my pulse on the market.  I made the decision that before I unplugged I was comfortable with my positions, nothing was set to expire till Sept with most of it out into December and Jan.

Turns out I should have sold everything and then re-entered when I got back.  But that is the way it works some time. Time for me to review and learn some lessons.  You have to take something away from every trade, profit or knowledge.  Not much profit the last two weeks…

DIA – This trade went up nicely but I didn’t sell, its now down, I need a pretty strong rally in the next two weeks if I’m going to get out of this even or with a profit.  I’ll sell part of the position, even if its at small loss, on any rally over 200 points.  But the lesson I’m taking away from this trade is that I was really just trying to play the “market” not specifically the Dow 30.  The Dow and the S&P 500 usually trade very closely together, but the last two weeks that broke big time.  The last two weeks the Dow is down 3%, the S&P is down 1.5%  That is DOUBLE.  With the leverage that Options bring, that is a big gap.  Lesson learned.  I am going to buy SPY from now on when I want to play general market moves.  I got sucked into this mistake because the media almost always quotes the DOW when they report moves.  Lesson learned.

USO – I started a position on USO (vs UCO) a couple weeks ago when WTI broke under 50.  The volume is much better on USO and though its not as leveraged you can get orders filled a lot easier, that is a lesson I learned previously, volume matters a lot.  I’ve got the Oct 16th, $20 calls.  $20 on USO is = to about $60.  I don’t necessarily think we are getting back to $60 in mid October but these far out of the money options have a huge potential to move, they are trading at .07 cents right now.  This is a very very aggressive play, but if WTI rally’s up a few dollars on any sort of Middle Eastern turmoil or if the Iran deal hits some bumps, that is not out of the question.  Listening to the “experts” predict the moves of Oil drives me crazy so I’m trying to ignore the never ending headlines.  I’m actually thinking about putting a really big bet on Oil with a date out to Jan. 17 and just leave it.  You can buy the Jan 2017 $20 calls for about a $1.30, will Oil get back to $60 in 16 months??  If we get back to $60 that will be a 300% return with very little risk in my mind.  For anyone scared of the risk in Options that is one of the safest bets you could make in my opinion.

VIX – bought a little VIX action with a Sept date, its flat, only way it will move is for a big spike this far out.  I bought it at the lows of 12.  Its just a hedge against a major fall against my DIA position.

BABA – even though I’m playing with the houses money on this one since I got over a double, its still frustrating to see it down.  Its didn’t hold $80 because the news out of China is just getting worse.  Its all going to come down to earnings on the 12th.  I’m hoping for a rally into earnings to get me back to even and I’ll sell 1/2 and leave the rest to see how that actual earnings play out.  When I re-entered this trade after making so much money I should have pushed the expiry out farther, instead I just added to my old position.  Lesson learned.  If you are committed to a idea you do NOT have to just cost base down the same position, you can add but with a different expiry.

TWTR – I bought into this knowing the only real catalyst would be a new CEO or an acquisition rumor.  Nothing has changed on my premise or plan, lots of time for either of those scenarios to play out.  But WOW was it painful to watch TWTR blow away the top and bottom line and then get crushed because of user growth and the brutal feedback of the new/returned CEO.  One comment, one little comment that they are open too or looking into a sale will shoot this stock through $45 instantly.  I wish I could cost base down but I’m already in with a sizable position.  If anyone reading this has not bought TWTR options, look hard, go way out to Jan. 2017 if you are cautious.

VMEM – this is painful, last week it rallied up to 2.50, options DOUBLED, a couple days later its back down to 2.00 again and the options with it.  I have a big position on this, with lost of time, feel OK with my new cost based position but I sure hope they had a good QTR or announce they are looking for a buyer on the next earnings call on the 24th.  I really don’t know how low this stock can go, who is selling any volume of shares at $2? IPO was $9.

So in summary the last two weeks have sucked.  Earnings season has not been great which really surprised me since expectations had been lowered.  The sentiment I feel in the market is now very negative, the street is looking for any reason to sell off and punish stocks, I really don’t know what is going to break this feeling, its summer and volume is low which can have an effect, but I think what we need is an official correction (10% off the market highs) and for the Fed to just get the stupid raise on the books.  Hopefully I can salvage these positions and move into a higher ratio of cash and then pick some really long stuff off waiting for the stupid technicians required pullback so that we can get back to the familiar patterns.  Why the street thinks interest rates of .25% vs 0% will make any real difference is beyond me.