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Bad week.. stopped out and other stops close

Apr. 03, 2011 3:21 AM ETJBL, MSFT
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Seeking Alpha Analyst Since 2010

CFA member. In this blog I put my thoughts. Work in an Italian bank in a strategist position (forex and commodities), but my true passion is the stock market.

This week was a bad one for me.

I was stopped on (JBL) losing 17% on the spread I opened last week.

My short on Microsoft (MSFT) didn’t work as expected because the general market was strong and in this condition is more difficult a decrease. I am still short from 25.65, but think to close it on Monday. After the rebound, Microsoft decreased a while, but without break down support at 25,30 on Friday. It seems to have built a pennant, and now it could break above/below with a 50/50% of probabilities. Therefore I’d close on Monday covering barely commission expenses.

This March wasn’t good for me at all…lots of stocks I followed suffered and I wasn’t able to catch them earlier over the days of eartquake in Japan. My fault. this month stole me a good part of profits made in the first part of year and end 2010.

Also the ETF on Greece is not working as hope. I had a signal that last time gave a 30% of gain, but this time it didn’t happen. Unfortunately I am quite close to the stop loss level and I could close it this week.

Copper ETF is not working properly as well. For the first time from 2005 this seasonality trade didn’t work because of tightening China’s monetary policy. This year Chineses didn’t buy copper after the Lunar New Year holiday.

I don’t know if this week I’ll make some trades. Need more time to evaluate markets conditions. At the moment the trade I could try is going long Nasdaq 100 with target at the gap in area 2382. If there’s a small drop, I’ll open it. Otherwise is not worthy trying at Friday closing level, because the stop would be wider that the theorycal profit.

I can’t sell naked put, but if I could, I’d sell a put @56 on QQQ with 1w expiration. Selling a put spread is not worthy at the moment in term of risk/reward on very short expiration days.

What make me dubious about this last rally is that volumes weren’t as good as hope and my fear is that this last month/quarter rally could be just “window dressing” of funds that underweight stocks because of Japan. I think I’ll wait earnings season to make big moves.

What seems sure is that investors finished the month on the “risk on button”, as the depreciation of yen vs. all major currency showed.


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