Friday, April 22, 2005

Easy Come...Easy Go

I took some losses today. Apparently HAR's earnings didn't help the stock out. I took a $155 per spread loss on the HAR bull debit spread. This brings up a dilemma. I could have closed the spread up $70/spread yesterday. Almost every single earnings season, I have a position where I'm up big prior to earnings, and I wait for earnings and the stock loses the gains. Afterwards I tell myself that if I'm ever up big prior to earnings that I will sell before the announcement. Will this be the last time I don't sell in advance of earnings? I hope so.

I re-entered the QQQQ May 31 calls that I sold yesterday. I was pleased that my price was close to the lows for the day. I probably could not have bought any lower. After I bought them, the market rallied a fair amount. Generally on a Friday like this where the market has moved big in one direction, I expect a counter-trend to develop into the close as winners take profits and get flat for the weekend. It seemed like today's rally off the lows was particularly fast and strong...could this be a sign that shorts are nervous, and maybe we had a bit of a squeeze? Maybe this is wishful thinking because I am long.

I added a new position to my long-term portfolio. My long term portfolio consists of stocks I hold for 6 months+. I purhcased a small amount of NITE stock and some out of the money January-2006 NITE 10.00 calls. One of my favorite RealMoney.com columnists, James Altucher(Trade Like a Hedge Fund, Trade Like Warren Buffett) has written a series of articles recently highlighting NITE as a value play. Today in the Columnist Conversation section of RealMoney.com, Cody Willard, who is another one of my favorite columnists, mentioned that he was acting on James Altucher's idea by buying NITE stock and some out of the money calls, so I decided to try the trade too (in small size.) My other long term positions are SHLD, CMCSA, LU, and XEC. My long term positions almost always come from reading Realmoney.com articles.

The May portfolio is no longer at a positive P/L. All positions are still above their strikes. Considering how much the market sold off, I am pleased how well my positions heald up. Compared to the other recent market sell-offs, my positions were not so volatile today.

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