DAILY E-LETTERS
1/1/2000-1/31
01/31/00
Am anticipating problems with the Monday commute so I am sending this out tonite(I hope).
Rams not romping but old NFL team winning use to be a BULLISH sign for the Stock Market. I
guess it depends on who "BIG AL" and the Boy's from the FED had since their
meeting this week will decide the direction many markets move in. On to the TRADES.
COCOA-finally has made a decent drop (closed at 808 after filling our seel at 834. HIGH
was 836) and I expect a slight bounce to 822 in the morning before it collapses to 785
where we will but a future verses our 800 PUT which expires on Friday. If this big drop
does occur may want to pick up a "cheap" 800 CALL that the present owner's will
be "dumping for a song" ($70)
JYEN-crashed AND burned on Friday and with some chance of a recovery back to the 9500
level (where it may then fall again) BUYING TWO 9500 calls (with one week to go they are
inexpensive) looking to SELL a future later in the week and own both sides seems like a
good prospect. SWISS FRANC also fell on hard times (we got this one right at least) and
may also be a good BUY two call sell one future play with a little less risk than the YEN.
01/28/00
Nothing better than high VOLATILITY in the options or
daytrading game and that has been the "soup du jour" all week. GDP due at 8:30
and the markets are up in the overnight. Apologies for the delay on Thur. but it is hard
to fight E-problems.
A few points of interest, fact, and history.
JAN F-cattle was at 8515
yesterday with one day left im the options (I cornered the 8500 PUT MARKET) MARCH was DOWN
over 100 points and you ask why the JAN was up 3??? See above and yesterday's E-ing.
In the early 1900's ONE ounce of SILVER was equal in barter value to ONE bushel of SOYBEANS. For decades traders (who I believe are all dead) followed that relationship. Right now JULY SILVER is at $5.44 an oz. and JULY SOYBEANS are at $5.45 a bu.
Just like the underling theory in stochastics when my survey of the "general
public" results in 80% or more in favor of something, being a true conter-trend
trader, I "GO THE OTHER WAY". Bandwagon for the TITANS is bulging at the wheels
from everyone jumping on, add to the the "bounce theory" and you get RAMS IN A
ROMP!!!
ON TO THE TRADES:
SOY BEANS- moving hot and heavy but there may be some consolidation so with
"juice" in the options high for a one week play SELL the 525 march straddle one
put one call (same strike while a strangle is different strikes) for 25 cents. 525 is the
level that the US govt pays farmers for their beans and a pivot around here seems highly
probable. I would fear a strong run-up only so maybe buy a 550 call for 5 cents as
protection.
COCOA-dropped (not enough yet) and I am SELLING this morning at 834 with a STOP at
842 (risk $80) and buying some MORE 800 puts for 8 points.
SUGAR-is underrated and has as many "bears" in it as the Titans have
supporters. So I am RE-Recommending getting long this market with MARCH and MAY options
MAR 550 CALLS for 15 points ($11.20 per) and MAY 650 for 12 points.
01/27/00
The most influential man in the world (in my humble
opinion) was at it again. That crash
you heard late yesterday came courtesy of "BIG AL" (Greenspan). He is up for
re-appointment as Fed Chief and while addressing the committee he mentioned that there has
been an increase in investor borrowing for stock speculation. When he uses words like
"worried" and "concerned" look out below. The Nasdaq dropped 60 points
on top of a weak day and continued to fall overnight while the S&P and DOW held fairly
well. Markets can rebound if this mornings reports are favorable but if not go SHORT
S&P with a target of 1400 (do not short NASDAQ)
I am the biggest ONEGLASS fan
and do shout from the hills when we hit a good one. Well the WORST TRADE EVER was FEEDER
CATTLE strangle , they should strangle ME for that one. This IS one of the most
"fixed" markets. I have told my associates that if they hear me mention the word
feeder cattle to "shoot me" so add this market to the list of futures to avoid
along with LUMBER, PLATINUM, and the NYFE. ' NUFF SAID
On to the TRADES.
SILVER and GOLD-have been giving mixed signals and while the markets guru's say the
British auction numbers were already built into the market the demand was HIGHER than
expected. Use caution if playing these markets through the reports today and if SILVER
breaks 536 GO LONG.
PORK BELLIES-may have formed a bearish DOUBLE TOP and though I have been quite
bullish it is time to get out of the pool. Not that I really want to go short but TAKE
PROFITS and wait and see.
SOY BEANS-did not hit my target low of 510 so today we will LOWER that buy to 507 1/2 to
go long for a DAYTRADE with a stop at 504 3/4 (risk less than $150)
01/26/00
Everybody has
different levels of risk and each market has its moments of high volatility. Part of the
trick is to stick to a specific plan when entering and exiting a trade. I am often
chastised for using VERY tight stops and taking QUICK profits and all I can say is
"that is MY style of trading". Quick example is daytrading the NASDAQ. I
sometimes use as little as a 8 point ($160) stop in the MINI contract because not only am
I making a "timing" trade but at any given moment the market could move 60
points ($1200) and that is no risk to take when just trying to "scalp" 20-30-
points. Other markets, like SOY BEANS, are trendy but will have brief
"cleanouts" and a risk of 3-4 cents is more than enough to avoid such events.
Reports due Thurs(durable goods -.1%, jobless claims up 8,000) and Friday (GDP down .6%)
are expected to be deflationary which should have effects on the METALS, BONDS, and Stock
Indexes (metals down, bonds and market up). On to the TRADES.
COCOA-still has me predicting another test (and breakthrough) of the 800 level of support.
Those not in yet can BUY the two week option (MARCH) for less than $90 (strike 800) or
just SHORT the market at the 838 area with a 852 stop (risk $140)
WHEAT-has shown little life in the face of the surging BEAN market and while I am
expecting a retrace in the SOY products I do not want to short THEM so I look to the MARCH
WHEAT to SELL at 264 3/4 with a STOP at 266 3/4 and an objective of 258 1/4 (risk $100
return $325). Look to BUY BEANS at the 510 1/4 area if you achieve profit in the wheat.
SILVER-a basic "DOG WITH FLEAS" is at it again after touching the top trend line
at 536 yesterday and following the decline of GOLD (as we touted yesterday) can see a
drastic turnaround ESPECIALLY if the upcoming economic data is deflationary.
WILL CHANGE THE PASSWORD AT NOON and if you are still IN I will send it to you.
WE ARE
BULLISH
BEARISH
SOY BEANS
COCOA
PORK BELLIES
LIVE CATTLE
JYEN
SWISS FRANC
01/25/00
Storm of
the CENTURY on the east coast but I'M HERE. Sell-off in the stock market on monday is
prompting me to be a BUYER this morning of the NASDAQ(up 23) even though trading may be
thin early due to traveling conditions in the BIG APPLE. ZOn to the trades.
DUE to computer malfunctions this is the second version and is running late!!!
COPPER-is a BUY at 85.15 with a stop REVERSE at 84.70. OPTIONS for JAN (very thin)
expire on THUR.
GOLD-has shown some life the past three days but I am NOT BUYING it. UP $2.40 Like the
march 285 put ($180) OR THE 290 PUT FOR $250.
JYEN- adage goes "what does not kill you can only make you stronger" and this
applies to the YEN. Neither intervention nor rumor of flooding the market with bonds has
crushed the YEN so BUY the FEB (two weeks to go) 98 CALL for 14 points ($175) or the 97
for 30.
01/24/00
Last week saw the Nasdaq up 4% while the DOW dropped 4% so those who stuck with long nd and short Dow made a nice profit. Later this week Initial Jobless claims Thurs (expected to rise) and GDP Friday (LOWER) are the key economic reports forthcoming. Existing home sales are due out on Tuesday and are expected slightly lower.
PASSWORD WILL CHANGE LATER TODAY. PLEASE REGISTER if you are not a
customer or subscriber and wish to continue to receive this E-LETTER. On to the TRADES
PORK BELLIES- HIT our 90 cent prediction and now what happens?? Well for
"candlestick" fans the "hammer" that formed on Friday can last be seen
in mid-Nov just prior to a hog report which was followed by two LIMIT UP moves. While the
report on Friday was a little bearish I look for an "instant replay" and will be
BUYING FUTURES FEB just below 88.00 which would mean almost a LIMIT DOWN move on the
opening. This sounds like an aggressive (risky) strategy and IT IS.
COTTON-had a pull back on the close partially due to profit taking and possible rain in
the
southwest. Still see 60 cents as a viable target and will seek out value in the options.
BUY MAR 59 calls for 30 points ($150).
SWISS -has finally collapsed (down 60) and do not see much of a rebound in the next week.
SELL a RALLY up to the 6275 area or BUY MORE PUTS on this move (two weeks left in
options).
EXPIRING OPTIONS- FEEDER CATTLE JAN (THURS)
HEATING OIL FEB (WED)
UNLEADED GAS FEB (WED)
NATURAL GAS FEB (WED)
COPPER FEB (WED)
01/21/00
Ya
gotta love this GAME!!! DOW and S&P crushed yesterday (down 185 and 15.00) and guess
what? NASDAQ was UP! Other notable spreads saw spot HEATING OIL up 643 and UNLEADED GAS up
only 59 ($4 a point for each). Even in the Grains-BEANS up 4 1/2 WHEAT down 1. Stick with
these trends. Overnight action sees HEATING oil up 300 more, DOW up 37 (last trading
day for JAN options) and currencies mixed (yen up 50 swiss down 25) EXPIRING OPTIONS today
include stock indexes, OJ, and FEB grains. On to the TRADES:
ORANGE JUICE-did not let me in on WED (fortunately) but still see chance for a
"FREEZE FRIGHT" this weekend and with the COLD STORAGE report due at the end of
the trading day (this affects pork bellies also) I would take the chance to BUY the MARCH
85 call for 170 (each 100=$150) or the 90 call for 110 and take a short term chance on the
weather play.
SOY BEANS-are working nicely for those with the 500 call that we bought on Tues. Yesterday
I "locked in" the option with a SELL at 504 3/4 in the morning and got out at
499 1/4 by noon.
BEANS are up 2 cents (507 1/2) on the over night and I DO see 510 trading by the end of
the day. REMEMBER the option stops trading at 1:00 est an hour and 15 min before the
future closes.
HEATING OIL seems unstoppable and the FEB option expires next WED so those
counter-trend traders should find some value in a market that is up 19% in seven days.
COTTON- may have its "pull back" today and if so look to pick up MORE CALLS as I
do not think the run is over.
1/20/00
When is ENOUGH really ENOUGH??? Deciding the right time to close out a winning tradeis often the toughest decision to make. With my trading system I have attempted to build a workable exit strategy by purchasing MULTIPLE positions and taking profits in stages. I USUALLY avoid the "problem" of getting out too soon. Unfortunately I have not been "greedy" enough as evidenced in the last week with the Crude oil and Cotton markets. I will work on it.
Tomorrow options (JAN) on the DOW and S&P expire so prices are low even though
volatility is high Dow is UP 40 points in the overnight so look at the "free
trade" concept (buy a put now and buy a future later and take the position overnight
without worrying about a stop. On to the TRADES.
COCOA- still looks like a sell at the 845-848 level with a stop at 856.
SWISS-also still a SELL. on a daytrade look for a test of the 6300 area and sell 6299 with
a 6308 stop.
FEEDER CATTLE-droped right to the supporting trend line and WE bought 8650, and 8600 calls
and one 8500 put to take through tomorrow's LIVE STOCK REPORT. still can get this spread
for less than $225.
COTTON-experianced a limit up move (300 points) and the "GAP" at 6000 cents may
be filled today and a pull back may be eminent.
01/19/00
Combine an Economist, Statistician, Meteorologist, and Psychic and you have the IDEAL Commodities Analyst. Add mental discipline and remove the "fear of pulling the trigger" and VOILA'-you are a Futures Trader. It dose take time and effort (as does everything) but the rewards do follow those that are diligent and plan ahead. ALWAYS remember RULE ONE Keepthe loses SMALL.
Differential between stock indexes apparent again yesterday as NASDAQ was up 66 (down 40
in the overnight) and DOW down 160 and S&P down 10. This E-letter has correctly
advised to be long NASDAQ when bullish and short S&P during weakness. Watch for small
corrections but stick with this formula.
In charting last night I
foresaw a HOST of markets in BULLISH mode. GRAINS, MEATS, and METALS abound with buying
opportunities as does the AUSSIE DOLLAR.--- SWISS, JYEN, and COCOA are my BEARS. On to the
TRADES:
ORANGE JUICE-,fundementally, is in relatively large supply and is technically in a
downtrend, so What is our recommendation??? WRONG. We are BUYING today in anticipation of
a strong cold front working its way to the far South. This may be a stretch but with an
unusual wedge of fronts and a trough off the East coast there is a "possibility"
of 40 degree temps in FLA. which maybe enough to "squeeze" 5 cents out of the
JUICE market this week. The VALUE play is the expiring FEB option (FRIDAY) though it will
be a "thin" market. The 85 CALL at 50
points (it settled at 25) can be a GREAT deal. For those who want more time the MARCH is
the call with the COLD STORAGE report due AFTER the market closes on Friday.
FEEDER CATTLE-options for JAN expire on the 27th and the 86 call (ONLY 20
points-out-of-the-money) can be had for 50 points ($250) the 8650 for 30 points. BUY the
combo as I see the contract highs of 8700 being tested as on Friday the LIVE STOCK report
also comes out.
SOY BEANS-must have read "ONEGLASS" yesterday as the followed my scenario almost
EXACTLY. WE Bought the 500 calls (Feb.) for 2 cents ($100) and sold half the position for
6 cents and now own a "free" in the money option with three days remaining. Here
is where the fun begins. I will place SELL FUTURE orders at 509 3/4 cents looking to
"lock-in" 10 cents on the call and would exit the future at 503 and hold the
call to try it again.
01/18/00
BRRRRRRRR!!!! Big chill hitting the East Coast and
continued rise of energy products
should NOT abate. Stock Markets under some early morning pressure (nasdaq down 56 S&P
8 points) G7 meeting on SAT may unfold some surprises, but experts think not. Grains drop
sharply overnight-Collapse or Correction?. Short week should be packed with action SO on
to the TRADES.
SWISS FRANC-faces stiff competition form the Dollar, the YEN, and now pressure on the Euro
(which IS headed toward 100 verses $) all are contributing to the demise of the SWISS. we
advised last week BUYING PUTS and today as a DAYTRADE we will SELL a bounce to 6299 with a
stop at 6311 risking $150.
COCOA-is 20 lower this morning and any pop up should be sold. Preferably at the 838 mark
with a stop at 852 (like those numbers a lot).
SUGAR-has rumors swirling that the Chinese will need to IMPORT due to damage to its vast
crop. Last week we recommended to BUY the 600 calls for 8 points (which we now own) so
this is just a reminder to those who have not "pulled the trigger " yet.
SOYBEANS- are DOWN 7 cents after hitting near $5.00 a bushel on Friday. See this as only a
temporary pullback that will allow us to "play" the FEB options which expire on
Friday. For approx. 2 1/4 cents a 500 call may be purchased depending on the opening range
and market conditions. TIP have your order in BEFORE the opening bell just in case the
drop down is short lived.
ENERGIES- just keep going up. OPTIONS for crude expired on Friday and left me "in the
cold" with some of my strike prices. Though I am very bullish it seems that HEATING
OIL will have move almost 10 cents in the past week HMMMMMM may HAVE to look at puts just
so I can BUY a FUTURE later after a "standard" retracement.
01/14/00 (real early)
I know, a bit unusual to be receiving OG this early BUT I
have good reasons. First-
ALL MARKETS ARE CLOSED ON MONDAY- that being said do not expect a
ONEGLASS on the 17th (also Ben Franklin's birthday) SECOND- tomorrow (FRIDAY) several
exchanges will have EARLY CLOSINGS they include, in NY, the COMEX at 12:10 est (copper,
gold, silver) THE NYMEX at 1:00 est (energies), in CHI-TOWN, FINANCIALS and MEATS close at
one. STOCK INDEXES and GRAINS are regular hours. Given the shortened markets and the
possible "HEAVY (at least for this city) SNOWFALL I am plannig ahead and writing the
trades up NOW. CPI report and options expirations are my main concern which is why I have
placed open orders "GTC" (good till canceled) JUST IN CASE. On to the trades.
COCOA- hit my target price almost on the head (high was 875 i called 872) and got the 850
PUTS for 19-21 points. Keep the stop at 882 and look for a slight bounce at 851 and then
838.
FEEDER CATTLE-cleaned-out a few weak longs on the close with the grains surging and
BUYING the futures, MAR, at 8555 with a 8515 stop (risk $200) seems like a solid play as
8750 is a likly target. SELL the 84 PUTS for 100 if short options are your style.
SOY BEANS-run up through the 490 level seems to indicate a test of 500 in the
MARCH
contract. Still have the 525-600 calls for march at various prices and do wish to double
up thoses positions, BUT those just starting to put together grain plays that are not in
the FEB options (which incidently have a week to go and are good to use in combe with MAR)
can get 550 CALLS for
$125.
01/13/00
DATA, RUMORS, and SPEECHES are on the menu throughout the
trading day. PPI and
RETAIL SALES due at 8:30 est and RATE HIKE in Britain is imminent while the highlight (or
flashing DANGER signal) could be BIG AL'S (greenspan's) talk on the economy and tech
stocks.
"FAIR THEE WARNED BE THEE, SAY I"
On to the TRADES:
JYEN-has been under pressure since the last intervention and with a G7 meeting on the
horizon (JAN 22) this trend should continue. on a DAYTRADE SELL 9533 with a stop at 9546
risking$187.50.
COCOA-follows a very consistent pattern and the next two moves are as follows: pop UP to
resistance level of 871 and then retreat to the 800 area and BELOW. SELL futures between
868-872 with an 885 stop or BUY the MAR 850 PUTS for 19 points ($190).
SOYBEANS-can't even maintain decent rally on bullish fundamental news which IS a situation
that concerns me. IF 487 (yesterday's high as well as past month's) is touched SELL with a
STOP_REVERSE at 490 1/2 risking $175 . If double-top forms BUY 475 FEB PUT for 2 1/2 cents
and look for a re-test of 460.
SUGAR- has steadily retreated in the past few days due in part to the record low for the
RUBLE and most bulls are in hiding. A good play is the 6 cent MAR CALLl at 8 points $100
which has over a month to go . BUY two and add one 5.00 put for an extra 8 points in a
skewed strangle.
01/12/00
Little in the way of economic news on the overnight wire except
that the industry is worried that if YAHOO can't make money can any other tech's succeed?
US bonds continue to drift down but could see an interday rally to 90.00 before
another collapse. CORRECTION from yesterday ---the British are 75% sure they will raise
their interest rates on THURSDAY (not friday) and this is already built into the market so
MAYBE puts are the call. MIXED news in the crop production reports and today's
ANNUAL ESTIMATES and FIGURES may push each market to further extremes (COTTON UP, JUICE
DOWN, BEANS???(can't be any more MIXED) ON TO THE TRADES.
COPPER-this non-ferrous metal settled at exactly the 33% retracement level from mid-Dec's
low to recent highs at 8630 and with TWO downside FRACTALS as my focus points I am BUYING
MAR at 84.05 with a tight stop at 8380 and a REVERSE at 8315 to fill large GAP at 8170-20.
SILVER-has been quite a DUD in recent days (WEEKS?) and the play for the next three days
is to BUY 525 FEB CALLS (TWO) at 2 cents or less $100 each and look toward an
INFLATIONARY PPI tomorrow.
PORK BELLIES- are still rather expensive as far as options go BUT the 90 cent target level
that I have been looking for seems more and more likely. ON ANY PULL BACK try to get long
the FEB futures contract or for the more aggressive traders SELL strike 76 PUTS FEB for 2
cents $800. MAY have a chance to BUY the 88 call for half a cent, .50, $200
01/11/00
USDA MONTHLY crop production report is due at 8:30 est
and grain statistics and yield
numbers will be churned through various research departments and programs for the next 24
hours. Knee-jerk reactions are always common place and the trick is to have a plan
and execute it. Place limit orders early to exit options EVEN if it is an overly ambitious
price it will be "resting on the floor". This helps put you in the better
of two categories of traders, "the QUICK" instead of "the DEAD" (or
those who ACT rather than REACT) WILL NOT have any analysis of GRAINS or SOFTS till after
market openings and REMEMBER tomorrow will be the release of the ANNUAL USDA CROP REPORT
so stay tuned. Trend WAS our friend yesterday in the NASDAQ and outside of rate
increases down the road do not see much stopping the ascent. British Gov't is expected to
increase its INTEREST RATE on Friday at 7:30 est, and Thurs and Friday are full of
economic reports. On to the TRADES.
CRUDE OIL-had everybody writing this market off yesterday including my clerks on the floor
who said "NOBODY" wants CALLS. Well crude jumped from 24.02 to 24.67 by the
close and is at 24.98 on the overnight. API is released tonight and since the option for
FEB expires on friday some"inexpensive" plays are abundant. I got only 1/3 of my
orders filled in the options (calls 25 strike) that I was trying to buy yesterday and will
look at the STRANGLE at 2550 and 2450 for about $250-290. To achieve this price structure
I will have to "LEG" in to this position. STILL I feel CRUDE has NOT SEEN ITS
HIGHS YET!
COCOA-is a slower market than most (hard to win or lose ALOT fast) so here is a SPECIAL
play BUY MAR here 838 with a 831 stop and REVERSE at 859.
SWISS FRANC-has a LOW of 6421 and is trading at 6435 up 14 SELL on a STOP at today's low
6421 and place a stop, when filled, at 6432 risking $137.50.
01/10/00
Only fitting to start one of the most "report packed" weeks in a while with BIG NEWS TIME WARNER merging with AOL has sent the stock market soaring (NASDAQ up 88 S&P up 19) DO NOT BUCK THIS TREND TODAY.
As for the rest of the week, on Tuesday the MONTHLY GRAIN reports are due and WED we will
have the release of the ANNUAL USDA GRAIN report. The combination of these two reports
should have far felt affects on several markets making TODAY an excellent day to be BUYING
OPTIONS(maybe strangles?) in COTTON(up strong on Friday's close), SOY BEANS (down 5 in the
overnight), WHEAT (may finally show some life), and OJ (no cold weather forecast and alot
of fruit out there). Thursday and Friday will feature the PPI (Producer Price Index
expected up 0.3% {.1% up}) and then CPI ( Consumer PI up 0.3% {up .2%}) as well as Retail
Sales figures (Thurs. unchanged) and finally Industrial Production 0.4% on friday)
TO ADD to the confusion on FRIDAY
GOLD<SILVER<COFFEE<CRUDEOIL<and
SUGAR options EXPIRE and each of these markets has some report that can "make or
break it" this week. SO brace yourself for what seems to be a WILD week in the
futures markets. On to the TRADES.
COTTON-is an market that most of my clients still have 57 MAR CALLS from our Y2K play and
though 60 cents is a little far away cotton has been known to move the LIMIT (3 cents 300
points) on reports of this stature. I would add 2 to 1 CALLS to PUTS BUYING the 59 calls
for 30 ($150) and the 52 put for the same.
SOY BEANS- are another market that we still have calls (some have FEB 490 and other have
MAR 550). The $5.00 call for FEB which expires in two weeks should go for less than 2
cents $100 so BUY that or spend a little more and get the 490 FEB CALL (there IS a 490
call but the Journal does not list it) for 4 1/4 cents. ADDING a 460 PUT for 2 3/4 cents
(less than $150) may not be a bad idea.
GOLD and SILVER-may experience a POP UP if the CPI and PPI
are as inflationary as they appear but I would wait a day or so and let some more TIME
ERODE before getting TOO MANY (more?) CALLS.
01/07/00
Unemployment report will be released in 20 min.(8:30
est) and WHO knows what today will bring(if YOU do, give ME a call) Did buy the NASDAQ
early yesterday and caught some quick cash but overall TECHS lost battle vs BLUE CHIPS.
Seems that Y2K "insects" are starting to appear and it has some markets spooked.
It is FRIDAY (better known as "limited trading day") and the REC's will appear
after this short commercial.
ONE GLASS TRADING ----will be a managed program that trades exclusively in the Futures
Options markets with Limited Risk. The CTA, Michel P. Saponara, graduated from Michigan
State University in 1981 with a degree in Business Administration stressing Economics and
Statistics. He has worked on several exchange floors as well as for Salomon Brothers and
Merrill Lynch. He has been a Commodity Analyst for over 10 years and specializes in
options. He heads the core of International Futures Trading and Research department and
publishes a Daily E-Letter (ONEGLASS VIEWPOINT) which is received by several thousand
speculators each day. Mr. Saponara tracks 23 different Futures markets. He is a
Technical Analyst that seeks to take advantage of periodic trend corrections (retracements
and cleanouts) before Key industry reports are released. Utilizing volatility factors,
chart patterns, and his Support/Resistance points he purchases undervalued options for
short and mid-term trades. His system enters with 3-5-8positions (Fibonacci numbers)
depending on account size and he exits with objectives of 3-4 times premium value for one
third the position, 5-7 if the second level is reached . The last third is held until the
final move is complete or trend reversal is recognized. The price of each option varies
but most are within the $150-250 area. Feel free to contact this office with any questions
or inquiries you may have about this forth coming program 877-849-4685. ON TO THE TRADES.
SWISS FRANC- may have double topped and with possible interest rate hikes down the road
see 6200 (new LOWS) trading in the not so distant future. For FEB options BUY the 6350 PUT
and SELL the 6150 PUT for a DEBIT of 20 points $250 with a MAX potential profit of $2250
GOLD-has double bottomed at $280 and given some
inflationary fears DAYTRADE long at 281.40 with a stop reverse at 279.40 is a solid play.
1/6/00
Could not have been more WRONG about the SILVER since ten
minutes after I sent my
E-letter it collapsed through my support level and then some. Valuable lesson for those
who were Daytrading without stops NEVER say the stop is TOO CLOSE. Remember we are all
going to be wrong (often) it is when we keep the losers small that we live to fight
another day. UP,DOWN, SIDEWAYS, is the market story for yesterday. It was fairly
easy to see that the DOW early in the morning was the stronger of the BIG THREE and while
it is time (and commission) consuming by distinguishing between which to buy when you see
an up trend and HEDGING with the weaker (in yesterdays case by being long one dow and one
mini nasdaq vs short two mini S&P you were able to "scalp" each position as
it became a winner.) decent profits can be made. I really only advise this to be done by
seasoned trader's and preferably electronically so that you do not have to phone multiple
desks. I occasionally stray from my "normal" trading patterns when I spot a
differential as I noted above. ANYWAY on to the TRADES.
NASDAQ-is down 40 points and I am bullish at the 3465 level with a stop at the 3444.
TRADE numbers for the CANADIAN dollar(buy 6872) and COCOA(sell 852)(from
yesterday)remain the same for today
COPPER-has taken steps toward the 90 cent area and will remain bullish until it settles
below
82.50. On a DAYTRADE BUY MAR at 8455 with a stop at 8390 risking $155.
1/5/00
Stock Indexes are MIXED this morning (NASDAQ down 22
S&P up 3.00) and it looks
like an anything can happen Wednesday. Jyen intervention on Monday night could be a short
term solution and though it is down 25 points up may be the natural direction. Crude oil
stocks were DOWN but last week's numbers were revised UP so it is a "push" and
crude may open 10-15 lower. Only factory orders are due today and they were predicted to
be higher but have little affect on any market. On to the TRADES:
JYEN-historically (which means "now and then") INTERVENTION is a short term
bandage when surgery is needed. Yesterdays stock market plunge added some weakness to the
JYEN but I still feel that "natural forces" will keep this currency rising. With
three days left in the JAN option I will BUY the 9850 CALL for 16-20 points ($200-250)
even though I already own 101.00 calls.
CANADIAN DOLLAR- has moved in sympathy with the JYEN so it is no surprise that I am BUYING
CD MAR at 6872 with a stop at 6847 (risk $250) ($10 a point compared to $12.50 for jyen
and swiss) or BUY the JAN 6900 CALL for $150 if market tests my 6870 support level.
COCOA-still looks VERY VERY bearish and I am a SELLER of MAR futures at 852 with a stop at
866 risking $140.
SILVER-is NOT done yet as it retraced to previous resistance level of 531. BUY 550 calls
FEB at 3 cents $150 which expire on the 14th. If going LONG futures(MAR) use a stop at 528
1/2 or BUY the 525 put for 2 1/2 cents as protection.
PORK BELLY-is dangerous but exciting. Market seems poised to break up to the 85.00 cent
level. Options are still expensive but on a day trade BUY FEB 7960 with a stop at 7880 and
that is a risk of $320 which is a little STEEP for this advisory letter BUT......????
1/04/00
Just as expected, High Volatility is prevalent as the new trade
year ushered itself in yesterday. Besides the roller coaster stock market, Beans, Coffee,
Pork Bellies, and Currencies all made BIG interday moves, and expect Metals and Energies
(both closed Monday) to follow suit. Not an abundance of Economic news forth coming and
with the Dollar, Bonds, and Stock market ALL WEAK doors are open worldwide for interest
rate changes and Gov't interventions. Tokyo markets were strong but stock data is SOFT
(NASDAQ down 82.00). Cobwebs have been shaken from my keyboard (off six of ten days WAY
too much) and we will have an active (and profitable?) week. On to the TRADES:
DOW and S&P-Perfect time (2-3 weeks) to breakout CREDIT RATIO SPREADS to take
advantage of volatile see-saw markets. Margin IS required on trades of this nature and
they are occasionally labor intensive but usually worth the effort. The basic
"gist" is simple. When wide price fluctuations occur PREMIUMS on options are
expensive and JUST buying puts or calls does not offer good value or ROI. By BUYING one
call AND one put that are approx. 200 points out-of-the-money (using the DOW as an
example) and SELLING 2 puts AND 2 calls 400 points away a CREDIT is established on each
side. If, for two weeks, the market remains in the 400 point range (inside the long
strangle) the short distant options will erode to NOTHING and the credit (cash) can be
"pocketed". The BONUS comes if one of the options we bought becomes
in-the-money. Here are the prices and strikes we will work with today (DOW IS DOWN 110 at
113.55) BUY ONE JAN 112 PUT SELL TWO 110 PUTS for a CREDIT of $600 and on the CALL side
BUY the 115 call and sell TWO 117 CALLS for a $500 CREDIT. Prices are varied since the
options market is not open yet.
CRUDE OIL is down 30 (overnight) and has "experts" predicting a BIG selloff due
to lack of Y2K and terrorist problems and "rumor" that OPEC countries
"cheated" on production limits. Though it SEEMS logical TOO MANY are TOO SURE
which makes me very skeptical. I will wait for tonight's API report before I am ready to
abandon my bullish technical evaluation of the energy market. For those NOT IN any OIL
positions, "legging-into" a 2650c/2450p strangle for $500 is a wise play in a
market destined to move several dollars in the next few weeks.
GOLD and SILVER- are getting "HAMMERED" (said if $300 does not trade in GOLD
$260 will) and though it is the gold dragging down the silver may still see a slight
recovery in the latter. AGAIN those NOT in any of these OPTIONS can find multiple
"value" plays with the FEB options expiring NEXT Friday (14th).
YEAR 2000
The WORLD (cyber or otherwise) did NOT end according to
most sources. This IS good
news. Unfortunately NO cargos ships of BEANS sunk, NO oil fields are left BURNING, NO
country's economies collapsed and my Y2K play did NOT make my clients RICH. LIFE, as well
as TRADING, reverts to normalcy now as the year 2000 begins. Our strategy for the
LIQUIDATION of our present options positions will not be MASS SELLING but will take
profits on those options with less than 10 days till expiration (like SILVER and COFFEE)
and take a "wait and see" attitude regarding the rest (Beans, crude, and gold).
Metal and Energy Markets ARE CLOSED today. The ECONOMIC calendar for this weeks looks like
this: Purchasing Managers Report (56.0 expected) TODAY,
Construction Spending (Tues.) and New Home Sales (Thurs. down) will affect LUMBER and
UNEMPLOYMENT (unchanged) and CONSUMER CREDIT (up BIG) are due on Friday. On to the TRADES:
CURRENCIES-have been rather quite over the past week on Y2K jitters. The passing of the
torch in Russia as well as renewed confidence in Economic prosperity may open the door to
a wide trading range in YEN and SWISS. OPTIONS expire on Friday. I like a BULLISH position
in the YEN and am BEARISH the SWISS (like the Canadian dollar to the upside as well) BUY
JAN SWISS 6300 PUTS for 19 points ( $237.50) and for the same price BUY the JAN YEN 101.00
CALLS.
COCOA-is basically unchanged and with the FEB option expiring on Friday a option/future
play is as follows. BUY the 850 CALL (two) for $150 and wait to SELL one FUTURE at 852
(market at 842 now) look for 780 to trade by Thursday.