Red Flags

We just noticed a couple more Red Flags. The Dow Transport Index has pretty much peaked, Skew Index is at dangerously high levels, Volatility is at dangerously low levels, the holidays are coming up and portfolio managers need to lock in their bonuses, and The Nasdaq is at a "Trader's Must Take Profits" rule level. 

Only the greediest are left at the table -you know the old maxim:" Pigs get slaughtered". If you haven't made enough money in this market by now, you are doomed to losses.

Word on the Street

Short-term market top is here - take profits before others do;)

Current State of the Market

The Big Tech earnings pop is about over. Apple got no love, Facebook is next to report, then finally Tesla. We are currently 2X's long the volatility. The fear gauges are all at record lows. Not much more to play before the holidays. Portfolio Managers are just dying to lock in their gains and more importantly...their performance bonuses! We are betting on some selling; however, we are tracking Tesla and Groupon for potential trades. Check emails for research and trade strategy.

No Guts:No Glory!!!!

Another "failed-to-pull-the-trigger" event! This one hurts! Yesterday we were looking at the Google October 950 calls at $1. Our computers showed a double-bottom and earnings event scenario. We looked at it for an hour. Our computers gave it a 70% chance of success; however, it was a win or lose all. We passed. Had we pulled the trigger, we would have made 60-times our money in 24 hours!!! That is right...60-times our money. The options would have been worth $61 in one day. I am devastated. It doesn't matter whether anyone believes us or not. We were there with our hand on the trigger and we froze. Let's put it this way...for every $1000 we bought...we would have gotten at least $60,000 today. This is not the first time we were there and froze. The good news is that we are there. The bad news is that we freeze. Note to self: Gamble a little!! We will be there many more times, the question is: Will we continue to freeze-up? Aaaaaaarrrrrrrggghhh!!! Too devastated to continue this post right now......more later.

Trade Update: GRPN

We sold today at $11.20 for a 5% loss. The traders got hold of the stock and pushed it to $9.88. Our position was too large and made us a little nervous. The stock is drawing too much negative attention for our tastes. We were quite surprised by the quickness of the selling and prefer to step aside at this point and see how things shake out. Stay tuned.

Trade Updates for Thursday: TSLA , GRPN

Well, it looks like we jumped off Tesla just in time. We sold at $194 on Monday. It turned out to be perfect timing as the stock has plunged to the low 170's the last few days. Our decision was more a matter of instinct than anything else. We knew the stock would get hit at 200 bucks and we just cashed out a little early to avoid the rush. Good thing we didn't get greedy!

Our Groupon trade was looking so good this morning that we plowed our Tesla profit into maxing out our position. They hired some great talent from Amazon and other tech marketing and operations types. We loved this news so much we thought about bringing in some reserve capital and margin the hilt out of it on buying more. We did max out the current accounts and decided to not get too crazy. Good thing! The stock faded to $11.30 at the close and our basis is about 55 cents higher. We are going to attribute it to the general market weakness and political bickering. The company specific news on a fundamental and strategic basis is just fantastic. These new guys and gals they picked up are heavy hitters. We continue to believe the shares are worth 16 bucks by the end of the year. We may have to trade around our position if the market continues to weaken because of the size we have acquired. Let's hope not.

Stockspeare