Wednesday, March 14, 2007

Puts puts puts, wait for what?

I've been waiting for this.

Okay, granted that the last few days of rebound (read: with low vol) almost wiped off the bearishness from my face. But last night, when Dow closed a mega -245 points due to its prime mortgage loans thingy, I'm on board the bearish train again.

First thing in the morning that I do is to buy STI puts. I wanted to get HSI puts but since I won't be monitoring actively for the whole day, I thought it's too risky and so I didn't. That broke 2 rules of my trading:

1. Don't buy in the morning immediately after market opens. I'm talking about 0900 to 0910 that period.

2. Don't change your bid after you key in.

Okay fine. I did break both rules and bought my sti puts higher than what I thought after it closed. I'm like 3 bids away from breaking even, damn. I think tmr should do the trick and make my sti puts turn positive.

Looking at the charts for STI, after we covered the gap around 3200, we tanked down today to close at -100. It turns out that all the indicators are fake rebounds, a bear trap that I described much earlier. We have quite a lot of room to go down from here. My target for STI is AT LEAST to the level of 2930, which is around the level of the last low. It's likely to touch 2960 (ema100 days) and rebound from there, though I doubt it. OCBC analyst are talking about STI reaching as low as 2700 to 2800 points (if that's the case, wonderful!)

Just in case you're wondering which puts for STI I bought. It's the one with strike level at 3000. Quite safe if you ask me, since we're now at 3053 points. I don't intend to cash out my warrants, just bought it for the capital gain, so yup.

HSI also quite powerful. Tanked down nearly 500 points today. If I'm a bit free, I might consider getting some puts for this index as well. If I can't monitor it intraday, I'd rather forgo the huge earnings (the warrants for this can go 50% up/down) because of its volatility. Can huat big or die big. Play safe.

Good thing about my portfolio is that it didn't tanked down as much. Acceptable lah. To focus on the long term, it's better for STI to bottom out completely. Have a complete selldown, totally, then we can focus on reaching 4000 points towards the latter half of the year. Europe market dropping from 1.5% to 2.5%, quite huge. Let's see how Dow opens in half an hour. Dow futures stand at -44, with General motors expected to give lower than expected earnings. Looks like another down dow day :)

Guys, keep up the comments!! It's lonely here!