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Written by Steve Meyers   
Sunday, 07 February 2010 16:17

All markets rebounded late Friday, which prompted me to examine the best trading strategy. If we get off to a good start Monday then I think we can rebound into option expiration which is Febuary 19th. They have used option expiration week to drive the market higher so this coming week is key. We have picked up most of the move on the downside  so booking 1/2 of the positions and leaving 1/2 on is not a bad strategy. Surprises will be to the downside and we would still have positions on if we do get a negative surprise. If we get a rebound then we can put 1/2 on at a higher price. I think the high is in but we are going to initially see a lot of back and forth trade. Shorting treasuries into the 19th looks to be a good trade as well. I am looking to short the 30 year for a 2 week trade.

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Newbie |72.2.175.xxx |2010-02-07 18:38:21
Steve, I picked up 100 shares of FAZ and 500 shares of SRS about 10 mins before the Fri reversal. Obviously, wound up the day down. Do I hang onto all shares, sell half and double up, or book losses?
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SteveM |71.52.164.xxx |2010-02-07 20:48:30
It's a tough call. I haven't seen any news of a Greece bailout so see where we are in the a.m. Risk is stll huge to the downside and news flow out of Europe will set the tone. I feel high is in but we could bounce for a bit here but i am covering 1/2 my shorts.
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RonH  - Trader |207.102.48.xxx |2010-02-07 22:00:06
FAZ is a great vehicle to stay away from. 3X will scorch you if you get on the wrong side of it.
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stevem |208.84.68.xxx |2010-02-08 10:03:04
I agree with Ron. I do not like the triple leverage. If timing is perfect, all is great but if it isn't, the decay on FAZ is unbelievable.
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LanceM |24.193.177.xxx |2010-02-08 10:51:42
Steve:

What levels are you looking at in the 30 yr bond trade?
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LanceM  - re: |24.193.177.xxx |2010-02-08 10:53:32
LanceM wrote:
Steve:

What levels are you looking at in the 30 yr bond trade?
Also any thoughts on using the TBT as a short vehicle?
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SteveM |208.84.68.xxx |2010-02-08 11:05:04
TBT works great if we can time. When I mention going short for a 2 week trade, I just sell the opening which was 11904. If we stabalize Europe then it should be good for a couple point trade. If we get a cushion, just like before, I will place a tight profitable stop. Eventually we get on the big one. It may take multiple tries.
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LanceM |24.193.177.xxx |2010-02-08 11:41:14
OK Thank you SteveM
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LanceM |24.193.177.xxx |2010-02-08 11:43:48
I read once read somewhere that Paul Tudor Jones entered a trade over 10 times before he got it right but when he did it paid him big.
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SteveM |208.84.68.xxx |2010-02-08 12:20:33
As long as we can pick good entries and not suffer money hits, we could do it to infinity (I don't think it will take that many tries)
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Ron Rebner |98.27.191.xxx |2010-02-08 12:47:27
Steve. What are the odds that the rebound you believe will happen up to 2/19 will take the S&P past the 1085 area? Thanks.
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SteveM |208.84.68.xxx |2010-02-08 13:50:23
IF we go down to make a new low no in the 1025 area, that 1084 probably is a good point to look at for resistance and it's possible to go a shade higher but not much.
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Anonymous  - re: |98.27.191.xxx |2010-02-08 13:55:51
SteveM wrote:
IF we go down to make a new low no in the 1025 area, that 1084 probably is a good point to look at for resistance and it's possible to go a shade higher but not much.



What if we don't go back down? I'm trying to get a idea how far up this might correct to. Thanks.
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SteveM |Manager |2010-02-08 14:02:57
50-62% Of the decline is what I look for. If we do not make a new low then 1084 is 38%, 50-1097, and 62% is 1109. Look at those areas to provide resistance.
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Anonymous  - re: |98.27.191.xxx |2010-02-08 14:05:57
SteveM wrote:
50-62% Of the decline is what I look for. If we do not make a new low then 1084 is 38%, 50-1097, and 62% is 1109. Look at those areas to provide resistance.


Thanks Steve.
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Mark Sorensen |66.241.87.xxx |2010-02-08 15:36:49
The weakness in the market is a very good sign for us. Tomorrow is key. If the bulls don't bring it on then I think 1120 is out of the question. They are running out of time. The shit literally starts hitting the fan in March with the second wave and it only gets worse from there. I've removed some short positions awaiting some kind of rally. Will it come?
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The statements, opinions and analyses presented in the articles and newsletters on this website are provided as a general information and education service only. Opinions, estimates and probabilities expressed herein constitute the judgment of the author as of the date indicated and are subject to change without notice. Nothing contained in this website is intended to be, nor shall it be construed as, investment advice, nor is it to be relied upon in making any investment or other decision. Prior to making any investment decision, you are advised to consult with your broker, investment advisor or other appropriate tax or financial professional to determine the suitability of any investment. Neither GrainBelt Commodities, LLC. nor Steven R. Meyers shall be responsible or have any liability for investment decisions based upon, or the results obtained from, the information provided.