Saturday, January 17, 2009

Keepin' Score (1/12/2009)

As I read through last Sunday’s post, I realized a few things: First, that I was really wishy-washy in my statements and second, it wasn’t my best week. But there’s something to be said for mistakes and analyzing them.

AAI said: “I'm inclined to avoid this one because something about it seems "off" …Downside support would be at the SMA(30)/(50) at 10.15/10.24 respectively and below that around the 9.40-9.50 area.
What happened: Well, it closed on 1/13 at 9.55 but if you were nimble a strangle still could have scored a limited profit since the day’s low was 9.30. I’m going to give myself -1 point on this because the trade could have been profitable and my downside targets were a tad too optimistic.

DNAI said: “… a strangle here doesn't make much sense, it is worth paying attention to as a straight momentum play if it turns out this rumor has any substance.”
What happened: Well, +0.5 points for avoiding the strangle as it never would have paid off.

INTCI said: “It's currently sitting right at the SMA(30/50) 14.26/14.19 and if those levels fail it could eventually slide down to the 12.50 area.…this is another case where a strangle makes little sense on the assumption that a lot of the news is already priced in.”
What happened: This is more difficult because INTC moved quite a bit from the Sunday pricing until Thursday when it hit 12.70. So +0.5 for the 12.50 not being broken but -0.5 since a strangle opened on the pricing on the sheet would actually have been profitable, though you would have had to pull the plug before earnings instead of after. Net 0 points here.

MII said: “that is just about as close to failure as you can get. Plus, the volume ticked up a bit there. Ouch. MI has only once been as volatile as the options contracted pricing implies so again, best avoided as an event play but might be worth a watch as a short.”
What happened: Well, I was right and wrong here. It would have been a great strangle so -0.5 points. But it was also a great short so +0.5 points. Another net zero.

That’s all for the week since I didn’t bother commenting on Friday’s plays. Considering the movement from Monday to Friday I’m glad I didn’t.

Week’s Total Score: -0.5 points
Running aggregate score: +3 points