OCT, DEC months now the weakest !! This is getting crazy....of course. This is a daytrading type of market now. Volatility like this oftentimes precedes a big move.
I believe I am on sixth trade I have posted here since late September and all have been Counter-trend against very strong uptrend. And if I hadn't used options, I been down at least $1800 each contract and yet I am up bit under $750. If this market was more like Crude oil or Indexes, you would be able to see how profitable it is to take a loss in the futures and cover losses and make profit by using the options. Almost any trade I take, I will loss at least $600 going against the trend, will lose on the futures or on the options, if on the futures I hope to make up on options, if futures goes my way, hope to make losses up on the futures and lowering protective stop to cover the losses on the options. And sometimes I lose on both sides. And my rules say I can't get out once I am in till retracement occurs of 50% of last nine years before using exit rules, am seeking min of 50 cent move. To most I trade very risky way, but I think the risk is very minimum and rewards are great. Been using variations of this method for twenty years. I have only made changes in it three years ago to add-on when in trend and using the 50% rule to stay in trades even longer. Well, isn't this fun, got stopped out at ave price 169.60. I held on to the debit spread. On day chart showed much less volume when price reached 170.00 which were all time new highs, sold Dec 169.90 ave price, and kept debit spread from old spread of plus 1.00. Long Dec 171/short 174,will watch smaller timeframe tomorrow to get out of options if goes low enough. Fridays' protective stop on Live Cattle will be $600. I saw huge move down in morning and saw Triple bottom which I bought on day trades, was hoping it wasn't going to up enough to stop out position, but....we try again. Feeders didn't make new highs.
This is a "fun" market....and good trading to you. The options definitely "saved" you here. This just goes to show that you can't be stuck in one stock, one commodity, one currency-pair.....ya gotta move to where the action is. For instance, copper was the place to be several months ago. Now it's tearfully boring....and choppy.....which is hazardous for day trading. I definitely need to get into this cattle "game".
Weakness again in the feeders and live cattle. I've been watching the soybeans over the past week. Option expiration is today on Nov. options, and we rallied 30 cents yesterday on strong export numbers. I like to play the bean spreads, lower margins, good volume and you catch some decent moves as well.
Live Cattle has once again run into heavy selling at the supply level. Still obeying my demand and supply analysis.
I added to long term short positions when price hit resistance areas and half were day trades, sort of no brainer trades, I got into same Dec Calls 171/174 debit spread options at reduced prices. Just have to see and wait.
Even if we get a break-out this week, I think it will be an excellent opportunity to get short. This rally is getting really old and the price action is getting ragged.
I'm with you all on the short call. but of course we'd have to see what happens in the upcoming days.
Been doing little day trading, but just staying short long term and keeping options in place. Dec stops $600 above entry.