A bird in hand is ... He can always get back on Monday, after his fresh weekend at the 5 star hotel (with massage paid?)?
AAPL is holding Qs. This entire market can be manipulated by AAPL. I agree I should have gotten into SPY but the margin requirements are very different and hence the risk. Think about it. Also, Qs were in an extreme oversold level than SPY at that time. Well, you win some you lose some.
Well said, and well done! Also forget to mention that the gap closure for the purists is at 38/39, but I understand why you got out at 50/51.
Bull markte is intact, news don't matter at this point. Todays reaction is nuthing compared to the price action we had in last few weeks. Buy the dips in leaders, NFLX, AMZN, GOOG etc..
It wasn't really a fake move, it was an acknowledgement that projected earnings would usually mean an S&P 500 somewhere in the 1400s and the "risk discount" was getting too high. It is important to note the valuation gap and why it exists ( eg Greece, US economic numbers ). On a pure valuation basis ( which is pure fundamentals ), US markets are cheap. That being said, shorting close to the top of a trading range in a summer market is usually not a bad gamble, particularily prior to US jobs numbers, which have been the weakest US economic indicators all year.
It's possible that IV collapses after earnings or a major report like the Employment Situation. Considering the market reaction was muted even with horrendous results, the market is thus pricing the puts as though there will not be much more downside volatility by options expiration. In a situation like today, you would be better off selling a credit call spread. Of course, not the easiest thing to predict. I was expecting more bloodshed myself.
Another thing: I think today's muted reaction could be due in part to a weaker dollar that props up the S&P. Also, consider that horrible employment numbers could prompt a QE3, all in the name of "job creation." Or even higher expectations that corporate earnings starting next week will be as good as expected, whether people are employed or not. Consider that manufacturing indices have picked up recently regardless of dismal employment numbers.
Bounced: You made some outstanding posts. I wish you had more posts I could read! At the open yesterday after I noticed the IV issue, I thought in similar lines to your that relates to the points you discussed. I want thinking whether another possible way to play it better would have been to short capital good sectors, and long GLD or long gold stocks in a zero beta.
And one could add here that the dollar futures (DX), on a weekly chart, show a very clear bear flag, suggesting that the probability of moving lower, i.e., resumption of trend, is greater than the probability of moving higher. "To the moon, Alice!"