BOT Jan 1.44 puts at 89, SLD Jan 1.41 puts at 30 today. RR is 1:4 with a probability at least 50%. Originally had 500 pts spread in mind, but settled with 300 pts. Let's see what FOMC will do
I think right now commodities and FX have disentangled themselves. THOUGH this could also be the December effect. Though I agree that Ben is a dollar crasher, and I think he has no other choice.
I think AUD and CAD will be still doing OK in near term. However Euro and Europe is really distressed now. Two key sentences from FOMC announcements: "In light of ongoing improvements in the functioning of financial markets, the Committee and the Board of Governors anticipate that most of the Federal Reserveâs special liquidity facilities will expire on February 1, 2010, consistent with the Federal Reserveâs announcement of June 25, 2009" and âInformation received since the Federal Open Market Committee met in November suggests that economic activity has continued to pick up and that the deterioration in the labor market is abating.â That tips off a little into next FOMC, which is 1/27/2010.
will bounce off 144 then rally to 147( maybe higher) gold back to 1180 level crude back to 78-80 and the market should break this base now or never.(up) i still see neg crap under it, but have watched it prove me wrong for months. all this in the next 30 trading days
I think it will take less than two weeks for the european sovereign debt issues to play out. Nothing can cheers Euro up at the meantime. It will reach 140 before 147, that is the reason behind my trade. Only five trading days left before Christmas. Let's see.
The Euro drop so far has been relatively orderly, average 150 points per day, let's see what is going to happen this Friday or next Monday ? Is Euro able to hold above 1.4 before Christmas ? Remember, the heartbreaking drop last year is still fresh in many traders' mind. The sad thing is that no entities in the world can bail out countries the way US bailed out AIG and Citi. This event is going drag on much longer than hosuing recession. Europea has NOT recovered from the housing recession yet, now comes this.
I knew I just dodged a bullet. Distressed time is not the time to short gamma. I switched from Euro bull to Euro neutral last Friday on Dec 11, then from Euro neutral to Euro bear on Dec 15. During those 300+ points drop from 1.49 to 1.46, I managed to make 90 points gain by **selling** puts. Thanks to the power of options. Now I am long puts spread.