There was so much about August that was bad but then again the trading really made a difference for those who were nimble.
Let’s see now: debt ceiling, debt downgrade, multiple issues in Europe, the Fed and Bernanke…let’s throw in an economic slowdown and you have the ingredients for volatility.
Too much uncertainty and the VIX rose sharply. The markets hate uncertainty and when there is fear it becomes a ‘shoot first, ask questions later’. The month ended rather boldly, four straight gains for the markets but still left it down 4-6% depending on your poison.
This was one of the worst months we’ve had in over a year, but perhaps there is some relief coming with stimulus. I for one do not believe it’s necessary and that the economy is stabilizing, but we’ll move according to what we see. There were some good performers during the month but the market still needs some work.
As the next uncertainties are peeled away we could have the makings a good rally. Earnings are strong and money is starting to flow back to stocks. We start a new month tomorrow – and we’ll hear many talk about September being the worst month of the year – we’ll let the market tell us what to do, thank you very much.
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Our results for the month were mostly mixed. As you recall the early part of the month was a mess as we unloaded many call plays that were hit hard when volatility started to rise.
We took a breather and then picked up the trading pace as volatility started to contract. We finish the month a bit higher than when we started but did manage to book a bit more wins than losses. Let’s hope the next few months are clearer and less volatile for all.
We swapped out of our Sept WLT SPREAD and bought a Dec 85/100 while simultaneously selling a put spread to help finance it. We sold three positions, exiting with gains on QCOM, FCX and our BTU spread. We have several plays open now, mostly spreads which we will be working through and booking when we are able.
Have a great night, see you on the stream tomorrow! Questions, email me – bob@explosiveoptions.net.
Bob
