Bad days coming again!

I think we are headed back down again soon...watch out for your long positions

DRYS

My DRYS (Dryships) trade worked out really well today. We finally broke through the resistance line holding us back since Nov 2007. The stock was up $9 today (12%) and i had to stick with my discipline on this. I sold half of my calls today for a 75% profit in 5 days. I still think it goes higher but with a profit like that you have to take some off the table.

Having said that i still love DRYS. The Baltic shipping index which measures the day rates for the dry bulk carrier ships are moving away from their all time lows. To give you an idea of the difference: The shipping rates for 1 ship is $90,000/day. Last year in November the rates were $180,000/day. This cut in shipping costs is already reflected in most of the dry bulk shipping carrier stocks. I want to add more to my DRYS position and will once the stock pulls back a little more more where it closed today (around 78-79)

New Trades

Covered MA at 232...went long more DRYS

Times are a changing....

So MER reports a bad quarter today and stock ends up $2.50 for the day....same thing happened with UBS and LEH couple of weeks ago. I think the market is starting to price in all negetives here and is starting to look ahead. After the bell today, GOOG blew out the numbers and the stock is trading up $72 as i write. This tells me that a lot of shorts were caught leaning the wrong way and were blown out of the water today. Tech is starting to gain institutional favor again and i will definately need to close out my RIMM short tommorow.

I did some buying of calls today in TSO(Tesero)- a refiner. With peak driving season looming around the corner, the refiners are going to have to start upping the crack spread pricing. The $115 oil will translate into over $4 in gas by Memorial day. With cracks spreads near their lows right now ($9) the only way for refiners to start printing money in their peak demand season is by increasing the crack spread.

Also bought calls for DRYS(DryShips) - with the Dow Jones Transportation Index (DJT) close to highs, the railroad stocks (CSX, NSC) at all time highs, i think the dry bulk carriers are going to start ramping up. DRYS is a leader in the bulk goods shipping business and hence my buying calls in DRYS.

MA looks like it could take off its high at $232. If i start seeing heaving institutional buying of MA, i'm closing out my short position and going long right away.

Only big looming "IF" right now if Citigroup's quaterly report tomorrow morning. If C doesnt say anything too bad, i really believe we will be out of the woods for the shorter term. We also need to take out the overhead resistance at 1390 in the S&P(which we are very close to right now). GOOG's earnings should definately help the S&P tomorrow. Lets see what the market tells you tomm.

Same Shit...Different day

Consistant with a bear market, right when you think the market is turning and becoming a buy, it'll drop just as fast. Like i have said before, a bear market does damage by wearing you out as a trader rather than just drop consistently.

We once again hit resistance at 1390 in the S&P and dropped 250 points on Friday. This market has been trading in the 1390-1180 range over the last 3 months. A significant buy/sell signal will only be generated once we break through one of these resistance/support levels. Until then, stick to trading small size and book your profits fast as usual.

Positions: Short MA, RIMM

LEH, UBS, LVS, MA and PS3 (Playstation 3)

So i realize its been a while since my last update but i have a perfectly valid excuse for that. I just bought a new PS3 last week and it has been taking up pretty much all of my free time. I must say though: It totally lives up to the hype and i personally was blown away by the graphics on some of these games. I'm currently playing "Army of Two" and "Motorsport", both of which i highly recommend to anyone with a PS3. Also, the blue-ray picture quality is absolutely out of this world. Just signed up with Netflix and cant wait for my first shipment of Blue-ray movies to come in.

On to the markets.....I do believe yesterday was a reversal in the market sentiment (atleast for a short time). As a trader you have to be able to process new information as it comes in and be willing to change your opinions based on this new information rather than just sticking with your old theories. Monday evening Lehman (LEH) announced that they needed more capital (liquidity crisis like BSC?) and were offering $4 billion worth of convertibles thereby diluting existing shareholder value. The market sold LEH off after hours monday but yesterday the market took it to the moon. If LEH had done this same thing the week of BSC going bust, i believe the market would have taken LEH out to the woodshed and beaten it down like a red-headed stepchild......but something changed and now the market welcomed the capital infusion. Also, Monday night UBS reported $19 BILLION in writedown and the market took UBS up 5% tuesday...WTF!!!

This is what i mean by processing new information and acting on it. I was admittedly very bearish on the market but after seeing the market reaction to these big news i am starting to waver a bit. Although until i see sustained institutional buying i'm still not too optimistic on the market but i am definately less bearish than i was last week. I still have my RIMM, RTH and MA puts on. Infact in the 400 point rally yesterday i even added to my MA puts because of the poor price action in MA. I believe even if the market does rally considerably in the future weeks, MA will be left behind.

I bought my first set of calls yesterday in a loooooong time. I bought June 80 calls for Las Vegas Sands(LVS). For those that havent heard of LVS, it is the biggest casino operator in the world owning prime properties such as Venetian, Venetian Macau and others in Vegas. I saw solid price action, good institutional buying all day in LVS. The calls i bought were trading at $700 yesterday and are trading at $900 today. Sold half of them today for a 28% profit...still holding on to the remaining half.

Short: RIMM, RTH, MA
Long: LVS