Is Berkshire in Trouble?

This 2 part series will cover recent market developments about Berkshire Hathaway, points to a strategy on how you may benefit more on the same trades he did recently and an option trading strategy that probably Berkshire uses for maximizing it returns on the underlying they find worth investing. Don’t forget to read the big picture of US stock markets. Markets are behaving pretty much th...

JPMorgan decline sets off bullish option bets for 2009

Today’s tickers: JPM, BBY, ACE, IRM, SHLD & CSCO JPM – JP Morgan Chase & Co. – With the market in meltdown mode, investors are once again departing all shades of financial shares. There are new lows today at several major financial institutions including blue-blooded JP Morgan. The 52-week $28.87 low is a radical shift from the $50.50 52-week peak set three days into O...

VIX Likely Headed for Third Highest Close Ever

There is still an hour and a half left in the trading day, but it is beginning to look like the VIX will close over 70 for the first time this month and record its third highest close ever.At 2:37 p.m. ET the VIX is at 73.62, well off of the record 80.06 close from October 27 and the second place 79.13 close of October 24 from the preceding Friday.A lot can -- and usually does -- happen in the ...

The Concrete Shoes of XLF

Lately there have been quite a few days when it looks as if the market is wearing ‘concrete shoes’ and will never be able to keep its head above water. Time and time again the financials look like those concrete shoes: financials plunge; the market follows. In fact the performance of financials relative to the broader market has been weakening steadily since early October 2006, when the ratio o...

Which Way Wednesday?

Yesterday was a real wild one! I called it "Testy Tuesday" in the morning post and we tested both our upside (3 times) and downside (once) levels during a wild trading session. Our patience paid off as we got to our 8,200 goal where we did a little more bottom fishing, including a perfect flip to short on the SKFs right at our $200 goal on that ETF. In the morning post, I said to watc...

Swing trading portfolio - Optrader

The last couple of months have been very profitable in the swing trading portfolio, thanks mostly to the profits from the many puts. The portfolio is up 67% since September 2nd and 719% this year. During that period, we closed 31 trades. 23 of them were winners, for 8 losers. That’s a 74% winning rate. The average win was 1.35. The average loss was 2.39. Our expectancy was 0.999-0.623=0.3...

Lots of Premium Left on Last Day of Trading in VIX November Options

VIX options expire tomorrow morning in a VIX special opening quotation (SOQ) and with only one hour of trading left today VIX calls that are still almost two dollars out of the money (November 75 calls) just traded at 1.20, suggesting that traders see a significant probability that market conditions could deteriorate over the course of the last hour or open down sharply tomorrow on additional b...

Yang departure spurs bullish Yahoo! bets

Today’s tickers: YHOO, HPQ, QCOM, F & HTX YHOO – Yahoo Inc! – Perhaps now that Jerry Yang has stepped aside as CEO of ailing Yahoo! we’re seeing the ‘yeehaw!’ effect in play. Investors bought shares in the second largest Internet search engine in hopes that the shift of management might spur fresh talks with Microsoft. Since Yahoo! under Yang has shed som...

VIX Over 70; XLF Under 11.70

Markets are breaking down once again...with XLF establishing new lows.

Fifty Day Historical Volatility Rolling Over?

Something interesting happened yesterday that has happened very rarely over the past two months or so: 50 day historical volatility (HV) in the S&P 500 index dropped. While that fact in itself might not be worth of a headline next to the latest installment of ‘Adventures in TARPland,’ there is a strong possibility that historical volatility in the SPX has just peaked. Actually the 10 day ve...