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October 22, 2012 / redman59

Great Apparel Experience ($UA) and Apple Trade ($AAPL)

Last week was a busy one for myself and not so much on a trading basis.  When it comes to mid-October the market tends to get active but my trading volume tends to diminish and not so much from a market thesis standpoint but from a “it’s hunting time” standpoint; for deer, rabbit, bear, and other small game.  This is my time to get in touch with the primitive side of humanity as well as walk in the steps of my ancestors and hunt some animals.  But I will say that technology has definitely made things easier from when our ancestors partook in the sport.

This is the first year that I have utilized Under Armour ($UA) gear and I must say that the stuff is awesome!  Early morning I sat and then did some drives for deer and I would sit in warmth, sweat in walk, and the sweat wicked away and my $UA shirt dried out quickly.  My former cotton shirts would have me switching out shirts or just have me freezing when I sat again.  I will say that I have no problem spending the money on good gear (and $UA fits that bill and others I have talked to agree as they are the ones that encouraged me to finally step away from the cotton (cotton still does have its uses though).

I would have a chance to check my phone  intermittently intraday and some quick after hours study to see how the market was doing and I must say last week was definitely full of action to make bulls and bears look foolish.  It basically ended flat to slightly up with 3 big up days to be wiped away by 2 down days most of it coming on Friday.  I went into the week flat as I knew I would be out-of-tune of what was going on.

Seeing the action during the week I knew that I wanted to get long some $AAPL as this stock was getting hit and it was hitting a short-term oversold indicator, and I was looking for the into earnings run that it typically see’s.  Also it was hanging into that critical 100EMA that I have previously written about and I saw this as a good chance to get in.  Knowing that I wouldn’t be able to monitor it much, I chose to use a credit spread via weekly options with the thought of getting out prior to earnings on 10/25.  So on Thursday 10/18 I entered (via mobile phone) into a 605/595 Bull Put spread for a 2.05 credit, risking $795.  A lighter portfolio allocation as I knew on Friday I would not be able to monitor the position for adjustment.  I was happy with the trade but then on Friday we saw the decline of -3.68% and Murphy was in full control.

Monday brought in a different scenario in that $AAPL saw a slight gap up and saw follow-through, basing, and then a late run into the day.  This brought some relief as my stop was close to getting hit which is 1.5x the credit received.  At the end of day I did enter into a Bear Call spread to slow down the trade in case we see some selling.  I entered into the Weeklys 660/670 Bear Call Spread for a 2.55 credit, risk being $745.  This created a Weekly Iron Condor in which I have a total risk of $540 with max gain of $460, but I will take off prior to earnings on Thursday after hours.

The reason why I entered into the 660/670  Bear Call spread into the close was to reduce the deltas to a more neutral position and I can see potential resistance in the 645-650 area by looking at intraday charts.  Below are my order entries for my current position along with the risk profile of my current trade on a one-lot basis:

Also today I entered into a $GOOG trade via the Weeklys 670/655 Bull Put spread for a 3.90 credit risking $610.  For this position I was and will watch the 670 level.  I see this as a good support level and I will exit the position on stop-loss basis with a close below 670.  This level broke after I put the position on but it saw a nice bounce from there and I expect it to stay above this level into week’s end, especially with the  outperformance by tech today.

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