Portfolio Update

What a day in the market. From the opening bell there was a solid pull back with a retracing in the afternoon. Unfortunately this retracing did not become bullish for the majority of the market.

This movement created a bearish candlestick with a long lower shadow because the bulls "woke up" late. Sometimes this indicates a rally the next day. However, because this did not occur during oversold conditions, there is little evidence that this possible rally has any chance of long term success. It it more likely that this is the top for this leg of the trend. I would expect the next week, or two, to be generally bearish.

As for my portfolio, everything went down, but my SLV ETF shares bounced back later in the day. This resulted in only a small dent in the commission cost for purchasing them.

CVX fell nearly to the bottom trend line for it's current channel. This creates a nearly 30% loss for my call option. Unless it closes below this bottom trend line, I will hold it.

FPL fell also to close with a nearly 30% loss in value. In addition, it closed below the steep trend line that it had been following. This is significant enough for me to think that it's attempt at reversing may be over. However, it may just be a pull back for it, so I will be watching it tomorrow to see if I should accept the loss.

Next we have WFC. It also fell in price, but it did not drop below the trend line it has been following. Before I can decide to get out of it, I need to see it make a more obvious move or execute my stop-loss order.

Lastly we have, MU. It dropped hard with only two days before options expiration. It probably has something to do with their VP of HR selling nearly 5,000 shares today. I will probably be selling the $8DEC09 Call against it on Monday.

While writing this, I have decided that I am failing miserably in naked option trading. I seem to be getting in too soon before the turn or too late after. And when I am in at just the right time, the movement is too slow or I stay in too long or jump out too soon. For this reason, all future naked option trades will be on paper until I feel confident that I can do them better. In the mean time, I will be doing Covered Calls, preferably with dividend paying stocks. I will be sticking by my current naked option positions in the manner that I dictated above. I will probably have a decision on them after tomorrow.

Because of my failure with naked options trading, I am now too low on capital to make any good Covered Call plays. So against my preference to try to dig my way out with the existing capital, I have transferred another G into my account. That is my opinion, you can take it or leave it.

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