Nothing exciting over the weekend, so status quo in the markets - the strong bid persists and futures look to open flat to up.
Let's take a quick look at our socially responsible stock play - First Solar (FSLR):
I mentioned selling naked puts or bull put spreads when it hit support at 100 a few weeks ago.
Since then, SPY has rallied, thus demand for oil has helped keep prices above 80/barrle and thus, the "relationship" with energy prices and alternative energy stayed in tact. FSLR has rallied from 100 to 108, an 8% gain, throw in 10 days of time decay and I am moving my stop up to break even/lock in profits at the 100 level. The goal is to make through another 5 trading days and get to the weekend for 2 more days of time decay and a profit should be ensured.
The put I sold was valued about $3.5 and is now trading for $1.15, with a 1:1 risk to reward, that is almost a 66% gain.
I am going to create a "collar" by putting on a bear call on USO as prices have gone through the roof and premiums are pretty healthy with 2 weeks to go until March expiration.
Even without a stop, you would be risking 3 to make 1. Not bad for a credit spread, but I would probably risk 2 to make 1 or even less as I don't want to just throw away gains made on the FSLR trade. Below is the chart, a huge rally over the past few weeks. I am looking for it to just stall at these levels - but being short oil is admittedly risky given any rise in international tensions.
Forex seems pretty sideways for now, but we know that can change in a hurry as the leverage allows for a small move to create an entry. I will update any trade opportunities with a quick sentence or two.
A quick note on trading psychology - trading is not gambling. But if you would like to participate in the best homegrown March Madness pool, please send me an email - you need a referral to join.
Speaking of March - there isn't a better time than March to ski. Long sun exposure, warm temps, soft snow on top of a great base. You can ski a few hours in the morning and then get a run in during the afternoon, or a skate ski, or if you are really brave, a road ride.
You can top it off with some homegrown rye at the High West Distillery on Park Ave - comfy decor, great food, fantastic drinks.
Have a great day and Be Environmentally Cool with Locals Have More Fun apparel
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