Hidden Money Methods

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admin On May - 10 - 2011



We have bought  5 of the SPY Jan 2011 114 Puts for $3.10.

Our plan worked pretty well with the SPYs trading negative for most of the day and jamming it at the end. These will serve as protection going into next week with a bunch of unpredictable events.

We’re planning to buy 5 of the SPY Jan. 2011 114 Strike Puts. We’re adding these as correction protection against the rest of our portfolio.  This position entry is potentially contingent upon price and time.  Please read in full to follow our line of thinking.

Many large and important variables including the elections, QE2, the mortgage title/robo-signing/put-back mess, resultant banking woes, currency problems, housing market deterioration, and unemployment are not all likely to turn out as positively as has been expected by most investors.  This could lead to an aggressive sell-off that will gain speed and depth due to the shorts having already been squeezed and over-squeezed out of this market.  This will eliminate many of the natural buyers that can be counted on during corrections.  Effectively this means that there is a lot of “air” and very little more underneath the market action that we’ve witness for about 2 months.  Exact timing of significant corrections is difficult and therefore we’re taking action now to at least have this 5 lot in place should this unfold in the short run.

Our plan is to buy this 5 lot at 3:45 PM EST today.  The algorithmic traders and momentum boys have playing the closing hour like champs for longer than we can remember at this point.  Manic markup from 3:00 PM onward has simply been baked into nearly each day’s trading action, thus our 3:45 PM trigger time.

HOWEVER, use 11,060 on the DIA as a reference point for this SPY trade prior to 3:45 PM.  If the DIAMONDS trade below 11,060 we’re not going to wait until 3:45 on this buy, we’re going to execute the purchase immediately.



The SPY puts expired worthless today but they did serve our purposes well by allowing us to have a hedge against all of the long oriented positions that we’ve been carrying for the past 3 months.


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