June Trade

Currently I feel the market is due for a small recovering rally and then I think the market is going to sell off. When looking at the SPY chart, I think there is a good chance we could have a head and shoulders pattern starting to form. I think support will hold at 105 and we will move back up to the 112-115 level where we will sell off again and form the head and shoulder pattern. I'm not sure how long it will take, so rather than opening my normal credit spread, I have decided to purchase a June SPY 105 call and hold it for a couple weeks as we bounce off the 105 support. I will then look at opening a bearish credit spread as we get closer to the 115 resistance level.

May Results

The month of May has been a crazy month for the whole stock market.

All three of my trades ended up working out which has brought my account back to where it was.

May 2010 GLD 106/107 Bull Put Spread expired successfully for a ROI of +17%

May 2010 SPY 124/125 Bear Call Spread expired successfully for a ROI of +15%

May 2010 GLD 111 Calls for a ROI of +105%

My account now sits at $15,900.

SPY Puts

What a crazy day was yesterday. Since SPY closed below the 115 level I have opened Jun 2010 112 Puts as I expect the market to drop down to the 109 level and test that next support.

Watching SPY

I will be watching SPY closely over the next week as it heads towards the 115 support level. If that level fails, I will be looking at opening some put positions as SPY should then fall to the 109 level.
 
My May 2010 124/125 Bear Call spread is looking great and should expire successfully on May 21st.

GLD May calls

After my April GLD spread went the wrong way last month I decided to buy back my puts and leave some of the GLD 111 calls open. I then rolled the calls over to May 2010. Today I decided to sell off the profits made which ended up making up a lot of my losses from the original spread trade.

May 2010 GLD 111 Calls ROI +105% for +$3,515

This puts my account at around $14,160.