Luna $ Ticks

November 26, 2008

Rocket Stocks

Filed under: Trading SPX SPY — moontrader @ 6:03 pm

I believe many readers here are frustrated with the retracement I thought would come between today and Friday, but at this point you might already have noticed that this rally is no chicken – or turkey. No doubt that Quantitative Easing is happening – just check interest rates – and it seems that this is the main reason behind this rally. The excess of liquidity the government is injecting in the market is the cure of a symptom, but it doesn’t fix the real problem. Anyway, what matters right now is that this flood of money will be driving the stocks up for quite a while, and maybe in a straight line.


The low volume is also due to the holiday week, so I wouldn’t care much about it. VIX is in a downtrend for now:


All in all, I wouldn’t dare to short anything for now. Today I went long with some ultra proshares (QLD, SSO, UYG) and even bought some bank stocks (C). The financial system will certainly get the most benefits from the monetary strategy Bernanke chose.

One last thing. Friday will be my last post before my wedding, which happens on Sunday. After which I’ll out on honeymoon for 10 days.

Ah, and Happy Thanksgiving to all!



  1. Have a great Turkey-Day & honeymoon!
    Buy all the cheap tourist trap junk you can stuff in a shadow box.
    Makes a great chuckle-point on the wall for years to come.

    Comment by fuzzygreysocks — November 26, 2008 @ 6:41 pm | Reply

  2. First off, I think you were very close in calling the reversal last week. I think you even mentioned in one of your posts that it might happen last Friday… very insightful.

    Second, in commemoration with the “DING DONG the BEAR is DEAD, I took some time and decided to share my intergalactic, defy thermo-dynamics “create money from nothing” trade. The assumption for this trade is of course that the S&P will be higher in December 2009 than it was last Friday. I did this trade (with puts) at the top when the S&P was 1500 and it worked out very well…..around 1600%.

    I told you I would sell a 735 put to test the “the bear is dead” theory……but the closest one was the 750. So today early in the wee hours I sold 2 DEC 09 750 S&P puts for around $20,000. I also bought 1 S&P Dec 09 750 call for around $20,000. My net cost is around $0, I think it was around $35. So next Dec 09, if the S&P closes above 750, the one call contract will be worth the difference between 750 and the S&P price. If it oscillates throughout the year and closes around 1000 in Dec, the contract will be worth $25,000. If it falls below 750, then I own the S&P there.

    So there you have it……how to use the market to create money from nothing. You can do it on the SPY too, you just divide the numbers by 10. Any index will work. It’s all the same in concept, I use the SPX because it pays the most premium. It works best if the net cost is as close to $0 as possible. I guess you could mix and match too…….like sell SPX puts to buy RUT calls, since the RUT ALWAYS outperforms the DOW and SPX coming out of a recession.

    PS…..I bought Citi today too. I might as well, I’m already guaranteeing the debt… can they fail?

    Have a nice T-day and fun on you honeymoon.

    Comment by RoughMath — November 27, 2008 @ 12:07 am | Reply

  3. RoughMath, can you explain what the downsides to your “create money from nothing” trade is?

    You state that if it closes around 1000 in Dec 09, the contract will be worth approx. $25,000 and if it falls below 750, then you will own the S&P there.

    What if you close out the trade in the summer, while S&P is at 600? How about S&P at 850?

    Trying to learn here.

    Thanks and gobble, gobble!

    Comment by maria — November 27, 2008 @ 3:46 am | Reply

  4. RoughMath
    is there a margin requirement on that?
    I’d close that trade in Jan 09 when we hit 1000ish

    Comment by Forkoholic Serge — November 27, 2008 @ 12:14 pm | Reply

  5. Gives you good health and commentary on the subject of the most excellent
    And thank the efforts exerted Site

    Comment by Mark — November 27, 2008 @ 12:47 pm | Reply

  6. […] Read the original post […]

    Pingback by Rocket Stocks « Luna $ Ticks | — November 27, 2008 @ 2:40 pm | Reply

  7. Enjoy the honeymoon. Good post

    Comment by GM — November 27, 2008 @ 4:01 pm | Reply

  8. […] Here is the original […]

    Pingback by Rocket Stocks « Luna $ Ticks | — November 28, 2008 @ 12:41 am | Reply

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