I Bid Thee Farewell…

I feel like I have been a critical influence to the historical events that have taken place here today. Crude prints $140, the major averages confirm major technical pitfalls, critical downgrades have been asserted into the market place, and the Option Addict debuts on iBankCoin.com.

Before I depart from this most enjoyable extra curricular activity today, I emplore you to consider buying a few dips in Coal stocks. My favorite names and charts include Alpha Natural (ANR), which has already been mentioned, along with Peabody (BTU), and Foundation Coal. The dips are waiting for you, and these stocks have plenty of fuel left in the tank.

After having been spoon fed copious amounts of wang by mother market yesterday, patience paid off and the favor was returned. I have recaptured yesterdays losses, and leave iBankCoin with my backseat full of riches as I head back to my internet cave.

A special “thanks” goes out to the 6 or 7 of you that read what I had to say here today. Thanks for making this a relatively pleasant experience. Also, thanks to “The Fly” for allowing me to run down his property value.

In closing I would like to pay tribute to the person responsible for my appearance here today. This person is a personal role model, a really good friend, and all around, the greatest blogger ever.

Me.

Disclaimer: Remember, if you trade any of the stocks mentioned here today, a seminar company will invade your home town, covertly gaining access to all of your personal riches. And, you may lose money.

Later,

The Option Addict

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Today is another pivotal day from a technical perspective.

Crude oil is poised to move again, the price action suggests a wild ride in the upcoming weeks. If crude breaks $140, it will tap $150 quickly. Back up the truck on your favorite energy names.

The dollar is trading at a relatively higher low, but I am waiting for a break below this channel line before I trade.

Curiously, the VIX is the most interesting piece of this puzzle. The chart of the Dow that RC posted earlier this week is a troubling signal of more losses yet to come, but for such a bone crushing move in the averages today, the VIX isn’t moving. This makes me believe that the market will sustain a much larger drop before the VIX starts to rally to a point that would suggest a buy signal.

Again, this price action today is critical. I’m looking for financials weakening at support, and weakening tech stocks trading off their highs to get ready for the next leg lower. Until the VIX trades to $28, I won’t budge my sentiment. Rather than try to get defensive here, get short, or else.

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The “aftermath” of yesterdays bullshit rally has brought stock prices back to their senses. As you know, I am a degenerate option trader, and yesterday was a ball bashing event to those that chose to leverage their coin, and I was plenty leveraged. About an hour before the Fed, I was down nearly 8%, which is the largest one day drawdown I’ve had this year. Good news is that the drawdown has disappeared this morning. That’s what makes options fun. They give me a unique “high” that can’t be attained buying stock, hence my trading handle “Option Addict.” Speaking of getting high, here are a few “hits” I took this afternoon.

ADBE– My favorite tech short. I own half a portion of July 40’s with a target price of $36. The target was derived from the recent head & shoulders pattern that looks close to confirming. Once confirmed, I plan to add my other portion.

My next favorite short is ICE. Having recently ripped higher to it’s 20 day, it is finally detaching from the MA. My target price is the lows, and I own the July 120’s. This stock would also be a prime candidate for a call spread. Implied volatility is relatively high and weakening. Coupled with the passage of time, I would consider selling the 130/135 July call spread. As long as the stock trades below $130 at expiration, you’ll take down $150 (mid) per contract.

I also like puts on GOOG. Today’s price action is a significant break of support, and the next level I could see this stock trading to is $475-$500. I’m going to take down some Aug 500’s towards the close as long as the price remains below $535. My stop will be contingent on a rally to $545.

The recent rally in financials have generated excellent rips to sell. My favorite bank short today is STT. I am taking half my typical portion of puts here, and will add on a break below $65. July $60’s.

I am also adding a few long positions to my existing book. These are all energy names, obviously. I am going in heavy at these lows. Take a look at ATW.

ATW was one of the few highlights of my day yesterday. I own July $115’s, with a target price of $125.

I also like ANR. It does nothing but trend higher. The bounce off the 20 day provides an easy way to manage a trade here, plus I think the next time it cracks the century mark, it will stick.

Last is UPL. I like the rally off the 20 day, and the short term continuation pattern. I bought July 100’s this morning, will add to the position on a break of the Benjamin mark.

I am sure you have all been entertained with the onslaught of charts. Look at it this way, it’s better than watching CNBC.

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“The Fly” will be out on important business matters today. Unbeknownst to you, he left me the keys of iBankCoin.com and asked if I would be willing to guest blog for the afternoon. In short, I accepted.

I’ll be providing 3rd tier content throughout the day to give this site a frank and authoritative feel. Thanks “Fly.”

[youtube:http://youtube.com/watch?v=yUrZ7upfvq8 450 300]  

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