Watch List: Home Depot

Catching my eye for reasons other than business... a tweet.

Jobs report propels Dow to new closing high

The Dow closed at a new all-time high although below its intraday high.

Trading Alert: IWM

Bought IWM Jan-14 103 puts to hedge IWM Dec-13 101/103 put credit spreads. You should buy 1 put for every 10 contracts. #stockcharts

Trade Alert: IWM

Sold Dec-13 101/103 put spreads and sold Dec-13 116/118 call spreads to create long iron condor. Credit Received: $0.41. Return on Margin: 20.5%. Your fill may be more or less than mine, but seek at least a 15% ROM.

Trading Alert: RUT

Sold Dec-13 1020/1030 put spread. Credit Received: $0.90/contract. Will sell a Dec-13 call spread to seek a minimum of a 15% return on margin for a long iron condor. #stockcharts

How to hedge your gasoline purchases like the pros

It's possible to hedge your gasoline purchases next year by buying shares of the Unites States Gasoline Fund (UGA).  The United States Gasoline Fund® LP (UGA) is an exchange-traded security that is designed to track in percentage terms the movements of gasoline prices.

Here is how to hedge your gasoline prices.

 UGA shares to buy = (Your annual miles driven / your vehicles miles per gallon) / UGA share price x your local gas price per gallon

Example:

# of gallons of gas used in a year = 20,000 miles / 20 miles per gallon = 1,000 gallons

UGA shares to purchase to hedge one year of gasoline = 1,000 gallons / $57 share price for UGA x $3.11 per gallon = 54.561 or 55 shares

So,

1,000 gallons / year x $3.11 / gallon = $3,110.00

54.561 UGA shares x $57 per share = $3109.98

Your gasoline is hedged at $3.11 for one year.

If gasoline prices go up, your UGA shares will increase and offset your rising costs with shares being sold as needed.

Please note the hedge is not perfect and relies on UGA being highly correlated to gas prices and ignores transaction costs.  In addition, if gasoline prices don't rise as expected you could incur a loss.  But, the probability of gas prices not rising above where they are today is low in my opinion.

Surprise!

The Fed surprised the market by not tapering its bond buying sending the market to record highs. Raise stop losses and ride the wave.

Don't let probabilities give you a false sense of security

That's why I always hedge and will hedge my Oct-13 925/935/1100/1110 long iron condor on Russell with Nov-13 107 calls if Russell crosses 1065 and Nov-13 puts if Russell drops below 990. I am prepared to hedge although probabilities indicate that Russell will expire Inside the Red Lines.

Down in the Delta

Delta Air Lines - 74% probability of being Inside the Red Lines over the next 40 days. 73% probability of touching $19. 4%. Chance of touching $26.  #stockcharts

Dance with me

Russell seems to like dancing around the 50-day moving average. #stockcharts

Field position is key

Since football season is upon us I could not help it.  Place your option credit spreads outside the red lines for Facebook (FB) , SPDR Dow Jones Industrial (DIA), S&P 500 (SPX, SPY), Apple (AAPL), and my favorite, Russell 2000 (RUT).

Blame August on Syria

Let's blame it on Syria as U.S. stocked declined on Friday. This is the worst month for the Dow Jones Industrial Average and S&P 500 since May 2012.

U.S. stocks bounced up today

The Dow Jones Industrial Average closed up 48 points to 14,824 as oil stocks led the rally. The S&P 500 closed up 4 points to 1,635. The Nasdaq rose 15 points to 3,593.

Stocks drop on Syria fears

All major market indices dropped on fears that the U.S. will get involved in Syria. The Dow Jones Industrial Average lost 170 points, S&P 500 dropped 26 points, and the Nasdaq fell 79 points. It takes guts to buy when the market is falling, but that's what I did.

Adrian Davis

Looking for the S&P 500 to bounce

VIX crossed below its 10-day moving average which suggests a bounce for the S&P 500. #stockcharts

More bounce to the ounce for Russell

Declining volatility below the 10-day moving average bodes well for a short-term bounce for Russell.  #stockcharts

Amazon is trapped Inside the Red Lines

#stockcharts

Yes, we can still Google it

Google is bouncing off its 100-day moving average.   I stopped Yahoo-ing years ago.  #stockcharts

Can we get above the 100, please?

The Dow Jones Industrial Average is below the 100-day moving average. #stockcharts

Give Me Apple for $500 Alex

I expect Apple to sit around $500 until we know about the new iPhone and iPad.

S&P 500 - Dead Smack in the Middle

Inside the Red Lines and waiting for direction.#stockcharts

Facebook

trapped Inside the Red Lines.  Put credit spread at 33/31. Wait and leg into call credit spread. #stockcharts

Facebook

trapped Inside the Red Lines.  Put credit spread at 33/31. Wait and leg into call credit spread. #stockcharts

DJIA

FW:

http://www.debrale.com/fnd0gc.php