Thursday, June 18, 2009

Targets Today

Looking for S&P to test the 924 range and potentially overshoot by 2-3 points. Will be adding shorts at this level again and enter new positions.

Current Position summary:
- Short Oil (DTO, DUG)
- Short Technology (AAPL, RIMM, IBM, MSFT)
- Short Commodities (POT)
- Short some emerging market funds
- Short Financials and Real Estate (via SKF, SRS)

No futures position yet. At the moment 40% committed on capital.

At the moment I can sustain a run towards 937 before having to worry about closing out or hedging. Those are long term positions and will only be closed with 2 closes above 924 level.

I may hold off on futures until we see the 890-892 levels for a reversal to back test the upper ranges. Will hedge long at that point for a swing trade but keep all core positions listed above.


  1. Thanks Chris for sharing this. am thinking along the similar line. I have never done the futures. if you know, who is good Futre brokers? what kind of risks say for mini ES. One contract ane one SPX oe ES point what is the equivalent changes in dollars?

    let us hope this pans out. I am holding on to the mutual fund shorts through my IRA as an intermediate term play.

  2. 1 ES futures contract = $5625
    $50 points gain per point

    If you start with futures, create a small account and only use enough to cover 3 contracts ($16K). Then only trade with one contract to start with, leaving you one more contract to average/scale and enough buffer to take a 10 point risk.

    Once you get comfortable you can start using more. Most brokers should allow futures. I use tradestation of course, but TOS and all the other ones have it too.

    For tradestation, they give me more contracts for cash hours (yeah they are nuts and hope I screw up so they can make more money).

    I like futures a lot better for pure short term SPX trades as its easier to set stops, etc. And it scales linear meaning you do not have to worry about decay that much if you hold it longer.

    The best for futures, you can trade 24/7. This is nice for holding it overnight HOWEVER thanks to GS overnight ranges are quite wide so if you hold you need to set a fairly wide stop loss.

    However, you can use that to your advantage as well. Lets say you close out at the end of the day with 10 points gain, put a limit order at half of that to re-enter and it hits quite often as overnight action generally stays within the previous days range. Of course this is only if you consider holding a day or two for a swing trade. If I have less then 5 points gain on a position I generally close out all together unless I am really sure of a move.

  3. Thanks. is there a buy/sell spread in futures? Options kills you unless you have significant move because of the spreads on SPX

  4. very small spread. Current offset is around 4 pts for september contracts. So small enough to not have to worry about it =)

  5. you ready to short chaugs? bid/offer on a futures contract is fractional not 4 points.

  6. yeap just added some shorts here.