Hi everyone,

From the movement of commodities stocks, agricultural industry, US dollar and precious metals prices today, it is time to call it a day.

Great for those naked call sellers, Dave, Sun, Eugene and me.

The market will rally from here with sliding operating cost. But do not be too happy, it will hit a brake when VIX hits 18. Most likely tomorrow (after Fed meeting), or latest by next week.

Way to go.

Hi Hanz,

It seems yo read the market quite well. I thought you are a non-directional player? How to profit from the trend you noticed? What techniques do you use?

Thank you for your insights.

JK

Hi JK,

I am still a non-directional player. The reason I cherish a reversal for all these commodities and oil industries were because of the delta. As I roll up and forward, the delta was pretty strong for the short call (these short calls were nearer to expiration than the short put). With the reversal, the delta effect is minimized and hence a profit is seen from time decay and delta repair.

With Fed meeting today, no matter they cut or not cutting rate, the US dollar will see a rebound. Cutting 25 basis point means they will be no imminent cut that soon, and the US dollar has priced in the cut. By not cutting any rate, the Fed will help easing the rising food price, and definitely US dollar will rally from here.

Good for us as aliens with US dollars in US accounts.

Hanz

Spot on! VIX hit 18 and the market reversed! My short put's delta will be tamed. Hurray!

Yes Hanz, I also noticed a unique trend. The market pulled back, then went up strongly the next day. And the third day is down day, then the market is reversing.

I remembered you noticed the opposite pattern months ago: the market rebounded the first night, then pulled back strongly, then it went up the third day. Then it went all the way from March until now.

Yes, my position was losing some to the strong delta from short call, it is improving tremendously now.

Way to go, down!