Monday, October 1, 2012

Back From Vacation

I am back. I really needed this vacation, couple of bad decisions right before it is a good illustration. It was idiotic to cover short position in Red Hat (RHT) calls. I was afraid of a big move after earnings report, but report happened after options expiration.
I almost ignored market when on vacation. Market ignored me as well, my overall portfolio hardly changed in the last two weeks. The only surprise: sharp (for the asset class) rise in the value of muni bonds and associated closed-end funds. Can't complain, I have sizeable position in them. But profits are made to be taken, so the first order of business today was to close position in Invesco Van Kampen Trust for Investment Grade Municipals (VGM). I am not fond of CEFs trading at a big premium.
It's hard to understand current market. Why Google (GOOG) is up more than 150 points (25%!) in two months? Maybe this position is in need of some trimming...
Among other things, there is a head and shoulders pattern in all major indices. It looks especially good (or bad, your choice) in Nasdaq Composite. If it works, index can go down to 3040. An obvious play is to buy $67 QQQ puts. I am not sure I'm doing it though. Risk / reward ration is not too good and I want to spend several days to get a feel of the market better.
Disclosure: I am long RHTGOOG.
Additional disclosure: I have no positions in VGM and QQQ. Positions can change any time.

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