Zynga gapped up this morning on news that it was being bought for $12.5B, but it only popped from $6.5 – ~$9. So, it was a relatively huge jump, but the stock itself is priced so low it gives me pause. That said, it’s on my watch-list, so volume is there, so I shouldn’t worry too much about that (plus, it matters more how much the option is priced, not the stock itself). I’m going to add this to my watch-list and keep an eye on it. I’m not sure if I want to look at it to fill the gap or if I want to play another breakout but I’ll see how it moves this week.
Equities pushed down for most of last week, and this morning, looks to be a lot of the same. There was a gap-down today, which might get filled, but overall, things are looking somewhat weak right now. That said, it’s not making reversal moves here, so I think things are still strong overall, we’re just in a bit of a dip
Since I didn’t look at charts yesterday, I’ll take note of how the Forex market is doing and see where I want to focus my attention this week.
The dollar is pushing up a good amount this morning, but it looks a bit extended and it’s in the middle of a range. I don’t see much from this this week
CAD broke out this morning, but quickly pulled back and looking at it’s 4 hour chart, it’s coming off the top of the Bollinger band area. I’ll look to short this
GBP has been on a tear the past month, but it looks like it’s running out of steam. The BBs are starting to come together on the 4hr chart. That said, “the trend is your friend” and if it can breakout another time, there might be more upside potential. I’ll keep an eye on this long this week
JPY had a nice push up this morning, and looks like it could have breakout potential on the daily chart. That said, on the 4h chart, it’s up against the top band and pushing through it. ATR is increasing and the top band is NOT a place to stop, but I also don’t want to get faked out, so I’m not going to do anything today, but I’ll keep an eye on this this week long (oh, one other point I wanted to make is that this should push up on equity weakness, which we’re seeing, so there’s another straw in that hat)
Today’s Pairs
GBP/CAD – Long
CAD/JPY – Short
GBP/NZD – Long
NZD/JPY – Short
GBP/CHF – Long
CHF/JPY – Short
NZD has largely been basing for the last few weeks, and while today doesn’t look much different, there might be some short potential here. On the daily chart, price is near lows and the BBs are just starting to expand. Looking at the 4h chart, though, I might see a nice upside-down cup-and-handle forming. I’ll definitely keep an eye on this to the short side
CHF dropped a ton this morning, and today’s the first day of the breakout. I’ll take a look at this short
End of Day
I didn’t pull any triggers today, but I’ve got myself setup pretty well for the rest of the week. I’m still looking at GBP, but I might be tempted to take it off of my watch-list so it doesn’t distract me. It’s okay right now, but we’ll see
A couple of thoughts that I had throughout today: 1) If something is on a tear and it’s in it’s second day (say), if I can find a target, and I know my stop-loss level, might it make sense to still get in with a market order? Especially if I see the breakout but I just missed it by an hour or something? Something to ponder and 2) I think I need to experiment with following my stop loss along the SAR on the 4h chart rather than the 1h. Another thing to practice and ponder.
I set an entry order for a BAC (I think) options trade with a stop loss, using leverage as if it were a Forex trade and I got stopped out quickly and for much more than I was expecting. I was risking $1,500 but I ended up losing $5K. Here are the numbers so I don’t forget/lose them
Short Put
Sell Stop – $1.20
Stop-Loss – $1.50
Entry Fill Price – $.65
Exit Fill Price – $1.61
Looking at IB, it looks like my entry price was “hunted” or, rather, I was the only seller, and the buyer was only willing to buy much lower. Makes sense. It also makes sense that, since I used a stop entry price, I was willing to go anywhere lower than 1.20, so I should start including limit prices so that I don’t get filled wildly lower, as I did here.
BAC actually gapped up this morning and then pushed down, so the value of the put increased, which is not what I was hoping for, but I understand what happened. Good thing it’s a practice account, and clearly I need to keep using it for a lot of things.
That’s the other thing I need to figure out: how to use both my live and practice accounts… I can’t be logged into 2 instances at the same time, so I’ll either have to figure out a workflow or use my phone or something. I’ll figure it out.