Thrill-Ride Thursday - Where Will Economic Indicators Lead Us?

Isn’t this fun?

Up 200, down 200, up 200, down 200 – wash out your savings, rinse and repeat! What a total sham of a market we have these days with machines running us up and down on virtually no news at all. Yesterday they would have you believe that Ben Bernanke caused a sell-off. How ridiculous is that? He didn’t say one thing that he didn’t already say in the Fed Minutes that were released on the 14th, which were the notes from the meeting of June 23rd so for analysts to get on TV and say “the markets were concerned by the Chairman’s comments” is beyond stupid – it’s criminal negligence.

That’s Can Not Be Correct and other media outlets are supposed to have something that is called a Public Trust, which means that broadcast licenses are a national resource that are meant to be used responsibly. I know, that almost sounds like a joke but it’s not – we used to care about these things… Now the public is treated like cattle and is simply stampeded to the slaughterhouse at the whim of the media and the Big Money that pulls their strings and our equally puppet Government spend their days fighting over who gets to wear the captian’s hat on the Titanic. Maybe it is a joke – too bad it’s on us!

That’s why we keep things light over at PSW – we know it’s a crock but, as long as it’s a crock we can figure out, we’re happy. I mentioned yesterday that Tuesday morning’s Alert to Members had 2 long plays on the Russell that made over 40% each in a day. Well yesterday we shorted the Russell at 9:42 with TNA $32 puts $1.60 and IWM $60 puts at $1.32. It wasn’t as exciting as Tuesday but the TNA puts made $2 (25%) and the IWM puts performed much better, also hitting $2 for a 50% gain on the day. We have now learned that TNA and TZA, despite looking sexy, are not as good to play for direction as the IWM puts and calls. This is due to the wide bid ask spread and low liquidity, which means the Market Maker can rob you blind by stealing nickels and dimes from you every time you buy and sell – this is something you should always be aware of when trading options on ultra-ETFs.