Want a shot at the long side? Watch this chart

Mr. Negative Checks In…

We are knee deep into the post-Rita /
end-of-quarter-make-my-portfolio-pretty bounce, and although the market looks
pretty good overall, I want to check in with a couple of short trades. The
banking sector has been very weak, and I think any further bounce in the BKX
Quote |
Chart |
News |
could be used to “harvest” a few puts. Ideally, I would like to see a
rally into the 98.00 — 99.00 resistance area, but I don’t think we’ll see that


Although it makes me nervous that everyone and their mother
wants to short the homebuilders, I would be a buyer of puts in LEN
Quote |
Chart |
News |
a test of the 60.00 — 62.00 area.


Volatility is not cheap in any of these stocks, but as I
mentioned a month or so ago, long-dated puts make sense in this sector as
periodic eruptions to the downside can be taken advantage of by writing
short-dated puts against the core holding of long-dated puts. Reel them in on
rallies and repeat as needed.

Want a shot for the long side? The Chinese aren’t the only
ones who can fire up a dotcom, look at this chart of Rediff ADR’s
Quote |
Chart |
News |
, an
Indian dotcom (where stocks just made an all time high!):


Almost every person I have met over here has an email account
with these guys, and since there are a billion people give or take 100 million…

There isn’t great volume, and no options (damn!), but it sure
looks interesting!

Joe Corona

Joe Corona is a 23-year veteran trader who makes his living
trading options
and other derivatives. Mr. Corona has been a floor trader on numerous exchanges

including the CBOE, CBOT, and CME. Joe most recently spent 4 years as Head
Trader for Market Wizard Tony Saliba at Salibaco, a proprietary trading firm. He

has also been an options instructor for the International Trading Institute
where he has trained hundreds of options and derivative traders for major
institutional trading desks worldwide. Joe is the Director of the Asia Pacific

region for CDLS Consulting, LLC which specializes in trading U.S., European, and

Asian options and derivatives.