I've been thinking about how much intraday trading I can do and whether I can make it an additional earnings stream without affecting my other business. I know it can be done, I just don't know whether I can do it. After concentrating on it for a week or two, my feeling is that although I enjoy the extra activity at first, after a few days I get tired and my overall business does suffer. Whether a decision is on an intraday or an overnight position, it requires about the same amount of mental energy. If anything, an intraday trade seems more tiring because you more often have to cut soon after entering the trade.
The intraday trades that do seem to work are the ones where I'm putting the position on for an overnight move and it just happens quickly. Serendipity rather than any brilliant plan.
In terms of adding a second income stream to my regular trading, I haven't given up on a simple premium writing strategy in the bigger dollar stocks. And I mean really simple, all I want to do is write puts on stocks that I think are near support, where I'm fairly comfortable to be a holder if support fails. If I become a holder, I then write calls. I've had one stab at this and pulled out because I made it too complicated by trying to leg into ratio spreads and also because I was fiddling around too much with my core business at the same time and got distracted.
I think I can make this premium selling strategy work because it's passive, ie, I don't have to make too many time and energy consuming decisions and it's simple. The hard part is going to be leaving the decisions alone.
The action today is quite positive, a rise of 22 points at 11.23 am, as there is a Reuters story about Merkel and Sarkozy having agreed to a scheme on Greek debt. This is despite a US market which trod water as it waited to see if the US debt ceiling agreement would be reached. As regards my longs, there's just a minor uptick on balance and I'm not putting on any new positions as yet. Banks are strong performers as a reduction in funding costs would be a big boost.
The DJIA looks like this on the daily scale.
If the rally was to push on to a high above the last swing, it could still fall short or match the May high and keep that head and shoulders look about it. Or else...if I can just get the bearish scenarios out of my head, what if there are clean resolutions in Europe and the US, sputtering world growth kicks back into gear and inflation calms down in China? Another bullish scenario would see a minor rate cut which also would probably take the edge off the AUD. The upshot could be a move to 5000. Here's a weekly chart of the Asx 200.
12.42 The Chinese economy is now thought to be contracting after the HSBC PMI number came in below 50. The market slipped about 15 points on the news and is just up 6. Is this a precursor to an easing of rate pressure in China or a harbinger of stagflation? It's impossible to tell whether it means that the authorities are slowing down the economy in an orderly fashion or they've overdone it...for now, the market doesn't like the number.
1.49 Over a week ago, I bought a few puts in NCM on the off chance that there was a new high in place. Instead, the stock kept racing along with the gold price. Today looks like a more serious reversal day after a good quarterly with spot gold having stalled at $1600 and a resolution to the European and US debt crises, however temporary, a good reason for this to underperform. I've bought some July 4050 puts at 36 and some July 4000 puts at 16; not a big dollar expenditure and with a week to go to expiry, I'm looking for a quick pullback to 3900-3950. Here's the daily.
I was chopped out of an IPL long but still like the stock. This time I've bought some Aug 400 calls at 10. I think the chart is making a head and shoulders low but it's taking time to turn around and buying the calls allows me to weather choppy trade more easily. Once again, it's a small dollar expenditure but I think that a change in sentiment can push the stock back into the 430-450 range.
3.33 A slightly poor day for me with the market up 9 but the strength in the banks with resources softer on the Chinese PMI. NCM keeps sliding so there's some encouragement there.
4.11 NCM recovered on the close but still had a reversal day. The rest of my positions were mixed, a bit weaker, and the index finished up 6 points. I'm positioned for a temporary resolution of problems, a fall in safe haven gold and a short term bottom having been made in the Australian market.
I think I may take a hit in the morning. The Asx 200 might have completed it's first leg up. First the daily. Today's action is a bit like the interim high on June 22nd before a double bottom.
The 60 minute chart has 5 waves up too.
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