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OK Walt, more spider tales. An implied volatility web was being woven ever
so slowly as the VIX Zone score was drifting into complacency and the
market inched higher. Finally the VIX Z score hit -2 and the web was
complete. All the victims were stuck except for the symbiotic traders who
had survived previous encounters with the web and infact made a practice of
taking from the web. They had learned that when all is quiet on the
volatility front and the spider sleeps it is time to prepare for a quick
sojourn into and out of the web with a reward for the risk encountered.
Ninety percent gains were achievable in OEWTH Aug 940 puts in two hours.
BobR
At 06:12 PM 8/7/97 -0400, you wrote:
>Last weekend, one of the predictions I made was:
>
><
>Sept Heating Oil
>Why on earth would this market go higher? No major Summer
>storms to hinder production means lower prices.
>Historically the suppliers run tight inventory when
>supply appears to be abundant. so......
>SELL Opens below 57.00 Protective stops above 57.00
>Take profits near 53.75
>The only thing that bothers me about this trade is that
>many people seem to be of the same opinion. Still, I will
>take the trade if 57.00 isn't immediately broken. >
>
>
>Well, on Monday I sold, and for 3/4 of the day everything
>was peachy. I had a profit, and I was sitting at break even
>and...... GEURILLAS!! GEURILLAS!!! BUYBUYBUYBUYBUYBUY
>
>I was stopped out so quickly, I didn't even have a chance
>to feel bad.
>
>So, with the market sitting two points higher, and the
>whole world wanting to buy Heating Oil, what was my
>opinion of market direction? UNCHANGED. This little story
>will show you why:
>
>Here in the small Florida town of Zephyrhills we have
>your typical Floridian wildlife; spiders big as catcher's
>mitts. Not as numerous as in the movie Arachniphobia, but
>almost.
>
>Outside my trading office window, a small phone-book
>sized spider had taken up residence. I could have
>squashed him, but the spiders tend to eat the REALLY
>bad bugs, so I let him be.
>
>Each day, as the sun was going down, and my trading day
>was coming to an end, my 8 legged friend, safe from the
>heat of the day, would wander out onto his web. It was
>amazing to watch him work. A total model of efficiency;
>no wasted movement; a place for every strand, and every
>strand in its place.
>
>Watching him hunt was an analagous trading lesson I won't
>forget. Did he run all over the place looking for a bug to
>club on the head and devour? Nope. He just..... sat there.
>His web was cast, and he KNEW the edibles would come.
>
>In no time, a B-52 sized cricket, long in the legs and
>short on the brains, was hoplessly (pun intended)tangled in the web. The
>spider looked at him fondly and......SMILED.
>Call it Literal license if you want, but I think I know
>a smile when I see one. I'll let your own imagination
>serve as the grisly creator of the neat packaging and
>consumption that followed.
>
>On August 4th 1997, Heating Oil rose to the stars. Geurillas
>were behind every bush. Rumors of plant shutdowns were all
>over the news. But, as a trader, remember that the providers
>of information may also serve as unwitting catalysts for
>the clever sowers of disinformation.
>
>Most traders now wanted to BUY Heating Oil contracts and
>Heating Oil options at ANY price.
>
> Me?....... I just thought
>THE SPIDERS ARE SMILING.
>
>[8/4 SOLD on Open 56.70 Stopped out 57.30 BUT the Spider
>is smiling so.......
>
>8/6 SOLD 57.60 breakout of previous day's Low. Currently
>short at 55.45.Will exit during the night or on the Open.
>
>TRADE 1 $272 Loss per contract after commissions
>TRADE 2 $883 profit per contract after commissions ]
>
>Walt Downs
>CIS Trading
>
>
>
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