I Love Roller Coasters

It's the first day of spring, and it is already shaping up to be a beautiful one. At one point, I had contemplated asking the soon-to-be Mrs. Nash to marry me on this day. Of course, it's apparent that I opted for spontaneity and did it the second week of February on a nice, sunny day hike. I don't regret it a bit, because nothing that has happened in the past month would be happening now. We're within 11 days of signing papers on a house that is almost perfect for us. A little updating in the master bedroom and it will be exactly that.

I thought I'd chime in bright and early since I glanced at an interesting article this morning. Well, more of a page of research, really. Good research, though.

http://www.schaeffersresearch.com/commentary/content/option+skews+-+ja+solar+baiducom+inc+google+barrick+gold+lehman+brothers+amazoncom+sirius+satellite+radio/trading_floor_blog.aspx?single=true&blogid=83480

These charts break down which stocks are most active in puts and calls. These are options to buy contracts (in blocks of 100 shares) for the rights to sell and buy stocks respectively. You buy a call option contract when you think the stock will go up, and you buy a put option contract when you think it will be going down. Simple, yet complicated when you start weighing expiration dates, strike prices, etc. Check the Chicago Board Options Exchange website for good learning material.
http://www.cboe.com/
Anyway, this is how I bide my time watching the market and using my "play money" to my advantage. That money also goes toward buying things for my Jeep, going to play poker, engagement ring, etc. Discretionary income, if you will. I have been keeping an eye on Amazon lately since it is defying logic of late. Many people have been talking about how the bottom is going to fall out of this thing any day. It hasn't done it, yet, and I've been looking for solid information supporting this theory that it will go lower. I happen to think this is the case as well. Finally, I stumbled on these charts that seemingly confirm that the majority of traders think AMZN is on the downturn at least for the short term.

The options that traders were buying skewed heavily toward puts right before Bear Stearns took its horrific and historic dive last week. 3 to 1, Puts to Calls raised a huge warning flag. That's what allowed me to double my money on that particular contract, and I think in this crazy roller coaster ride of a market, this is my tool of choice.
Of particular interest (since at least two of my good buddies have asked lately) look at commodities (ABX, KGC, GLD) and oil (VLO, TSO, XOM) for long-term stability to weather the recession. Also, when the media really starts stories of people complaining about gas prices and talking about alternative energy this summer, look at JASO, FSLR (Scott, you'll like those).

Food for thought.
CZ