Ok I got my creative juices going now and its only 10:15.

We traded in the market today. I think about 11 other people traded in the market today. This was one of the lowest volume days of the year. More than 85% of the miniscule volume was to the down side. We called the market to be down .5% today and the Dow was down .6 and the S&P was down about 1%. Italy and Greece got their new governments, but the same old problems. The only big guns out today were Mr. Buffet who bought gobs of IBM. Actually he did that over the last several months. Nobody is making any bets at this time. Our play with the VIX is showing signs of life.

Here is a note we sent to a few of the folks we actually help manage portfolios for:

Boys and Girls;

If you have been watching your bucket of money, you will note I am moving things around a lot.  I am going back to basics a bit and a strictly adhering to a stop order loss of 8%.  NO EXCEPTIONS.  Because of this, you may have seen sell orders for CYAN, BPI, AAPL, and ARCI.  (Most but not all of you had these holdings as long equity.)

While I chose to sell Apple, I do consider it one of the best stocks out there.  Most of you got out of AAPL at $386.  I immediately put buy order in at $376, as I read the tea leaves of the chart and estimated $378 would be a support point.  I must have been close because the stock stopped falling at 379 and vacillated there most of the morning, I am guessing this is a good buy point to re-establish our position.  You are all back in at $379.00 with a hopeful trip to 500 in a years time.

You will also note we have most of you in a VXX option trade.  These are January 21, 2012 $40.00 options on the VXX.  The VXX is an ETN that trades in relationship to the VIX which is the Chicago Board of Options Exchange volatility.  If you want to do more homework on that just use Google and you can learn as much as you want.  What you need to understand is that the VIX via the VXX ETN moves when people don't feel good about the market (The VIX and subsequently the VXX goes up) and it moves when people feel good about the market (The VIX and subsequently the VXX goes down)  For every contract you own, you have the right but not the obligation to buy 100 shares of the VXX by January 21, 2012 for 40.00 a share.  You got these contracts for $8.49.  Each contract controls 100 shares of VXX so for $849 dollars you are controlling 4,000 dollars of VXX.

Our strategy here is to profit from all the turmoil in the market.  Issues in Greece, Italy, Spain are driving the market crazy causing uncertainty (A good thing if you are betting on volatility)  Now, a lot of that has been built into the market, but once again we have the egg heads in Washington who have to do something by December 21 or we once again go into a technical default.  If you think we are going to solve European and US debt issues, drop me a note and I will close out your VXX position today with the 4% gain we currently have. 

Personally Devin and I have a sizable block of these options as we see the VIX via the VXX moving to 50 or above in the next few weeks.  Currently the VXX is at $44.92.  If you do the math, our break even is $48.49 ($40.00 our strike price on the VXX plus the premium we paid to control those 100 shares of $8.49.)  The sooner we hit our break even the sooner we should enjoy a 30-40% gain on the options.  I will cash us out when we see a 30% gain.

We also got you into GWW Grainger which distribute, facilities, maintenance, and other related products and services in the United States, Canada, Japan, Mexico, India, Puerto Rico, China, Colombia, and Panama. The company offers maintenance, repair, and operating supplies; and other related products and services through local branches, catalogs, and the Internet. Its products include material handling equipment, safety and security supplies, lighting and electrical products, power and hand tools, pumps and plumbing supplies, cleaning and maintenance supplies, forestry and agriculture equipment, building and home inspection supplies, vehicle and fleet components, and various other items for facilities maintenance market, as well as services comprise inventory management and energy efficiency solutions.

GWW has been on our watch for more than two years and we have almost always made money on it.  I have always liked the company and read the 10Qs, but was looking for good entry point.  The chart was showing a nice buy point at 178, so we are in.  I will watch this close but feel we should have some upward movement through the first quarter with a possible 200 on the horizon.  Our stop will be near $163, which is a bit more than 8%, but the stock would have to break what appears to be two support lines at $172 and $165 to get there.  Heck I will put the stop at 165 to be safe and be at 8% stop loss. 

Salve Lucrum