Random Thoughts

1) I'm looking closely at put selling opportunities in Bank of America. The returns for writing the 7's a few months out or the 8's near month are really nice. It seems housing has bottomed and the Fed will not let these major banks fail. Looking back several years from now Bank of America will probably seem like a joke trading at 8.

2) Freeport-McMoran has had a nice little run up above 35. If I can sell near month 32's for greater than .30 I will be hard pressed not to pull the trigger. Short term dollar strength may send this opportunity my way.

3) Pundits seem to think that a correction is in order. I see the increase in volatility and volume so they may be right. As such, we need to balance opportunity seeking with swinging at the fat pitch.

4) Everyone is talking about Apple. I recently read that businesses are still running on the PC platform. I can't help but root for Intel and Microsoft. Reversion to the mean suggests that Apple should give up some ground to other players. Whether that's Google, Amazon, Intel, Microsoft or someone else I can't say. But Apple is feeling like a bubble to me.

5) If the dollar rises short term I will be looking for attractive entry points in commodity stocks or ETF's. As always SLV, GLD, FCX and GDX are my precious metals favorites. In oil I like Conoco-Phillips, Chevron and Exxon-Mobil. Other good traders are XLE and OIH in the ETF realm.

6) While I wait I have 4 out of the money positions percolating and taking advantage of time decay. With the long weekend coming I'm hoping the passing of time will continue to be my friend.

7) I think I'm beginning to like to write puts even farther out of the money because the maintenance requirement is so low. With less maintenance comes potentially higher returns with less risk and more downside protection. My last couple of profitable trades with Lowe's and Freeport-McMoran evidence that.

8) Rules 1 & 2: Don't lose money.So far so good. Managing tough trades is an art as much as a science. Rolling options is challenging, fun and as of late, profitable.

9) Have a great day. Please feel free to share your thoughts. I'm hungry for discourse. Most people have no clue about trading and if they do they probably don't make money at it. I know I lost money for a while then broke even for a while before I started to do as well as I do today. Knock on wood!! Reversion to the mean is always lurking.

P.S.  I've got an eye on Coca-Cola, Caterpillar and Phillip Morris and am hoping that recent weakness will continue as they are all great companies with rising dividends.