Quite a busy week but at the same time, promising one for the general markets. There was a good run on financial stocks and broader markets gained nicely. Next week will be the one to really judge whether or not these levels can withstand.

From OPNewsletter’s perspective, we have invested nearly 32% of our capital and we are sitting comfortably without making any adjustments to either portfolios. Usually we target 60% of the portfolio to invest. Albeit, if we don’t find any good opportunity, we stay away as “Capital protection has higher priority over missing potential opportunity”.

We are up + 2.81% x-commissions and +1.24% including commissions. We however will open another at least two more portfolio sometime next week.

When we are not making any adjustments, I suggest you read more. Browse the website and understand the concepts to prepare you better for a volatile markets. I had earlier suggested on how to survive this market.

Though OPN Trades are OK even if you trade a little late (except in very volatile and wildly moving markets), If you think you don’t have time to stay in touch with your portfolios, stay away from real-money trading for a while. I strongly encourage doing it on papers only. There will always be time to make money and market is always there. It’s a tough market and you want to protect as much capital as possible while maximize learning from such time for if we survive this, normal markets will be easy walk.

Have fun and profitable trading, OP

There was big weekened news before markets opened, Fed will rescue Fannie(FNM) and Freddie and stock futures just shot-up and so were FNM, FRE and Lehman (LEH).

According to Market watch story, the White House and Federal Reserve moved to give the mortgage giants the capital they need to survive the depression in the housing market and turmoil in financial markets that had left them dangling over a cliff. Of most immediate importance, the Fed’s board of governors voted to open up its emergency discount window to Fannie and Freddie. In addition, Treasury Secretary Henry Paulson announced that he will seek congressional authorization to buy stock in the two companies and increase the government’s credit line. At the moment, each company may borrow only $2.25 billion. In return for the capital, Paulson said that the Bush administration would ask Congress to grant the Fed a “consultative” role in the capital standards of the companies.

Yes, it did provide initial jump to the market, but guess what, by the time I am writing this, the rally has lost all the steam. And after opening at huge gains, LEH, FRE and FNM all have lost their gains.

Here is what I wrote to OPN subscribers-

Markets seems to “trying” to find a reason to rally..I am not sure if this is just a “oversold” bounce or really a reaction to fed’s plan to save FNM and FRE. I don’t find anything new over the weekend, this rumor was already in the market place on Friday, net I am not confident of this rally…so if you do decide to play long, be cautious….

And as it appears, this is not good for other financial troubled companies as government is not expected to help others.. Read more…and it may not be a good news for Lehman.

This is not an easy market, Trade Carefully, Trade Profitably, OP

This was not an easy month. In fact a very tough month. I mentioned to subscribers that this was the worst June for Dow in nearly 70 years and If we gain this month, or rather even break-even including our commission, at least, I will consider this a cause for celebration.

For me, preserving capital overrides almost every other investing theme. OPN not only delivered the break-even, but also delivered the upper range of it’s own target (5-7%/monthly). OPNewsletter closed at +7.1% for Jul’08 expiration trades. The result includes commissions and doesn’t include bonus trades.

This was not a good month particularly for plain Iron Condors and huge intra-days moves required adjustments and staying close to the market. Those who couldn’t follow same plan as OPN mentioned, may not have achieved same results in this a volatile market. Triple digit moves for Dow were a common sight.

Overall we spent only 50% of our capital this month as I couldn’t find any better opportunities and what worked in our favor this month was the right “Asset Allocation”. Thus preserving cash was more important than missing opportunities. With this cash and oversold markets, we may place some directional strategies for Aug’08 cycle.

There are a few posts I would encourage you to re-read as Markets are at a very delicate point. I am watching closely and shall share with the subscribers as key indicators provides some hints. Albeit, it’s going to be very tough and rough time.

1. Where are we heading?
2. and 7 ways to survive this market

Profitable trading, OP