What a wild ride that was!
We had it all today, the highs, the lows the thrills the spills, with a 190-point drop from our highs to our lows and we had a great time playing it because it was pretty much just what we expected.
Except for one thing – shenanigans! I was forced to call shenanigans twice yesterday: In the morning, I wasn't buying the rally saying:
- 9:59: "FXI dosn’t see a recovery, doesn’t that seem odd?"
- 10:04: "This is insane, it’s like this was tailored to negate Greenspan’s statement. Same as yesterday, setting stops as any stock that can’t take this as good news doesn’t belong in the virtual portfolio!"
- 10:11: "Oil topping already? All mo trades terminate and all stops tighten if the Dow cant hold 13,600."
- 10:20: "Saved myself .20 of the drop on the DIAs so I’m scaling back into the $136 puts at $130 (maybe 100 per hour unless we break back below 13,600 – S&P still not making record so I’m getting suspicious again)."
- 10:28: "Daily double likely to come on the put side today, oil slipping, transports slipping CHINA B SHARES ARE DOWN 25% IN 3 DAYS, GE flat, Google rejected at $480, BA-AXP-HD-XOM accounting for most of the Dow rally…:
Needless to say we had a great time taking momentum puts all the way down from 13,600 to 13,450 including, of course, our many energy puts but at 11:40 we were already rolling out of our QQQQ puts (a little early) as they had doubled and I said: "2,550 is very key on the Nasdaq, as is 1,515 on the S&P and , sadly now 13,500 on the Dow – boy I predicted a test but this is like a final exam for this rally!"
I made a tentative bottom call at 1:04, with the Dow at 13,492: "TASR holding up nicely. I am thinking bottomish here. I’m way behind on DIAs but $1.80 on the QQQQ $48 puts is plenty! " At 1:46 my premise was: "Don’t force things and don’t panic. I see UPS coming back and FDX coming back, AGN is going up and up and up… This may be a settling point. What I’m doing is taking insurance coverage into the weekend on my remaining positions but hopefully we’ll be ready to make some good moves next week. This is a very big energy sell-off and if you take out the energy stocks then the S&P didn’t do too bad. It takes the market a few days to change leaders but the industrials (the ones that actually use oil) may be a good bet on a recovery. Energy losses are bad for brokers who trade them and a market crash is bad for on-line brokers so that’s to be avoilded but we’ll see if the Asian markets can avoid a meltdown before we throw in the towel over here. I see lots of overpriced things getting dumped like ZUMZ and UNFI, it’s like Cramer’s garage sale – that’s not a bad thing as it doesn’t look like panic selling from the big boys."
My second shenanigans call came when our man Cramer came on CNBC and decided to bash BA, who was holding up the Dow, causing me to note: "Why would Cramer choose today to attack the only stock that was keeping us from a 100-point down day and why was there a rash of selling right when he come on???? First tick down on BA was 2:35 and they knocked it down $1 in 10 mins, can anyone timestamp his comments?"
At 3:35 I predicted: "Here comes -100" and I was right on the button at 3:42 where the Dow bounced off it's low of the day, causing me to say (in response to a question about shoring Google): "GOOG not looking very shortable right now. Pay no attention to this drop, it’s forced. GOOG is too much bother to buy and sell in a fake sell-off so the manipulators are scared of losing control of it when it corrects. Same goes for AAPL and SHLD. In a real sell-off, they should do much worse as they are a ready source of cash and also high-risk holds… Very quick bounce off exactly 100-points down (plus HegdeDog's bash of BA) makes me think this drop is very engineered to deprive you of your stocks. Just a feeling and I’m sure not betting the farm on it but I have cash that is ready to go if China doesn’t drop 500 points tomorrow (FXI says 300+)."
We'll know if I'm right in the morning but that's our stance going into tomorrow, a lot more bullish than we thought we'd be although we still expect a relative flat-line into the 3-day weekend but holding up here will leave me very anxious to BUYBUYBUY next week.
I'll post charts tomorrow and wrap up our sales over the holiday weekend as today was simply exhausting but I did post the intraday virtual portfolio moves on the member's site. I just need a rest after that wild ride!
