Which way will we go???
I was just laying out my DIA puts and calls and my QQQQ calls in member chat and I realize that those positions clearly indicate that l have absolutely no idea what's going on.
As I expected last night. the GDP data gave us a nice Goldilocks set of numbers but the PCE including food and energy, which the Government likes to ignore, was up 4.3% for the quarter, up from 3.5% in Q1. The "core" PCE is up just 1.4% for all you non-eating, non-energy using citizens so let's all party like we are Amish people on a hunger strike!
I can kid about the Amish because they'll never read an electronic document but, for the rest of us, I still urge caution, caution and more caution as the DIA calls and QQQQ calls we took were UPSIDE PROTECTION, meaning they are there to protect our terrific gains on the put side. We could make money on both ends of this trade today as we wait for some Federally funded BS to hit the markets from Paulson, Bush (oh no but, yes, he's speaking!), Bernanke et al who'd better say something positive before we start making Asian-style declines.
The Hang Seng missed my down 1,000 target by 222 points and recovered 127 into the close so kudos to them for making it back over 22,500. The Nikkei dropped 418 points, also with a 100 point gain at the last minute so I'm taking all of Asia with a grain of salt this morning. NTT's profits dropped 25% as they experienced the kind of cost inflation that our government doesn't believe in.
Europe is off about a point ahead of our open and has been gathering strength in their afternoon, so we will watch that finish with great interest but it will take a lot for us to jump back in and BUYBUYBUY. We certainly have the cash on the side ready to do it but we're going to need clear tech leadership, not energy leadership, to even consider jumping back into this very chilly pool:
We actually played OIH to the plus side yesterday. Happy Trading says they still have room to run and we do not argue with Wang's World, as he's only been wrong about once this whole month!
Another guy that's been dead on the money is ZMan and he's got positive calls on HAL and VLO this morning and no new puts, pretty much in line with our much lighter position on the downside of oil as we had our fun yesterday and there is NO need to be greedy (remember how hard it was to get here?).
The dollar already pulled back off Paulson's pump while gold is expected to retest the dreaded $666 mark this morning. Dollar down and gold up = bad economy as will rising rates in a down market so there's lot's to look out for today was we head into the weekend very much in cash!
Have a good one,
– Phil
