Well that was easy!
I love it when a plan comes together and they don't come together any better than today did. We played our standard Stop, Drop and Roll strategy and the market cooperated with us fully as we were given ample time to reposition ourselves and take out our callers. We even made our Daily Double on Apple and a nice day trade on Google with several other pick-ups that are looking very good this evening.
I won't do a big recap because Stock and Option Trades did such a good one already but I will summarize the action by noting we saw tech buyers right out of the box at 9:30 and targeted AAPL and GOOG calls and VIX puts as the day trades to watch. At 9:50 I noted it was very temping to BUYBUYBUY but our patience paid off as we were given a better opportunity at lunch time.
Bush was, of course, no help to the markets but we knew Paulson was coming on to clean up his mess at 3pm and that's what we counted on (well, that and a .75 rate cut tomorrow!). I was so happy with the way things were going for us at 10:04 I said: "This is friggin fantastic" as it was the financials and commodities that were dragging us down – exactly the things we WANT to rotate out of.
At 10:40 I said I was nervous to add calls at 12,000 but the Dow obliged us and dropped back to my 11,800 target and we held it so we finally hit the BUY button in the afternoon as things were just being given away. At 12:47 we got a positive turn signal from the VixDex(tm) and I put my foot down an hour later saying: "I can’t believe this action ahead of a .75 minimum cut… Seems unreal but we’ll take it. " Just 5 minutes after that we bought more GOOG $430s and added QID puts, which is always the definitive turn call at PSW as we take our chances with the QID ultra-shorts, a play you REALLY don't want to be on the wrong side of!
Theat was 1:44 and we hit the turn pretty much right on the button. We took our day trade winners off the table and I regretted selling the Apples, even though they doubled but we're glad we got out of Google at yesterday's high so we can't complain (unless it gaps up on us) and we have many longer positions in both so messing around with March calls with 3 days to expiration is just asking for trouble although we will be grabbing $440s and $130s right out of the box tomorrow if the momentum looks good.
All in all, a really fun day and we get another big Fed cut tomorrow, which we will hedge into as we may be up 500 points from the bottom by then.
