No surprises in today's trading.
At 9:46 I said to members: "Keeping an eye on the Qs possibly breaking out at 47, Nas leadership would be great. It looks like today is going to be energy pullback day for the OIH and the majors, that would be nice but it could drag the rest of the markets down as the financials sure don’t look like they are going to save us." And that is pretty much exactly how the day went.
Actually the financials did a little better than we thought but that's great as we were buying financials yesterday. We held our positions through a difficult test of 11,750 but the S&P never even hit my 1,300 danger target (9:52) so we took the opportunity to roll down our positions, buy out some callers and put our faith in the Fed to do the right thing tomorrow.
We rode out some disastrous consumer confidence numbers (50.4, down from 58.1 and about 1/2 of last year) which hit a new all-time low, setting yet another Bush economic record that may never be broken! That gave us the blow-off bottom we needed just after 10 and I did a BUYBUYBUY speech on HOV at 10:19, hitting my favorite builder right at the bottom and we picked up the Aug $7.50s for .30 (a DD of our previous position).
As I said in the same comment: "I’m very optimistic that this is all total BS but it’s going to be a rough week riding it out. I’m covered and I’m rolling down and I have my index puts – that’s all I can do given the situation." That led us to yet another very nice Google day trade, also catching the dead bottom.
Still, the timing call of the day belonged to Optrader, who came in at 10:51 and said "TSO-Look at the price movement on the July’s 22.50’s, up on big volume, with the stock down more than 2.5%." Those $22.50s gained 50% in the next 3 hours and finished the day at $1.25, up from $.95 at the time of Opt's call so mega kudos to him! Our long-standing VLO calls finally perked up as well, but only back to even in the $25KP.
We missed the top of our Google day trade by 50 cents as I called us out at $25 mid day with a 20% profit but we take what we can get in these choppy markets.
All in all, it was a decent day as we got some commodity capitulation that didn't destroy the markets. As I've been saying all week though, it's all about the Fed tomorrow so let's cross our fingers and be ready for anything on a "Which Way Wednesday" where I wouldn't be surprised to see us go both ways – twice!
