Oh sorry, I'm not supposed to say these things until AFTER they happen (Rule #1 of time travel).
Well, the cat's out of the bag and we all know Bernanke has a press conference at 3pm and, since the rest of the Government is shut down – there will be much more attention than usual on the Chairman so it's no surprise (or it won't be in 7 hours) that the markets once again popped (will pop) into the close as AAPL breaks (will break) over $500 to lead the Nasdaq to another closing high.
Already this morning we made a very quick $500 per Futures contract going BULLISH on oil (/CL) at the $101.50 line. If you want to play along at home and are too cheap to subscribe to our Member Chat, you can still follow us on Twitter (soon to go public and boost our GSVC pick!), where I put up the occasional trade idea – including this mornings $500 in 3 hours trade on oil.
Yesterday, also for free, right in the morning post, I noted that we were shorting oil at $102.50 and, since we were long on oil this morning at $101.50 – there's another easy $1,000 PER CONTRACT in 24 hours from one of our free trade ideas. For those who don't play the Futures, we took advantage of the dip in oil yesterday to cash in our USO Nov $40 puts (also mentioned for free in a morning post) at $3.50 per contract, up $1.50 (75%) from our 9/18 entry.
Those are simple, no margin ways to play the moves but, even if you don't like options, you could have played USO (the oil ETF) down from $39 to $36.50, which is still a nice 6.4% gain in 2 weeks (161% annualized). This is good stuff folks – even if you don't understand these trades now, don't you think it's worth a little of your time to learn?
We're focusing on nice, boring trades in Q4 in our Member Chat as it's good to go over the basics – even with our experienced Members who sometimes forget: Boring is GOOD! We went to more of a cash position two weeks ago (yes, AHEAD of the drop) with the intention of working on our quick, cash-to-cash trading skills and yesterday we caught a good example as we gave up on the QQQ puts (thinking about in morning post, pre-market) at 9:33 but, by 11:58, we looked toppy, so I said to our Members:
AAPL makes the QQQ shorts a scary thing – especially with the Icahn/Cook rumors hanging over us. Safer to go with TZA (strange use of the word safe) and I like 20 of the Friday $21.50 calls for .70 in the STP as a fun play as they were $1.90 yesterday. Stop at .45 for a risk of $500.
We got out at .90 less than 3 hours later, at 2:54, with a 28% gain ($400 on 20 contracts) and – just like that – we're back to cash and we go to sleep not caring at all about what the market does overnight. Isn't that a nice way to play? In our slightly longer-term positions, we took the opportunity of the "rally" to get more aggressively bearish in our Short-Term Portfolio and we set our bounce lines in the morning Alert as follows:
- Dow 15,220 (weak) and 15,340 (strong) – finished at 15,191
- S&P 1,688 and 1,700 – finished at 1,695
- Nasdaq 3,800 was our shorting line, the official weak bounce is 3,735 and 3,750 is strong – they are way over, which is why we like them short, but for AAPL – finished at 3,817
- NYSE 9,960 and 10,020 – Finished at 9,993
- Russell 1,066 and 1,070 – Finished at 1,074
Despite having two indexes over and only the Dow under (and we discount the Dow because they changed the mix, so the levels are less relevant than usual) the low volume led me to warn our Members that the rally seemed to be BS and we remained bearish into the close. Already this morning (8:38) our major indexes (Dow, S&P, NYSE) have given up pretty much all of yesterday's gains while the Nasdaq and the Russell are more than halfway there already.
There's not a whole lot of "new" news today. With the Government shut down, we're not getting out data reports. CNBC is still dressing Cramer up in a suite which means they are still trying to get their victims viewers to take shares off the hands of their hedge fund and Banksters masters and the Banksters are heading for the White House today to meet with Obama to discuss what it will take to get their Republican lackeys to release our Government.
While I've been writing this, the Dollar has dropped considerably, now 79.97 as the ECB kept their rates on hold and the Euro burst higher. That is masking a tremendous amount of market weakness after the ADP report (the only report we'll ge this week) showed only 166,000 job gains in September while August was revised down from 176,000 to 159,000 (-10%) and July was revised down from 198,000 to 161,000 (18%). So, overall, we're net 112,000 jobs in September – very pathetic but, on the other hand, reason for the Fed to keep easing (see headline from the Future).
Speaking of the Future – look out below as the S&P seems to be running out of gas as less and less of the 500 participate in the rally every day. As you can see from the end of the 2011 run – declining new highs are the first signal, and we're already cautious – but, when you begin to see a spike in 52-week lows, get ready to RUN AWAY!!!
Yesterday I noted for our Members that the S&P's forward earnings projections have been falling apart recently and are now as diverged from the index as the 52-week highs are. These are the kind of signals that drive us to cash (or major hedges for our long-term positions) while we wait for Q3 earnings to confirm or deny the expectations.
There's nothing wrong with NOT playing while the market is in this kind of flux – especially in this political climate. Whatever you decide to do, please – be careful out there.
