We failed to retake 10,200 yesterday.
We failed to retake 1,100 on the S&P and we failed our 2,225 line on the Nasdaq and that means we’ll be testing that 630 line on the Russell and, if they don’t hold, I’ll be sending a box of chocolates to CNBC to apologize for calling them a bunch of dangerous morons when they were telling their viewers to panic and liquidate their portfolios on Friday afternoon. Today, on their web-site, CNBC has quite the collection of headline articles including:
- Global Markets Now Infected with Europe Fear
- Markets Headed For a Double-Dip Recession: Pro
- Double-Dip Recession Now Assured?
- Year-Long Rally Is Over: Charts
- Roubini: Stocks to Fall 20% Further—Cash Is Best
- Correction Is ‘Not Over’—Market ‘Worse Than January’
- Fortress Chief: We Are De-Risking
- Greece ‘Tip of the Iceberg’: Deputy Doom
- Germany Prepares for $13 Billion ‘Debt Guillotine’
- Is the Shanghai Composite in Bubble Mode?
- In Europe, Britain May Face Largest Debt Hurdle
- Europe in Crisis, Lawmakers Get New iPads
Gee, kind of a chicken and egg thing trying to figure out of they cause the panic or are they are just egging it on? After looking at the front page of their web site, even I’m ready to stop at the nearest gold vending machine on my way to the gun store. Cramer set the downside target at 9,500 last night and said the negativity may be overdone (I guess he’s reading CNBC’s web site).
Despite the dips, we don’t panic and liquidate our portfolios on one-day drops. As I mentioned in the Weekend Wrap-Up, we have plays like our SDS spread that pays 7:1 if the market stays below 1,085 and, in yesterday morning’s Alert to Members, we added 4 May and June hedges (DIA, QID, TZA, SDS) which triggered as we lost the Nasdaq in the afternoon. Mega kudos to the great Andrew Wilkinson, who gave us a heads up on today’s action by catching this move in his column:
EEM – iShares MSCI Emerging Markets Index ETF – An enormous bearish put butterfly spread comprised of 240,000 put options cast a gloomy shadow over the emerging markets fund late in afternoon trading. Shares of the EEM, an exchange-traded fund designed to provide investment results that correspond to the price and yield performance of the MSCI Emerging Markets Index – an index created to measure equity market performance in the global emerging markets, are down 0.35% at $37.21 as of 3:30 pm (ET). The massive bearish transaction on the fund suggests one big player is bracing for a…
