We are starting to love our stick!
From our first Alert of the day, at 9:47 we went bullish into the drop, selling the naked DIA $94 puts and covering our longer put plays fully. After picking TZA hedged ($11.15/14.32) and a short on COST (who had jumped 10%) it was all mooing with longs on MCO, ERTS, BSX and VZ but then a bearish play on GLD at $97.50 as, again, we didn’t think gold will hold $1,000. The market started a sell-off at 1:25but took a bounce but, as you can see from David Fry’s chart, the S&P held 995 at 2:45 and at 3:07 I said to Members:
Volume right at 100M at 3pm. 140M is “stickable.” Mr Stick stopped coming after he got hosed on Monday with someone(s) selling like crazy into the attempted closing pump but “they” jacked it up pre-market on Tuesday and got their money back Tues am at which point they les the market slide to (hopefully) get rid of the jokers who had the nerve to sell into the stick. After an almost 72 hour rest period, I think Mr. Stick is tanned and rested and ready to put a positive spin on this week into the holiday weekend. That’s my market story at the moment. I’ll be right if we get a move either into this close or possibly a pre-market pump into a Free Money Day tomorrow that jams us back to 9,500 on very low pre-holiday volume. Those DIA $94 puts are still $2.15 and I still like them as a way to play for a move up. The $95 puts came down to .69 as the bulls have lost faith and that makes them a fun play to get back into as well.
So far, my market story is looking pretty good and it’s a quick 150–point ride back to 9,500, which will be a tall order if Non-Farm Payrolls disappoint but looking at then Hang Seng this morning, which got the Grand Mother of all stick saves into their close (500 points in 45 minutes), I’d have to say pretty much anything is possible. This morning’s “rally” in the Hang Seng came off an announcement by authorities thatChina will raise the ceiling on foreign investments AND shorten the “lock-up” period on certain types of investments considerably. This came on the heels of another announcement that a plan to stop banks from…
