What a week this has been!
Three days in a row we’ve had to flip 60% bullish at the open as we break our watch levels – that’s amazing performance. Yesterday took just 28 minutes before I put out an alert to fully cover long put covers, putting us 60% bullish and we held that stance until 2:59, when we were able to buy back those covers for a 20% profit and we finished the day half covered (55% bearish) with the same DIA $80 puts back at $2.50. As I said earlier in the week, it’s a gas and brakes model on our long covers while we are able to let our long plays run and we made plenty of those yesterday as the markets firmed up at higher levels.
Once we get past this morning’s Jobs report we’ll feel much better but certainly we’ll be heading into the weekend with a wishy-washy half cover again as it’s just too scary to risk. RIMM really surprised us with great earnings and that goosed the Nasdaq after hours and the pre-markets are showing half percent gains as of 7 am. Of course, as I mentioned yesterday, this was our game plan as we got the FASB news we expected yesterday, followed by the mandatoryCramer pumpthatcould give us a little added momentum in the morning.
CNBC (GE) follows up with a headline this morning that says “March Job Loss May Signal That The Worst Is Finally Over.” What is their logic for this statement? “It almost can’t get any worse,” says economist David Jones of DMJ Advisors. Also:“I don’t see how we can sustain job losses this severe, never mind intensify them,” says Ken Goldstein, who follows labor and consumer trends for The Conference Board. “I don’t see why or how business can sustain it.” Oh I wish I were joking but this is actually what passes for logic in corporate news…
Maybe I’m old fashioned but I tend to think a layoff cycle is ending when people STOP being laid off in record numbers, not while we’re posting new records. Yes it may be peaking, but PMIs and ISMs are still showing severe contraction and, as I’ve been saying all week, the government is simply not doing enough to address the core issue of unemployment and home foreclosures yet to effectively turn anything around. Cramer’s logic is that somehow the announcement of a plan means…
