What a friggin’ joke!
In Monday’s Member Chat I put up the chart on the right and said that we are likely to flatline for 3 days as we were repeating the patten, in reverse, by which we fell during the quake. We weren’t sure whether that would lead to another drop, like it did on the 15th but, lacking another earthquake, we could climb back our wall of worry (because “it just doesn’t matter” does it?) back to test our Major Breakout levels.
This isn’t sour grapes – it’s what we expected to happen because we know the market is a manipulated joke so we play it that way. We picked up long plays (hedged, of course) Monday on CCJ, CSCO and GLW. Tuesday we added SDS hedges and that gave us cover to go with long ideas on AA, AGNC, AAPL, CHK, GE, JRCC, KO, MCD, UNG, WMT – some of which were offsetting short puts against the SDS hedge to make it free if the market heads up.
Wednesday we had that TERRIBLE New Home Sales number (worst since the 1950s, when the population was 1/2 of what it is now) so we calmed down and just went with long ideas on KO (again) and SHAW while now taking a couple of shorts on GMCR and NFLX and a bullish spread on the VIX, which is technically bearish. So you can see how we begin to balance back to neutral as we begin to move higher.
Yesterday the market ignored the TERRIBLE Durable Goods Report and we began taking last week’s bullish trades off the table as we had plenty of fresh horses to ride from this week’s picks. We were all short yesterday with ZSL (an aggressive short on silver as they touched $38) QQQ puts for next Friday and another short on GMCR as they rallied back at the day’s end. The only long I liked yesterday was the one I always like when it’s down – XLF. That was all our non day-trades, not $25KP adjustments for the week and you can see how we play as we take LESS long trades as the market goes higher – not more as we are not momentum traders. We prefer to buy when it’s low and sell when it’s high – perhaps a radical concept but it does seem to work pretty well.
IN PROGRESS
