What a day we had yesterday!
I called the morning post “Tempting Tuesday” as we expected to “look” good out of the box but we creeped up to our levels in such a forced march that by 12:16 I sent out an alert predicting a retest of 7,550despite the run-up. In my1:47 comment to memberswe were looking for an afternoon Mega-Pump, which we got and our DIA $77 calls jumped from .19 to .43 just 90 minutes later and we even made money on the back end of the same spread (DIA $76 puts) as they flew up into the close. I hit the turn pretty much on the nose with my 3:15 alert to members, where I said: “Good time to go 60% bearish, buying out front month puttersbut no roll-up on the long puts. We can re-cover if we make new highs on Dow and S&P but, otherwise, easier to sleep with downside protection after a 2% up day that made little sense.”
The markets pretty much fell off a cliff soon after that (maybe it’s just our members selling off that causes these things?) and this morning it looks like we will be opening at that 7,550 target (8am). Of course we have the ADP report pre-market and ISM, Construction Spending and Pending Home Sales at 10 followed by crude inventories at 10:30 so we had lots of good things to worry about in addition to the G20 protests, which are no surprise to us as I posted the schedule for the “Storm the Banks” rally in Monday’s post. I know I seem to ramble from topic to topic sometimes but a large part of calling the market moves is paying attention to little things like that!
Speaking of rambling – Yes, G20 Trillion Dollars is my new catch-phrase for the week as that’s the current global stimulus commitment with the US leading the way with $12.8Tn already promised. I find this totally ridiculous as that’s $128,000 for every home in America – surely we could have solved our mortgage crisis by simply paying off everybody’s mortgage at this point, rather than bail out the banks who leveraged those mortgages 40 to 1 and made the World insolvent. I had a much more modest plan on “How to Solve theHousingCrisis Tomorrow” since Jan 2008 that would have made this whole thing go away for $2.7Tn – it doesn’t seem like too…