Wheeee, what a ride!
At 1am, in Member Chat, we were discussing why the market was selling off 1% but by 5am, we had rallied the Futures back above yesterday’s close causing me to say to Members at 5:33:
The Euro itself is up 1% to 1.352 but not the Pound and the Yen is below 77 so still time for all this to reverse again and we’ll be back to where we were last night (down 1%).
Nas Futures are my favorite short (/NQ) at 2,365 with a stop at 2,371 and that’s $20 per point so be very careful. Oops, silly me – oil (/CL) is my favorite short at $99.50 with a stop over that line.
We caught that move pretty much on the nose and the Nasdaq fell right back to that -1% line at 2,340 for a $500 per contract gain in less than an hour and oil came back to $98.60 for a $900 per contract gain by 6:10. That was enough for our morning drive to McDonald’s AND a tank of gas so congrats to all the early risers and we really had it all this morning with the 3am trade working like a charm followed by the double dip we caught at 5:33 and now we have a silly bounce back (8am) but, so far, not high enough to get us excited about shorting again.
We left off yesterday with plenty of short positions from our afternoon Member Chat – JUST IN CASE we had a repeat of last Wednesday’s 400-point drop. While we didn’t expect such a violent move (caused last week by Belusconi’s resignation which was, a day later, turned into a good thing – see “Whipsaw Wednesday – Yawn!“), we did think yesterday’s rally was just A BIT overdone (see David Fry’s chart) and, since nothing that has happened overnight has changed that outlook, perhaps some of the following trade ideas from yesterday’s Member Chat at 3:21 will still be playable this morning:
- GOOG $625/620 bear put spread at $3.10 is a nice downside play – figure risking $1 to make $1.90.
- MMM $82.50 puts are $1, also a good trade for a crash tomorrow.
- WYNN $130/125 bear put spread at $1.90.
- XOM $77.50 puts at .21 are a fun play too.
- Still shorting
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