Commentary – 07.12.11
If there is one thing we know about this market is its unpredictability. Last night when I went to bed the futures were down about 9 – knocked for a loop after some worries over Italy suddenly surfaced. This really is not a new problem as we know but given the sharp rally and little pullback many were just looking for an excuse to sell (remember, there are a million reasons). Overnight, it appears the stops were hit on rather thin volume but prices fell hard nonetheless, touching down 23 handles at one point. When I awoke the futures had battled back to being down 7, seems I missed all the fireworks. The news to come was not particularly good but then again the type A personalities have been ruling the action of late. The day started with a drop but eventually rallied nicely – only to get hammered mercilessly with no support as Ireland took a ratings downgrade. Such is life in this thrilling market. The VIX made a sharp move higher while volume ran hot, breadth was modestly negative. Chairman Bernanke treats us to some testimony the next two days so we’ll see what is up his sleeve. Also in Washington the debt crisis gets more and more play. Soon it’ll pass, but will confidence be restored?
Positions – Below are position updates. I won’t post comments everyday but will have updates from time to time. We are NOT daytraders by design, therefore needing to justify a move against because of market action is really nonsensical. We need to understand the purpose here, take it easy and trust that the charts tell the story. (We added positions on Tuesday 7.12.11 – we hold positions until I send an alert that we are exiting)
WYNN Aug 155/170 vert call spread at 6.15 – Casinos have been moderately strong but this one has been stellar. We cut the risk down some by using a spread but the reward can still be substantial up to 170 or so. The hourly chart gave a nice buy signal today, the stock moved nicely but then gave back some. Still like it higher.
BIDU Aug 140/150 vert call spread at 4.05 – We’re back in this chinese search engine with a spread, where last time we netted a strong 105% gain. This has dropped from the recent high but give it time and we should have a good move up on our hands.
Other positions still open: JOYG, QCOM, DE, OPEN, X, WLT, DECK, POT, FCX, CLF, NTAP, CF are all Aug plays, while AKAM and APA are still July and open.
Earnings season is underway, JPM and GOOG later in the week. Next week we see much more but let’s see how things go for now. Maybe some stability on the euro and political front (who am I kidding?). Be ready for any new alerts and follow the stream on twitter.
Have a great night, see you later in the week and on the tweets!