The Energy and Commodities Sectors have had a good deal of short term buying and short covering the past four trading days, but it looks like those sectors are running out of gas. Tech is dropping on the ORCL earnings, and Financials are getting squishy because of the large put positions traders see building in that sector right now - and the continued earnings downgrades hitting the sector.
I added to my paper puts on OXY. I was thinking of doing the same with FCX, but I was already in some puts right close to where we are now anyway. This really looks poised for a pullback in Energy and Commodities. As always, I don't have a crystal ball, so that's why I have stops. But I am very comfortable with my put positions from yesterday, and the added positions from this morning.
I don't know if I will be able to do a follow-up post later today since I work until 9pm, and get home later than that. I'm still trying to figure out how to handle Thursday and Friday nights for now.....until things change.....
Just a quick late day note. The markets finished down, and so did Energy. Now, the Energy thing is significant because oil ran up 1.30+ today to close above 107 - and yet most Energy stocks finished down. So Energy, Gold, Commodities, Financials, Tech, some Retail, and some other areas all went down or are looking to roll over. I'm not looking for a huge downswing, so another drop tomorrow and I will be out of around 1/3 to 1/2 my puts depending on conditions. I liked the Gold puts so much I added to them with an ABX put today. I don't expect a lot of focus on the Economic Reports tomorrow, although the "fad" report will be Consumer Spending (even though I don't think it will mean much unless it comes in way outside the estimates). The big focus is Earnings Warning Season is starting, the ISM on Tuesday, the Jobs Report on Friday, and Earnings Season in the middle of April. The market is looking for clues on a possible "recession." The market is also still trying to decide if we are done with the worst of the Financials mess, which looks like about a 60/40 proposition right now. By that I mean it looks like a 60% chance we are done with the worst of it, and the further along we go without catastrophes, the higher the odds. There are some Financials that are even looking bullish, like FNM, FRE, and MS.
We'll see what tomorrow brings.....
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Good Afternoon Dwight:
ReplyDeleteWe/(I) don't want you running out of gas either.
Idea/suggestion:
1) Maybe hold off any Thursday evening post to maybe a quick Friday AM post. That might include some of your ideas from the Thursday evening discussion.
2) I know this is extra work-but move any Friday afternoon post to the weekend like you did this past-weekend. Unless maybe you want to post some quick opening/closing paper trading ideas before the weekend.
Again-just an idea.
I know you just recently celebrated an anniversary and that's where the TRUE INVESTMENT lies-so be sure to reserve some gas (and time) for that special one.
You do so much for us-and it's appreciated.
Robert
CANI
Hello Dwight,
ReplyDeleteI agree with Robert. Don't burn yourself out. Your blog is so insightful and you always provide great content. But don't let it get to a point where you feel it is chore. It is a blessing for us to follow your teaching when it is available, but the best communication comes from when you are relaxed and eager to do it. Perhaps you don't have to post on Thursdays unless there is earth-shattering market news that you want to provide insight on. And for Friday's post, just provide a summary of what you see coming the week ahead anytime during the weekend at your convenience.
Thanks for all you do.
Christina
Hey Dwight, good call on jcp. What happened to retailers today? The news made it sound like they had earnings and alot of retailers gapped down. Anyway I like the family page and think your virtual coaching has made my investment worth while. If you ever do anything in the future please keep me in the loop.
ReplyDeleteThanx again'
Steve C