I Pronounce Thee: Lehman Day

Financials are in the news again. LEH may be working on raising billions in capital as analysts predict the company will report its first quarterly loss since the company went public in 1994. This may float a little tailwind behind Brokers out of the gate, but I'm still playing Financials with bearish puts.

7:45 am MT: I stopped DO for a 30% loss on a half-sized position. I took profits on CNX for a 10% gain, and I took profits on BTU for an 8% gain. I also entered small put positions on MS and MCO. I locked CNX and BTU because I still have a nice position on MEE, and I don't want too much in any one area. Energy and Commodity stocks look like they are catching a little bid this morning, so I will continue to scale out of FLWT and some others as we go along today.

8:45 am MT: I sold the last of FWLT for a 1.87 gain, or 42% profit. It may still keep going, but I'm comfortable with the gain, especially in these market conditions. I also nibbled some calls on MOS, which I may turn into a little intra-day trade.

8:50 am MT: I sold MEE for a small 4% gain. I really think the market is quivering and shaking a little, and could be poised to fade off through the middle of the day (hence all the puts I'm trading). I could be wrong, but I decided to cut way back on my long (call) positions.

8:55 am MT: I sold HES at breakeven. Under most conditions I would be absolutely excited about buying calls on a nice bounce like HES, but these aren't most conditions. Again, I could be wrong, and maybe my radar is being goofed by the microwave oven interfering with my tin foil hat, but it seems like the market may want to fade. As it is, I am keeping a few calls, and a lot of puts. All I can do is manage this and see if it works. We shall see.....

9:00 am MT: I locked and walked on PXP for a nice 1.10 profit, or 31% gain. Same story as HES, normally I would be crazy for a setup like this, but I'm taking profits sooner, rather than later, just as I said I would. I also time-stopped out of AA for a small .38 cent loss. I will re-visit the stock later if it picks up some momentum. I also sold the MOS calls at breakeven.

10:00 am MT: Here are some interesting Bullish and Bearish movers today:
Bullish: MUR, APC, ECA, NEM, RL, VRSN
Bearish: PCP, MS, UTX

I picked up a small put position on PCP.

11:00 am MT: I sold the PCP puts for an 8% gain in an hour. I may go back in to PCP on another intra-day bounce. I am getting to where I'm just diddling around today. I actually picked up mini-sized call positions on ECA, MUR, and APC. A technical bounce is a technical bounce, despite my misgivings, so I picked up a little position in each of those stocks. I have more than enough positions, and I will probably continue to exit some profitable trades as the day goes along.

11:20 am MT: I culled out MCO for a .40 cent loss on a half-sizer. I also re-assessed my positions and decided that I had too many, and that I still don't like the Energy call, despite the technical bounce. So I culled the three trades that I just did: ECA was a .30 cent loss, MUR was a .40 cent loss, and APC was a .45 cent loss, all on half-sized positions. I'm going to get up and go out and take a walk. I can tell that I'm trying to make something out of what may be nothing. Under normal conditions I would be loading up on the Energy bounces, but I just think its a bear trap. I think the Big Institutions may be playing a game here. I know I've said this a bunch of times today, but I think the market is poised to roll down. I'm willing to miss out on a major upswing in a number of stocks right now because of my Technical and Fundamental view.

I did re-enter PCP puts just before this latest drop. I played the July 120 puts earlier, and now I'm playing the July 115 puts. So far so good.

11:37 am MT: this may be it, this may be the market fade I was looking for. We shall see.....

12:25 pm MT: I locked down 1/3 of the GS puts for a nice 2.20 profit, or 21% gain so far. I also locked down 1/3 of my DIA puts for a nice 1.01 profit, or 25% gain so far. I locked down 1/3 of my QQQQ puts for a .50 cent profit, or 21% gain so far. I have orders in to lock in 1/3 of my MS and SPY puts as well.

12:40 pm MT: I sold the PCP puts for a 10% gain in 1 hour and 15 minutes. I'm not really in to taking the trades this quick, like on PCP twice today, but it gave me a move and I took it. I will need a little bigger upswing to re-enter a third time today, I probably won't get it, but we'll see.....

12:45 pm MT: I locked down the rest of the GS puts as it started to bounce. The total trade was a 2.40 profit, or 23% gain. LEH came in with some "defensive" news about their business, which started the whole bounce/short covering at the end of the day. I stopped MS before it went through my breakeven point for a small .05 cent gain. Here we go again.....Like I keep saying, keep the trades shorter, you'll be glad you did. I've had a nice, profitable day, but nothing, and I mean nothing went to the support or resistance areas I thought they would hit for the past several days. Everything turns in space. There's too much Fast Money futzing around with the market. I did pick up some more GS puts at the high of the 15m swing towards the end of the day, but as usual, I'm taking small positions.

1:50 pm MT: I sold the SPY puts for a .34 gain, or 8% profit. I then did the same thing I did with GS (and PCP earlier), I swapped the trade out for the next strike further out of the money. I traded a little delta for a cheaper position to reduce my risk. Now I'm back in to some new SPY puts that cost less, and have already picked up a little profit. I may look at MS again for some puts tomorrow, but I'm not sure yet, I want to see how the market reacts to the LEH "news bogey" overnight. As it is, I'm not super excited about the MS chart, or the KSS chart for that matter. So I could end up doing nothing on MS, and time-stopping KSS. We'll see what happens tomorrow.

3:00 pm MT: Market Wrap: It was all about Lehman today.....Lehman, Lehman, Lehman.....Lehman here and Lehman there, Lehman everywhere! There are no other stocks in the universe, only Lehman. Lehman is the economy, Lehman is the market, Lehman is all knowing.....Lehman is.....the Answer! Leeeeeeaaaaaaahhhhhhmmmmennnnnnnnnnn! Yesssssss!

Ok, seriously, don't get caught up in the Lehman news bogeys. Keep playing the charts. The market indexes continued to roll over today, with the Dow being the most bearish, and the Naz being the most reluctant. I was right about the Energy bounces, at least for today. Those stocks faded off and are looking a lot choppier than they were going into the day. The strengthening Dollar acted as a catalyst for some of the selling. It looks like Energy and Commodity stocks have another couple of days of consolidation. Maybe the Oil Inventory Report tomorrow will act as some kind of bullish or bearish catalyst (especially if the Energy Department can actually report real numbers.....). As it is, it still looks like the Dow has a pretty good chance of dropping down to the 12,200 - 12,300 support area, which means that the market could still drop for another day or two, we shall see.....