Big Money started picking up stocks on Friday after a deep drop into the Cheap Valuations Zone. Traders are carrying through with the bounce this morning. Pre-market futures are up, which is what I would expect after such a large snap back on huge volume Friday. I will have to get myself re-acquired with the price action to start naming the battle points of support and resistance, but I will name the 8,250 area on the Dow as short term resistance for now on the horizontal and the diagonal trendlines and from previous price action. If the Dow can clear 8,250 then it opens the way for a move back into the 8,500 - 8,700 area. Support is the 7,500 area.
The zones are pretty wide and the price action pretty violent still. Redemption selling and capital gains selling appear to be slicing the market pretty hard.....and Big, Smart Money appears to be willing to let the market slide on the selling deep into the discount zones before buying. I suppose I would do the same thing.....Why buy too soon when you know there is enough legitimate fear (capital gains selling) and less competents (redemption selling) out there to keep sliding the market down.
The net result of the volatile price action is a higher degree of uncertainty (lower probability and lower visibility), which means that I am still looking to play intra-day swings on the majority of a position and not hold a full position overnight. Today I will be looking mainly at calls, and as always, we shall see.....
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Dwight,
ReplyDeleteWelcome Back!!!
Good to have you back Dwight!!
ReplyDeleteDwight - Thanks for the pre-market analysis. Great to have you back!
ReplyDeleteThanks Dwight
ReplyDeleteGarrett
Hey Dwight, nice to have some good reading in the morning again.
ReplyDeleteThank you.
Hi Dwight. Great to have you back. I hope all is well with you and your family.
ReplyDeleteWasn't expecting to move that high this early! But it looks like we're hitting the downward trendline and we are definitely due for a pullback. I'm interested to see what will happen here and if this move will hold up and break through the trendline.
ReplyDeleteAnyone catch the move up this morning?
Joe
Hey Joe,
ReplyDeleteI held a few SPY calls over the weekend and closed them soon after the open for a nice gain. Bought back 2 calls and sold them for 5.7%and 6.3% gains. Out now and watching.
Good to have Dwight back guiding us.
Susanne
Talk about a market on hold. Looks like everyone is waiting for Obama's panel, should be interesting. He is supposed to speak in the hour.
ReplyDeleteClosed out my GG Jan $20 calls for $875 real money. Spot gold spiked high to $830 and then some profit taking started so, time to go even though the emotions were saying stay in, I fought the temptation successfully this time. Feels much better.
ReplyDeleteWaiting for the next swing.
Well done Susanna and everyone who is profitting today!
Francis
Good job Francis and Susanne. I missed the big rip up (didnt want to chase) and have been getting kicked around since.
ReplyDeleteGood for you Steve not chasing, I have succumbed to my weak emotions of not wanting to 'miss out' too often and chased and lost.
ReplyDeleteSo the SPY is flattened against resistance around 84-85, when would you consider Putting a SPY.
You are so good in spotting those high low swings!
Thanks
Francis
Thanks Francis, but today has not been my day. I just bought a put at 84.00(a nibbler) and a stop at 84.50. We will see.
ReplyDeleteIf this one doesnt work I am done for the day and will just watch.
Wishing the best for you Steve.
ReplyDeleteGoing on what Dwight said about Dow 8500 target area, would it make sense to consider DIA puts of 85 if that area is showing resistance?
For SPYs, an 85 Put makes sense for the same reason so you must be on the right track!
Francis
Francis,
ReplyDeleteI'll bet you're smiling like a Cheshire cat! Congratulations! Now, that's what I call a trade.
I sold my KSS call for 17%, and I've got an FCX 20 Jan call that I bought (target: $24.25) just before Monsieur Obama began to speak.
Susanne,
Nice trading! I agree with you; it's good to have Dwight back.
Steve,
I'm with you on chasing entries.
Thanks Laurie,
ReplyDeleteRelief is the emotion I am feeling; been a while since I had a victory so looking ahead to trading properly.
Still underwater with my GILD calls; in repair mode as I was not quick enough to exit.
Not expecting great things, would be happy to break even on this next flag up and call it a scratch.
Well done on your FCX, looks like a good bottoming reversal pattern call. China still needs copper!
Francis
Congrats Francis. That's an awesome trade. We're all getting better, at least I'd like to think so.
ReplyDeleteI picked up some puts at the end of the day because I think the charts are setting up for a grand put opportunity. See how it plays out tomorrow.
Joe
Thanks Joe.
ReplyDeleteHere's to your successful Puts tomorrow!
Francis
Francis,
ReplyDeleteI know that relief of which you speak - just thought it must be gratifying to have a sizable profit in the spendable stuff. Here's to a graceful GILD exit as Dwight so aptly puts it. Sometimes you get a second chance!
Good trades, everyone!