My thoughts exactly, LR. BCS and DB have not rebound while S&P is right back to that magical 2100 line as if nothing happened. Something not right those banks tell us, but who cares. It doesn't impact US. TINA they say. I wonder IF all of our global US companies will report 'currency headwinds' again as a reason for missing estimates this Q, circa last Euro drubbing 18 months ago.
At end of day today, near 2100, I am selling everything I bought at 2000. Was 50% cash last Thurs. 35% cash end of day Mon. And now back to 50% cash. Tom Lee gets every market move correct, but says even he was suprised to see how much cash was on the sidelines with this V. New Normal.
Duke hit this one out of the park. Hat Tip to our dear friend. Can't wait to see what he has to say next on Sun.
Why BS? Both stocks were stumped when they and many other techs failed during the last Euro currency slamming 18 months ago. Is it that crazy to expect they made the same mistake twice?
So IF you go back to mid-June with Andrew Left, you will see that every time FB gets back to 115 it gets sold off hard for a point or more. What IF you actually knew what to do with this info. Sure there is a gap to fill from 115.48-116.26. And on one of these moves to 115, it will fill that gap. But here's the beauty of this short trade, your max loss is only a buck-ish by selling over 115. Why. Because unless you have a catalyst like ER or some macro event, you need not worry bout the stock rip-roaring thru that gap fill. And IF it does, you very easily stop out on the day that swift move thru 116.26 occurs. So far this trade has worked 3 straight times 115 has printed. Lets say you pull off this short trade 10 times and make a buck or more every time. Will you care IF/When you get stopped out and lose that buck to the upside. Even better, you repeat this as many times as possible before ER week. Then you take it off entirely and even get long for ER.
IF you see this, then you are thinking like a Pro. And now you know what to do the next time you see 115.
WW was certainly smart enough to buy at 109. Been saying it would print for weeks now. But he is equally stupid for selling the 113 calls for 75c against the position. So looks like I will have left more than a buck on the table. Fully expect those calls to take my stock. But WW enjoys a good double so happy to see whoever I sold those calls to have hit a double thanks to me. And can't complain with 4.75 profit. Still holding the ER 109 calls for 2-3 bucks. But that is an eternity away. So may have to trade those in for better prices at some point IF this V runs out of steam.
Ludacris once told me 'you wouldn't believe your eyes if you went to Brazil'. He was right.
Mon was fun. Rest of week even better. Would be amazed if all my 2000 buys see a 2100 sale by Fri.
One thing to note since you don’t seem all that concerned about the net effect of Brexit. Recall 18 months ago when the Euro was crushed within days/weeks. Nobody prepared for it. And one by one, tech company after tech company including FB, said it faced ‘currency headwinds’ in the quarter and it expects to experience the same in the next quarter as well. Fast forward to today and you see the Pound and Euro getting slammed in record speed as a result. So the only question is, did they make the same mistake twice and not hedge accordingly. I hope not. But IF they and other techs come out and start blaming currency again in the coming weeks, the stocks will be stalled or worse for the rest of the summer.
I don't think there's the slightest chance of a rate hike in July. Jan made her bed by ironically and masterfully changing her tune within days and tying the decision not to hike to the back of the Brexit vote. So unless the Brexit vote is completely reversed (not out of the question), I say no way does she now go back on this linkage. I don't care what the US econ stats show in the next month. In fact, add in the US election and I'd say there is zero chance of further rate hikes this year. That is, unless she wants to give The Donald more ammo for his campaign.
UK Farage-slapping the EU. Merkel with the fistacuffs right back. Obama on the wrong side of the argument as is often the case. The way this is shaping up, it looks to me like a lot of politicians have bet on Red for the summer. CBs were already losing Street Cred. Not much they can do right now that would be otherwise as effective. So they wait and apply the 'gets worse before it can get better' methodology.
1865 is coming, in time. A gap says it is so. But on this particular move, I do not know. Frankly, I see many opportunities for news-changing catalysts going both ways in the near future. WW expects it to be a fun summer. IMO, this was not an over-reaction. At least not yet. Longer term, you can find the silver linings if all goes as planned. Like El Erian said. But miles to go before we sleep.
You did not have 1 hour and 45 mins. You needed Patience. When you bought the stock in the gap with me at 109, you wait to see it break toward the 200 DMA. There would be plenty of time to sell 109 calls for 50c to a buck IF the stock went against you. THAT was the message. The 200 DMA is around 206.50. Pretty simple to find for yourself. Just use the interactive chart feature on yahoo and add the 200 DMA indicator. It will be a day behind but the avg contains 200 days so it ain't going to fluctuate much day to day.
So today, you are lucky enough to wake up on the Right side of the bed and you're up 3 points. Now, you can sell 113 calls for 70c or the 112 calls for more than a buck, and add another point or more to the 3 pts we're working with. S&P can test all the way back up to 2060. Or, it's only going to fill the gap to 2032 before picking up right where it left off with the downside.
Nice work. Many laughed at us instead of listening. Now Cash has the last laugh. You are in like company. WW bought a call spread in the Gap for ER today as well. But looks like stock still wants lower. With the 200 DMA so close, it would only make sense to print. And depending on the velocity of a 200 DMA move, Par could be hit just as easily printed. The good news is, options for this week are expensive. So if you buy the stock and it goes against you, you can sell some options against the position to get some income while you wait for ER.
Open mind best way to go in current market. If you recall, I went to 50% cash back in Apr at 2100. The drawdown from there and corresponding rally was far too shallow for me. However, with all the stock outside days I saw going into The Vote, a Bremain all but certain so we were told, and a market so close to its ATH, it appeared to be playing out an UPside Breakout scenario. One that set a new ATH and then consolidated back to 2100 before ripping higher. Under this scenario, I was expecting to put my cash back to worse at 2100 no worse for the wear to watch a run to a 50% Flabby or 2300+. But The Vote changes everything. And now I get to put that cash back to work much lower than 2100, as I'd hoped for all along. Many thanks to the boys for bailing me out and doing what they are SUPPOSED to do in the summer. I guess Jan's last minute open mind change of heart was the right call. I wonder who tipped her off.
Don't fret. Your original premise is right in the intermediate term. 109 is coming. Timeframes matter.
But make no mistake, this is a Risk OFF event. Why? Because now instead of feeling cozy you don't sleep well at night knowing that ANY morning you could wake up to another country deciding to cast the same vote. Next waves of selling coming later today or next week. That said, you still have the same ER trade potential.
So on a day like today, a NEW hits channel should be playing something Usher - CRASH. Instead, pretty sure I'll be listening to Kelis - Milkshake AGAIN.
And you should be going out to GOOGL and FB earnings weeks for FB calls beyond today's trades. Today was your gift. But not at 113.
Timeframes matter. Closed the 113 put hedge off the open and bought 112 calls. Now already out of the 112 calls and looking for next trade TODAY. Still have the 115 calls for next week for 60c, but as said playing those as if I expect them to go to 0 because of the 113 put hedge that already paid for the trade.
WW did not think it would happen. Eats crow today. Pat yourself on the back and move on to the next one. But do NOT wait 3-4 days. You trade TODAY.
IF you're naked, you have not slept. IF like WW, you hedge events like this and your hedge pays for everything and then some. Had a 115 call spread for next week, hedged with 113 puts for this week. The 115 calls for 60c will likely expire worthless next week. But the 113 puts go from 30c to 2 bucks at the open. They could go to 4 bucks. But you close it off the open and roll if you want.