Well, it’s really, really obvious now that the final vomiting up of stock sales happened very close to yesterday’s final bell. The ES bottomed at about 4:30 EST and it did nothing but climb between then and now. I don’t mind that I still have the vast majority of my short positions, but if I had it to do over again, I would have closed out my larger ETF shorts at the close. That kind of rush for the exit is probably going to be reversed, and it was.
I’ve backed off quite a bit, having taken my portfolio from a 95% commitment level to 66%. I got blown out of my only large short – FXE – at a loss, and many of my individual stock holdings were up 2%, 3%, and even more on the day, meaning, of course, a chunk of my profits from yesterday were eaten alive. (more…)
Well, the only big short I had coming into today was FXE, and I got stopped out of it at a loss. I’m not touching it again, because the EUR/USD has pushed too much to the upside. More important, I am quite concerned that the inverted head and shoulders pattern – - very much intact – - could pose a meaningful risk to equity bears. This demands continued observation, as it could certainly influence equity strength in the weeks ahead.
Today’s strength was quite predictable; I’m using the bounce as an opportunity to get into other positions at good prices. Here is one of them:
Chipotle – purveyors of overpriced, so-so burritos – reports this Thursday. I have puts on these chaps. I think there’s ample room to fall from current levels.
Facebook has been off the radar screens for a while, since it’s been pretty much a $27 stock, more or less, since freakin’ November (unlike some inexplicable high-fliers, such as the incredible sexy and innovative Campbell’s Soup or Johnson & Johnson – - check ‘em out, CPB and JNJ, if you think I’m joking).
Earnings are coming up May 1st, marked with the red vertical line below. They’d better shock the bejesus out of people with their earnings if they want a chance of getting interesting to the investing public again, because they seem very vulnerable to slump back into their lower range in the lower 20s and high teens, as they were last autumn.
My sympathies this morning to the victims of the bomb blasts in Boston. A particularly contemptible act by deranged and hate-filled idealists seeking to make the world a better place through indiscriminate murder. As far as I’ve been able to ascertain no group has yet claimed responsibility, but I’m sure the full power of the US is bent towards identifying the perpetrators and bringing them to justice.
SPX fell heavily yesterday and closed well below both the daily middle bollinger band and rising support from the November low. I’m pretty certain we are making or have already made the Spring interim high here and we should see an H&S or double-top form here, though it isn’t clear yet which we are going to see: (more…)