Greetings again from Red Rock, where blogger’s guilt compels me to do another post. (Many popular bloggers do one post a day, tops, and I get jumpy if the latest post is more than a few hours old. That’s just how I roll.)
The Dow Jones Composite (which is the Industrials, Utilities, and Transports, all mushed together) is, as I said in yesterday’s post, “tightening and narrowing”. The fall on Friday took it right down to support. What I want to see – - what I really, really, reallllllllly want to see – is a break of that trendline, because it’ll be the first break of that wedge ever. I would be giddy. And that’s really what all of us want, isn’t it? (more…)
It’s been a really good day, and although I’ve left almost all my positions intact, I have closed out a few. One of them was Chicago Bridge & Iron, which I closed because it came close enough to filling its gap (and making its measured move) that I figured it was sufficient. I’ve mentioned CBI a couple of times in the past, and this was a very clean set-up. However, when it’s this stretched, it’s time to cash out.
Well, I’ve been having a good morning so far. A triple-digit percentage gain my AMZN puts (I dumped ‘em at the open), and I’m beating the averages (inversely-correlated) on my short positions. I think a reasonable path for the ES is something like this:
Well, after losing money year after year after year after year, Amazon has perhaps finally worn out its welcome. I am gleefully – cheerfully – both short the stock AND long the puts, so I’ve already decided Friday is going to be a cool day. What’s particularly nice is that the stock is doing poorly in this completely retarded, helium-filled environment, so if – God forbid – the general market started to soften, Amazon could easily lose half its value. Easily.
The perma-rally in the stock market is getting thinner and thinner, both in terms of breadth and daily range. Just take a look at the Dow Jones Composite; this wedge is getting ungodly tight. I realize anticipating a break has been like Waiting For Godot, but I continue to hunt down the best individual short positions, stock by stock – - – the domestic ETFs offer, in my opinion, almost no edge right now.