What a week. Haven't I said that every Friday for the past four weeks or so? Also – what a DAY!
I'm going to avoid looking at anything resembling a chart for a while. I'll do a post this weekend. Until then, relax!
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Hans Blix VIX Clicks
The VIX got just about up to 30. It isn't necessarily the "spike" everyone has been looking for, but it's definitely out of the doldrums. Things are zany enough that I'm scraping some partial profits off the table, particularly in index-land.
Epic Fail
Morning Bliss
A fresh cup of decaf and a pre-opening graph like this is all I need to start a good day.
This I Believe
We are now in Day Eight of the "grind-out-it" basing, frustrating bulls and bears alike. Amidst all this uncertainty, let me make plain what I believe:
(1) During 2008, probably within the next several months, we will reach about 10,700 on the Dow, and possibly go as low as just below 10,000
(2) The Dow will not see levels above 12,000 again for a number of years
(3) In the next few weeks, we will either see a countertrend rally or, if not that, swiftly break to the levels mentioned above
The last trading day of this week, Friday, should be interesting. I am long puts on both the $NDX and $RUT, but it's entirely possible I could have to bail on those at a loss. I am slightly inclined toward a drop on Friday, so I am prepared for it. I am far more confident of my energy shorts, but we'll see how it goes.
DUG is fascinating. Its behavior with respect to its support line (formerly resistance) is highly compliant.
There are a number of issues that have been severely battered and, should the Dow start to truly move higher, these issues in turn should have meaningful strength. Check out the hammer today on CAT.
I don't think I've offered this short idea yet, but BIG is pretty interesting, and it has a nice, tight stop.
My puts on DECK has been relatively moribund, but today was a step in the right direction, particularly given the overall strength in the equities market.
Oh, and then there's ICE, which I've been mentioning on practically a daily basis. I closed out 1/3rd of my position on this today with a 100% profit. This may sound insane, but I think it is within reason to target a price of $45 or so on this one.
I haven't had a position in CMG for a long time, but I'm proud of bringing this to the attention of my readers months ago, when I had the world's most uninteresting burrito there.
Likewise, I closed my COH puts a while back, but this issue still plummets. The words "Phil" and "moat" are germane here. Don't even ask.
Don't you think JPM is due for a bounce here? The poor investment banks!
Speaking of which, LEH was down nearly 20% at one point today.
Perhaps the strongest evidence I can offer for a medium-term bottom is the SPY. Notice how, in mid-January and mid-March, the volume on the SPY surged? We're seeing that again.
I'll close with a music video. I think I was one of 7 people in the world that saw the movie Pennies from Heaven, which was from 1981 or so. I had a childhood infatuation with Bernadette Peters, plus I love old radio tunes. I was reminded of the song since our economy is heading into the dumps, kind of like the Depression! See ya tomorrow.
