Greetings from world-famous Denver International Airport. Some of you may think that I travel a lot. I don't. I just complain a lot about it when I do. Today was a fine example of why I hate traveling – – it takes me away from the markets! Incredibly, with just a few "quickie" opportunities to check into the market, I had a dynamite day, even making money (both directions) with some large Russell put (and then call) positions.
Lately I have been very correct about:
- Fall in ag-related prices
- Fall in oil-related prices
….and I've been very incorrect about…….
- Bottom being in on investment banks
- Equity markets being in position for a sustained bounce
Luckily, for those last two, (1) I haven't touched an investment bank, either long or short, for weeks; (2) I've been able to play the long and short side of equity index volatility very profitably.
This morning, I had 1000 shares of DIA, and when the Dow was up 100, I had that funny feeling that there wasn't going to be any more upside short term. I sold out (for a whopping $600 profit, which is pretty puny for a $112,000 position!) and bought Russell puts (since I was amazed to see Russell actually slightly down, in spite of the Dow being up 100 at the time). Well, the Dow lost all that, and 150 more, and those Russell puts turned out fabulous. Later in the day, I went long Russell calls and closed those out for a profit as well. I am – – as is the case these days – – in no index positions at all. I am simply uncomfortable at these levels holding big positions overnight.
$XBD seems to simply have no bottom. I have given up guessing. It'll probably take another major brokerage going belly-up.
DIA seems to be hitting at least a little support on its Fibonacci, but it's very, very weak. If we get a multi-week bounce, I'd expect a lot of strength on this one.
The head and shoulders formation I've been watching for weeks on $UTIL continues to very slow shape up.
OIH (finally!!!!) is starting to fall apart. It's about freakin' time.
I am blown away how fast the Russell has fallen. Clearly here we have huge support from mid-January and mid-march. If we break mid-March, look out below.
Adding credence to the idea of support is the $OEX touch of the retracement as well.
S&P 500 broke its March lows (just look how far it has traveled since mid-May!!!). This has been a far more rapid bear swing than we've enjoyed in a long time.
There's a lot of high-quality chatter going on in the comments section, and some of it is centered around DUG, which broke above resistance today on very, very strong volume.
Now a few favorite short positions……CERN is falling away from resistance……
XEC is one of many energy shorts that has great potential and has already paid off.
If MasterCard breaks that major trendline at $240, it's an easy trip to $220, which is the measured target.
Add PXD to the energy list….
I'm crazy about SOHU. I own a ton of these puts.
AZO is move away from the retracement it made toward its diamond pattern.
BHI has taken a while to ferment, but I think it's finally there.
COP has sweet potential as a failed bullish breakout.
DECK has been weirdly strong, but I've got hope for this one.
And EOG is doing fantastically; very little support anywhere in sight!
I'm getting on a plane now. I will not have another post until VERY LATE Tuesday night. See you then!
