My "theme" has been repeated so often, it risks getting tiresome, but I'll say it again: energy shorts and agriculture shorts (with index option day-trades thrown in for good measure in either direction). It has served me well recently.
Even though yesterday showed the potential for "The Bounce", it sputtered very quickly. Today, however, a push higher held, and in some cases, the push was quite substantial. The Dow's 152 point rise was actually one of the tamer ones:
Since we're in a bear market, I really, really like rallies, because they give me new opportunities. The giant question, as always, is this: does the rally represent a one-day wonder, or is this simply the start of a very substantial countertrend, like we saw in mid-March through mid-May? I don't know. The IWM, shown below, doesn't hit really serious resistance until around $71.
I was excited this morning to see how quickly oil-related issues were plunging. Today's hammer pattern implies we're going to have a bit of a bounce short-term, but I think that for at least the medium-term, the high prices in crude were marked a few days ago.
In my IRA account, a couple of days ago, I went very bullish, putting all my cash into QLD, DDM, DUG, UYG, and UWM. Yesterday, July 7th, DUG's strength compensated for the weakness in the other four positions. Today, however, all five positions were up handsomely, particularly UYG, which benefited from the bounce I've been expecting from the world of investment banks.
I was amused to see a headling that AMBAC had "surged over 50%" today. Yes, that's very true.
But it's important to keep such things in context!
My puts on the $XAU had a decent day, but I am looking for much, much lower price levels from here.
With such a strong day for the bulls, it was particularly heartening to see one of my favorite put positions (and one of my largest ones) take it a bit on the chin. Clearly a break below last week's lows would spell great things for this position.
But even more favorite than that is the chart I keep foisting on you – ICE. It went up today some, but that's OK with me. This pattern is uber-powerful.
I bought some IBM puts today, although I've got fairly tight stops on it. It really depends on if this rally has legs or not.
My short on RJF was already in place, but it's pretty clear to me from this chart that, in spite of a 11% lift in the price of the stock, the general direction is going to be down.
I was going to buy a bunch of BAC and COF stock this morning, but I didn't have time. Ah, well. It's no surprise to see such a battered issue have a spring higher. This is the largest rise BAC has seen in months.
The overinflation of OIH has definitely been let out to some degree. Looking at these fan lines, noodling around in the 200-210 range seems most likely.
Here are a couple of short ideas. MTL………
……and STT, which seems to be retracting back toward its broken trendline.
Tomorrow is also going to be busy for me. ThinkOrSwim users, please note I will be doing the "chat" session at 2 p.m. PST, 4 p.m. CST, 5 p.m. EST, so please join me there. I have no idea what I'll talk about, but I'm sure I'll think of something good by then!
