Just when you thought you had the market all read, the market teaches you a lesson.
However, this time I can see the trap that lies ahead. The temptation, that is GOOG earnings, nearly blind sided me into thinking that I can just switch to cruise control til the end of the year.
The early bird does not catch the worm this time. He will dine on a rotten piece of meat that'll leave a sour taste in his mouth for the next 10 days, beginning this friday (possibly even as early as late tomorrow). *note: option expiration on friday.
GOOG's earnings report was the talk of the town today. CNBC had coverage on it all day long. There's just too much hoopla built up for this report which will create a superficial rise in the stock price for better part of the day tomorrow. It's then likely to fizzle after the report. I'm prepared to jump ship on this call option as soon as 650-660 level is attained during the day.
My view on the market being Bullish until the end of year still stands strong. However, there is going to be a roadblock until the end of this month. Once October is in the rearview mirror and S&P 500 @ 1500, Nasdaq @ 2750, & DJIA @ 13600, the coast is clear from there on until December.
If you are a stock trader, retreat into cash position and take a nice vacation until end of the month. If you are an investor, hold onto your positions and do a little 'mon back on the pullback. If you are an aggressive trader, like myself, shorting and buying puts will work just fine for the time being. You may choose a Chinese stock that's on a ridiculous run like PTR to short on a very short time frame. Or you may choose a housing stock that's still in search of a bottom like HD to buy a put in. Other than that, the only other safe haven during this upcoming storm is in the big oil stocks, most notably XOM, COP, CVX, etc. These three stocks are a sure bet to test the 100 dollar price tag in the near future.
"The best part of a roller coaster ride is the sudden fall. Don't be scared. Raise up your arms and enjoy it!" ~ R. Choi
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