Now there is a plan!!!
It sure didn't help in the first place telling America that is was going to hell in a hand basket in his previous speeches.
Ultimately the market is the great equalizer and will do what it has to do to put things in their proper perspective. No amount of political rhetoric will change that.
WHAT A WEEK
I was looking for 8,000 on the Dow but I didn't think it would happen in 1 week.
The real question now is has the market found a bottom???
Well here is the chart of the Dow for the last 10 years and it sure aint pretty. Five years of gains gone in the 12 months. There is not only blood in these streets but the carcasses are pilling high!!
I have had a number of traders tell me they are looking at selling naked puts after the bounce Friday afternoon. All I can say is they have bigger Kahunas then I do.
Grant it the premiums are huge but it is in no way a guarantee. My advise maybe consider a calendar spread sell the short term puts but buy some longer term one for a little protection.
Stocks
Suffice it to say our strategy of cash with some shorts has worked out well. (I only wish I was even more aggressive on the shorts but hindsight is 20/20.)
The question is what do we do now. Well as always discipline and patience are key. We need to wait for the proper signals and even then at least until things settle down keep our positions small and our stops in place.
You will notice a number of key reversal days Friday and a number of opportuniites on Monday to buy Fridays high as a test of a rally.
Personally I am still straddling the market. I have been able to roll this over a number of times in the last month with gains on every position. However the premiums are swelling now and the success of this strategy may be limited now.
ETFs
XLY - KRD
XLP- KRD
XLF - KRD
XLK - KRD
I think what we have seen is the end of the 3rd wave in most things and that we will be entering a time of contemplation. A 4th wave that will last for some time.
But remember anything can happen.
Peter
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