Wow, I think I need a rest after yesterday…
We made 21 trades in comments after starting the day with none – once upon a time 21 trades was a busy WEEK! Still, we grab our opportunities when we can and we have a lot of open positions (albeit small ones as we went to cash 2 weeks ago) to manage in what looks to be a tricky market.
Let’s try to keep some perspective today as you can’t even call this a correction yet, we had a 200 point drop the day after Thanksgiving and THAT wasn’t even a real correction since it was the first real pullback in a 3 month run of 1,200 points. We are still up 1,500 points from mid-July and if we are rotating out of commodities there is bound to be some pain in the process.
China had a bit of a pullback this morning with a 387 point drop but, like us, it’s a drop in the bucket as they have gained 1,200 points since 12/22. We just had that discussion yesterday morning when I said:
"I’m looking for a top to short. If the markets are going to collapse they will go first and they could drop $7 in a day easy. I’m thinking I’d rather take FXI $120 puts when it tests that level than DIA puts as I think FXI has a LOT more room to fall." Too bad we were so busy with other plays as the index made a nice top out at $118 and I’m sure it will go way down this morning.
There may be a chance to grab FXI $114 puts early if we put a bid in for $4 so let’s give that a shot pre-market. This is just a market trick you can sometimes get away with – putting in an early high bid on something that hasn’t opened yet but is gapping. With luck, you can scoop up sell orders from yesterday that haven’t cancelled.
Not to worry about the Hang Seng, they managed to hang onto the 20,000 mark where they sit a comfortable 40% ahead of the Dow on the 20-year chart. Of course that’s nothing compared to the Nikkei, which gained another 127 today, bringing them to 17,353 outpacing the dow by 150% over the past 2 years (notice the very nasty 50% correction they…