Pre-markets are on fire!
After looking at all the bad news yesterday and writing about it in the morning post, it took us all of 12 minutes of trading to call a bottom in the 9:42 Alert where I made the first general call to hit the Buy List since I last updated the trades on March 18th. That day we were at 7,761 and, 2 weeks later, on our second test of 7,500 in 2 days, it seemed worth taking a chance on our hedged entries as we had some near and clearly defined breakdown levels where we could flip back to bearish if we had to.
In that same alert we flipped our DIA covers to bullish with a target to hold 7,550 (the same one we were watching all week) and this time we hit it and never looked back. We did make several cautious moves in the late afternoon – JUST IN CASE we had a massive reversal and we finished the day 55% bearish (meaning our long DIA puts are 1/2 covered) which we will happily flip to 60% bullish if this pre-market rally (up 2% at 6am) looks like it has legs. We don’t mind taking a few hits on our DIA covers because the purpose of them is to let our long plays run and we surely wouldn’t have been comfortable leaving a 300-point recovery on the table without downside protection.
The federal government is saying they will back the warranties of the Chrysler or GM vehicles. Well that’s great news for consumers — combine the efficiency of the federal government with the honesty of car mechanics… President Obama is giving GM 60 days to come up with strategy of viability for spending taxpayers’ money. GM should have said to him, “Hey — you first.” – Jay Leno
It was the Jobless Claims that made us nervous, yesterday’s ADP report was TERRIBLE and we have claims ahead of the open at 8:30 along with earnings from CREL, KMX, MON, MOV, RAD and SCHN which we are weary of but what’s trumping all market fundamentals is the hopes that mark to market accounting rules will be relaxed today and banks will be able to make up any numbers they want for their asset values so – Yay, I guess… Yesterday I said that the government’s actions are like replacing the carpet and furniture…