So it looks. I've been bearish during October but and while it worked pretty well for me the first few weeks the wheels came off of the strategy in last week. Listen, I have to give credit where credit is due and give Jim Cramer credit-he has turned out to be exactly right.
http://diaryofarepublicanhater.blogspot.com/2014/10/jim-cramer-declares-his-cheklist-met.html
His checklist did hold up very well. True we can't be 100 percent sure the bottom is in as the indexes remain under some key technical levels. We'll see if there's resistance here-there was no resistance at other levels during the rally.
That's kind of the strange aspect of both this correction and subsequent rally-technical levels didn't give any resistance on the way down-S&P easily fell through 1905, 1875, 1850, all the way under 1820.
However, it rallied back just as seamlessly. Cramer was right in what he said yesterday regarding Caterpillar. It was the last stand of the bears-I should know as I was short with some puts and-the bears were flushed out.
As he pointed out, CAT's report may not have been that great-arguably while the bottom line looks impressive-a $.40 cent beat-much of it was done via buybacks and price cutting measures. It wasn't a testament to an improving China picture. Still, the stock rallied because it was oversold. As Cramer pointed out at $110 it might have sold off but at $94 it's a different story.
So at this point, I don't think you can fight the bulls. Yes, we have a new Ebola scare today with that NYC doctor, Dr. Craig Spencer, contracting it. This hits close to home for me as a New Yorker-though I don't live in the city but Long Island. So it gets closer and closer. To be sure he contracted it when working with Ebola patients in Guinea.
From what I've heard so far it seems that NY has handled this pretty well-it was well prepared with a few hospitals reserved for Ebola patients and there hasn't been lots of panic. Certainly it's been better than Texas though this is a low bar. Dr. Kent Brantly says New York has apparently 'done everything right to contain this case.'
http://www.today.com/video/today/56292247#56292247
The market has similarly not panicked too much. The futures are down this morning but only marginally. We do have oil down again so we'll see what impact that might have.
Today should start well for me as I finally got a short right-Amazon. I got 7 puts for Amazon at $297.50, October 31 and should be in very good shape. It really couldn't have come at a better time as I had taken some tough losses staying too long in shorts on CAT and Gilead. Knowing when to say when is not one of my talents.
I had everything in my account on this Amazon move. If I had gotten this wrong I'd be out of the market. Now I have recovered and am close to even again. Amazing how much can ride on one move. That's what I love about the market.
Once I get out of AMZN this morning I will plow a bunch of cash into Alibaba (BABA). While it is widely seen as ushering in the top of the market before the 10% correction, it has performed very well during the selloff never falling below $84 and then finished at $94 yesterday-which is above where it opened on day of its IPO. After that some Apple calls. It broke out of its long term resistance of $103 yesterday. For awhile the stock seemed stuck in the $97-$102 range following its anticlimactic release of IPhone 6-for the stock it was anticlimactic.
After its earnings beat on Wednesday and its breakout yesterday I think it should be able to rally at least to $110.
http://diaryofarepublicanhater.blogspot.com/2014/10/jim-cramer-declares-his-cheklist-met.html
His checklist did hold up very well. True we can't be 100 percent sure the bottom is in as the indexes remain under some key technical levels. We'll see if there's resistance here-there was no resistance at other levels during the rally.
That's kind of the strange aspect of both this correction and subsequent rally-technical levels didn't give any resistance on the way down-S&P easily fell through 1905, 1875, 1850, all the way under 1820.
However, it rallied back just as seamlessly. Cramer was right in what he said yesterday regarding Caterpillar. It was the last stand of the bears-I should know as I was short with some puts and-the bears were flushed out.
As he pointed out, CAT's report may not have been that great-arguably while the bottom line looks impressive-a $.40 cent beat-much of it was done via buybacks and price cutting measures. It wasn't a testament to an improving China picture. Still, the stock rallied because it was oversold. As Cramer pointed out at $110 it might have sold off but at $94 it's a different story.
So at this point, I don't think you can fight the bulls. Yes, we have a new Ebola scare today with that NYC doctor, Dr. Craig Spencer, contracting it. This hits close to home for me as a New Yorker-though I don't live in the city but Long Island. So it gets closer and closer. To be sure he contracted it when working with Ebola patients in Guinea.
From what I've heard so far it seems that NY has handled this pretty well-it was well prepared with a few hospitals reserved for Ebola patients and there hasn't been lots of panic. Certainly it's been better than Texas though this is a low bar. Dr. Kent Brantly says New York has apparently 'done everything right to contain this case.'
http://www.today.com/video/today/56292247#56292247
The market has similarly not panicked too much. The futures are down this morning but only marginally. We do have oil down again so we'll see what impact that might have.
Today should start well for me as I finally got a short right-Amazon. I got 7 puts for Amazon at $297.50, October 31 and should be in very good shape. It really couldn't have come at a better time as I had taken some tough losses staying too long in shorts on CAT and Gilead. Knowing when to say when is not one of my talents.
I had everything in my account on this Amazon move. If I had gotten this wrong I'd be out of the market. Now I have recovered and am close to even again. Amazing how much can ride on one move. That's what I love about the market.
Once I get out of AMZN this morning I will plow a bunch of cash into Alibaba (BABA). While it is widely seen as ushering in the top of the market before the 10% correction, it has performed very well during the selloff never falling below $84 and then finished at $94 yesterday-which is above where it opened on day of its IPO. After that some Apple calls. It broke out of its long term resistance of $103 yesterday. For awhile the stock seemed stuck in the $97-$102 range following its anticlimactic release of IPhone 6-for the stock it was anticlimactic.
After its earnings beat on Wednesday and its breakout yesterday I think it should be able to rally at least to $110.
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