Markets sold off yesterday, erasing most of Monday’s gains,
Wednesday Morning Reads
Till Support Do Us Part
Stocks continue to walk the tight rope above a deep canyon. The wire shakes, footing appears to be lost, yet the market is able to maintain its balance and move forward.
The key support levels remain $IWM $120 $QQQ $110 and $SPY 208. Like Friday, today those levels were broke, but in now classic 2015 fashion a late day rally closed each above those support prices. Another tight wire catastrophe averted.
What lies ahead? Will support give way, or is the market showing once again the same resiliency it's shown throughout this historic bull market?
Tuesday’s Option Action – (Recap)
Yesterdays massive rally reversed overnight into today's rout as China's unexpected currency devaluation sparked a sell-off that moved stocks lower and their respective options some 100's of percent.
$AAPL plunged over 5% reversing all of yesterdays gains, something I thought might happen even before the big China news last night. PUT options soared some over 1,000% in reaction the the move.
$GPRO tumbled almost 10% sending PUT options I bought yesterday soaring.
and the unexpected Alphabet restructuring of GOOGL sent it's call options up 1,000%. After a slow start in 2015, GOOGL has had one of its best years in terms of movement.
Let's dig deeper into today's action.
What Do I Think?
After the market bottomed in March of 2009 I was in the same camp as the many who thought the economy would never recover. Who thought the actions of the government, the FED were too little too late. I was shorting the spikes to the upside. The problem was these spikes kept going. Prices did not pull back.
Half way through 2010, after fighting countless unexplainable rips to the upside I came to the understanding that this stock market was one you were either long and made money , or short and lost money. It was that simple.
Those perma- bears who remain short to this day, I give them all the credit in the world. Anyone who has been short this market since the lows in 2009 and is still around to write about it? You've got my respect.
That bear in me still is alive and at some point it will be time to go short this market. Is this the time?