Sunday, September 28, 2008

I may be crazy, but it keeps me from going insane.

Nice rally on Friday after a gap lower on fears of Congress taking its usual course. Looks like a gap higher that should take us to 1265. A weekly close above that level will put in the bottom, and get us moving up for the next six months or so. 1450 here we come.

Tuesday, September 23, 2008

I Love You Just the Way You Are

Pretty normal post expiration Monday retrace. After a 120 pt move on the SPX, we do need a little breather to take care of some overbought indicators. Really like the VIX not moving on this low volume downdraft. We should see a close above 1265 in the Dec futures to really knock the socks off of the shorts.

Good arguments made by Merrill's Rich Bernstein on why the banks are close to a bottom but not quite their yet. I think once we see the Treasury's plan on mortgage bonds, the financials will skyrocket. Playing the range right now in the XLF (19-23). A close above this will start a new bull run.

Getting down to the wire for the Mets. The Brett Favre acquisition is going as I thought for the Jets. Spend a lot of money on past talent, and you get a mediocre offense.

Friday, September 19, 2008

Yowza, Yowza, Yowza

So that's what you call volatility. For those of you playing the home game, hopefully you did not get whiplashed too much. Now with this short sale restriction in place, we will see the rally I have been looking for. A move of 10% to 15% from here on the quick is in the cards.

Get back in there and buy, Mortimer.

Thursday, September 4, 2008

Back in Black

Well almost in the black. The market has done what I thought it would by staying in a tight range even with oil coming down. The economists at Merrill Lynch are still seeing slower growth throughout the world economy. My view is that these numbers are already priced in to most stocks so we are at bargain levels. Financial stocks have stabilized and are poised for an upmove here. Made some good short term trades on the airline and retail stocks as fuel prices have stabilized for the time being. Move to neutral on those sectors now. Pick up some good names in the commodity sector here as the 4th quarter approaches and yesterday's winners will be marked up.

For those of you not too familiar with my trading style, let me revisit some of my themes:
1. Buy stocks when they are in a cheap market.
2. Buy good names in good sectors on pullbacks.
3. Buy volatility in beaten down stocks that have based for a few weeks. Time is needed to wring out the sellers.
4. At all times, sell out of the money calls. Take in some premiums and trade around the positions. You can always buy them back if you want to. Remember, a cheap sale is better than an expensive buy.
5. And most importantly, the market will always move to the point of most pain before it reverts to the norm.

My Mets still 2 1/2 games ahead of the Phillies.