Today the market closed early, so it's a short Tuesday. Since the volume is small again today and market is up again, I used this to add a small IWM puts positions.
- After July 4th, we will have more traders return to action. Hopefully the true color of the market will still be bearish.
- The week after we'll have earnings, plus CDOs, 10 year yields, oil, subprime mortgage, all these "good stuff" will still be discussed more, if one of them could not hold up, we'll have some issues with the market.
- We don't have a hurricane yet, and the oil is already above $71, there is lot of risks for oil to go higher.
- Another major issue is the dollar, is this the real bottom or this is the start of another round of sell off. If the latter is true, then the yield in U.S. treasury has to go up in order to attract foreign buyers, that will put an end to the private buy out activities that fuels the market. If this cycle gets started, I don't see it will end pretty for the equity market.
- So even with a flat or slightly up July 5th and July 6th, I'll hold my puts and short ETFs, may even consider add another small positions.
- Have a great holiday and enjoy the fire works!
3 comments:
I agree with your sentiment. Monday and Tuesday were excellent opportunities for loading up on QID, DXD, or MZZ. I was able to pick up a few hundred shares of the QID at the low today. This time around I'm limiting my buys to only 200 shares at a time. That way if the market turns higher I can get out with little pain.
It felt great to buy today at the 52 week low. I hope it proves fruitful.
David
Whats your advice on rimm now that it has made another all time high?
I'm out with RIMM since it's in the 150s, and it's the biggest losses I got from any other single stock or ETF. I think it's way overvalued, considering AAPL also did reat recently, I think one of them has to give back a big percent of the gain, and I think it's RIMM. But play RIMM is like play fire, yes, if you catch the end, it can drop 20%; but the question is when? Will it drop tomorrow? or drop from $250? So my advice is to stay away from RIMM, if you want to short, short it on the way down, not up, and using very small speculative money to play. I won't touch it for now. If it's down 10%, maybe I'll consider it.
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