Wrong, But out with Minor losses
We remain written against all of our long call positions in AA and HL as this has reduced our costs and therefore our risk.
The short in AAPL was stopped out @$97.72 for a $22 loss, the SPXU cost us $46. On the options side we lost $ .17 on the AAPL and $ .09 on the QQQs.
I still stand by the rationale that I posted yesterday:
The basis for these positions are the following statistics; 60% of the S&P500 are yielding more than the 10yr US Treasuries (a point at which we generally see a reversal, and 82% of those same stocks are above their 50 day moving averages, also in historic high ground. These 2 statistics and the fact that we have come well over 1300 Dow points and over 150 S&P500 points makes me think we have a tradable pullback. For that reason I’ve taken a few profits and completed the spreads noted above and am looking not for specific “point” moves, but rather I am going to issue sell stops for reversals.
However, the break to new highs concerns me after what looked like a reversal day in many names. Another point that was made to me by someone whose opinion I respect related the opinion that if earnings do start to grow while interest rates stay low, multiples will expand further, and now that we are set with Hillary and Trump, the market has some certainty. We can survive either of them, as opposed to Bernie; and we all know how much the markets love certainty.
We also took on a small position with 300 COTV, a recent new issue that didn't perform well but has been building a nice "stairstep" pattern. Also using a close stop.
All that said I bought back 200 SPXU @ $23.86 with a sell stop below todays low of $23.63. For tomorrow I will use a stop that allows for what I expect to be a fairly wild expiration in the options. For now we'll go with $22.99. Trees don't grow to the sky and I feel like we can take these small losses in order to be in the right position when this inverse index make another move like it did on the last selloff, when it moved $4 in 3 days...CAM
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