Monday after Mother's Day, Dow up 12 of last 14
McDonalds today releases April sales. Holders in our Blue Chip option (www.bluechipoptions.com) have already seen a 36% rise on this option, and wlll hopefully selling the rest of their position Monday when slimey old McD, worst hamburger made, ugliest buildings, promoting a fat culture, will again BOOM.
Meanwhile, Friday we stop lossed on the call, our first loss in 16 days of trading, but took nice profits on the May515 Put, which hit highs of 135%.
Actually astute day traders reported in following our support and resistance lines and our mid day recalculation sent by Twitter were able to trade both put and call profitably several times during the day as the market massively whipsawed.
China will most likely show a second month of a trade balance, showing a deficit and this might trigger the market.
Fidelity Brokerage, and I'm sure others, has defined that all trades on May 6th between 2.40 p.m. and 3.00 p.m may be deemed "clearly erroneous" and corrected.
Of course you have read that it was Proctor and Gamble hitting new lows on "gossip" that new Pampers caused skin rashes, and falling 22% in a minute, leading the market down.
You have also read it was the fast transaction electronic trading that caused this.
Traders with us at Blue Chip Options have heard from Floyd the past 8 weeks that the market was overextended, and likely to have a 3% retracement to the 10,746 line.
That 3% runs with Elliott Wave and Fibonnaci movements. However, chartists can easily prove the 5.5% actual moves we saw in the market can be correlated with extreme cycles around Elliott Wave.
More important, it is the speed in which we saw FEAR spread, and shows Floyd (screw all the reasons why, even Goldman's President says he doesn't know (sure)) is correct on one thing:
When euphoria moves the market as much as we've seen in the insane run up to new highs, without healthy consolidations, the market itself takes over and "cuts your nuts off."
That's what happened. A consolidation, for whatever reason, needed to occur, and it did.
What happens next is the key.
We'll comment this week "on what really happened," but we recommend being very prudent in all option trades. The market is actually electronically mixed up. My brokerage couldn't even show the OEX option chain, and I found several others that showed NO options.
Whatever this electronic trading is, and what nano seconds on emotions are creating, and 76% or more of the market now controlled by these types of trades we have again entered the Wall Street Wild West.
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