Thursday, March 19, 2009

Irrational Exuberance

Irrational exuberance is now occurring, after irrational pessimism, and it's great for trading. The volatility was extreme yesterday around the FOMC, with bottom tests at 7217, allowing traders to day trade again on the April370P for up to 1.00 per contract, in addition to holding as our hedge. Better, our day trade on the March370C was exceptional, with traders reporting profits of up to 5.00 per contract!! in same day trading.

There is little to comment on that is not already ad nauseum. The shorts are now dead in the water. We'll be talking much about shorting in coming weeks, as it's the hot topic, the trading public first learning that shorting was a profit game, and now perhaps beaten up by a 1200 point rise in just a few days.

Calls continue to lead, but the market is now vastly overbought, so take prudent risk. There is little really that is creating uptrend, other than the exhaustion of the downturn, and that rampant fear that led the decline.

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