The Facts

As futures were just wiggling along early this morning Bloomberg hit with this news:

U.S. Index Futures Drop, Stocks Erase Gains on Apple Outlook, China Rates
and chartists later in the day shared with us:

-- BOUNCE IN OVERSOLD DOLLAR CAUSES PROFIT-TAKING IN STOCKS AND COMMODITIES
-- GOLD TUMBLES
-- STOCKS APPEAR DUE FOR SOME PROFIT-TAKING BUT REMAIN IN AN UPTREND


and

A testimonial befitting of yesterday's actions:


Hello there.

It's me..."Christian" _______. Just over a year ago, I subscribed to your free trial offer. I want to thank you for that. I also made some comments that you ultimately posted on your blog, I believe.

Just to jog your memory, this was around June of 2009. You know---trading requires a certain mindset. Agreed? that's not a startling statement. And I gotta tell ya---the tuition is quite high on Wall Street.

Boy...have I paid to learn how to play. And I fear that I still have to learn some more, and, of course, learning is gonna cost some money. When I came on board with your firm albeit on a trial basis, I funded my account with $8.5K---not a lot of money by any stretch. but get this. I started on a Monday, June 8th. By that Friday my account was up to $14, 600! Not bad? By early the following week...I gave it all back and then some. I closed out the account minus $5k of my initial principle. In summary, I know I can do this. I just have to resist from trying to create a trade where there is none to be had, and I also have to keep from over trading. In short, I need to work on my discipline. what I find is that I'll tune into CNBC to check out how Europe closed their session in order to have sense of the climate for what's to come.
Of course, if it's a Monday and any political stuff happened over the weekend that might adversely impact the market, I'll be on the lookout for this. And let's not forget the economic calendar that we need to watch. But where I tend to get into trouble is when I make a trade and in less than 15 minutes or so...I'm plus $800 or more, and I end up feeling like...phew! that was easy. And then I want to go back in to trade some more. And some times I win but most times I lose. And I suppose...this is one of my problems(?) I know that I'm good at picking (or sensing) which way the market is going. Often times the signs pretty clear. So, I jump in and make a quick hit. but there I go again...trying to scalp the market from home. I don't think is quite as easy as if one were in the pit? The dynamics of electronic trading, particularly the delay factor is of consequence. I love the OEX---it's all I've ever traded. And I'm determined to come up, on average, as winner. This next go around (which will be soon), I will enter the market with a sharper eye toward avoiding my previous mistakes as well as refraining from over-trading or attempting to create a trade where there is none to be had---perhaps you've been guilty of this in your earlier years of trading the OEX? I'm not sure if I'll be able to participate in the year end rally (if there is one) or if I'll have to wait until next year and catch the market when it decides to regroup and move forward again. And praise whatever higher power that we're not stricken with some horrific terrorist act that will send the market into a tailspin. And, of course, I'm not sure how long the veil of "economic indiscretions(s) can continue to hide the fact that this country is in deep pooh-pooh before clarity on the situation is prevalent across America---and BAM! It will hit the fan! Talk about a market dive---plunge of whatever you wanna call. I remember that I bought a book titled "Dow 40,000." Wow! That's a lot of change. But how about "Dow 3,500!" OUCH! Either way...there will be a lot of $ to be made if you know how to Trade. Nice talking to ya. Be in touch soon."

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The FACTS: The market sold off and hit theoretical lows of 10,870 area, leading right to the Fibonacci re-tracement that market always moves to. This is a healthy sell off if it holds on decline and if profit taking was just in order, and the fundamentals return. I mean, Apple did utterly FANTASTIC in earnings, yet that they did not do "good" enough was a trigger.

Puts we bought Monday were hugely profitable, buying the November 510 Put as low as 4.50, and selling to 6.90 by 3.30 p.m. 50% plus returns in a day no one can beat, and we also took a nice first buy to the call, which we'll hold, be ready to second buy and simply watch the market today. Puts may have some more downside, the market itself may, but we'll hold with our Tuesday profits and our open signal.

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As most of our traders have grasped I will be branded a liberal. Thank you. And I believe the best writing coming out in America these days, the best true and fear journalism, comes from The Atlantic, Harpers, and surprisingly, Rolling Stone.
Rolling Stone has Mat Taibbi, the best journalist of this century as a free lancer, and Tim Dickinson, who can close the loopholes on facts. As the GOP spends millions to regain power (with which we have no idea what they would do except stop the tax cuts for the rich, and end that damn start at healthcare), Dickinson takes the time to clearly identify what has been done, what was happening as Obama came into power, and how in the end he may be judged.

This view into politics is a direct view into the stock market and into real reporting, agree or disagree. Liberal vs. conservative is immaterial as both are just "names," often just used for "calling" or for "degrading a point of view" to "upgrade your point of view"

Please read this if you read any one article I pull off blogs and websites:


http://www.rollingstone.com/politics/news/17390/220013