Thursday, May 14, 2009

Expect more upside and volatility tomorrow

Tomorrow is opex and I would expect a range consolidation day with a slightly upwards bias. I'll be looking to add to short positions starting at SPX 900 with the hopes that we might rally as far as 920, but I think that might be too wishful. Recognition that the party is over has set in with the big players, and they will be looking to DISTRIBUTE to the retail investors as much as possible.

All my favorites are candidates: Jun/July puts on GS, AAPL, XLF. QID, FAZ, SRS, etc. should all be easy winners. I'll be taking profits from 830-800. I'll likely keep some of the houses money on some puts in case we totally break down.

I've also had some requests for my expectation of the timing and path for the rest of primary wave 2/B, so I've included it here. Best to your trading!


  1. You might want to consider this view:

  2. Rich: Tom in Wilm.....Thanks so much for the chart...great work. I think you are right

  3. The similarities between now and the 2002-2003 bottom are striking. Perhaps we are truly bottoming..chances are against that. But I'm not underestimating Wall St/government's ability to kick the problem into the future again with some parlor magic.

  4. schweizer - it is always a possibility that we go to new lows as per your chart. But the bears need to show some impulsive moves to the downside before I ever become a believer. So far it has only been half-hearted.

    saleen - gov't cannot manipulate long term trend, so I wouldn't worry about a new bull market. What would be the fundamental driver? Less bad news? Sorry but stocks are still expensive, so the gov't can try all they want but in the end, the market is bigger than they are (and wall street).