Historically financials lead us in and out of bear markets. We are in a long term secular bear market and I expect when the bear is finished ravaging it's prey stocks will be in the single digit P/E's. In the meantime it looks like we are in a short term cyclical bull within a long term secular bear. Financials remain strong although I don't know how much is related to the mark to market hearings and the uptick rule.
I haven't been stopped out of my QQQQ, GS and BBY puts but I'm getting close. It's strange not to see the market awash in a sea of red. I'm looking for some longs to get excited about but I wonder if this cyclical bull isn't long in the tooth and we are in a Depression in case you didn't know.
Foreclosure filings hit an all time high and unemployment numbers are only getting worse. People are saving more and that's good but not for retailers who love our spend first mentality.
"Adjusted for Inflation, Dow's Gains Are Puny" WSJ
18 minutes ago
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Agree with you on the pain for retailers. I'm waiting for AMZN to come down...amazing they've been able to maintain the P/E in this market. I've been selling calls the last couple days. I think we'll see much slower growth in Q1 after the Christmas bump. Also, NY and other states are passing/have passed legislation to tax Amazon's online sales so their price advantage will be diminished.
I've been crushed on BBY puts, I'm still learning. I got to thinking after looking at what the puts/calls have done after this earnings announcement and that led me to the strangle strategy. I searched the site and found no mention of this. It seems like a strangle play would have been perfect for this. April 32.50Ps closed at 1.90 yesterday, 35Cs closed at 1.55. A 10 contract stake in both would have you staring at a 1.40 gain. You could lock the call profit now and then wait on the profit taking and eventual downtrend in the overall market to drive that gain even higher.
You could have went 1 strike farther out on each side for a lower amount of deployed capital and still be staring at a gain of 1.
It seems like in a market like this with tons of uncertainty ANY news is enough to really move stocks around.
Thoughts?
Hi, it seems we are in bear rally mode with the government throwing everything against the wall they can. I don't have any puts except those used as insurance in long accounts.
I think strangles are a very good strategy as they profit from volatility so I agree with you there.
Good luck in your trading.
P.S. I got stopped out of my BBY puts with a small loss. I think stop losses are necessary so long as they're not too tight.
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