Run Forest Run
July 18, 2008 – 8:17 am
Anybody remember the VIX?
Getting slammed like a Naked Short. Another point or so down gets it 10% below it’s 10 Day SMA.
How about Expiration, haven’t mentioned that much.
You don’t want to play for pins in a volatile and high volume tape, so I’d be a bit careful to say the least.
Also keep in mind that directional moves can feed upon themselves around expiry, as trapped options shorts have to cover as stocks blow through strikes. And then put the next strike into play. It’s not a stretch to say these financials have seen a historic whipsaw this week.
This effect often lingers through Monday post-expiration.
Just something to keep in mind.
Good point. Give us a tip of the hat when you think the VIX has bottomed and we can climb back on the shorting overbought financials once again. STT, COF, WABC as shorts.
July 18th, 2008 at 9:36 amright here right now, I’d say about another point in the VIX. I kind of think by Tuesday morning this expiration-boosted rally will peter out.
July 18th, 2008 at 10:11 amExactly - a lot of this was short covering and some good old market finagling. This was a much needed market correction and it has completed its 5 step upwards pattern. Monday we might still see a bit of a push in the morning but by the end of trading I expect weakness to return. Tuesday should be fun.
Only question is which sectors to play. As a trend trader it’s a bit difficult right now as everything has moved counter to its original trend pattern. I might just swallow the bitter pill and get into some discretionary counter trades. Very tempted to place some puts on the financial sector…
July 20th, 2008 at 6:16 pmyeah, the “euphoria’ of the new rules may finally be dissipating
July 21st, 2008 at 2:58 pm