ST trading:
The market's mood swings seem to be coming faster and faster. Just today, everyone abruptly forgot about the Fed, and is back to talking about earnings.
I was 100% long at the beginning of this month, and I have steadily sold into this rally. Began buying put LEAPs on 4/12 (JNPR, NVLS, NTAP so far). Got really worried on 4/18, when every stock I'm thinking of putting, gapped up, many breaking above resistance levels that have held for months. But, in the last few days, all these stocks have steadily fallen back to their former support lines.
This is either an impressive headfake, or a breakout to the upside. Some stocks (like TXN) are now back below former resistance, so it looks like a headfake. Others (like AMAT and NVLS) have drifted down, but are still above former resistance. If we drift down for another couple of days, and AMAT gets below 51, and NVLS gets below 48, I'll feel a whole lot more comfortable holding puts. I'll probably add to my puts at that point. OTOH, if we don't get below those levels, I will have to seriously consider closing out all my put positions, as the former resistance levels will now look like support, and we may be in for a big rally (like the kind we had in summer of 2000). |
