I've had puts on TOL for a while. Today was super because it dropped like a stone, and my puts were already in the money. Also, there is still a lot of fat on all of these (len, kbh, bzr, et al), and they are just starting their bear market. IMO, every rally in this sector is now just a chance to short at will. Short the bear markets on rallys, buy the bull market on dips.
I'm finally getting through my thick skull how to play these ridiculous bubble/bubble burst sectors. The bull side does not always make sense, and it will last longer than you think, way longer, years longer than makes sense. When the bear finally starts, it's quick and vicious, and relentless. So during the bull phase, just leave common sense behind and ride the wave as long as it lasts and just use trailing stops.
OK, where is the next bubble forming? |
