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Monday, February 9, 2009

Buy the Rumor sell the news?

The markets rallied hard and now seem to be overbought and need at least some kind of breather . It has rallied , it seems, in anticipation of the stimulus plan to be announced tomorrow. So once its announced the markets might go down as those who bought in for that reason now have no reason to hold .
Also the plan would have to be very good or would have to beat expectations for the markets to rally. Anything which is expected or less will end the markets down , at least that's my opinion.
That is what happened on Friday when the NFP data was bad but that was expected and so the markets rallied.
The p/c has been low for a few days now.
Oil rallied Friday and Monday morning but could not keep it up. I had to sell my calls in USO , I did make a good profit but way less than what I would have made if I had sold it Friday afternoon.
USO is now 28.2 or so, another trip to 27.5 or around there and I will buy a few calls with a tight stop.
I got rid of my BRCM calls for a loss to but got more than what I would have last week.
If the markets are flat or up tomorrow and start showing weakness around the announcement , I will get some puts, on what? no clue maybe qqqq.
Also I have started watching UNG along with CAT to get long, buy calls on any good pullback.

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