Tuesday, August 8th, 2017

Obama spoke and market dives

Obama spoke and the market dives.  Understood. Nothing wrong with that. Wall Street has expressed its anger and rage over it. They didn’t like it one bit.When ever these people get angry and depressed they start selling  things off. This is their knee jerk reaction. They know nothing better than to kick their Golden Goose down the road in a fitful tizzy. I have seen that in 2008 and 2009. That has been the saga with these morons who control and manipulate markets everyday and take your money without shame or guilt or remorse. If you happen to trade against them you will stand naked and the proverbial shirt gone from your back.

Two days in a row the market has been down. Down with renewed vigor. The fear has crept in the markets and $VIX is hitting its 50 day moving average once again. There is no fundamental reason behind it other than that.

The overall market is still good. Our economy is turning a corner. Earnings are the first indication of a turn around. We had great earnings from GOOG, GE, MCD and we shall have some knock out earnings from AAPL on Monday. But all these stocks got killed on Friday. Why? Because a handful of people in bigger  institutions who have been recklessly manipulating these market in the past now felt harnessed and caged with the new regulations that may be imposed upon them if Congress passes the law.

But that did hit our open positions drastically. Market was overbought to begin with and trading sideways. This proved to be just the straw that broke the camel’s back. Now we could be in for a 5% to 10% correction in SPX and this can last from 5 to 15 days easy- unless the market bounces back on some good news right away. But I think the selling has not stopped yet. There is more to come, till they crush the markets and stomped on it with both feet and make it look lifeless. In the end they will take your money when you get fearful don’t they? Than the very same people start buying all over and the food cycle starts again.

Nonetheless never get disheartened with this. I know there is lots of anxiety in the minds of some of us. The thing is how to deal with a position that is under water,  and how to turn it around.

This weekend I am busy engineering some moves which should keep us out of trouble. One has to be prepared to trade to the downside and change direction quickly. I have been in these spots many times and I will use whatever I know of to come up with option strategies to shore up and profit from these down moves. This will require some extra capital, proper stop losses, and dry powder.

Stay tuned.

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  1. […] decent size cup formed as  result of sever declines  in January due to Walls Street’s temper tantrums and as time went by new buyers stepped in and took the market back to January highs forming an empty […]

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