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Philip Davis
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  • Will We Hold It Wednesday – Nas 2,809 or Bust!  0 comments
    Jul 27, 2011 8:17 AM | about stocks: SQQQ, TZA, EDZ, USO, SPY, DIA, IWM, PCLN, NFLX, CMG

    Wheeeeee, this is fun!  

    As I mentioned in yesterday’s post, the move up in the markets was an excellent time to establish some disaster hedges because – well, that’s what you do when you are heading into a potential economic disaster, isn’t it?  

    I’ve laid out my concerns since last week so now it’s just time to sit back and enjoy the ride.  In addition to the bearish bets I outlined in yesterday’s morning post, we added a short play on copper futures (/HG) at $4.45 (reiterated in this morning’s Alert to Members) and THREE (3) Disaster Hedges using SQQQ, TZA and EDZ – each of which return well over 1,000% should the markets falter and, if those 2.5% lines fail on the Dow and the S&P today – faltering is going to be pretty likely.  

    Of course we don’t go 100% bearish and we picked up a very nice 42% winner day-trading oil up (NYSEARCA:USO), of all things.   After we cashed out our winning short trades on the Futures at the $98 line, we got a nice ride back to $100.50 where we shorted again and now we’re back to $98.50 this morning so – wheeeeeee!  Gotta love that oil scam, right?  Another long we took was a protective bullish spread on IWM – just in case our "leaders" actually "fix" the debt ceiling but that’s not looking very likely this morning with Boehner’s ridiculous plan being so poorly contrived that he is now unable to get his own party behind it.  

    That is, of course, the "plan" that President Obama said he will veto and that the Senate has already said no way to but, like a child throwing a temper tantrum, Boehner has decided that the Republican Controlled House of Representatives will now spend 72 hours working on this non-starter of a plan rather than sit down and attempt to have constructive negotiations.  

    As we expected, the continued uncertainty out of Washington is having the perverse effect of panicking people INTO the Dollar, which is the main reason we got so bearish on stocks, copper and oil.  We also get oil inventories this morning and Durable Goods at 8:30 along with the Chicago Fed Index so it’s going to be a very exciting morning in a day when about 100 companies report earnings as well. …
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