The Realist

Protect Your Portfolio: Here Comes the Squeeze

These short term swing are just noise. I believe as an investor you must focus on the fundamentals and they are not good. When I look at the S&P at 1300 last week my first thought was, where can this go from here. How could it go up? Was it going to go up another 150 points to just under its high from last October? With all the bad news that has come out and the tremendous losses in the banking sector should this index be anywhere near its high? And don't get me started about retail. Every single retailer beats their own made up numbers by 2 cents then guides down and the stocks traded up.

These rallies are just bear market bounces. We had a two month downswing from May-July, almost every day was down, the chart is almost sickening. A bounce had to come and the Fed and Treasury helped it. But the next downswing has started. The last downswing at the end of May just so happened to start the Monday after options expiration day. Wow, this Monday happened to be the Monday after expiration day as well. Just a coincidence?

Did anyone check the put prices for the banks when they were running up? The premiums were insane. WB when it was trading near $20 had $15 Oct puts trading over $2. The market makers were basically saying that they did not care where the current price of the stocks were at.