You would have needed to have courage (and luck) coming into last week with heavy positions leaning bullish or even just a smattering of them. Those who had it got rewarded, because when we got to our desks Monday we saw the market gapping up more than 1% - so those who anticipated a market falling on bad news were trapped badly. That has seemed to be the theme of this market in recent months, punish those leaning too hard the wrong way. Now, we would all like to see the most 'obvious' moves, anticipate and be correct, right? It's not that easy as the market works to disappoint and punish the majority. We have been laying low for a reason - charts and technicals are not signalling to us that it's time to be aggressive. Understand that our time will come to put our capital to work - but now is not that time. Heavy cash positions are smart at certain points in time, gives us time to wait for ideal conditions and protects our precious capital. We'll miss the bottom and the turn, you say? Sure we will...because as trend traders that is NOT our game. Give me a slice of the move within a trend - don't need to get me in at the bottom or out at the top, I'll be fine with it.
Markets were strong all week long, rising 4/5 days on low volume (sound familiar?) to reach levels above the 'tsunami news'. Bonds turned in a decent performance but the curve continues to flatten - bond players not worried about inflation here but those fans are being waved by some Fed officials. We'll let the market tells us - currently it's not pricing in a tightening until 2012 at the earliest. Earnings this week were rather mixed - RIMM blew it again, ORCL had a strong report as did a few other tech names. Next week brings the end of the month and quarter, so maybe some volatility to come. Play it tight.
Great week for our trades, we added some new ones at the end of the week as well:
# March 24, 2011
# 07:23 | Bagger Vance GG ($50.20) Sold to Close GG APR 45 CALL Apr 45 calls, at $5.30 +56%
# 07:00 | Bagger Vance MCP ($55.20) Sold to Close MCP APR 55 CALL Apr 55 calls, at $3.10 +68%
# March 23, 2011
# 11:55 | Bagger Vance BIDU ($134.00) Sold to Close BIDU APR 125 CALL Apr 125 calls, at $10.70 +114%
# 09:21 | Bagger Vance SLW ($44.20) Sold to Close SLW APR 40 CALL Apr 40 calls, at $5.00 +25%
Good week for us booking some gains. We did great overnight with BIDU and MCP. I posted a chart on BIDU below on what we did. In this one Wed and out Thurs for a big double! I can't tell you how much you're missing if you don't get the alerts. Just ONE contract on BIDU and two contracts on MCP this week netted you nearly $1,000 in PROFITS!!!. Enough to buy a year's worth of email alerts from me! What are you waiting for? Click this link to get started, it's easy and you'll be on your way like everyone else!
Have a great weekend.
by Bagger Vance