{+++}It was a perfect storm for the bears today as Portugal got downgraded, then Greece got downgraded to junk by S&P, keep in mind that Greece was hit by Moody’s a couple of weeks ago. We also saw Goldman Sachs get beaten like a baby seal by the the boys in DC.
The portfolio took some stops, maybe five or six, thankfully the stops have been tighter lately so it could have been worse, but a loss is still a loss. The g0od news? Well, the volatility is back and that makes it easier for us traders to make money. Europe is screwed and I just wish there was an ETF for Portugal to short. We were short Spain (EWP) a couple of times recently and my thesis was spot on but my timing was a couple of weeks off and we got stopped. That one will grate me for months.
Here’s the big question…do we short this or buy it? Everyone wants to know. First of all. today was a big surprise and a perfect confluence of events for the shorts. we could have been ” shorter”, but why? you will go broke in a heartbeat trying to pick tops (or bottoms) in the market. I always say the market will tell you when there is a change of direction. Maybe today was a big shot across the bow. Maybe not. We have seen panic days before since 666 and they have proven to be one or two day wonders. It has bee hard to keep this market down.
When the market flips like this, the best thing to do is wait a day. Let the dust settle. I was long some VXX and have been for a couple of months, I added aggressively after the Portugal news, along with TZA. I traded out of a good chunk, but still held some overnight. I will trade out when the market looks like it wants to recover.
Oddly, GS was up all day. The financials are getting pounded and may be ready for a pop, not making that trade yet though.
No names tonight. Patience pays.
Levels to watch.
S&P 1180.150.1115
NDX 1985, 1945
We attack at dawn, see you on the chat.