Tuesday, December 21, 2010

21 December 2010 (Everybodys Gone Away)


21 December 2010 (Everybodys Gone Away)

If it sounds familiar, you’re going back to 1973. An artist named Danny O’Keefe had a hit with a song called Good Time Charlie’s Got The Blues. It was covered by a bunch a folk, including a good size hot for Jackson Brown. I discovered it when Elvis covered it in 1974. It was almost biographical for Elvis, especially the stanza, “You know my heart keeps telling me, you’re not a kid at 33. You play around you loose your wife. You play too long you loose your life.”

While the market seems to be squeezing some more upward momentum, with the S & P 500 and the DOW just above the resistance points we mentioned last night, many of our core holdings are doing quite well. There is quite a bit of carnage on our options page. It’s UGLY. (A financial term for loosing our ass.) However most of these are 3-4 month calls so all the read ink is not too scary. If I am brave later I will download a copy of the portfolio with all the red ink. The point is, with little volume (Everybodys Gone Away.) it is hard to see action in the options market. All it takes is one person to clean up a position and your call is down 40%. And that 40% hangs there until someone else discovers the value. (It reminds me of the real estate market in California from 2000-2007.)

Have you ever heard of a melt up? That is what they are calling the market over the last few days. The market did close about the 11,500 and 1,250 resistance numbers. That was after having a nice run up and a little pull back in the last 30 minutes. Volume was non-existent as me and about 9 other people were trying to trade.

We look forward to tomorrow as FINL, Finish Line did not disappoint and had some nice earnings and positive forward looking statements. That should perk up the call options we bought on Monday. All we need is few traders on the stock. With the numbers for Nike being lackluster, there is a good chance FINL will get some exposure tomorrow.

One more time, don’t let this “melt up” catch you buy surprise. Check your stocks take some profit and be sure your stops and stop limits are in place. Make no doubt about it we are in an over bought situation. There will be a correction, but trying to guess when is a fools game.

"You mean you got NOBODY at the SEC that can tell me when the correction is going to happen?"

Salve Lucrum


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