Dow Jones 10,927 -224.76 -2.02%
Nasdaq 2,424 -74.49 -2.98%
S&P 500 1,174 -28.66 -2.38%
A lot of folks dumped their holdings and ran for the hills today. Grabbed whatever they could find out of their goody bags and trash cans, and dead sprinted out of Dodge.
Me? I had another good night's sleep aside from the four or five times I was awake enough to check my stocks. The first few times, my responses were slightly negative. "Shit!" Sleep another hour or two. Check again. "Fuck!" Later, a more sedate "Fuhhhck..." Late in the session: "Aaah." Then, the predictable bagholder's creed: "It'll bounce back..."
Technically, I sleep from 3 or 4 a.m. to 10 or 11 a.m. Hawaii time, so it's a good morning's sleep. But the market plain sucked for longs. Everything on my list, before I crashed out, was generally positive in premarket. Heck, even IMAX was trading at around 19.48 and I had a chance to get back to break-even.
But the "done deal" of Greece's bailout is turning into a Big, Fat Greek Maybe. The market panicked and collected profits. I like to think that investing and trading involves much more sanity and discipline than junkets to Las Vegas, but have people ever cleared out of a casino because of an economic issue in Athens?
It's always interesting to see how things come full circle. This circle of the euro and the yuan and the dollar is far from complete. It's also interesting to see how different viewpoints tackle the problem. Some traders cash out and watch from the sideline. Others look for buying opportunities. If I were still 60% cash, which I was for most of April, I would've been opportunistic. Maybe.
• Apple (AAPL 258.68 -7.67 -2.88%) continues to surf the channel. Though it hasn't reached its near-term high (272 intraday last week) lately, it did bounce again off its support at 256. It's clockwork, the second third time AAPL has floored and held ground there. Uncle Sam wants to put a lid on Apple's supposedly monopolizing methods, but he can't stop the masses from satisfying their lust for the iPad. Clearly a buying opportunity for the brave, but anyone going all in here is crazy. Maybe crazy good.
• Baidu (BIDU 693.00 -15.99 -2.26%) is making sensitive shareholders seasick again. Since the otherworldly gap on earnings day, the stock has ridden the elevator up and down in big chunks. A trader's delight, I suppose. My little position is fine; I expected volatility in this name. Like my AAPL position, the long term is a good deal for the stock. Do not bet against Mao (or Deng, actually). Google's only loss in history.
• Citigroup (C 4.26 -0.15 -3.40%) broke support at 4.33, though not by a huge percentage. It's still concerning, though, since C really has little or nothing to do with last week's Goldman Sachs meltdown, nor the Greek financial tumble, and as far as I know, not much to do with the Gulf oil spill. Touching C shares here is dangerous — burns to the touch — but the price is quite attractive. If the Euro zone/league/futbol association decides on a measure to solve the Greece/Spain/Portugal problem, C will ramp. Vikram Pandit in the hot-air balloon, baby.
• Dendreon (DNDN 52.89 -2.54 -4.58%) proved vulnerable to the greater market today. Strategies to buy DNDN long before FDA decisions have been overall profitable lately, unlike the earlier years. Maneuvers to buy DNDN at the end of the day on huge spikes have also proven profitable. DNDN was available just above 50 on the day Provenge was approved last week. Shares then went to 57. Below 53, it's very alluring. But again, what happens in Greece stays in the U.S. stock market.
• Ford (F 12.85 -0.45 -3.38%) had blowout numbers again in monthly auto sales, but today's drop isn't a bad thing. Those of us who enjoyed trading F in the spring might get discount prices here. The last time I traded F was right here below 12.90. Trading it between 11 and 13 was very nice back then. I missed the ride to 14-plus. Like AAPL, BIDU and DNDN, Ford is positioned with an advantage in its industry. Likey.
• Goldman Sachs (GS 149.45 -0.05 -0.03%) has been resilient at times, but that's how it goes when a stock has bottomed out. Talk of GS falling to 125 or 100 ... really? I would love to acquire shares at those levels. That would be like giving the Patriots five extra draft picks, or giving LeBron a chance to play with D-Wade, John Wall and Dwight Howard. Until then, GS is the bankster who will prove, eventually, to be teflon. Fine? Fine. It's about the food chain, the democratic, capitalist food chain. There can be regulation and limitation, but ultimately, every ecosystem has its top and its bottom. Hate the Yankees? They have to exist. If it weren't them, it would be someone else. Food chain. GS will rally at some point. I probably still won't own a share.
• IMAX (19.07 -0.20 -1.04%) has been bottoming lately and didn't get hit as severely as the NAS as a whole, but it did drop intraday to 18.18. Oh, while I slept like a baby, buyers stormed the castle and looted, snatching shares nice and cheap under 19 bucks. As the toxic toga party overseas continues, Iron Man 2 news will be out soon enough and IMAX shares will swell. I'm selling quick with a profit. This stuff moves often, as I expected, and missing a sell point really sucks, as I've learned.
• Netflix (NFLX 99.36 -2.63 -2.58%) isn't my favorite growth stock at this price. I liked it in the 70s and 80s, when I didn't think to start a small position. The looming competition from Apple, Amazon, Coinstar, etc. is real. Smart company, but what can they possibly do at this point to add value aside from Hollywood Video closing shop? Buyout talk will grow, no doubt.
• National Bank of Greece (NBG 2.84 -0.36 -11.25%) rose from 2.60 to 3.30 (or so) in the past week. Another pummeling today. It's all about the news for this stock. I like watching it, not as a potential buy, but as a thermometer on the situation there. I don't think of Greece as an economic workhorse. But if the bailout works out, NBG goes up and someone makes money by jumping on that wagon.
• FAZ (12.52 +0.87 +7.49%) has been on my screen for several days. I used to watch it a year ago for entertainment value. Now, as the only green light in a sea of bloody red, it is probably the one (or two) relatively safe issues I would get on board with on a day like today. A position at the 12.07 open (intraday low 12.00) would've been a profitable day trade (12.72 high). Tricky steroid stocks like FAZ and FAS move so quickly. Catching the bottoms and selling the tops are much easier said than done. But this was the only profitable possibility on my screen, benefiting from uncertainty in the tanking euro. Even GLD finished in the red today, probably because it's been overbought.
• iPath S&P 500 VIX Short Term F (VXX 22.37 +2.04 +10.03%) is a mysterious entity that I hear more about these days. All I know about volatility is that it thrives when the market is quivering and peeing itself. VXX closed at 20.33 on Monday and opened this morning at 21.08, and it was fairly profitable after that, hitting a high of 22.71. The one-year high was 91.96, and it's off its one-year low (17.84). A lot of smart people hedge their bets with puts and spreads. VXX, though, seems like the simpler way to go at it. With 9.3 million shares traded today, it's liquid enough to start examining. Homework time.
For now and, maybe, a few days or weeks, I'm stuck. I lost discipline when I should've remained largely in cash, and now I'm holding on for a bounce during this correction. I held my AAPL shares through the last correction in mid-February. At higher levels now, odds work against the bulls, at least more than they did in February.
Trading off economic news, global crises and unnatural disasters is fine. So is locking down on a few great stocks and blocking out all the noise. Someone out there trades AAPL long when it's beaten to a pump (78 in March 2009) and trades it short or with puts up at 270. I'm not that smart, having sold it a few times much, much too early. But I'm not convinced that paying attention to external factors is mandatory to profitable trading.
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