Thursday, June 15, 2006

What a wild

trading day today was - I opened the day in cash, made a brief attempt at fading the open in FCX, closed that position, then did a complete 180 to finish the day about 60% long, and up substantially.

I am taking all my long positions home tonight. With all the short killing that went on today, I think momentum continues at least into the open tomorrow, although where it goes from there is anyone's guess.

My thought is that we se a continued rally in the am and a weak close tomorrow. First off, some traders were undoubtedly caught heavily short and off guard by the force of this rally. More importantly however, is that options expiration is tomorrow, and the put sellers will drag this market up kicking and screaming to reduce the price tag of settlement tomorrow. Earlier this week, the value of unexercised SPY puts was in monster territory.

Of course all this guessing means nothing; my main focus will be on price action tomorrow, and I can foresee returning to cash again either tomorrow or Monday; I wouldn't be surprised in the least if the market pops a vicious whipsaw in our direction soon.


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