With the news out of GE this morning, it was time to sell my May AAPL calls and get a little defensive shortly after open on the premise that the news of the earnings miss may turn out to be a multi-day trading event.Now, at 11 AM, it is looking like the market is actually holding up fairly well, but the trend will probably be down all day today and into to Monday so there is no point in being in a hurry about getting back in.
My ATI puts have completely hedged my long positions and I am up for the day. I had to take some profits and I did peel a few off the table at $3.50 this morning, but the majority will be held until later this afternoon, when I plan to close out the position.
The GE news is hitting the market just when we were once again near the top of the trading range we have been traveling within for the last month, so the technical damage is still pretty reasonable. If I was to pick out stocks that would miss earnings badly, it would not have been GE, but I think that most people are expecting more misses like this and a lot is priced in. I still expect the market to stay in this trading range for another 2-4 weeks so I will still be selling the rallies and buying the dips.
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