What to do on a down day? It worked!
Written by KrustyDusty
October 28th, 2009
It seems like every day there are individual stocks in the penny biotech sector that have large movements upwards (or downwards) despite the market (high beta). Then if you ever would be open to the possibility, there are days when it seems like it's not every day, just most and sector rotation is occuring or everyone market manipulation or just don't know.
I started getting that feeling yesterday, Tuesday Oct. 27th. I'd been watching! Many, from the S & P Analyst - Norrin, Elliott Wave Theorist, Robert Prechter, Investor Service Vector Vest and then even this weekend an article in Barrons gave caution that we may be near the top.
So even though the penny bio's seductively call out to because of impressive gains and other times declining profits it was a time to play outside. As often as I've failed I was able to by a stock that wasn't a biotech. Yes I know heresy to some but, it did work. Had already picked the vehicle out. SPY and since I hate being called a shorter I bought puts and today sold them for some 30% increase. Then since it was early in the day and the S & P continued to decline I bought again in the trust portfolio for my adopted daughter and again in just two hours saw and appreciable gain.
So take a serious look at this vehicle if not now then next time there's no bio to play and know you can get out even though 'they keep pulling you back in'. What's my take on the continued opportunity for downside to the S & P? Three main thoughts are that the GDP tomorrow may be good and turn the market for a short run up before falling into correction, some think that a good GDP report will be a 'sell the news' and we'll see downside and the third of course is a bad GDP will just, be bad. It will be interesting, nonetheless as I must now decide when to sell those puts! Deciding when to sell a winning position is not the easiest decision but, not the worst to deal with. I already hear some rumblings of a bounce so I'll watch real close and be prepared to go long in a minute, this is not a position to walk away from.
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KrustyDusty is not a professional investment advisor, but is currently ranked by Covester an independent investment management system, as #1, having the highest annualized rate of return amongst thousands of other investors. Covestor independently verifies all trades through account brokerages daily. Sign up for our stock alerts/newletter to follow all TapeBeat.Com news and recommendations.
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Disclosure: Long SPY puts in and out at end of day or as called for
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