By Sell Puts
MOst must agree BAC's Kenneth Lewis's testimony is gonna stir the pot Thursday. i will be watching. Pandit over at C has a personal feud with Sheila... this bull train is going nowhere fast, once the window dressing disappears one will realize nothing has changed. BAC and C are still in a pile of sh$t.. If the global deflation/inflation issues snowballs those who are under the tarp will see their shares become worth less and less.
The greatest short in history could be coming up.. the time is not NOW it appears, lots of strength in the form of program trading. I think when the time comes the interest rate debate heats up we are in for a sentiment change. When everyone starts getting worried again its a big ol' train that gets going... The funds sell into all the upgrades, take profits.. and then become sell side players.
The CHART above is a chart of the vix. I am playing this as a possible breakout... we are in a very large pennant formation. Im looking for the support under 30 to hold, which is the ascending green line. If we do hold we are gonna break out to the upside and July will be interesting. if we break down, we have a long way to fall. ALways have an idea of where the vix is trading.
TRADE IDEA:
If you are currently long term bearish on US equities you should consider buying protection on your longs in the form our further out puts on the SPY, or calls in UUP. SInce the vix is down, the volatility variable of the Black-Scholes model is smaller thus making puts cheaper.
Drumbeat: June 2, 2012
5 hours ago
