Today promised to be volatile and so far at least, it is not really living up to the hype, but alas, the day is still young. USG is a stock I am watching closely as it threatens to break above 50. I am a seller up here, taking profit on the shares I bought and mentioned in this blog a couple days ago. Subprimers have bounced hard the last couple days and the pressure for the short term is off of them. I am still keeping a watchful eye on the BKX, i.e. the banking index as a proxy for the market. Also watching the brokers such as GS, MER and BSC, which are under some pressure today. I dont have positions in them, but believe that they are the "tell" in the market.
The PPI out this morning has boosted gold and gold stocks and it seems that the next move for the fed, despite all of the talk to the contrary, is up, not down. Inflation is a real problem at this point, but for some reason, call it wishful thinking, the market has talked themselves into the next move being a rate cut. This could lead to a little disappointment for equity holders as this is digested. I remain cautious and have shorted some YHOO and INTC this morning against some LEAPS that I own in both of them, which I might add have performed horribly over the last couple weeks. Also own a little SDS as protection against a downmove should we get one.
BBND performed admirably yesterday and while we are getting some profit taking today, I would still be a buyer if we were to see a 15 handle in next few days. A more speculative entry would be in the 16.30 range.
The last hour today should not disappoint in terms of volatility.
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