Well they didn´t go to 13,000 yet but I think all the shorts are covered, again. You know you can make 5 to 10 times more, more money; 5 to 10 times faster being short in a Bear Market than you can being long in a Bull Market.
I said that the first week last June was the start of a new Bear Market and that the next rally after a 2,000-point drop was a Bear Market rally, followed by a 3,000-point drop, and I think this last rally was also a Bear market trap. If it is, the next sell- off could be down 4,000 points, all toll, the shorts will have made 10,000 points on the Dow, but wait till we go to 13,000 Dow.
Remember, in Bull Markets you buy the dips, in Bear Markets you sell the rips. Easy game.
Let´s check our Short list:
OEX Down -120 pts+
PCLN Down – 450 pts
AMZN Up, lost money
IBM Down -50 pts
GOOG Up, lost money
TSLA Down – 180 pts
NFLX Down – 35 pts
AAPL Down – 35 pts
VIX Up 35 pts
I would buy puts on this same list- except AMZN, wait 2 days, they had great earnings- keep in mind when you go short buy puts. Because the most you can lose by buying puts is the price, you paid for the puts.
If you short a stock and it goes up, your loss can be unlimited. If you do short a stock, buy slightly out of money calls, this will limit your loss.
Being naked short you can lose the ranch, really. Ever since options started trading in the mid 1970´s I am shocked whenever I hear someone has lost a bundle of money, there are so many ways to protect yourself with options.
I think the e-mails I got from my readers, kind of sums-up how they are doing.
The first one is scary:
“Hey, Market Call Anastasi, if the Dow doesn’t go to 13,000 like you keep saying, one night you are going to see a few dark vans parked in front of your house and driveway with mean looking guys inside.”
Well, I live in Peru, that´s a long drive.
The next one I should have saved, printed and framed, he says:
“I don’t believe I made $ 500,000 on the 25 puts. I´m giddy laughing, I made a boat full of money on Priceline and I buy a boat, I mean a container ship. It is the first time I ever bought puts or an option.
I felt like that 70-year-old woman from Wisconsin who for the first time in her life, she bought one Lotto quick pick ticket and won the lottery the next day. Who knows if I had listened to you about the rally only being a Bear Market trap I could have made 300 or 400 points instead of 200 points… Thanks Market Call Anastasi…”
The majority of the e-mails all said they were happy they sold all their stocks in June at the Bull Market top and that they made money buying puts.
As for the mean looking guys in the dark vans:
If you spent more time, reading my blogs maybe you would be driving “Vettes and Vipers” my two favorite cars. Just remember this blog was intended for friends, family and relatives because it´s easier than constantly calling from Peru and Yes. I have a disclaimer; it reads:
“If anyone is dumb enough to listen a poor Italian kid from South Philadelphia, they deserve to lose money”
I won´t get bullish until the Dow breaks 18,200 on the Upside on large volume. The total daily volume of stocks has been declining.
Not a good sign and earnings of companies have been declining. All I see is bad news everywhere.
I keep about 15 market internals every day, 4 times a day. At 10.00, 12.00, 02.00 and 04.00 O´clock, and I will admit some of them are starting to look a little better. If the Dow should break 18,200 on the Upside and only on a large volume, sell your puts fast for whatever they are trading at. I would be shocked if that happens.