Cody Willard: Who’s more scared and an update on yesterday’s trade

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The markets are holding steady this morning and we remain near recent  highs, which also happen to be as high as the benchmark indexes have been  since last spring. The question  that nobody seems to be asking is what happens if we bust through those  highs, and the technical-analysis guys et al start chasing “the  breakout.”

We don’t have to catch every nuance of every move of the  markets to continue to outperform, as our strategy of buying weakness and  selling breakouts has our portfolio filled with many longs and calls, as  well as shorts and puts.

Here’s what you need to hear today:

Do  not get impatient. Do not let yourself feel naked if the markets rally,  and don’t let yourself be so long overall that you have to panic if the  markets happen to crash again.

Someone emailed me earlier  requesting that I ask you guys who’s more scared right now, the bulls  or the bears? I’m pretty sure I know the answer right now, but let’s ask  it — “Who’s more scared right now, the bulls or the bears?”

As for SanDisk Corp.,  mea culpa. The stock is down 10% this morning even though the company  beat estimates last night because it also guided a little bit lower  for this quarter. Nothing to worry about longer-term for SanDisk  investors, but the calls we bought yesterday are obviously taking a big  hit today. I’m going to hold my SanDisk longs steady. We still have huge  gains from our purchases when it was in the $30s that more than offset  today’s losses. Still not happy about losing money and making that  mistake in front of you though.

Apple remains my biggest position  overall (see My Latest Positions) as it has been for a while now, and LPS remains my biggest short.

Stay focused!

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