There is a House…

Senate passes, market drops.  BUY the RUMOR, SELL the NEWS…  That’s how we’ve played the game twice now, will it be that way tomorrow?  As Mole’s weekly chart pointed out at the beginning of the week, you short on Monday, and close on Thursday or Friday.  It has been that way for about 6 weeks now, I hardly suspect that to change.  Mole has been slipping me some info about the TOMO and POMO auctions, and there seems to be quite the supply waiting on the sidelines.  Volume has been fairly light for the past two days, and trading has not been as fluid as it usually is.

$VIX has had 3 confirmed buy signals, and now, 1 failed buy signal, and very, very close to being able to issue yet another buy signal.  This is serious proof that wave 3 of 3 is underway.  So about options trading…Yes, the $VIX is absurdly high, and puts are expensive, and calls are even more ridiculously overpriced.  However, there are a few things you can remember.  Expensive options can always get more expensive, and the $VIX can always go higher.  The game has changed, but it can still be played.

Here is the $NDX.  Notice a lower low, but divergent MACD Histogram and Stochastics.  Not to say that these cannot catch up, but right now, I am wary of a reversal around 1450.  Still about 3% away, but seriously, that is an typical day right now.

I maintain that puts on tech companies is the way to go, but Ag stocks are really pushing the envelope.  Fortunately, I have been all over CF.  Other ideas are BG, MON, MOS, TRA, POT.  Yes, they are a little far gone, but as I said, the can go further…

Also, if you have not seen this beautiful gem, check out this graphic from the NYT…

Tomorrow will likely be slow, at least until the vote happens, IF it happens.  The trading climate is difficult still, make sure your timeframes are short, and your risks are managed.  That’s it, a short update tonight…We will be sure to keep you posted…in fact Mole is posting some of his choice picks as the night goes on…Be sure to check them out if you have not thus far.

Skål!