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It what has become a big weekly event – – until a couple of months ago, it wasn’t even on anyone’s radar – – the initial jobless claims came out today, and it’s another big’un. It’s diminishing, of course, but “diminishing” is relative.
Let me state the obvious: it’s one whole hell of a lot more fun to trade a market like the one from Feb 20 through Mar 23.………
One of my favorite stocks to watch during the earnings season is Netflix (symbol: NFLX. Come on.). I avoid this thing like the plague, but I like to sit in the bleachers and observe the action.
Imagine how weekly call owners must have felt when they saw NFLX after earnings came out. Visions of new sports cars dancing in the heads of WSB adolescents. What a thrill!
Allow me to express my warm feelings toward last Friday, a time in which the equity markets exploded higher for absolutely no reason at all (note the limit-up on the Russell, tinted in green) and terrified bears like your humble narrator into vastly reducing risk. Thus, instead of 165% exposure, I’m at 95%.
Here we are on pre-market Monday, and a good deal of that baseless gain has vanished.
The past two months have had the equivalent of about two years of news and market activity compressed into an incredibly tight and vivacious space. This is an incredibly difficult market to trade. Now that the weekend is upon us, allow me to reflect on an important personal anecdote and how it is informing my current approach.
The time leading up to the February 19th was a total and utter grind. It was an era of a VIX in the sub-teens and a relentless notch higher every single day for the bulls. It was horrific. And then, out of the clear blue sky (and many weeks after the virus was widely reported on the news), we got our first good, hard dip. For me, it was like a tall glass of cool water in the desert.
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