First off, a personal trade... I bought some C AUG 22.5 calls when C was trading around $19... I paid 0.32. Then C fell like crazy to $14, and those same calls were worth .07. Now, I was in disbelief, as I expected a turnaround at any time...So, I held thru it... And this morning, what did I find, but .90 for those same calls... Nice! However, I didn't catch that price, and sold for .70 instead.. Still, from .32 to .70 is good..
The point? It would have been easy to sell the calls for a loss, and take whatever I can get...But, I stayed with the plan, and on the charts, I expected a sizable bounce..It wasn't easy.. But, what I am learning even more from this past few months, is not only charts are important, but the calendar is equally important..
I noticed I would guess at the bottom in a stock/sector.. is it a double bottom? No? Is it a falling knife? Where is support? Fib's? Trendlines? Hey, how about the calendar? What quarter are we in? What is the sentiment of the sector? Have funds sold out of their losing positions yet? When do they have to sell by, if they wanted to? How did the sector react last quarter?
It was mid January, when we received a major bounce in the financials, which lasted about 2 weeks. Now, mid July, we get another 2 week bounce. I think its a good time to take quick profits in XLF (and XHB, as it hit $19 today)...
USO near $100, is a perfect setup to rally from..I expect a retest of old highs, not met, but tested...
SKF right here looks good too, could go down to 107ish, but a bounce to minimum of $140 is likely..
tb
