The Dow up over 10% - Did You Get On The Wave?

Like I said patience is a virtue. You should have not been too surprised, because we here at Crash Market Stock said it was coming. In any regard, I hope that you are finding ways to make money in this market, because the opportunities are ALL AROUND YOU!

So here we are, a huge rally, up over 10% for the Dow today. All of the options we discussed are up anywhere from 30-90% depending on which ones you bought. And after completely liquidating my FXP, there was not any downside today. So what now...

Tomorrow will be a very interesting day and I'm going to be very cautious to what I advise. There are many elements constantly pounding on the market everyday telling us Bad News. I mean, even today we got the worst consumer sediment report in 30 years. You would think that would devastate a market. However, this time, I believe there was more positive pounding, temporarily, to give us this huge run. But there is a lot less positive to work with than negative, which is why we need to be careful when playing the long. In fact, GDP reports come out Thursday, which I am sure will now show a recession.

As for tomorrow, we have the big announcement. Now, no doubt most of the reaction of the cut was factored today, but not all. This puts us in a sticky situation. Most are expecting around a 50 basis point cut in the rate. Anything less than that, will probably send this market down tanking (coupled with the people taking profits from today). If they cut to expectations or more, I believe we'll see another healthy rally tomorrow. Remember, there are billions of dollars out there sitting on the sidelines waiting for the "bottom", and as soon as they see signs of life, they dump it in.

As For me, I plan on keeping my option contracts and hopefully selling them tomorrow for a healthy gain. Then, depending on how the market moves, I would love to get back into a short position. Notice below the chart for FXP. See the trends?
As you can see, there is a pretty correlating trend with spikes in this ETF. Good fluctuation from $80-90 up to $190. For me, as soon as it gets below $100, its a buy, and look what we found last week. The great news is after today, it took such a beating, its back down to $113. Another day of that and I am back in. For your options, look to hold on tomorrow and think about liquidating at the peak of the day tomorrow. Remember, it may be better to sell it before the Fed's announcement, because as we saw from the Bailout vote, action can cause the market to move down. If we see FXP hit $92 or below, I would get back in. There is too much bad news to come to keep that stock below $150. Good luck, Happy Trading, and we will see you tomorrow.

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