Thursday November 29 2012 Climbing and Stumbling the Fiscal Cliff

Yesterday, I think it was, one of the traders on Fast Money said that the way to time the markets was to find out when Harry Reid was going to speak, and then go short. Then find out when John Boehner was speaking and go long.

That correlation held for about . . . . let’s see . . . .24 hours or so. I was sitting at the computer today when Boehner walked out and started speaking at 11:40. I know what time he came out b/c I looked at the chart and saw the drop in the SPY with the spike in volume.Boehner was definitely much more of a Debbie Downer today than the last time. In fact the markets sold in his first sentence.

So you tell me, is this a skittish market or what? I mean, really . . . . ?

But as it turns out it was a good opportunity to get a bit longer, which I did in PCLN and AMZN. I tend to buy deep in the money spreads that are out a few months and then sell short dated bear credit spreads against them. The move up in PCLN caught me a bit flat footed and was happy to see it pull back to 660 to square things up a bit. I am now short a 660 call expiring tomorrow and a 675 and 680 call expiring next week against my January 600/700 spreads. If it pulls back more I may buy a next week 670 call.

The market did come back, but this time after Harry Reid started speaking. He was no less stern than Boehner but I suppose the market is used to him being a Debbie Downer, so the event was discounted.

AAPL, I think, is consolidating still and may very well have some upside to it after all. David Pogue had a review of the tablets in the NYTimes today and says the iPad Mini is the best. Having just gotten one myself, I can see why they are going to be the gift this Christmas. Like the iPhone 5 the only thing that will limit them is the ability to make them.

Must be great to be a company where the limitations as to what you sell is how fast you can make your product.

You can read David Pogue’s article here: http://nyti.ms/TlUhPD