If you were freaking out and/or panicky at last Wednesday’s lows when the Dow Jones Industrial Average (DJIA) was at 15,500 and the S&P 500 was at new 2 year lows — now is the time to lighten up a little bit. If you were panicking last Wednesday and wanted to go to cash when the markets were tanking, you should probably consider trimming 10% or 30% of some of your positions so you can sleep better at night. Just a friendly neighborhood reminder to sell when you can, not when you have to.
And speaking of selling when we can, I want to take advantage of the further rally in Amazon and Netflix to take some more profits on our call options. I’m going to sell about half the call options I have left in Amazon, locking in more than a double on the trade over a ten day period or so. I’m also going to sell about half the call options I have left in Netflix, locking in more than a double on the trade over a ten day period or so. I’ve still got a common stock position in Amazon and Netflix and I’ve got a fraction of the call options left that I’ll plan to sell into strength in days or weeks ahead.
A few other notes for you this morning:
* I’m writing a lengthy report about how negative interest rates and a new easing cycle from the Federal Reserve in the context of the world’s larger currency wars will impact our world and I’ll be sharing it with you dear subscribers later today.
* $AMZN isn’t going to compete against $UPS and $FDX when it first rolls out its delivery logistics network. Maybe in a few years, it will offer retail delivery services to compete against $UPS and$FDX but at first the company will simply use it to ship and deliver many of its own packages, for at least the first three to five years as they build up the infrastructure.
* I’m just not thrilled about the gold miner’s balance sheets, but I’d rather be long $GDX than short it as long as $GOLD stays above $1200. I’m quite bullish on $GOLD, just not as bullish about the risk/reward on gold miner stocks.
* I’ve long been hard on Neel Kashkari in his various bureaucratic positions over the years, after he moved fromGoldman to Hank Paulson’s Treasury to TARP Bank Bailout Czar to nowadays being President of the Minneapolis Fed, (including recently in this exchange on Columnist Conversation with Doug Kass) so I want to give Mr. Kashkari credit for even suggesting these things: “1. Breaking up large banks into smaller, less connected, less important entities.
2. Turning large banks into public utilities by forcing them to hold so much capital that they virtually can’t fail (with regulation akin to that of a nuclear power plant).
3. Taxing leverage throughout the financial system to reduce systemic risks wherever they lie.”
* Nice interactive graphics. The world’s biggest economies:
More: – http://www.headlne.com/hdl/699…
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