Don't Be Blinded by Hindsight

Monday was a mixed day for me. I went into the weekend as I had the past few Fridays: with very few trading positions and sitting mostly in cash, other than long-term-income positions and core index positions. I did not take advantage of yesterday's dip, so I did not participate in the late-afternoon rally. It had me second-guessing myself a bit. I wouldn't call today a victory, though. There is no benefit in calling out hindsight. As I said earlier today, telling folks today they should have sold Friday is like telling a dying Abraham Lincoln he should have avoided Ford's Theater; it doesn't do a bit of good. So, we have to work with what's in front of us rather than what's behind us. I am still sticking with the chart of the SPDR S&P 500 (SPY) that I posted earlier today, which I am updating here.

SPDR S&P 500 (SPY) Source: StockCharts.com View Chart » View in New Window »

Facebook (FB) is actually running higher into earnings this afternoon. Based on the chart, I believe $22 or $17.40 is possible post-earnings, which makes straddles around the $19 or $19.50 strike somewhat attractive to me, preferably on the November expiration. But the Oct. 26 expiration may actually be worth a look on a small scale today. This oversold position of the stochastics has been a place where bulls can sometimes catch a big bounce, but the results are mixed. The bad news is it has only been 50/50, but the good news is the bounces from this level have come with good size. I will probably regret saying this, but the chart actually looks bullish to me into earnings....135 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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