A Little Protection Can't Hurt
After Wednesday's move, this is the type of morning the bulls hope will play out through the remainder of the day. So far, it's a consolidation day -- a rest. It's a market that holds onto most of the gains, and maybe bends a little, but doesn't break. It's been that way for almost all the moves higher. Again, there are the doubters and the non-believers, and I am with them on the longer-term scope. The big picture still appears fragmented, as Wednesday's action demonstrates the market is being driven by emotions and knee-jerk reactions. It is far too early to conclude yesterday's central-bank coordination will solve the problems facing Europe. Similar actions didn't fare well in 2008, as Doug Kass pointed out this morning.
The conflicting opinions are glaring at the moment, which leads me to believe the market won't just roll over at this juncture. However, I would use the pop to place puts under long positions. Timing the top is next to impossible in this market, as the upward moves seem to run higher until it feels like we will never experience a down day again. Just when we are all cozy and warm inside that cloak of invisibility, the market get pummeled. Buying puts and letting longs run does limit some of the upside, but it will make that cloak feel a bit safer and warmer when the market does turn lower once again....331 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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