More Gyrating
The Fight at the Top Continues
Dear Bottarelli Research Member,
Good morning. I’m not sure if you caught Larry Levin’s comments this morning on CNBC, but he brought something to my attention that’s worth noting.
As a veteran floor trader, Larry is somebody that I pay close attention to. Unlike other CNBC commentators (who deserve the mute button), guys like Larry and Art Cashin have their own money on the line every trading day. Therefore, they’re the ones you must pay close attention to. After all, they have the pulse of the market’s order flow better than anyone else.
So, I found it very interesting when Larry noted that yesterday at 11:03, someone came in and bought over 220,000 S&P mini-contracts. The entire buy order occurred in less than one minute, meaning that it was one single purchase. And get this: According to Larry, this was the single largest buy order he’s seen in his career.
I’ve noted before that the best way to manipulate the market’s direction is to make large-volume buys on the S&P pits – and this certainly qualifies. According to Larry, this indicates that some big-time players are expecting to see the Dow hit 12,000 over the next month. So, as much as it makes sense to expect a market sell-off, we must always be respectful of what the big money plays are doing. After all, they’re still the ones holding the puppet strings.
On that note, let’s do a quick open position review…
GMCR February 90 Calls (QGM BR): Based off yesterday’s 52-week high (sparked by a price upgrade to $110), we entered these calls for $3.42. Currently, GMCR is dipping a bit, as news surfaced that the U.S. Federal Trade Commission is requesting more information from GMCR concerning their merger deal with Diedrich Coffee. If you recall, GMCR recently beat out Peet’s Coffee & Tea in a bidding war for Diedrich, which was applauded by GMCR shareholders. Today’s FTC news is introducing a slight level of uncertainty, but GMCR is fully cooperating. In that sense, today’s dip might be a temporary news-driven event. Let’s hold our calls to see if the dust can quickly settle. Hold.
FDX February 90 Calls (FDX BR): Playing off the nice support level at $85.00, we added to these calls yesterday, lowering our cost basis down to $1.40. If this level holds, we’ll head back up soon. Hold.
WHR February 85 Calls (OFW BQ): With a total cost basis of $3.15, these calls have inched their way back into profitability, followed by a dip back down to break even. After hitting a high today of $3.40, I continue to like the WHR chart. Hold.
THE RELENTLESS PURSUIT OF TRADING PERFECTION: As you know, my most important goal is to offer you the very best service. In fact, I want Bottarelli Research to be the best trading newsletter that you’ve ever belonged to. Therefore, my team is always thinking up clever ideas for how to make Bottarelli Research better. We have our list, but now we’d love to hear from you. So, to kick off the new year, I’d like to conduct our first member survey. The goal of this survey, of course, is to help identify and implement any improvements that you feel are important. I truly value your opinion, so please take a few minutes to offer us your honest feedback. I will personally review every survey, and we’ll do our best to make the most-commonly requested improvements a reality in the near future. To quickly submit this 5-question survey, click below:
I truly appreciate and value your input. And as always…
Lock and load!
Sincerely,
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