A Rally Driven by Put-Selling
When I penned the piece about how the shorts can cause the market to rally through their sales of index puts, I had no idea that it would come into play so quickly. But that is exactly what you are seeing. Those who made the negative bet on this market are selling their puts. Then the inevitable chain reaction begins.
We just got out of a meeting where we reviewed our positions. Remember,
we sell strength and we buy weakness. We are not
technicians. We are making a round of small sales here, but we think that Monday will bring higher prices so we are not pressing the bet.
We are letting most things run.
Random musings:
Remember yesterday when I said to
watch the retailers to see if they could bounce back from
the big bad
Goldman
call? Well they are. My favorite remains
Target
(TGT) - Get Report
because, heck, my wife and I love to shop there. Long live
Peter Lynch
!
Also, so much for the truth and trying to tell it like it is at a real $375 milllion hedge fund. A reader writes:
Regarding your pins and needles about the employment number ("We are penned in, hemmed in and tense. We are worried and fretting ..."): Your reporting is reduced to the same %&^$! as CNBC with this kind of writing. I haven't traded nearly as long as you nor do I have your experience. I have learned (or am trying to learn) to control my emotions on trades and the media reactions to them. I love what you do -- mostly. But not today.
You know, this guy is on to something. Instead of telling the truth about how we really feel, I will start lying and say that we haven't a care in the world. In fact, I will morph into
Buzz and
Jeff
will be Batch!
James J. Cramer is manager of a hedge fund and co-founder of TheStreet.com. At time of publication, his fund was long Target. His fund often buys and sells securities that are the subject of his columns, both before and after the columns are published, and the positions that his fund takes may change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Cramer's writings provide insights into the dynamics of money management and are not a solicitation for transactions. While he cannot provide investment advice or recommendations, he invites you to comment on his column at
jjcletters@thestreet.com.
