Talk about a disaster. Not only has the snow wreaked havoc, but economic realities have, too, sending the Dow down more than 200 points on the day.
Our DIA puts should do very well if this fall continues, especially if the Dow tests its 200-day moving average near 17,240.
After closing quite a few wins between January 5 and February 23, 2015, we have run into some losses, including Lumber Liquidators (LL).
I still love this trade. The stock is over-crowded with bears on no real news. Sure, there are investigations being launched, but that’s old news. Sure, there was a 60 Minutes report, but most of that report was from a short seller, two attorneys backed by short sellers, and unidentified factory workers.
The key piece of evidence is missing, though. There were no victims.
Not only is MACD and RSI deep in oversold territory, but if we look at Money Flow, we can see money is beginning to flow back into the name. They know as well as we do that this is nothing more than a bear raid.
I’m watching it, and holding for the moment. However, if the underlying stock falls under $30, we’ll jump out. For now hold.
Ian L. Cooper
Forgotten Profits