We held bullish positions yesterday morning in Citigroup and the E-mini S&Ps but side-stepped trouble by paying heed to the following Citi Tout sent out the night before: 'Thrilled though we are about having caught a contrarian breeze via our purchase of July 17.50 calls, we should have no illusions that a bunch of shaky financial stocks are going to hold this market up for much longer. The broad averages are acting like they want to go down, and they are about to pull down the bank stocks, fleetingly in the grip of delusion, with them. Let's try to hedge our bet by offering two July 20 calls short for 1.65 against the calls we already hold for 2.65. Keep your bulletin launcher on, though, since conditions after the opening may warrant a change in our strategy.' Although we missed shorting the July 20 calls against our long position, we still managed to book a profit by exiting the position entirely before the fleeting, good times in Citi came to an end. Similarly, we dodged the bullet in the E-Mini S&P after getting long early in the session via the following advice: 'We're using a Hidden Pivot support at 1340.50 as our minimum downside objective, and you can bottom-fish there with an initial stop-loss at 1338.75. If the order fills and goes profitable I'll post further guidance in the chat room and under Intraday Notes.' (Click on chart to enlarge) As you can see in the chart above, a 1340.50 bid would have done very nicely yesterday, since it came within two ticks of nailing the opening low and held for more than two hours as the futures bounced eight points. In retrospect, initial risk (theoretical) of $87 could have returned a profit of as much as $400. Fortunately, we
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