Crocs, Inc. (NASDAQ: CROX) and the Cubes (NASDAQ: QQQQ): 3:12 AM NYC time, Thursday, May 18th: I post these quick comments in their own posting so they don’t get lost in the weeds:
Comment From Mike:
I think I wait for CROX to drift down to its 50 day ma (currently $26.68) before buying. Of course, in this market it would be prudent to make sure it finds some solid support there before taking any sort of long position.
Reply From Chris:
Good points, Mike. Thanks. Hopefully all the traders that read this blog got out of CROX on the intra-day reversal on the earnings news (the day of my fishing trip, which wound up costing me a few thousand dollars since I couldn’t nail my profits until I got home).
As noted since the end of April and in all my recent CROX postings, CROX is subject to the overriding force of the market, as are at least 3/4 of all stocks at any given time. And the market has been telegraphing that selling was coming for almost three weeks (also as noted since the end of April in all my recent Cubes postings).
Yesterday showed characteristics of a washout, but almost certainly NOT the final washout in this down leg, which could even be setting up for Monday, but that is pure speculation and only one scenario, which depends on if and how much pain is inflicted going into the weekend, which will determine the extent of the bearish sentiment and fear that will be exhibited on the front pages of all the mass media magazines and newspapers, websites and TV shows.
Also possible/likely is one of the days in the next week is a big panic open that would likely be buyable for a short-term trade if you’re someone takes calculated risks, as I do.
Remember, do your own analysis and make your own decisions. Last time I checked that what we all have to do.
Tomorrow’s option expiration makes things all the more interesting, as cascading (or rapidly ascending) moves can feed on themselves as selling (or buying) loops through equities, futures and options, which are all hedging each other and require adjustments in the same direction to maintain hedge ratios. This type of thing was a driver of 1987, which had its major selling starting on a Wednesday and culminating on the following Monday. Since then circuit breakers and other rules have been put in place to try to address these issues, but as with most good intentions, there are unintended consequences, after all they say “the road to hell is paved with good intentions.” Cheers!
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