China surprised with a rate hike and created a monster short squeeze in the dollar.

Those events coupled with some negative earnings events and a new suit against Bank America by Pimco, Blackrock and the Fed gave traders an Excedrin headache on Tuesday.

The Dow declined -230 points at its lows and the Nasdaq -58. That was all it took to stop us out of the RIO position since a stronger dollar pushes down the price on commodities. That cost us another 70-cents.

Our new First Solar position gapped down to $143.81 at the open to give us an entry point at almost the low for the day. That was just about where it was trading in after hours last night so the plan worked out great.

I looked at a bunch of charts tonight in hopes of finding something we could add on the dip. The longer I looked the more I grew concerned that today's dip could be followed by another decline on Wednesday. I have a bad habit of jumping the gun and entering positions a day or two early on major market moves. I get the direction right but miss the entry point slightly.

I found six potential plays but I am not going to officially add them tonight. Instead I am going to list them here and you can take the early plunge if you like. Having three losing positions in a row this week has induced a rising state of caution in my analysis.

All of these are November options:

Symbol, Strike, Price
CLF $57.50 $1.44
WLT $75.00 $1.71
VMW $65.0 $1.00
FTI $65.00 $1.20
CRM $90.0 $1.98
WYNN $90 $2.45

I will be out of town at a seminar on Wednesday and there will be no newsletter update.

Jim Brown

Current Portfolio

Current Position Changes

RIO - RIO Tinto - Stopped
Short Nov $60 Put @ $1.10, stopped at 63.50, $1.80, -.70 loss.

New Recommendations