We sat down with DennyCrane again today to get an update on how he is finding his footing in these volatile holiday markets, and what he thinks the New Year will bring.
Have you been doing any trading today?
I bought the $BAC 17.50 call for $0.04 at close yesterday. The overnights have been working well for me recently.
Denny talked about how holding his positions overnight have provided him with more chances to read these sneaky holiday markets. He says that the holiday markets are harder for him to time properly and that he has had a few missed opportunities because of it.
I tried to put a sell order in for my $BAC calls at open when they hit $0.10, but I missed it.
So, what do you think about these holiday rallies in retrospect?
I expected the rally, it’s just that I misplayed it. Like Lucci said, these holiday markets have been pretty disguised, but they have been exciting to trade nonetheless.
Denny talked a bit about how he had been looking for the Santa rallies, but that they keep popping up when he least expects them.
Last time Denny seemed very adamant about a correction after the New Year. We followed up to see if his hypothesis had changed.
Do you think that the market correction will be more than a post-holiday normalization?
Yes, I think that we will see a January pull-back of 500-800 points.
In addition, Denny said that he thinks that the FED may revisit the current rates when the dust from the holidays settles.
The FED will take a closer look at everything after we are out of the holiday fog, then they should be in the position to hike rates a bit.
Overall, we can all find some perspective in Denny’s holiday experiences. Holiday’s can be some of the most exhilarating times to trade, and even if you miss a couple of golden eggs, you can always gain experience that will help you anticipate the unexpected a bit better next year.
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