Did Somebody Say "Buy the Dip"?

Thursday, April 22, 2010

The Dow gapped down around 80 points on the open and traded lower for the morning until President Obama presented his speech to Wall Street on financial reform. Buyers stepped in after the speech rallying the market for the rest of the day closing in positive territory. Obama's most poignant moment came with his quoting an article from Time Magazine:
Through the great banking houses of Manhattan last week ran wild-eyed alarm. Big bankers stared at one another in anger and astonishment. A bill just passed by both houses of Congress would rivet upon their institutions what they considered a monstrous system of guaranteeing bank deposits. Such a system, they felt, would not only rob them of their pride of profession but would reduce all U. S. banking to its lowest level. They saw their deposits which they had spent a lifetime to build up and protect with their good names confiscated by the Government to pay for the mistakes and dishonesty of every smalltown bankster.
This article referred to the creation of the FDIC in 1933, typically seen as one of the most successful evolutions in the financial system.

Amazon (AMZN) and Microsoft (MSFT) reported after the bell and were both trading lower after hours. We'll see how the market reacts to them tomorrow.

My highlight of the day was watching Obama's helicopters fly over my building and out across the New York Bay. That was pretty cool. My plan this morning was to buy FAS and GS at the bottom of their ranges thinking it is unlikely that they significantly break lower without more consolidation. Yet, foolishly, I decided to buy them early on and get stopped out just before Obama's speech. Subsequently, they both rallied for the rest of the day. Oops. It's always tough to hold stocks into unknown catalysts like a speech with an unknown reaction.

Nike (NKE) finally gave me some extension today putting me nicely in the money. I took a little bit of the trade off into the strength but will hold over half. I will also consider adding on a pull-in. NKE is very tough to time correctly though so we'll see how it goes. What's with the weakness in JP Morgan (JPM)? Perhaps the Volcker Rule is affecting GS and JPM because of their large hedge funds.

Apple (AAPL) on a tear today launching through $260 and closing at $266.47. AAPL is now a $241 billion company. Wow!

Bought an initial position in GLD again. Let's see how it acts in the next couple days, just testing the waters after a few months out of the shiny metal.
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