REVERSAL.... YESSS.....

Yesterday the stock market suffered a classic reversal. Up and up and up all morning and no signs of a pullback. I had a `feeling' (feelings are turning out to be my achilles heel, believe it or not) that the market would close in the red. But was wondering what on God's green earth would turn the market around ... as I stepped out for the day. Volatility is missing too.... wonder whats gonna make the market go red... I mumbled to myself as I got busy with some chores.

Late evening when I checked on the market moves- was pleased that the pullback did occur in a severe way. Could never have predicted that a downgrade on BIDU would be the trigger. The point is that BIDU was just the medium... the market was overbought and any such news on a hi-flier was enough to affect the sentiment to swoon.

A recovery today will be short lived is my humble opinion. Like it or not am a seller. Cannot risk losing money so am out of CSCO at 33 and OVTI at 24.5 though my targets were 35 and 27 .... will get a chance to buy cheaper as the earnings season pulls the market down to better levels. And remember cash is king and can be used when the next big opportunity arrives.

Am still long on AKAM and LLNW. We are in at 30 and 10 on these. LLNW raised its estimates last evening. Thanked my crystal ball for the small mercy. AKAM is 36 and LLNW is 12.5 today... am happy and secure as these are in the right growth sector and competition or not streaming media is hot.

Be that as it may, our short positions have started working. CHNR- the second round made more money. Shorted at 45 again and will try to cover today at 35 (its 38 now). We bought puts on NILE, November $100 $3.50 a piece. The stock price dived from 100 to 89... in the last two days, the puts soared to $7 and we doubled our money- (100% return in two weeks... YAY HOO). Am not greedy though I know they can go to 15 if NILE dives another 10 points, am takin my profits and laughing to the bank, so to say. With the money am buying some puts on SLB (Schlumberger - oil service company) the November $100 puts at 1.80 are cheap. Just on valuation and good oil prices and prospects priced in already.

New ideas- ENER at 26 may be a good idea. Its Energy Conversion Devices, Inc. It commercializes stuff for alternative energy, energy storage, and information technology markets. It contributes to the solar sector- ! Though I think much of the solar power is priced in the high flying solar stocks like FSLR (we have puts on this one...too) and JASO and SPWR ...! You can get badly hurt and I dont recommend these solar stocks anymore. Not after seeing LDK (OUCH -LDK has been one sharp falling knife- from 70s to 40s... in less than a month) slide. The others will follow suit... one of these days when the market reverses and goes lower for couple of days. But all thats solar is not to be sold. So a play like ENER thats closer to the 52 week low- and pickin up steam... is a good idea with lower downside risk. Am buying some at 26 to start with. And will watch for a pull back to add more. Target price is 30 in a month.

Thats it for today. Fall is here, be it for the weather or for the market, got to make the most of both. Meanwhile, do post your comments. Correct me when I am wrong. Chide me when I brag. Applaud me when I make some money for you. Got to learn to keep the sentiment happy- its only money.