ETF Trading with Larry Connors: An Evening with CNBC’s Special Market Crisis Crew
Yesterday I mentioned that with so many stocks under their 200-day ma, the path of least resistance was lower. That path was taken, the market is now oversold and fear is extremely high coming into Friday morning.
Things were so bad after yesterday that CNBC decided to do a special “market crisis” show last night bringing in the “best minds in the world” to let us know what we should do from here.
Obviously I was interested.
First I heard Jim Cramer say that it was not too late to sell the banks. Got it.
Then Ron Insana, former CNBC reporter, then unsuccessful hedge fund manager (now I don’t know what he does) came on and said he disagreed with Cramer. Now was the time to buy the banks.
Then he clarified things and said he was really looking 3-5 years out. I was hoping he could tell me who would win the World Series 3-5 years out, but maybe next time.
The money manager sitting next to Insana said he was already knee deep in banks. Therefore he would buy “like 10% here” and trade around his positions, so he doesn’t need to drive himself crazy and double up.
Insana agreed. He said we should buy the banks “like a piece at a time every month over the next five months or something like that”. I like definitive people with definitive game plans like this.
I then watched further because CNBC promised they were going to bring out “the one and only Suzy Orman” to guide us very soon.
Four commercial breaks later (and a few innings of the Yankees game) there she was!
Her advice? “If you’re scared, it’s ok to sell some stocks now”.
Wow, that was helpful. Super! I wanted to stay for more professional insight like this, but I knew it was best to spend the rest of my evening rearranging my sock drawer.
So there you have it from the best minds on CNBC. In exact order: Sell banks, buy banks for the next 3-5 years, trade around banks, or scale into banks “like over the next 5 months”. And if you’re scared, you have Suzy Orman’s permission to sell some stocks here – “BUT NOT ALL!!!” as she was pointed her finger into the camera. (She also told everyone she was 60 years old and she looked better than the 40 year old reporter to her right – yep, it was officially time for me to call it a night).
Please use extra caution today as the futures are down another 1.5% this morning and volatility is likely going to spike even higher on the open. Europe remains the tail that is wagging this dog. A coordinated effort may allow for a short-term bottom to come in, followed by a bear market rally which we’ll short into. Having high cash positions has been a luxury this week.
The above is from Larry Connors’ Daily Battle Plan.
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Larry Connors is founder and CEO of TradingMarkets.com.