Overview Friday 17 July...

So this is a two-day recap since I didn't do one Thursday (Staind and Shinedown put on an awesome concert). Life's not all work all the time because we should work to live, not live to work. Anyway, we saw the bull stampede continue as they ran over the bears. I still believe much of this week's upside was related to options expiration. What we may see on Monday is the options hangover. Basically, a lot of people tend to end up with much bigger positions than they want as a result of options expiration, so they have to unwind those positions. As a result, we tend to see a countertrend move to options expiration on the following Monday. So, since this week was a hugely bullish expiration week, I would expect to see a down day Monday. We had some big reports in the past couple days, including GE, BAC, C, GOOG, and IBM.

Between a lot of companies having already reported earnings and giving us some good post-earnings setups plus the options hangover, we're going to see some really good opportunities in the coming days. With this, I will be focusing more on stocks that have already reported earnings, but if a stock hasn't already reported, I won't exclude it and I will state the date. Earnings season is far enough underway to give us plenty of post-earnings setups for the coming weeks.

Short-term bias: bearish (we've had a very powerful rally the past few days, but I believe resistance will kick in and drag us lower, plus we have the aforementioned post-expiration hangover)

Intermediate-term bias: bearish (I still think this correction will take us lower, perhaps to 800 on the $SPX and I don't think we're ready to power higher quite yet)

Long-term bias: bullish (I believe we put in meaningful, long-term bottoms in March, and would use the aforementioned correction to increase long exposure)

Pick updates:

I think DFS will have an expiration-related pullback early next week, and I hope to use this as an opportunity to escape this position and hopefully minimize the damage.

I'm liking what I'm seeing in PALM. It is holding tough at support like I expected, and I'm hoping for a rally up towards previous highs around $17 so I can sell some August calls against my November calls.

AIG is still shortable, especially since it filled that gap-down created earlier this week. This is a volatile one, and if you're going to short it, you must hedge. Whether you short common stock or buy puts, buy some cheap calls and/or sell some puts as a hedge, plus keep the position small.

ALVR looks a bit extended here, but it appears to have held support.

BKC still has a bit more upside, but don't look for it to rally huge. This was meant as a quickie trade on a bounce off support, and we're starting to get that.

BNI and FCX remain on the short list, but I don't think either will have substantial downside. I'm inclined to delete BNI entirely from the list and move FCX to a long once it has that pullback to support (the support level I thought would crack, but hasn't).

MDR, RIG, and SGR all, I believe, have strong downside potential. They're not as strong as say FCX or BNI, and I believe all three have further dowside.

Postions: long DFS August $12.50 puts, PALM November $12.50 calls, and $SPX index fund in 401k