Two Bullets Dodged

Early on Monday, I decided to do two things. First, I took my (very tiny) profits on my PLTR short by covering it. Good thing, too, considering what happened after earnings.

Second, I sold my CAT January 2027 puts at a good profit, which was an especially good choice considering this sucker is up almost $100 on eye-popping earnings.

Not to say that it’s some kind of glorious morning. Yet again, all the futures are green, and in some cases we are at lifetime highs. The most important index to me is the /NQ, which is nearly the red line shown below which, if violated, would do away with the series of “lower highs” that have been going on for months.

One bright spot, however, is China, by way of the FXI. This is far and away my largest options position, and I intend to hang on to these March 2027 puts for what I hope are substantial profits. This is a baby step in the right direction.

In general, though, the one or two surviving bears is at terrible risk. The /ES has, for the first time in two months, pushed above the red resistance level. (green circle).

I would hasten to add that only last Wednesday the same market pushed below support (red circle).

So, it’s just as likely that this breakout is the last gasp of this rally as it is likely that we’re entering a bold new era of ceaselessly higher equity values.