Shocking..

8:30 am EST Yesterday's action in the market was shocking to me. That is the only way I can explain it. In yesterday's post, I was concerned about the crosswinds going on in the market and I thought there might be some problems with the rally going forward. The market rallied hard. I thought Research in Motion (RIMM) had run up dramatically and was going to fall with earnings. They had a massive quarter AND raised guidance. About the only thing I was specifically correct about was that Apollo (APOL) had enough selling on Wednesday to make it a buy. It was up as high as $70 from its $63 Wednesday low. I think you can still hold on to this one.

Fortunately, as a trader, you trade the market that is in front of you. A good trader does not try to force their ideas on the market. That is a recipe for losing money most times. You need to trade what the market gives you. I expected a choppy market but it was a huge rally. I used that to my advantage. I got long in the morning and took some profits in the afternoon. It was that easy. I set up my hedged trade in (RIMM) at 3:30 pm. There was a lot of action in this name all day and I wanted to wait to see how it played out. I bought the May $65 calls and the $35 puts. The total average cost was $.70 per call and put. I anticipate the puts going to $.00 and that will be fine. So anything in the (RIMM) calls above $1.40 will be profit. Since the call options were $16 out of the money yesterday and they will open either in the money or slightly out of the money, I can be pretty sure of a healthy profit today. I plan on taking a portion off today and letting the rest run. (RIMM) reported such a strong number that you have to be bullish about the stock.

The employment number this morning was a non-event. If we had something higher than about 800k, it might have made a difference. In this case, there is such negativity baked in to the market, it is very difficult to disappoint. While I think the market can go higher today, of course I will keep my eye open for trends. We will make some more money here on Monday. Until next time, stay low risk..