FYI - Larry featured CAT as his trade of the week - short - which came out today. "This week we have selected Caterpillar as our Trade of the Week. The pattern that has developed is a Bearish 3 Drives pattern and presents us with the potential for a high probability short opportunity. The stock (Symbol:CAT) meets our criteria for liquidity and volatility. The pattern has completed and we will be watching for a good entry point. The 3 drive pattern was first introduced by George Cole in the 1930s and is also found in the classic, Profits in the Stock Market by H.M. Gartley, published in 1937. The 3 drives pattern was also used by Wycoff in the 1930s and later by William Dunnigan in the 1950s." See attached chart.
added more puts today. This time strike 70, maturity sept., average price $1.50. I start feeling the pain, my entries have obviously been too early.
with all due respect I can never understand trying to pick a top in an uptrending stock... as if to say...... I refuse to miss any portion of a perceived imminent decline! Either one enters on TA or on fundamentals. Based upon TA..... from what I can observe.... CAT is not... yet.... a short regardless if it is selling at 150 times earnings! I have no idea of its' fundamentals b.t.w. Moreover..................... I can never, EVER understand why someone needs to publicly declare (particularly on ET, as opposed to YHOO!) that they are stubbornly going against a trend by continuing to average a loss.... and with front month derivatives no less!!! :eek: It's kind of like beating one's chest in the caveman days... ....as if to say... I KNOW MORE than the market! Do you? I believe all your 65 puts will end up worthless; but wish you bonne chance. ICe
Shouldn't the stock have come down from a recent or fairly recent high to be squeezing shorts? I don't think the stock has been this high since 1999 or so.