Stock Market: Review of yesterday's action and Outlook for week of Feb. 23rd

It was a day of fear and hope yesterday culminating in a Double Witching expiration and gave the feeling of a roller-coaster ride. Much of the action was normal Options expiration but the added volatility magnified by comments coming from Robert Gibbs, Press Secretary for President Obama, when he took Nationalizing the Banks off the table for consideration. This followed a comment from Sen. Chris Dodd of CT, Chairman of the Senate Banking and Insurance Committee, where he said to the media that some banks might need to be Nationalized for a short time. When Dodd spoke, the market tanked to the lows of the day, and when Gibbs spoke, saying that President Obama was not in favor of nationalizing the banks, the market rallied, giving a clear signal of where Wall Street was on the matter.

I was very pleased about yesterday's action. We did go down below 7,300 but closed above it. We also did drop enough on the S&P 500 to come close enough to a retest of the November lows to say we had arrived and successfully passed the test, at least for yesterday. The S&P 500 closed at 775 after hitting a low for the day of 754. The November low was 741. The Dow closed at 7,366 after setting a new low of 7,266, breaking the previous Nov. low of 7,392.

Looking forward, I see this coming week showing a positive gain and possibly enough momentum going into the week of March 2nd to sustain a bit longer rally. On Friday I bought more shares of the ETF Ultra Pro shares of the S&P500, symbol SSO, at $18.48 and also bought more shares of the ETF Ultra Pro Small Cap Fund, symbol TNA for $17.48/share. I didn't hit the exact lows on each purchase but was very happy I did buy them. The low for the day for SSO was $18.25/share and for TNA the low for the day was at $17.19/share.

Reflecting on some previous call I had made, I was in error in my call on selling the ETF Ultra Shorts SDS and TZA back when I did. I had sold TZA back on Jan. 21st for $67.24 and yesterday TZA hit a high of $76.05/share. Clearly I could have kept the shares till yesterday and done better than I had back on Jan. 21st. I could have gotten at least another $5/share profit in hindsight. But I do feel good I made a good profit when I sold them. On SDS, I had also sold the shares on Jan. 21st at a price of $86.90/share. Yesterday SDS reached a high of $94.82/share so I left at least $6/share on the table for that one as well. Again, I made a good profit when I sold them both in the 25% to 35% range. The reason I am posting this all here is so you know I really do continually look at my decisions over time to reflect more on my decisions. If Bankers did that on the Sub Prime problem and realized what they were doing, we might not be in the mess we all find ourselves in as a country.

The moral of this analysis is several fold. First, Lesson #1, don't ever be sorry for selling a stock at a profit. Greed is your enemy as it makes you risk losing what you have. Secondly, Lesson #2, don't be afraid to look yourself in the eye and give a true assessment of you shortfalls and errors. It is the only way to improve your situation. And lastly, if you want to really learn lessons permanently, learn to admit your errors to others voluntarily. It can be very humbling and also very reinforcing of lessons 1 and 2. Hope this helps you today.