shorting the jumping cat

[maggandre]

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.

 

[inandlong]

Thanks magg'!

 

[heilbronner]

Quote from heilbronner:

update:

Added to my position some nice puts on CAT:

Sep., strike 65, average price: $1.05.

Added more puts today. Twice as much as last time.

Average price: $0.65

 

[heilbronner]

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.

 

[sixthbeast]

CAT showing signs of distribution between 72.20 and 72.45 short from 72.39 here.

 

[inandlong]

Quote from sixthbeast:

CAT showing signs of distribution between 72.20 and 72.45 short from 72.39 here.

For heil's sake I sure hope it continues.

 

[iceman1]

Quote from heilbronner:

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

 

[sixthbeast]

yah, i got out of it, lost about 10 cents on the stock. Read it wrong.

 

[version77]

Maybe CAT is experiencing a short squeeze?

 

[inandlong]

Quote from version77:

Maybe CAT is experiencing a short squeeze?

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.