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Caution on CHK And WLT Proved Correct Call, They Both Got Hammered

April 29, 2008 10:35 PM

As i said last night “if not for the Fed meeting coming, both CHK and WLT should be a short right here”. Both got hammered today. Should have just made the call to short it with a hard stop at the highs as I smelled trouble. My only concern was the fed meeting and the market direction is not certain after, and I like to make calls where i believe there is a high degree of probability. I have repeatedly said to avoid WLT here in the last 3 days however, and that call proved correct. WLT was down 4.84% and CHK down 4.55%. Not a bad day’s “work” as that is higher than an entire YEAR return in a money market…. in about 8 hours…..

 While it is difficult to know the direction here, extreme caution is in order. We have to clear Monday’s high in the SP to be long the market here, and the highs on both CHK and WLT are an issue, until proven otherwise. WLT has earnings May 1, so best to let that play out first, IMO.

 If we sell down after the Fed, it looks like we need to clear the 1370 area to the downside to put pressure on the market. I will update once I see the reaction.

Written by Tom@StockBlade.com · Filed Under CHK, WLT 

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