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"Tony The Tiger" - A Food Stock

The mood of Wall Street is now changing as the reality of tariffs is starting to kick in. Two weeks ago not so much so. Kelloggs had "so-so" earnings come out a few weeks ago and the stock exploded upwards. Note the very last line above mentions the effects of tariffs are not taken into consideration. So many stocks with "so-so" earning reports have jumped in price based on the "lets make America great again" slogan. Deere stock is shooting to the moon as I keep writing about in spite of declining sales in the last quarter. The sentiment seems to be that they are immune to tariffs. On paper they might be. Read this. Americans are struggling to buy gas, eggs and insurance. Total housing starts in the U.S.in 2024 were down 3.9%. Walmart, the recent darling stock in the last four weeks for Call option players woke up this morning with an earnings report which was healthy but with came with some caveats. Here is what happened. Perhaps the U.S. is starting ...
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Buying Caterpillar - A "Catching a Falling Knife Trade".

In with two "Calls" at $1.59 each which expire the next day. The stock is down ten dollars in three days on no real news. This kind of judgement calls is sometimes difficult to make. The stock seems to dropping on light volume which is better than on heavy volume. It's a "no news scenario".
Let's see what happens next. A 10:30 a.m. update, one hour after I got in. I am down something like 37%. At this point in time it has turned into a "sit-and-wait" hold. What I like better is an"in-and-out" in thirty minute trade.
Now another look at it at 11:30 a.m. with the D.J.I. now up over 225 points. Remember I got in at $1.59 a contract. I don't enjoy these having to wait until Friday morning situations.
There was a bounce on Friday morning and I got out. It's difficult to read but it says two contracts sold at $3.60 each at 9:49.a.m. Here is it's morning chart.
Would I make this kind of trade again? I am attracted to these "falling knife" chart formations. This one turned out OK for me. My point is, the next time you see one of these chart formations happening remember this blog and my comments about jumping in to quickly. Hopefully my comments will help in saving you some money.

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