This happens. A stock drops for no reason and then a day or two later viewpoints come out to explain why this has happened. Caterpillar this morning is a case in point.
Here is what the D.J.I. is doing at 10:37 a.m.
Here is how the Caterpillar 285 Calls are doing which expire this Friday. This printout is at 10:32 a.m.
Note they ended up going lower in price after this and went down to $1.78. The best time to have gotten in if you wanted to play a rebound was at 10:46 a.m. which was 14 minutes after the above printout. Timing is everything. Now here is a mid afternoon printout of how Caterpillar is now trading. Note the stock is trying to go sideways.
Here now is what the D.J.I. is doing at 3:06 p.m. It's still not having a good day and there is a good chance it could drop even more before the closing today. When the market struggles like this all day odds are it's not going rebound and if it does it could get knocked down again on the following opening.
If you were a trader you could take a small profit on this trade at this time and just wait for something else to do. I will tell you later how this position closed the day. Guess what! Here is how the day ended.
Day traders can make interesting decisions. A Thursday morning update in the first 45 minutes of trading. Buying in at the 3:59 p.m. plunge was the way to go.
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