Monday Market Mania – Explosion Rocks New York City

I was going to talk about BitCoin (/XBT in the Futures now), but screw that.

Something just blew up at the subway near the Port Authority in Times Sqare, in NYC (7:45) - this is supposedly a picture of it happening but not verified (Twitter).  The bomb squad is there and reports are someone has been taken into custody who looked like they had an explosive vest on but it's very fresh – we'll find out more as we go.  My initial reaction is to short the S&P (/ES) at 2,652.5 as it's toppy anyway so I don't mind holding the short.  Trains have now been stopped and evacuated.

This is where Futures trading is a very useful tool in our toolbelt – we're able to quickly react to news and protect our portfolio or, in this case, since we already cashed out, make a little money off the tragedy (sorry but it's true, we're like vultures!).  I was just in Times Square yesterday with my kids and their friends and we took the subway home last night – right through the Times Square Station.  

It's amazing how slow the indexes are to react to news like this.  The markets are so used to shrugging off news that it fails to react when things like this happen.  Meanwhile, we're not too different from our Friday call to short the indexes.  As I said in our Friday Morning Report:

What could possibly go wrong?  As you know, we are in CASH!!! but I'll short the S&P Futures (/ES) today at 2,650 and the Dow at 24,300 (/YM) and the Nasdaq at 6,380 (/NQ) and the Russell at 1,530 (/TF) because I think we're going to sell-off a bit into the close.  We generally use a 2 out of 4 rule for shorting and short the laggards as 2 of the indexes cross under and then, if ANY of them cross back over, we get out.  So that limits our losses while giving us a nice possibility for gains.

We cashed out a few on Friday but kept the /ES short into the weekend and now we're at 24,371 on /YM, 2,655 on …
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