Brave enough to make the hardest trade?

Ms. Calhoun, I can’t let you make such a sacrifice from a loyal southern girl. You must think of your country.”

“I am thinking of it. I know you’re an enemy and a spy. But you’re a man and I just can’t send you to your death.”

“Well, Ms. Calhoun, what would happen if everybody refused to kill an enemy?”

“Oh, I don’t know, I suspect there wouldn’t be any war at all.”

“Exactly…er, uh, I mean…”  —  Only The Brave (1930)

A reprieve from the selling and the bulls can finally look around to see who’s still standing. Yesterday that selling got ugly and there was a least some minor panicking from the bulls. That’s actually a healthy thing for the markets — remember that we want to buy when bulls are panicking and sell when bulls are celebrating. I know it’s hard to buy on down days like we did yesterday, but do you remember me pleading with you to “make the hardest trade” back when the Nasdaq was hitting 12-year highs and selling a stock seemed like the stupidest idea you’d ever heard? Buying weakness now becomes the flipside of that concept.

The hardest trade to make is usually the right one.

Earnings are hitting and they’re not bad so far. Today’s reports aren’t very exciting, but tomorrow brings Google. I’d rather be long than short Google for both the near-term and the long-term heading into tomorrow’s call…but I’m not at this point I’m not making any new trades in Google before the report. I will of course let you know if I do make a pre-earnings gamble on GOOG.