By Tuesday's close after a nearly 5% rally in the indexes, we were staring at 15%+ profits in the trade.
I also added to my favorite big-data analytics company Alteryx AYX near $115.
But this morning, Wednesday March 11, found me selling both and then some. I also sold two more favorites Square SQ and The Trade Desk TTD, the "CME of advertising."
Why the sudden change of heart?
Because the bull market just got kicked in the teeth by confirmation of a worse-than-unexpected earnings recession. It's not just the economic contraction happening because of COVID-19.
It's also the potential oil bankruptcies that Pioneer Natural Resources PXD CEO Scott Sheffield talked about on Monday. Sheffield said Pioneer is secure, but other shale companies in places such as North Dakota, Oklahoma and Texas will face difficulties.“We are preparing for two years of low prices and will make the necessary adjustments to maintain our great balance sheet,” he said. "But there will be many bankruptcies in our industries and tens of thousands of layoffs over the next 12 months.”
PXD dropped a stunning 37% on Monday.
And that is one of three reasons why I am much more on the watch for a potential economic recession.
Here is another: if the US follows the path of a country like Italy, the COVID-19 spread gets worse medically and economically in the next few weeks....."
Here's what I wrote this morning as I sold half my stocks...
Kostin Pulls the Plug
And here is a summary of Kostin's call, adapted from TheFly.com...
Goldman Sachs believes the S&P 500 bull market will soon end after 11 years