Pardon my pessimistic view; but I believe, today, we are only entering into the “eye of the storm” for the moment.
The woe of Greece is far from over; and we have yet to feel its domino effect that will impact Spain, Italy, and the rest of the financial systems around the globe. Again, the G man may under-estimate the ramification of Greece failure the way they under-estimated the failure of Lehman Brothers. Suffice it to say that defensive strategy must be planned ahead such that it can be executed in a moment notice. If you are overloaded in illiquid position; hedging plan will be your protective shield.
For trading strategy, I will place a buy stop above each SKF daily high. In other words, if SKF continues to have a lower low and lower high, I will move my buy stop to each day high. In any event when a surprise news hit the news feed and SKF shoots up; I will get fill and be long SKF even if I’m not looking (or too slow to react).
Also, I may buy some JPM put option giving their current portfolio predicament .
But then again, I may be overly-pessimistic. Nevertheless, being prepared for the worst case scenario can never be overstated under current financial climax.
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