Is It Over?

After suffering its largest point drop in history in Monday's session (4,451.28 points, or 12%), Tokyo's benchmark Nikkei 225 index closed up 10.23% in Tuesday's session. That session was boosted by news of an emergency joint Bank of Japan/Ministry of Finance meeting Tuesday afternoon. Does that mean the crisis is over?

Maybe not. Historically, some of the largest one-day percentage gains in stock indices occur during bear markets. For example, on October 13, 2008, during the Global Financial Crisis, the S&P 500 surged by 11.58% in a single day.

What To Do Now

Remember our gameplan:

Take advantage of down days to add long positions. Recall we did that yesterday, placing a bullish bet on Super Micro Computer Inc. ( SMCI ) .

Adding Short Positions

I have two short positions in mind now. One is an internet company which is scheduled to release earnings this week. I'm going to wait until I see those earnings before betting against that one. The second is a regional bank.

Betting Against A Weak Regional Bank

I found this regional bank using my Weak Regional Banks screen on Chartmill. The components of that screen:

Has options

GICS (Global Industry Classification Standard): Regional Banks

Technical Rating: