Monthly Archive for April, 2010

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Time for a bounce?

Published on April 18, 2010, 9:09 pm in Opinions. Closed Tags: , , .

Futures continue their downside move this evening. This is the first chance for the Asian markets to react to Friday’s GS spectacle. But the rest of the news isn’t that great….

The carnage of seizing banks continue….51 already this year. Regulators seize eight banks We’re on pace for twice as many closures as last year!

The SEC’s Fraud Case Against Goldman Seems VERY Weak

The SEC’s case against Goldman seems weak. The case against Tourre seems somewhat stronger, but it’s not no slam dunk.
Overall, based on a close reading of the evidence, the case against Goldman seems much less clear cut than the press and SEC are making it out to be.

Traders see room for a pause in stock market climb

Goldman Sachs May Face U.K., German Probes After Suit

I told you so :-)

Published on April 16, 2010, 8:47 pm in Trading. 1 Comment Tags: , , , , , , , .

We’ve been looking for an excuse to correct this market and today we found one. If the market indicators weren’t on sell signals already, maybe the market wouldn’t have reacted to GS so badly. It’s not just banks that went down today. Either way, I suspect no more campaign contributions for this administration from GS. I’m also gonna venture that GS bought its own April puts ahead of the news and will report a stellar quarter next week. GS volume was 7 times above its average trading.

Other good news today: Unemployment rises in 24 states in March according to the Labor Dept. All the big earnings report companies sucked, but not as bad as GS’s surprise: GOOG BAC GE ISRG were all down big.

For the week the Dow ends up .19%, the S&P down .18%, NYSE down .57%, the Russell up 1.7% and Nasdaq Composite up 1.1%. So the high beta stocks are still doing okay, but the blue chips suffered. I expect next week to be down for the small caps.

Should Small Investors Jump Into Stocks?

And oh yes, the SPY puts, VIX calls and TZA did their jobs today!

Giddy + Frothy = Stock Market

Published on April 15, 2010, 10:43 pm in Opinions and Trading. Closed Tags: , , , , , .

This bullishness (or is that bullshitness) is making me sick. C’mon people, we are not in that great of shape. Did you see initial jobless claims ticked up along with continuing claims? Of course now that unemployment has been extended another year, there should be a lot more liquidity now available for the market! :mrgreen:

Both ISRG and GOOG had earnings reports this afternoon and are getting snipped afterhours. GOOG was down over $30 from the day’s highs while ISRG was down $13. I’m expecting QQQQ puts and SPY puts should work out well tomorrow….along with the GOOG puts of course. Futures are already moving to the downside….we’ll just have to see how far. BAC and GE report in the morning, so maybe that will be the frosting on this cake. Housing Starts and Consumer Sentiment get reported tomorrow as well.

Remember, it’s options expiration Friday….do you know your options? :D

Party like it’s 1999!

Published on April 14, 2010, 9:19 pm in Opinions and Trading. Closed Tags: , .

The futures hit new contract highs and the indexes hit new highs and there was a large number of stocks hitting new 52-week highs. I’ve been here before…in 1999! CBOE Equity put/call ratio today hit .35 – you have to go back ten years to find a lower closing reading. The cumulative TICK on the Nasdaq hit an all time high, never ever seen before.

So what did I do? I’m giving this market enough rope to hang itself. Something is going to trigger a down move…maybe Greece, maybe interest rates, maybe a missed earnings report. Whatever it is, this cannot continue. I picked up more on the short side and cashed out half my long positions. I’m now cash/long/short at 50/10/40%.

Besides the great earnings reports we had today, there was news that hiring is picking up. INTC said they would add 2000 people, and JPM to hire 9000. So if some other companies can come up with another 9,989,000 jobs, we should be in good shape! ;)

And read up on some of the other encouraging news:

US home loan demand slumps to lowest in 3 months

Optimism at Small Businesses Falls

Lehman Brothers Was Insolvent Well Before Bankruptcy, but amazingly all fed officials admit that their biggest mistake in this whole crisis was NOT saving LEH…the one thing they did right in this mess, they now wish they hadn’t? What the $%@&*!

Crazy Train!

Published on April 13, 2010, 10:43 pm in Opinions and Trading. Closed Tags: , , , .

As Ozzy Osbourne sings, “Crazy, but that’s how it goes…. I’m living with something’ that just isn’t fair.” And boy was today a crazy train!

The top 5 active stocks represented 20% of the volume today. Four of those stocks are under 5 bucks, ABK C BPOP FNM. Only BAC was over five dollars. Not what you would call a healthy market. Pathetic volume to begin with and then 5 most active are government-welfare financial stocks! :cry:

One trade I made today was to cash out some UNG calls for 38%. A nice take on a two-week hold. I also sold my SPY puts on that morning run down. I felt particularly good about that after the reversal and continuing grind up in the markets….crazy.

In case you haven’t heard, Recession is not over yet, says US panel.

And I find this disturbing: For Consumers, Time to Shop Until the Mortgage Drops. You’ve got to wonder how we have record consumer spending and record housing defaults.

INTC blew away its earnings and went nuclear after hours….which isn’t unusual for them. Actually that’s very predictable. And more often than not, it gaps up the next day and then reverses. So we’ll see.

Okay, we’ve reached the hump on OpEx week. Remember, after Monday and Tuesday even the calendar says W T F . . .

The show has started

Published on April 12, 2010, 10:14 pm in Tools and Trading. Closed Tags: , , , .

Earnings season had its opening pitch today from AA…and boy did it suck. Not really that bad, but the hype and anticipation had traders looking for more….and they’ve just got to be disappointed in the morning. Tuesday will bring more reports to light including CSX and INTC among others.

Monday continues its pattern of being a green day… it’s been an up day 28 of last 32 Mondays!

The S&P 500 has risen on Monday 80 percent the time during the past six months, compared with 52 percent for Friday, Bespoke said. It averaged gains of 0.17 percent and 0.05 percent on Tuesday and Wednesday, respectively, and a loss of 0.04 percent on Thursday.

Read the whole story at Bloomberg.

And speaking of patterns, VIX now below the 2008 intraday low, which was the start of a 15% correction. The last time it closed this low was July 2007 which was the top before a 9% correction to the S&P. Just a little nudge for you to be careful out there. Here’s more info on the VIX from TraderFeed and the Daily Options Report.

I misspoke in my Saturday entry when I stated I was long/short at 35/65%. It is true but it looked like I was 100% invested. I should have pointed out I was 55% in cash. So a truer picture would have been a cash/long/short positions of 55/15/30%.

Either way I’ve been waiting for even a slight correction to cash the shorts, but now I’m thinking it may be a bit more than slight. Will AA earnings start the ball rolling down? Maybe INTC gives it another nudge down? I’m thinking even good reports, unless they’re blowout great, markets will sell the news. Wait and see.

Futures this evening are heading down, as are Asian markets. You can check the futures market here. So for now I’m content to have cash as my largest position. It would be good to have some resolution with a big volume move…in either direction. Volume continues to make new record lows. Sure would be nice to have more traders around. :D

P.S. I haven’t been updating the old blog over the weekend, mainly because this cold keeps me drowsy and lazy. So make sure this URL: http://wtftrading.com is your main link! And update your RSS feeds.

Blowing smoke?

Published on April 12, 2010, 2:49 pm in Trading. Closed Tags: .

The futures last night got me worried…but nothing happened when US markets opened. And with only an hour remaining in the day, there still is nothing happening. Indexes waivered but nothing strong in either direction. My shorts still okay as are my longs. I guess I’ll just keep blowing my nose. Be back later for a wrap.

This won’t help my cold…

Published on April 11, 2010, 8:47 pm in Opinions and Trading. Closed

Before I lay me down to sleep, I thought I’d take a look at the Asian markets and futures….I think I’ll take some extra drugs. Looks like my shorts will be stopped at the open. I was more weighted short than long: about 65% short and 35% long….so I’ve got a big wedgie coming. 8O

Futures gapped up about 0.5% and the Nikkei is up 1.1% as I write. Going to take my lumps and move on, but I’m still very skeptical about this market. I guess I’ll give it another 12 hours!

Short and sweet

Published on April 11, 2010, 12:23 pm in Trading. Closed

I am fighting a horrific cold…I can’t remember ever having something like this. I haven’t been able to do scans or update this blog, but I thought I’d get something out from my recliner….short and sweet.

We had a scary dump soon after the open on Friday, but then the bulls came back and continued the day in a slow upside grind. The Dow hit 11000 but closed just shy of it. With Greece, Germany and the IMF reporting all is fine with a bailout, do we run to new highs or will we just sell the news?

This week we are off to another “Beat the Earnings” race. I’m thinking that everyone has already placed their bets. In other words, the good earnings reports are already priced in, so even good reports will move the market to the downside. And in even more words, we have bought the rumor and will now sell the news. What do you think?

There are a lot of indicators telling us we are overbought and should sell-off, but the grandaddy of all indicators – price – says no way, I’m going up and that’s all there is….All bears stay home.

TGIF

Published on April 8, 2010, 11:19 pm in Opinions and Trading. Closed Tags: .

You have to admit last year was a crappy year for everyone, including retailers. So what’s the big whoop that the retailers are having such good year-over-year sales increases?

No scheduled news on Friday, so unless some geo-political infarction happens, or someone opens their mouth at an inopportune time, it “should” be a quiet day….but when was the last time the market did anything it “should?” :lol:

I’ve been moderating the Hit and Run Candlestick chat room the last couple of days so I haven’t been trading as much. I’ve got my usual positions but not very active. I like commenting and moderating the room because I find I learn more when I try to explain a position or interpret a chart. It makes you responsible and many times a light turns on and I “see the light.”

Although I took some profits in TZA this morning, I held on to some, thinking the day would continue to the downside…but no. So I’m underwater in the remaining position…for now. But remember it’s options expiration next week, so get ready for another wild ride.

P.S. This moving to a new website is a pain in the arse!