Trading thoughts, ideas, tips, musings, and pontifications. . .not necessarily in that order.
It is so hard to decipher the news sometimes. We’ve all seen opposite reactions from what logically one thinks would happen. But then again, who ever said the markets were logical?
Economic Outlook: Encouraging signs in US.
Gloomy consumers hit eurozone sentiment.
Stocks Rise in Europe, Canada as Oil Gains; Spanish Bonds Drop.
China Real Estate Bubble Bursts in Bond Market.
Debt-induced stress continues for many Americans.
It’s tough to trade against the news.
World markets have brought up gold and oil, as well as equity futures. There’s still another day of trading before the US cash markets open, but, so far so good.
It looks like geo-political news will catch the spotlight before bailouts and euros do. Sure it’s all related, but you may want to keep an eye on commodities this week, especially gold and oil. A couple notes on what’s cooking out there on the war front: Deaths as Israeli forces storm Gaza aid ship, Koreas Ease Tensions With Small Gestures, China Balks at Criticism of North Korea, and Israel braces for Turkish, Hizballah, Hamas reprisals. Greece halts joint drill. We live in interesting times. 
Coming this week on Friday, we have the monthly US Jobs report, which should show the much awaited pop created by census worker hiring. This should be psychologically motivating if we see over 300K jobs created. On the other hand we may also see a pop in layoffs in a couple of months as the government will not need all these census workers anymore. It’s like getting drunk….we have fun and feel good for a little while, but we’ll feel the hurt later. 
If all the euro-country lending/bailout stuff has got you confused, then this video, Lending merry-go-round, should straighten it all out for you. 
Hope everyone had a great long weekend. Thanks to the family and friends of our military might…past, present and future….without whose dedication and sacrifices we could not do all the things we take for granted. Thank you!
Before I start drinking and eating today, I thought I’d look at the weekly market activity. While all the indexes had a miserable month, the week was a recovery week for all but the Dow. Here’s the Dow weekly chart. Still not bad. It had a poke-thru the 50ma but closed above it.
The S&P 500 had a green week and may have found some support at the 50ma. Notice both the Dow and S&P hit their 200 weekly moving average at the end of April before moving down the month of May to visit the 50ma. 
The Nasdaq is trying to hold above its 200ma and may just stumble along here, unless of course it would like to lead the way up.
The Russell 2000 closed below its 200ma, but so far it’s just a poke through if it can come right back up this week.
Both the Russell and Nasdaq may have tested their 50 week moving averages. Let’s hope it’s a successful test! Now back to the festivities. 
Was the “flash crash” on May 6th a unique event? Back to the Future: Lessons From the Forgotten ‘Flash Crash’ of 1962
The crash of 1962 is a reminder that markets always have been messy and that investors’ morale always has been fragile. What’s more, the problems the regulators sought to solve nearly a half-century ago are still with us today. They probably will be tomorrow, too.
What this means is that traders still have “fat fingers.” 
Who the hell announces a ratings downgrade on a Friday afternoon before a 3 day weekend as traders are trying to get to the Hamptons. Some foreign ratings agencies I guess. What the $%@&*!
It was just frosting on the worst May since 1962. There were no back-to-back up days for the S&P in May. Ugly. But did May flush out all the weak hands just so the big money boys can grab the fruits of a run up?
From the Stock Trader’s Almanac: “First trading day in June, Dow up 9 of last 11.” On the other hand, “Memorial Day week, Dow down 7 of last 13.” And even more gossip, “June ends Nasdaq’s Best Eight Months of the year.”
So forget about all that for a few days and have a wonderful weekend. Make sure you thank the family and friends of our fallen soldiers for the commitment they have given to our great country! Now, I’m popping the top off the first of many beers this weekend…..
This was a different kind of day….the markets continued in the direction they opened….and in a very strong fashion. Advance/Decline volumes were huge: NYSE A/D volume closed at +34:1. That’s a decisively positive day! It’s not often you see a panic buying spree. Now, do we get some follow-through on Friday?
According to the Stock Trader’s Almanac, Friday before Memorial Day tends to be lackluster with light trading. But, over 60% are bullish! Maybe we do get a follow-through.
My long positions were looking a lot better today than earlier this week. C UWM and ABK are all green. UCO which was way underwater is now getting close to the surface and may get green in a day or two. My DRYS calls still have a way to go, but I have until January for them to recover.
Going through my scans this evening, there are way more stocks than I can keep track of during the day. So I may fine tune and keep scanning to pick the cream of the crop.
Tomorrow, I’m hoping, I can actually get out of some of my positions. I’d like to lighten up for the weekend. Besides, I need to buy a lot of ribs and beer! We’ll see how that goes. Have a great Friday if you’re trading….and if you’re not, have a wonderful weekend.
The markets started out to be a great start to a great day. But, all of a sudden, the sh!t hit the fan! What was that all about? Wednesday turned out to be another Monday. Ay least this time I wasn’t in there hoping I was out.
A/D volumes were so strong most of the day…the NYSE A/D volume was averaging like +7:1. But after that closing hour we were at 1:1…that sucked. All the indexes were making new 52-week highs but still not very impressive with a close like we had. All the new highs were made earlier in the day.
52-week highs look like they’ve been basing for a couple of weeks now. I hope today wasn’t a false alarm!
The S&P futures have criss-crossed the cash SPX a couple times today. The June futures contract has only 3 more weeks of life and the September contract is slowly but surely picking up in volume. It would be interesting to see the futures get ahead of the cash…and pull it up. After hours now, futures are way below the cash close.
Big day tomorrow with GDP and Jobless Claims in the morning. But they may not matter. The European Central Banks need to do something…like maybe reducing interest rates, to save themselves…and they better do it soon.
Volume may start dwindling as we head into the holiday weekend. And while we’re at it, make sure you thank family and friends of those that have given their lives just so we can do what we do! Peace.
I stepped away from the market today. Just didn’t want to climb on to a bucking bronco with my confidence already bruised from yesterday. Besides, I had a meeting to attend and was away from the market for 3 hours.
This morning was a 2008 flashback morning with futures down big overnight and an even bigger gap down at the open. The Dow went down almost 300 points before deciding that was deep enough!
Besides currencies, we actually had some geo-political strife in Korea to mix things up. Spain contributed its banking issues and bonds were issued all over the world. Did you get shook out? Looked like a classic after all was said and done….run down, pop the stops and start back up…and it happened pretty fast once the markets opened. Consumer sentiment seemed to help get markets moving to the upside….the Dow closed above 10K and the S&P, Nasdaq 100 and TRAN the transportation index actually closed green…not much, but green. 
What an ugly opening. It was a flashback to 2008.
For the third time this month…
In the event that an extreme market volatility condition is declared with respect to trading on or through the facilities of the Exchange, a qualified Exchange officer shall be empowered to temporarily suspend at the opening of trading or reopening of trading following a market-wide trading halt: (i) the need for prior Floor Official or prior NYSE Floor operations approval to open or reopen a security at the Exchange (Rules 123D(1) and 79A.30); and/or (ii) applicable requirements to make pre-opening indications in a security (Rules 15 and 123D(1)).
I had a fun and profitable morning of trading in equities and futures…and I should have quit with money in my pocket. But no! Encouraged by my success earlier in the day, I continued to trade futures. Expecting a nice rally into the close, I played it that way. The last half hour of the day wiped out my profits for the day and cut into my account….dammit!
Okay, the lesson learned? Trade what the market is doing, not what you think it will do. I know this, but it has happened before. How did I get sucked into this…again? Not paying attention, not taking the stop, convinced that I am right and the market is wrong. I let my rules slide right by me…idiot! Oh well, I made a mistake, I admit it and tomorrow is another day to start all over again.
Speaking of which…futures are in the midst of a crashette this evening…already down over 1%….and looking for a bottom. The US dollar looks like the culprit, up strong, or maybe the euro, getting weaker…it’s all about currencies. But there may be other distractions…like a lot of countries needing to issue bonds this week, oil dwindling down and gold spiking up. Like I just learned today, trade what the market presents to me.
I better go over my rules again. Here’s an interesting dichotomy:
Goldman Sachs Says Sell-Off Consistent With Past Corrections, Sees S&P 500 at 1,300.
Why Stocks Are Going Lower Long Term.
| DJIA | 10447.93 | |||||||
| NASDAQ | 2233.75 | |||||||
| S&P 500 | 1104.51 | |||||||
| ^RUT | 643.36 | |||||||
| QID | 16.85 | |||||||
| QQQQ | 46.01 | |||||||
| QLD | 58.20 | |||||||
| TZA | 31.13 | |||||||
| SSO | 36.95 | |||||||
| SDS | 31.81 | |||||||
| BGZ | 13.94 | |||||||
| BGU | 47.66 | |||||||
Sometimes, entranced by the screens, watching equities, options and futures change colors, charts moving in a wave, and indicators pointing in every direction, I just have to scream....
