For three days in a row we have opened and closed right about the same place. This kind of trading shows we are confused and don’t know which way to go!
August is usually tricky trading because of the low volume. It’s a time to practice holding onto your money or taking a vacation.
I’m sitting a little bit long with a few January call options in XLK XLE XLF and TBT. I’m holding most of my money, but thought some limited speculative plays using options wouldn’t break my bank. Here’s to a great 200-point turnaround Tuesday! 
The indexes ended right about where they stopped yesterday. Although the indexes were pretty tame, individual stocks seemed to move up nicely…MON DRYS CSCO had very nice moves. Even INTC ended in the green but well off last nights spike after earnings report.
This evening after China announced GDP up 10.3%, the US dollar sunk, and S&P futures popped. But why? Although impressive numbers, it was lower than expected and lower than the last report. I expect our futures will retreat after the initial pop.
I came across this quote today:
Raymond Floyd, a golfer…. When asked about the pressures of playing a high-stakes game against other very skilled players, Mr. Floyd said, “It’s all about focus. The losers think about the money. The winners think about hitting perfect shots.” … Sounds a lot like trading.
And remember…Options expiration is designed to take as much money from as many people as money managers can. So be careful the next 2 days.
Last week, the indexes fell on average 5%. Discretionary consumer stocks, industrials, and financials were hit hardest, which pretty much put the S&P’s 50-day moving average to cross below the 200-day moving average….or the “famous” Death-Cross. Whenever a shorter moving average crosses below a longer moving average, well, the bear is back.
Last night it looked like the bear had it well under control, but by this morning, the bulls were back. For the first couple of hours, it even looked like we would have a trend-day-up. Oil led the stock markets up. But, the bulls couldn’t get their act together and began to waiver at noon, and spent the rest of the day snorting: What the $%@&*!
The S&P ended closing right where it opened, creating another doji day or another indecisive day.
Remember that at the close on Wednesday some inverse, or bearish, ETFs will undergo a 5-to-1 reverse split: ERY, DRV, TZA, and TYP. That is, if you own 500 shares of TZA Wednesday night, you will own 100 shares of TZA at a higher price…specifically 5 times the closing price….on Thursday morning.
So watch it! Happy trading 
I didn’t like that move today…a 200 point range on the Dow…and closing near where it opened. Yes, another Doji day (open and close nearly identical) for the Dow. That’s four in a row. The Dow ran up and kissed its 50ma and then retracted for the rest of the day. But y’know, it wasn’t panicky, it wasn’t fast and it wasn’t with any large volume. So we closed right about where we closed on Friday. No big deal really! Tomorrow will say more….unless of course we close at the same place again.
The S&P candle is uglier than the Dow, a big bearish engulfing candlestick, but it still held 1110, its 200-day moving average. We haven’t given anything back since we bounced off 1050 two weeks ago.
Oil almost made it to $80. I unloaded some UCO, but as it turns out I should have unloaded it all. I’m still looking for a nudge of $83 or around the 200-day moving average, but I don’t know how fast that will happen. I guess we need to breakthrough the 50ma before hoping for that.
While I’m hoping for that (remember, hope rhymes with dope), here’s something to look over:
See you in the market! 
After a month of building a base and trying to get back above the 200ma, the S&P has spent 4 days above it but staying close by….maybe building the next base. The 3 doji days each closed just a little bit higher than the previous one. I wouldn’t mind a fast trip to the 50ma.
Ok, so I’m bullish, but I have this one seasonal problem….we have not had an up week after June options expiration since 1998! That may work against me. 
Today was just like yesterday! Yes, boring, but still showing confusion and consolidation, and again another doji. Candlesticks say we need a confirmation candle to tell us which way the market will go…but all we got was a “duh!” Which way do we go?
Oil got slapped around today, but considering that move from $69.50 to $78 in just 2 weeks, it too was due for some consolidation. Gold had a great day, breaking out through the May highs. The US dollar had a down day but may be looking for a move up. If it goes up the stock market goes crap.
I got a few coins out of TZA in the early morning, but then just stood still for the markets to do whatever they wanted to do. I’m still sitting long and cash….and the long part has a hairline trigger!
Quadruple-witching options expiration day on Friday! And no economic data reports nor any earnings reports may make for a dull opex. The action probably comes back next week.
I can’t ever remember the markets actually doing what I thought they would do! The S&P put in a doji day,as did the Dow, one red and one green. They both are still hanging above their respective 200 day moving averages. Considering the ugly news we had in the morning, bad housing, bad building permits and bad FDX guidance, you would think we would crash. But the markets persisted and came out a winner.
Oil had some bad news also with an inventory build, but oil shook it off and moved higher. My UCO position did well accordingly.
This rally has happened on decreasing volume, which by many accounts they say, is not a real rally. Technically all looks in place to keep on moving up…the break of the 200ma, bouncing off fibonacci retracement, MACDs moving up and all kinds of other indicators. But, and there’s always a but, the markets are very news oriented, and it doesn’t take much of a news blurb or even a rumor to send them tumbling down…again.
Was today enough rest? I don’t think so. I’m still looking for another breakeven to down day and again I’m not looking for much, just a little rest. So I’m mostly long with a bit of hedging via TZA. I’ll see how long I hold it.
See you in the trading arena!
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....
