The blades have to be getting dull on this chopper. All the indexes ended in the red, off anywhere from a quarter percent to one and a half percent. Volume was extremely low and Advance/decline volumes were barely down two to one.
But which way do we go now? I’m positioned on the long side, so I want the market to go long. Unfortunately, the market never does what I want it to do. So, play the charts. But I can’t tell from the charts. The only play I have is to tighten stops and maybe hedge a bit with TZA BGZ or maybe just S&P futures.
I’ll be listening in on the DRYS conference call on Thursday morning. Earnings came out after the close today and looked good. Now we need some good news…like an IPO or a sale. 
Thursday brings us the largest single day of earnings reports of the season. And let’s not forget our weekly headache of Initial Unemployment Claims. Something’s got to move in a confident direction, either up or down….soon, I hope. Good luck tomorrow!
Lots of trading today….all in S&P (ES) and Russell (TF) emini futures. What a fantastic day! And my oil play via UCO, although still under water, can actually see the surface of the water. 
Okay, now what? We need to see some confirmation, but after a big move like today maybe a breather is in order. Some sideways meandering would not be a bad thing, nor would a small pullback.
My biggest problem, still, is DRYS, it’s been sinking for weeks, along with the BDI. The Baltic Dry Index has fallen for the 30th consecutive session. It is the longest decline in six years. During this swoon, the index has fallen 50% from May 26th.
Here’s some bullish thoughts:
Why Jeff Rubin still sees triple-digit oil prices by 2011
Altucher says S&P ready for 1500
The Dow has had only 5 up days since May 4th. This is 3rd-worst post-Memorial Day in S&P history. After last 7 times the S&P lost more than 1% on a post-Memorial Day, the S&P was up 6 of 7 times the next two days.
Looks like the double-dip recession is a self-fulfilling prophecy. We’ve had good and bad news reported for a couple of weeks, but it looks like traders only hear the bad. Lots of reports coming out the rest of the week, with the biggie on Friday. We’ll have to see the reaction.
DRYS looks like it may have run aground. The China PMI report hurt DRYS, but since I already played this a couple of weeks ago, and I still hold some long-term calls, I thought I’d pick up some more of the stock at these low prices. I’ll give it about a 15 cent leash which would stop it out a few pennies below the May lows. This article gives me some hope: DryShips – A Contrarian Stock That Could Offer Lucrative Returns As Global Economy Recovers
Here’s to a good trading day on Wednesday!
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.
Wow, gold is on a rocket….but eventually the rocket fuel runs out. Have you noticed all the gold commercials on TV? On the business channels like CNBC, FBN and Bloomberg, they are trying to sell us coins and bullion. On “regular” channels they want to buy all our chains, bracelets, rings and teeth. So…do you think we’re in the middle of a gold bubble?
Y’know, the SEC could announce a circuit breaker rule soon, but why not instead reinstate the uptick rule and stop the naked shorts from manipulating the markets? But nooo, that would upset all the big boys on the playground…
DRYS and CSCO reported after hours. Neither had blowout reports and both are trading below today’s close, but not in the red…yet. CSCO could weigh on the QQQQ and Nasdaq and all the techs. Tech and banks have been leading the past couple days, so I’d like to see that continue.
We’re going to have to test the 200ma or at least get close to a recent low before we go to much higher, so I’m keeping a close watch on the inverse ETFs like: TZA BGZ TYP FAZ SDS. Play these on a short term and/or to protect some of your long positions.
Futures mildly unexciting this evening, hanging around where they closed, plus or minus a point or two. Initial claims on Thursday better continue to the upside. The slightest news, good or bad, could move this market in either direction.
The merger of UAUA and CAL really set the market into a takeoff. There was more good news as Greece had its umpteenth bailout and there was more construction spending than anticipated. And let’s not forget…we had this great up move on low volume.
On the other hand, this makes the Dow up 10 of the last twelve first trading days in May. And I can’t remember how many up Mondays….like 30 out of the last 38, or something like that. The only thing we need now is a wild Turnaround Tuesday. 
My long positions doing well: DRYS and GTF….at breakeven: RNN…and not doing so well: ZANE. I also picked up some TZA at the close. Gee, a nice gap down may do me good.
Here’s a real good explanation of “It’s different this time…”
Thoughts On The Intermediate Trend by Matthew Claassen
While we desire never to be caught with those words leaving our lips, in truth every market cycle has something different than the previous. Equally important, each market cycle shares similarities to one or more past bull or bear markets.
And check out this Greece info: Why Greece Will Default.
I don’t think the Greeks can make it and for one good reason: the economy.
The market is levitating on a stage, but I can’t see the wires that are lifting it. And this is a dinner cabaret, so isn’t it fun to go to dinner when someone else is buying? Isn’t that what the FOMC is doing? Free money! Free drinks! Suck it up suckers!
I’ve come to the conclusion that the market is simply never ever going to go down for more than one day (or a few hours) in a row.
Okay, enough of that BS.
So I’m still wondering what is driving the indexes up. It doesn’t matter because all you can do is react to what the market is doing…..not what you want or wish it to do. 
I sold the rest of the DRYS calls for 40% and UNG calls for 81%. It would have been nice if I had loaded up, but it just doesn’t happen that way. I’m happy with those calls, but still dragging along some losers….TZA TWM just waiting for the highly anticipated correction….maybe.
Although it’s a light news week, tomorrow we have Mortgage Apps, Consumer Credit and another Treasury auction….oh yeah, and Bernanke has a speech. Let’s see if tomorrow does anything different.
It was such a low volume day I think anyone buying more than 1000 shares of a stock actually moved the market! The ES didn’t hit 1 million contracts until after the cash close. Sure Europe was closed as was about half of the Asian markets, but still, I usually look for 2 million by 3PM EST. Trading was slower than a Christmas eve!
I digress. The indexes closed in the green but it was a very boring day. I covered half of my UNG calls for 62% and half of my DRYS calls for 23%. My VIX calls are about worthless, but I still have 9 trading days to see if they perk up. TZA is looking pretty crappy but I added a few shares near the close. In keeping with my bearish bent on the markets I also added QQQ puts and TWM calls. I’ll see how far that gets me this week. Oh, and VG which I bought about a month ago, finally turned green.
It’s reading stuff like the following that gets me shaking my head and wondering “why?”
Huge 25% hike for small businesses kills New York jobs.
Office vacancy rate hits 16-year high
Tomorrow we get FOMC minutes and find out how the Treasury’s 3-year note auction behaves. Today’s auction was pretty good, with the 10-year interest rate hopping above 4% briefly, but did not cause any consternation in the equities. Let’s see if the world returns to trading on Tuesday.
If you’ve been making the rounds you have to be in the group of dazed and confused. I’d say about 75% of the blogs I read are saying:
We’re oversold, fatigued, low volume, too many call buyers, bullish/bearish/neutral, [add your own words]. We should have a correction here but we could still move up/sideways a bit….or a small correction before new highs…or new highs before a small correction.
The other 25% are busy with their new iPads.
My opinion is that the news has not been good. Sure, markets were happy with the jobless claims and non-farm payroll reports, but you need to review the last 18 months of reports. Let me put it this way: if you put a cup of sugar into the ocean, would it taste sweet? $%@&* No!
On the flip side, my short positions have been getting chopped into teeny tiny bits and fed to the bulls. It’s not only the shorts but the longs also. I try one direction and get stopped…try the other way and get stopped again. I’m about 80% in a cash position and have a small short position via TZA and small long positions in DRYS and UNG.
Monday brings us ISM Non-Manufacturing and US Pending Home Sales, Australia has an interest rate decision and the UK markets are closed….and the futures are all gung ho green with the ES up 6 points from Thursday’s close. Indexes may still show a holiday-like volume so I’ll keep my cash position for another day.
Hope everyone had a wonderful Easter!
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....
