Trading thoughts, ideas, tips, musings, and pontifications. . .not necessarily in that order.
We definitely had an up day on Monday, but Tuesday was questionable…a little up a little down, up, down, up. Markets actually did fairly well considering AMR bankruptcy, financials falling off, and lousy guidance from TIF….all on mediocre volume. Will a Santa Claus rally pull us into the next year? Realize that there are only 22 more trading days this year! How was your trading year?
We recovered everything we lost on Wednesday, plus a little bit more. During the day we even went higher than Tuesday’s high and close. There’s only one thing missing…a follow-through day! We haven’t strung together 2 up days in a row since early July.
It looked scary in the premarket as again trouble in Europe rattled traders. But rumors and facts started growing throughout the day that got traders juiced…although it was the lowest volume day of the week. But it also was the 4th day of 500+ range in the Dow…WTF?
The banks, after getting bitch-slapped yesterday, were the frontrunners to the upside today. Gold took a big dive as did U.S. Treasuries…and thus, interest rates via TBT went up.
Let’s see if we can string 2 in a row!
“The stock market had its biggest one-day drop since 2008. Remember how the experts said we had to raise the debt ceiling or the market would crash? Well, they were half right.” — Jimmy Kimmel
As has happened the last three times the markets have had a green day, the following day was a big downer…no follow through. Volume was a “meager” 4.8 million, a let down after 3 days of over 6 million contracts traded. TRIN though was at an extreme 5.13 … looking for a bounce on Thursday or we’re in real trouble.
Because of SocGen’s problems and the Eurozone going down the tubes, the entire financial sector was crap. Stocks, and associated call options, such as C BAC MS GS, all withered in the bear stampede.
VIX is still elevated and I’m sitting on my hands just watching 987 tick charts and playing in my demo accounts. Sure, the pressure is off and I do great, but playing the charts and watching what happens is good practice….and you don’t lose money!
“By the way, the ratings agency is Standard & Poor’s. Who’s going to listen to a company whose name translates to Average & Below Average?” — Jon Stewart
I thought the bounce would start sometime by the close, but you can’t always get what you want! And the selling in the ES futures continued into the evening. ES has sunk below 1100 last time I looked.
I did nibble on some TBT calls at a time I thought they may have bottomed, but, no such luck. I’m still sitting in them, underwater. So you can say I had a bad day.
It was an incredible day….The VIX advanced 50%, and although I was looking to short the VIX, I sat on my hands. SPY down 7.5%, yes in one day. The Russell was down almost 9% and the “winner” today was the Dow, down “only” 5.5%.
Some sector ETFs really got bruised: FAS the 3X financial bull ETF was down 30%, so the financial XLF was down over 10%. But Bank of America, BAC was down 22%…ouch! Oil and technology weren’t pretty at all.
So is it time for Turnaround Tuesday? China has some announcements overnight and those European PIIGS are still a pain in the ass. And let’s not forget, it’s time for FOMC meeting and announcement. Gee, what are the chances of a rate hike on Tuesday? 
We gave back much more today than we took yesterday. And boy was it volatile. But what can you expect from OpEx week and a market that reacts to any kind of news out there?
We also had the biggest volume day in 3 months! SPY volume was double its average and ES traded over three and a half million contracts. Advance/Decline volume was -12:1 to the downside. Banks/financials hurt bad and interest rates took a pounding also…just look at XLF and TBT.
And let’s not forget all that Greece and Euro news coming out every 5 minutes and changing every 10 minutes. Escalating protests, mix in some opex, jobless claims and housing starts, we should have a real party on Thursday! Be careful out there. Remember, sitting on your hands is a position 
Four days in a row and 5 weeks in a row, the markets have gone down. Are we correcting or is the bear back…or is that continuing? Indexes closed near their lows, so more downside may be coming. Turnaround Tuesday anyone?
“John Paulson, in a letter to clients, is calling for a SPY rally from here, possibly 40% !” Yeah, but what do hedgies know! 
On the other hand, Paulson’s Flagship Fund Down 4% in May.
Financials sucked royally, so nothing else was going to play nice today. C was a leader down. This may have something to do with it: Citi’s Reverse Split One Month Later. This also helped them all go down: From Dodd-Frank to Dud: How Financial Reform May Be Going Wrong.
We can only play this day by day, but 1250 is in the sights. Bounce or straight down, be careful out there!
I’m real tired of hearing about all of Greece’s debt problems…fixed, not fixed, restructured…rumors, news and reactions. Today was like a tennis game…back and forth…up and down. All the indexes hung around breakeven…red, green, up and down. Does the U.S. stock market really depend on the Greece economy? What ever happened to Portugal? PIGS.
My remaining TBT positions, Jan 33 calls, were very happy today, after several different positions got stopped out yesterday. Financials also were up today, although, like the indexes went up and down all day long.
Non-farm Payroll report on Friday will confirm or deny ADP’s Wednesday report….which started the ball rolling down. Either way, expect a knee-jerk in both directions before deciding on which way the markets want to end the week.
After having one of the best days this year yesterday, I had the worst today! Amazing! I took profits on many positions yesterday. Sure I was expecting a pullback today, but not a crash! Just like tomorrow I expect a bounce, but not a 30 point bounce in the S&P….but you never know.
I can’t remember ever seeing the TRIN close this high…4.22. A close above 2 results in a bounce the next day 9 times out of ten. If no bounce, the market is in trouble.
Boy, the financials really got a bitch-slap today. Looks at those candles on XLF FAS UYG and IAI….ugly! And speaking of ugly, look at TBT. I got stopped out of many of my positions but will live to fight another day.
A lot more jobs data coming the next 2 days. Will it be a rollercoaster or just straight down?
Over the last 10 days, 4 have been up and 6 down and the net change has been small, about 33 points in the S&P, or about 2%. We closed below a so-called support area of 1340 and another 2% will get us close to 1300. Futures are moving to the downside Sunday evening, along with early Asian markets.
Sure it’s long way to Monday morning, but the biggest moves in futures have been during the overnight lately, so I keep tabs on that, but it doesn’t always predict what will happen in the morning. I do like to trade the Globex because it’s slower than the US cash hours and I can practice futures trading with less emotion!
My TBT and XLF positions may be stopping out soon if interest rates and the banks don’t start moving up soon. Options expiration week should stir things up pretty good. We also have a lot of housing data this week along with FOMC meeting minutes. Volatility is always good for traders and am looking forward to it. Happy trading!
“I hear that you dropped some money on Wall Street. Were you a bull or a bear?”
“Neither, just a plain simple ass.”
Ok, we’ve known about our debt problems for a long time. Today sure seemed like an overreaction and this Debt Market Reaction Raises Some Questions??
The panic sure brought up the volume, especially for a Monday and a holiday week! I picked up some USO puts and F calls to hold for a couple days. My bank/financial plays may be helped out by a great GS report this morning.
“Obama called on Americans to have more grandchildren. Probably so there’s more of them to pay off our debt.” — Jay Leno
| INDU | 0.00 | |||||||
| NASDAQ | 2905.66 | |||||||
| S&P 500 | 1344.90 | |||||||
| ^RUT | 831.11 | |||||||
| QID | 36.382 | |||||||
| QQQ | 62.05 | |||||||
| QLD | 100.36 | |||||||
| TZA | 18.3401 | |||||||
| SSO | 53.15 | |||||||
| SDS | 16.758 | |||||||
| BGZ | 23.5037 | |||||||
| BGU | 75.50 | |||||||
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