The day I have been positioning myself for, has happened…..and in a big way. I was done trading by 10:30AM EDT. Prior to the Employment Report I entered ERY, the 3x Energy Bear ETF, and was still holding on to TZA, QID and QQQQ puts from last Friday. I had sold off half of my position yesterday to try to minimize losses (see yesterday’s post). But today, I covered all those losses, paid the mortgage and have beer money for weeks to come. 
Now though, the markets are like watching paint dry. It is after lunch, major players have moved on to the Hamptons and the S&P pit is quiet, zzzzzzz. I’ve popped the top off my first Bud Light and will sit back and look at all the pretty colored lines and blinking watchlists. Have a Happy 4th of July weekend….and God Bless America!
No matter what side of the market you are on, there is no follow-thru in either direction…and there hasn’t been for a couple months. We are at the same place we were in early May. We’ve been stuck between 880 and 945….and this week it’s been 915 to 930. My, how exciting 
Economic reports today were worse than expected. You still have to wonder why we are up after reports that mortgages applications are down and a half million people lost their jobs? I think things started to weaken in the afternoon when traders noticed no one was selling cars and that several states were having budget problems.
I thought I was going to be happy when I heard that mortgage applications were down. And then I was almost ecstatic when I heard that ADP Employment report sucked…but no! Markets moved up, I couldn’t see why, but they did. I did shave shares off as the markets went up for a loss, taking almost half off. But I also scalped some long ETS like TNA and BGU, taking $50 here and a $100 there several times. It soothed the pain from my short positions, but I never recovered all.
I’m still in small short positions using TZA and QID. I’m looking for a spike after the Employment Report comes out at 8:30AM EDT to maybe come out breakeven for the week. After I unload my remaining shares, I’m looking to go out and buy enough beer to last the long holiday weekend 
Again, waking up this morning, I found my positions underwater. And for a few minutes the “good news” was that home prices only went down 18%….so much better than last months -18.7%….I feel richer already 
But then sanity came back to traders when we heard that mortgages were defaulting at a greater rate and that consumer confidence was down. The market went down, as you would expect with this kind of news…and thus, my short ETFs went up: QID TZA. Following along were some QQQQ puts and IWM puts. By mid-morning my biggest winner was the IWM puts so I sold those off and half of the TZA position. Lunch time brought the usual meandering up move in the markets, so I refilled my TZA position.
Near the close, the Plunge Protection Team was in full force, artificially taking the market up. Listen to what they were saying about the PPT on CNBC: Economic Analysis. And also read about all the “transparency” the government is removing from our markets at the Zero Hedge blog It’s hard to trade against the U.S. government.
So I remain in a short position because I think all the news can’t be good tomorrow morning: ADP Employment Report, ISM Manufacturing Index, Construction Spending, Pending Home Sales, and Motor Vehicle Sales. We will also hear from California if they will be paying their bills with IOU’s or Fed bailout money. The Feds can’t backstop everything coming down the pike. Almost looks like a horrible car crash in slow motion….or some sort of crash 
It’s
Adam Hewison at INO.com made a video on the changing relationship between AAPL and RIMM. He details a trading strategy called pair trading or trading pairs.
What trading pairs means is that you buy one market while going short the other market in the same sector. Now AAPL and RIMM are battling it out right now in the smart phone sector. It remains to be seen who is going to be triumphant in this battle but it would appear as though Apple may have the upper hand. Trading pairs is what many professionals do when they are unsure as to the direction of the general market but feel pretty comfortable in their analysis of the relationship between two stocks.
The video is free to watch and there is no need to register.
Perhaps to show support for Madoff, or maybe just remembering Charles Ponzi, traders paid tribute by bidding up stocks….for no reason whatsoever. The Russell showed a little bit of sense by staying in the red most of the day and ending there.
The futures in the morning reeked havoc on my short positions, but took off running at the open. I quickly started to cash out half my positions, fully intending to get out of the rest as the markets moved down. After taking my profits I left my office to check on the air conditioning people trying to repair the A/C. By the time I got back, my remaining positions were well underwater and stayed there most of the day…and worked their way back to a breakeven by the end of the day. I even picked up some IWM puts to take advantage of some good positioning for tomorrow.
Yes, I’m still looking at a down market. But, this low, low volume is making it hard to interpret what traders are looking at and what they are trading…and why. So I’ll trade what I see and take my lumps, or profits, as I see it. So far so good, although the intra-day noise makes for some scary moments. Be careful out there 
Reading many blogs this weekend, it is hard to try to make a determination on which way the market will/should go 
Some are bulls and some are bears, gee sounds like the markets, doesn’t it?
The markets on Friday closed mixed again….for 3 out of 5 days last week. VIX was back to a 25-handle, something we haven’t seen since September of last year. And the Nasdaq has looked pretty strong the entire week, except for Monday. So I was short into the weekend….QID TZA BGZ and QQQQ puts
Sounds kinda contrarian, but it seems everything is overbought, the economic news hasn’t been that great and we’re going into a holiday shortened trading week. I’m looking for down move early in the week and then up moves into the weekend, because traders will be happy for the holiday weekend. After that, well reality will set in when earnings season starts all over again…..seems like we do this every 3 months 
I thought the passing of Billy Mays might get all the TV and radio shows off the Jackson thing, but no such luck. I guess he doesn’t have a big enough fan base. Time for that Sham-Wow guy to step up and fill the void.
From my position yesterday of DDM, you could tell I was thinking the market was going up today. But, I wasn’t expecting the ugly morning market after that claims report. Boy was I sweating it….and it took most of the morning to get to breakeven. I started peeling off shares even before that, just happy that I was reducing my earlier drawdown. But I finally closed out the position in the green….not much in the green, but much better than where I stood in the pre-market 
So the day went the way I thought it would, but I really freaked out at the start when it didn’t. Early in my trading “career” I would have capitulated near the bottom, but that patience thing has been turning bad positions into good ones. The only thing that would have made today even better would have been showing more confidence in my position by adding to it when it was near, what I thought were the lows. Now that would have been kick-ass
My position this evening is just the opposite. I entered QID and some QQQQ puts near the close and will be looking for a retracement during the day. If it doesn’t happen on Friday, I may add some BGZ and/or TZA to the mix and wait for a down Monday and then a move up into the holiday weekend.
Futures have already started to the downside this evening, so all I need is some follow-thru in the morning. Happy trading
Usually the market goes up and down for a while after the announcement…..today just down. The markets, except the Dow, closed in the green, but still down. And since the markets do the opposite the next day, I’m thinking they will go up….at least for a little while.
The TNA trade from yesterday worked great. My trade today with DDM, so far, is not. I guess I’ll know on Thursday.
Here’s an interesting article: Why the Euro Shows the S&P will Hit 1000
Up and down, but basically unchanged for the day. I got out of the BGU position on the early pop and then played it a few more times during the day….quick trades, none lasting much more than 10 minutes, but 50 bucks here and 100 bucks there, ended up a good day. I also took 2 positions in ES, S&P emini futures late in the afternoon. They were real fast plays but ended up with 4 points, aka 200 bucks.
I ended the day getting into TNA thinking that small caps didn’t do so well today and that a bounce would help them out the most. Usually the morning of an FOMC announcement meanders to the upside, but we also have some housing news and durable goods news in the morning. So it is a risky play but played with recent profits, so I’m comfortable if it fails…a little pissed maybe, but comfortable 
The global economy is not doing so well. Did you guys hear that?
The World Bank now expects the global gross domestic product (GDP) to contract by a record-setting 2.9% in 2009, compared to its earlier forecast for a decline of 1.7%. “Unemployment continues to rise throughout the world, housing prices in many countries are still falling… bank balance sheets are fragile, and much more consolidation and recapitalization required,” said the World Bank in a statement. “As a result, the timing and strength of the eventual recovery in the global economy remain highly uncertain.”
Wow! Unbelievable! I would never have guessed that, at least not by the way the equities markets acted the last several months. And everyone must have thought the same thing, because the markets took a dive at the incredible, totally unexpected news!
And after that initial drop in the morning, it was another boring trading day, much like the last couple weeks. I wasn’t holding anything over the weekend, so I couldn’t take advantage of the gap down. I did though get into some DTO just before the open, which continued down all morning because oil continued down all morning. After making $2 a share, I was flat again.
Near the close I nibbled on some BGU, looking for the large caps to have a relief rally some time this week. Also, traders seem to be very patriotic, so after this pullback, I’m looking for a rally into the July 4th weekend.
Sometimes it is easy to see what and how you should be trading, and sometimes you’re not really sure what to do. The last couple of weeks fit the latter bill, so my positions have been smaller and fewer. Don’t try for those home runs in this environment. Stick to base hits and take profits often
There’s a lot of people out of work and now it seems there is a growing number of people out of unemployment benefits. Given that the proportion of recipients who used up their jobless benefits topped a whopping 49 percent, the continuing claims number going forward will be essentially meaningless.
Friday, with no major economic reports to point the markets in any direction, the equities market struggled to pick a direction on their own. So, they started up, then went down and ended mixed. For the week, the S&P 500 fell -2.64%, Dow -2.95%, Nasdaq -1.69%, and the Russell 2000 fell -2.68%. The question now….is this a pullback to be bought or a warning sign of a tough summer to come?
I’m in the near-term bear camp, so I was planning on entering some market-bearish positions like BGZ or DXD or TWM. And I did play BGZ, but it started making such a profit I had to get out for the cash. 
I was going to get back in by the end of the day, but I got distracted and wasn’t there for the close. I could have entered after-hours, but I said…”What the hell, I’ll wait til Monday.”
So I’ll wait for morning for these entries and also add DTO to the watchlist, because oil doesn’t seem to be going up after all the hubub in Iran and Nigeria. If bulls rush in I’ll just digress and buy, buy, buy
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Sometimes, entranced by the screens, watching equities and options change colors, charts moving in a wave, and indicators pointing in every direction, I just have to scream....