Yep, that’s what the market was waiting for….the FOMC announcement did not change its language nor the rates. The markets were like taking a ride on the Vegamatic…chop, chop, chop. Even when the markets decided to move up at the end of the day, it was still a chopper. But how long can this last….”Fed pledges to hold rates at record lows for extended period.” Just how long is an extended period? It would be good to know because interest rates will be low for an extended period….excessive unemployment will be around for an extended period…..the housing recovery will take an extended period….I’m gonna take a nap for an extended period.
If you played any of last night’s picks, PCYC was definitely the big winner. If you did play MIPI I hope you got out before the earnings report…it’s trading down 23% afterhours. I also traded SNIC, which was not on my list posted last night, but did have a nice pullback and reversal in the morning.
We’ve got some big time economic reports coming up the remainder of this week: PPI CPI and Leading Indicators. They’ll show us some inflation maybe which should jerk the markets around.
I started on the green beer already so I haven’t done any scans. Oh well, I may just not do any trading. Happy St. Patrick’s Day!
Yes it was a year ago that the S&P 500 hit bottom at 666. Boy what a difference a year makes. Almost a double, but not quite. Just think, a year after the S&P hit 666 on the low side, the Russell 2000 hits 666 on the high side. Ooooh scary…all these signs of satan 
Another difference is that the volume now is way lower than it was a year ago. The volume trend has been going down since mid-December! 
And again, we get no follow-through day on the day after a strong up or down.
Okay, so low volume, undecided indexes, is this a bull market? Seems like everyone wants it to be, but no one wants to commit. On the other hand, the VIX closes up for only the second time in 20 days. What the $%@&*! How low will it go?
So let’s read more about trends:
Is the Trend Really Your Friend?
Does Trend Following Work on Stocks?
At times like this, remember that cash is a position.
Asian markets open strong this evening, with the Nikkei opening up almost 2% and the Hang Seng up 1.5%. And this picture shows how bears feel….that includes my VIX calls.
Plus, I did a bit more web cruising….. trying to read and learn. And boy o’ boy, everyone is really bullish! I am also, but sometimes you need to at least rest a bit to catch your breath after a strong run….and last week was strong. Coming back a little will not be a bad thing. When everyone is bullish, the bears may speak up….loudly….at least that’s what I hope. 
And remember, hope rhymes with dope. Whatever.
Some interesting reading:
Spending more, saving less. Uh-oh.
Danger, Danger Will Robinson
Will the bears get gored? Charts of the indexes as well as individual stocks are looking, no screaming, bullish. The Russell 2000 broke out on Thursday and confirmed on Friday in a big way.
It’s a similar pattern in mid- and small-cap stocks. The Q’s and the Nasdaq have come right up to their January highs and are looking to breakout soon, if not on Monday.
On the other hand, the Dow and the S&P 500 still have some catching up to do.
Looking at both the charts, I expect the exhuberance to calm down a bit, maybe moving down to sideways just to catch its breath. I’m gonna look for some stocks to get into, but I think I may concentrate on some inverse ETFs like TZA and BGZ for tomorrow.
I was reviewing some of my recent blog entries and I notice the recuring theme of low volume. While skimming Barron’s Online this weekend I found this: The Low-Volume Stock Rally….a short and sweet analysis of low volume.
If you’re into lots of numbers, here’s a summary of the BLS Non-farm Payroll Report: The Employment Situation — February 2010
By the way, the charts came from FreeStockCharts.com, a pretty good free service, but it’s even better if you already subscribe to Worden’s TC2000.
It was an awesome hockey game today, although I was rooting for the other team 
but overall it was a good 2 weeks. Both US curling teams sucked, but the US walked away with the most medals ever in a Winter Olympics. I think the Canadians were gracious hosts. Thanks.
Besides watching the Olympics all weekend….with my computer nearby, I ran across some interesting reading:
California is a greater risk than Greece, warns JP Morgan chief
Short Selling Restrictions “A Great Indicator of Imminent Market Crashes”
Millions of Unemployed Face Years Without Jobs
Banks Out of the Woods? Maybe Not
And What the $%@&* is this? Okay, so she used to be CNBC’s eye-candy, that moniker being taken over by youngsters, but is she now an investor analyst? Well, at least it’s free….Maria Bartiromo’s Investor Brief
I was worried Thursday night when the Fed raised the discount rate because the futures dived, but Asia and Europe took the brunt of the blow. By the time it came around to the US again, there were some good CPI numbers. So, not even a rate hike could dampen the bull spirit. The Russell and the Nasdaq have been up 8 days in a row. The Dow and the S&P have been up 4 days in a row and could have matched 8 days in a row except for a couple of dojis. And one more thing, every day of this options expiration week was an up day….can’t remember that happening in a long, long time. 
And all this happened while Tiger had a scripted speech on all the TV channels. Did you notice how volume dropped at 11AM Friday? Boy, I was hoping for a PowerPoint presentation with a rating of all those women….or at least some action shots. He seems to have gained weight, but he’s probably not gettingas much ” excersize” as he had been before Thanksgiving. 
Time to do some Sunday scans and get some studying in for next week.
The Fed announces a Discount Rate hike after the market closes, the day before options expiration? What the fuck! Was it their intention to screw the traders?
Futures are down big this evening, but some things to keep in mind….China markets are still closed, big multinationls are gonna hurt because of the stronger dollar, volume will be big on Friday, and we’ll wait until next week before we know what the real reaction is to all this.
And another thing….Why do we need a commission for fiscal responsibility? Sure it creates a new bureaucracy, which means more jobs with huge pensions to goernnt employees, but isn’t that responsibility supposed to go to the congressmen, senators and president that we elected? Isn’t that what Congress is supposed to do? Be fiscally responsible? What the $%@&*!
I’m just totally pissed at my government right now. So read all about it here:
‘Washington has never been this dysfunctional’
Suggestion To President: NO Politicians On His New Fiscal Commission
What is the goal of the President’s Fiscal Commission?
The improving jobless claims report did not draw any enthusiasm from any traders. In fact, at the time of the report there were questions on what was happening with Greece and markets moved downward. But, the indexes overcame that early weakness, trading higher and closing in the green. Speaking of that Greece thingy….option symbol change. Makes it tough to do any research on options. If you are using TS and do trade options, make sure you update to version 8.7.
Here’s a note from the Stock Trader’s Almanac: Day before President’s Day weekend S&P down 15 of last 18 years. That makes a case for the bears, but, I’m rooting for the bulls at least through lunch time. Maybe we can change it to 15 of last 19 after tomorrow.
For tomorrow I will probably lighten up for the long holiday weekend, especially positions that are already green. But I will look at a few stocks in the morning….maybe PEIX LAB CRXX FSII.
For me it was a good day overall, even though it was questionable at the open. TLB continues to act well, as did PFSW. I wish I had held on to those TBT calls, but you know what they say: If a trader uses words like Hoping or Wishing or Praying talking about a stock, it means to exit the position immediately! Which also brings to mind…Hope rhymes with dope. And my personal favorite…Don’t be a dick for a tick!
See you tomorrow.
As the song goes, Greece was the word today, and most of those words were rumors, bailout yes, bailout no, back and forth. And they continue this evening and I’m sure into tomorrow. Tough to trade a news/rumor filled market….looking a lot like the Dubai scuttlebutt a few months ago. You would think we would learn.
But, it’s been a pretty impressive move off the lows of Friday….albeit choppy, choppy!
The US dollar is running up this evening, bringing futures down. The big story will be later in the morning, about 3 or 4AM when Europe begins trading. Hopefully Germany will put the rumors to rest on helping Greece.
Not much of economic data and Ben Bernanke’s speech has been postponed. I guess we won’t be seeing or hearing much out of Washington until the snow clears.
A couple of stock charts I liked today: GAP RJET HAFC. I also picked up some commodity plays via DBA and DYY…more swing than day trade…but you never know.
This was interesting: Warren Buffett Interviews Hank Paulson
And on a semi-related note: Will Berkshire Pop Friday Upon Joining S&P 500?
The S&P 500 sold off 2.2% on Friday — 5.1% over the last three days. We’ve reached the December lows and now targetting the late October/early November lows. And the VIX popped up 55% in the same time frame. I’m looking to see if the Nasdaq and Russell may show more resilience. Whatever happens, we have wiped out this year’s gains and we start over….the indexes that is. My P&L this year has started out well and I hope will continue to do so.
Now don’t get into a panic…yet. If you remember, the S&P lost 300 points at the beginning of 2009 from high to low before recovering and finishing strong…first quarter weakness seems to be a trend.
Not trying to predict market, but I expect it go lower, but it may have to make a little bounce just to suck in some more bulls. Pressure will probably continue on financials…so watch GS COF HBAN JPM. I’m going to keep special attention to A/D lines and the VIX on Monday.
Lotsa earnings this coming week….highlighted by AAPL on Monday after the close. But then AAPL will again be in the news on Wednesday when they announce, supposedly, their new tablet PC.
Be careful out there…and Happy Trading 
Kill Wall Street = Kill America…..
Obama is Killing America by Killing Wall Street …and make sure you read all the comments.
Why It’s Good News When Obama Sinks the Market
What’s the state of the economy? Keep a watch on the economic recovery….
Economic Recovery Dashboard
Watch how the recession progressed throughout the country like a virus, 2007 – 2009.
The Geography of a Recession
And finally, you probably never thought of this, but did you know that the space station had no internet access?
Astronauts (Finally) Get Internet Access
I spent the afternoon reading Pit Bull: Lessons from Wall Street’s Champion Day Trader by Martin Schwartz. It is a very entertaining book and an easy read. It’s a modern-day Reminiscences of a Stock Operator, which every trader has in their library or at least must read.
The book tells the story of a trader, Marty Schwartz, how he got started and evolved into a master trader. The good, the bad and the ugly parts are all in there. It is engaging and I had to finish it once I started.
What made it even more interesting is that it is the first book I download to and read on the Kindle. I bought the Kindle for my wife on her last birthday and she hasn’t put it down, but she reads mostly fiction. Many of the books I read are not available on the Kindle, but this was. So I thought I would try it….and it was an enjoyable experience.
So, I recommend Pit Bull, as well as the Kindle.
The markets gave back about half of what it earned this year, all in one day…and on the highest volume of the year. Is the market telling us something? Well, I’ve been thinking its been telling us to cash out your winners and take a short or two for a while now.
It also looks like it doesn’t matter what kind of earnings reports come out, good or bad, traders sell off…just look at AA and INTC…both good reports but they both went down, along with JPM which was a mixed report.
And here are some thoughts I had and articles I’ve read over the long weekend:
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Obama taxes banks to recover money for taxpayers. The banks then pass along the fee to their clientele, which happen to be the same said taxpayers. So, what has this accomplished? Well, the government can say it didn’t raise middle-class taxes. But that same middle-class has to spend more so they can bank. Sneaky!
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If this health reform bill so good, why are the president, congress and judges exempt from this law?
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Fight organized crime….do not re-elect your representative, senator or president! Promote term limits. 2 terms: one in office, one in federal prison.
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Consumers are squeezed as inflation outpaces wages
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What happens when the bailout money is spent and/or interest rates head back up? There are a lot of variables: the U.S. dollar, interest rates, commodity prices, the unemployment rate, commercial real estate, housing and foreclosures.
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Which way does the market go on Wednesday if Scott Brown wins the election in Massachusettes? What Are Democrats Planning for Health Care Reform if They Lose the Massachusetts Senate Race?
