The Russell was down but the Nasdaq was up. The Dow was up but the NYSE was down….and the S&P was just a little below breakeven for the day. Not sure what kept this market up today, but it sure as hell wasn’t anything logical.
Tomorrow is OpEx so trading may be a little crazy. I try not to do much trading because things can move quickly in either direction. My inclination though is to continue adding positions in anticipation of a correction next week. I’ve been nibbling on TZA, both the stock and its calls, and VIX calls. TZA is green and VIX is red. I’ll wait until Monday to decide on some stops.
There’s a couple stocks I looked at that show some incinations to move up: ZANE SHIP QYM HLIT. I’ll put thise on my action list for Friday, but it will take a lot to make me play.
Here’s some interesting reading:
What the VIX Really Tells Us
Is China actually bankrupt?
Break Your Trading Routine.
As Keynes famously once said “The market can stay irrational longer than you can stay solvent”. Be careful out there.
…So I didn’t….trading that is…I had plenty of green beer. Sure I watched and paper traded, but as expected none of them turned out any good. So I kept drinking. 
Is it the beer or does this market feel very toppy? I picked up some TZA today near the close. I’l find out in the next day or two if I was sober.
Ok, back to St. Paddy’s day.
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!
Another mixed day ending near breakeven. The Dow and S&P closed in the green, while Russell and Nasdaq were red. I guess that means the big-caps want to catch up with the small-caps. I’m not sure why an upgrade of retail giant WMT from Citigroup moved the markets, well at least the S&P and Dow into positive territory.
The big winner of my picks last night was definitely XNPT with a $1.07 range and closing +0.90 from the previous close. Yep, that’s a money-maker. The others didn’t do so much, GNVC +.13, YTEC up .02 and SHIP didn’t change at all. And I finally got stopped out of the remainder of my VIX calls….ouch, that one hurts.
So, let’s see what I found this evening: MIPI ISSI PCYC ISLN to name only a few. There are so many stocks that have pulled back to support areas. The tough part is paring down the list so that you don’t spend all your time trying to keep up with the watchlist.
Tomorrow we have the FOMC announcment on interest rates. It may be an instance of the “buy the rumor, sell the news” kind of thing.
Someone said Congress is scheduled to vote on the health-care bill either when they are drunk or hungover….so that means Wednesday or Thursday. Expect a lot of ugly green beer on the floor.
The markets keep moving up…almost straight up for the past 3 weeks! The Russell 2000 has been the leader, making new bull run highs.
The S&P 500 did reach a new high intraday, but failed to close at new highs. 
The Dow still has a way to go to meet or break its January’s high. On the other hand, the VIX has not made new lows while the Russell or S&P was making new highs. So there may be some caution required before assuming we keep on heading up. 
And let’s not forget that the volume has been low along with the volatility. Also, no matter if you use price or RSI or stochastics, whatever your measure is, these markets are way overbought!
A few stocks came up in my scans this evening that I’ve added to my watchlist: YTEC XNPT SHIP GNVC. I’ll watch’em but also watch out for the markets….the futures are pointing to some weakness as the ES is down over 5 points and the YM down 50. But a correction may be just what the doctor ordered to pick up some longs.
Remember it’s options expiration week in the last month of the 1st quarter. Also we have an FOMC meeting with its corresponding interest rate announcement….all this along with the usual economic news and earnings announcements. So be careful out there and happy trading!
While the first three days of the week were buy in the morning and sell in the afternoon, today we had selling in the morning and wild buying in the last hour. Between the first hour and last hour it was boring!
Both the Dow and S&P came within pennies of their recent January highs but did not break through.
And it was all done on lower volume.
So, in ES (the S&P futures contract) we have 10 up days in a row. This happened once before in January 1987…..And I can’t find any instances of 11 up days in a row. Either history will be made tomorrow or we have a tie for 10 up days in a row. 
Buying in the morning then selling in the afternoon and ending at breakeven….been going on all week. Maybe the jobless claims can shake it up on Thursday.
I just don’t understand these economic reports at times. Like today’s Inventories report: they revised December inventories from -0.8% to -1.0% and then report that January’s inventories are up +0.2%. What the $%@&*! It must be about government reporting that someone came up with, “Don’t be a dick for a tick!”
Today was newsworthy in the S&P futures as it has posted 9 consecutive higher closes. That’s a long stretch. Now I’m looking to see what is the longest stretch….but this evening’s futures tell me that we may not have to worry about it as they are already down 5 points.
The VIX has been up for 3 consecutive days after being down for 8 days. Thursday is shaping up to be exciting. Maybe it will be the day to cash my VIX calls and TZA positions.
Here’s an hourly chart of the SPY. Notice the unfilled gap from last Friday. Sure looks like a target to me….and Thursday may be the day we go for it!
The markets stumbled out of the block, but then it looked like the bulls were going to run away with it. The indexes did end in the green, but way off of the highs of the day….Which was good for my VIX calls. VIX has been green for 2 days in a row! whooohooo! So, was this a short 2-hour thing or do we see volatility pick up a bit into the end of the week?
It’s a light news week, but we do start getting some of the same old same old: Inventories, Initial Claims, Retail Sales and Michigan Sentiment….light, but enough to shake up markets and traders if they are out of the norm. Keep an eye on those inverse ETFs for the next day or two.
Four stocks today accounted for almost 20% of the entire morket’s volume, C, FRE, FNM and AIG. Total volume was up today, popping thru the 50ma….and a lot of that came in the last hour.
Remember that Equity Index futures like TF, ES, NQ, and YM roll this Thursday. By the end of the day, actualy after lunch, you will see volume start moving from the “H” contracts to the “M” contracts. So heads up. 
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 a great day for the bulls…I just don’t know why. Gee, “only” 36,000 people lost their jobs…isn’t that great news? No, but who cares…not traders.
My positions in MIPI and GY continued their upward moves and I took profits. But my hedge, VIX calls, took a beating, although my stops were not triggered….yet. Perhaps I have set them too low. 
Oh well. Here’s some interesting reading for you. Have a great weekend 
5 Dumbest Things on Wall Street
A Brief List of Things the Market No Longer Seems to Care About
Betting on the Blind Side
