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! 
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.
Last week started pretty crappy with the Dow closing below 10000 on Monday. But it quickly recovered and ended up for the week, although very volatile and choppy. Earnings reports are bascially over, but the news coming out made for the chop chop….mainly PIIGS, unwinding stimulus injections and interest rates. By the looks of it, the recipe may continue for a while….especially now that Dubai is back in the news.
The futures took a little dip during the shortened day today, and will soon be re-opening Monday evening to start the week…again.
The 3-day weekend was nice. I worked mostly on learning new software…more on that later. But Sunday I spent with My Valentine 
mostly by saying goodbye to many Presidents….mainly my Washingtons, Lincolns, and a few Jacksons. But overall relaxing and very enjoyable….and now ready to get at this market again. So let’s get this party started. 
Despite a big, big selloff on Friday, the markets ended on a bullish note and in the green. Now that we have experienced the largest pullback since the beginning of the March 09 run up, maybe Friday’s key reversal will be the start of something fresh. Monday will tell.
Lots of employment news on Friday morning…..Yes NFP decreased by -20K. And even though November NFP changed from +4k to +64K, October went from -127K to -224K and December went from -85K to -150K! So even though we get a number the first Friday of every month to tell us, or warn us, what the employment picture looks like, it continues to change for months. They even added another 800K more people lost there jobs in 2009 than were originally reported! What’s the big whoopdee-doo about the numbers? Why do we go through this every month?
The VIX grabbed a 29-handle before it retreated to 26, basically unchanged for the day. So everyone was feeling cynical and full of fear in the morning, but all turned out okay. Boy, aren’t we traders weird?
Isn’t it time for the Treasury to start popping the U.S. dollar bubble yet?
Some interesting reading….
Bank failures to keep rising in 2010, despite GDP rebound
Obama’s $6.3 Trillion Scam Is America’s Shame
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
Did you see Congress raise its own limit on its own credit card? Yes, they raised the U.S. debt ceiling so as not to get a default notice. Sure wish I could do that! Hope everyone had a great holiday weekend. Here’s some reading for you to get ready for another holiday shortened week:
Is it all just a Ponzi Scheme
Why Interest Rates Will Almost Certainly Rise in 2010
Here’s a couple you need to read as a pair:
Banks Bundled Bad Debt, Bet Against It and Won
Goldman Sachs Responds to The New York Times on Synthetic Collateralized Debt Obligations
I’m going to get back into the groove by looking at charts, charts and more charts. Many charts looking real good, like the SPY QQQQ. Many showing a breakout formation….but also on lower volume. Let’s see what Santa left the markets tomorrow.
Lots of choppy action…lots of gaps…lots of sudden moves. Dips get bought and rallies get sold, and in the end, the market is little changed. Once again we managed to get nowhere fast. If you’re a day trader sitting at your computer all day, the trading may have seemed dramatic. If you’re a buy -n- hold type investor, well, recent moves have had the tightest range of almost any time slice you would care to look at.
Volume was way up on Friday, but that was from quadruple options expiration and S&P re-indexing/re-balancing on the last opex day of the year….and may have been the last trade for many traders now on their Christmas vacation. So watch volume really fall off this week and next. 
Markets will close early on Thursday and will be closed for Christmas on Friday.
As I write the futures are in a tight range again. But, later tonight the Bank of Japan will be releasing some information and our own U.S. Senate will be voting on their version of ObamaCare….both may move futures.
Some interesting reading for you:
That’s a lot of stock! talks about there being enough C stock outstanding that every person in the world can own 2.5 shares.
A Race to the Bottom
John Zogby On U.S. Business And The Economy
C’mon Santa Claus…it’s time to rally!
Another 3 banks bite the dust this weekend as the FDIC pushes bank failures to 133 for the year….not too bad considering the year that was. Fairfield Residential, one of the largest apartment owners and developers, filed for bankruptcy on Sunday. Should have some affect on SRS.
I got sucker-punched on Friday….bought into SIGA at a point I thought would be support. Minutes after purchasing, it took a dive, a big one. Sure it was a small starter position, but a one dollar dive even on a few hundred shares can sting, and definitely bruise the ego. 
And for the third day in a row, SEED had a nice morning pop to take advantage of, and then meander down to re-enter at the end of the day. I’ll keep playing it until it stops working.
China and Japan markets are already down this evening. ES futures taking a dive as I write and are in a 5-point range, at least so far.
Read this A Sideways Look At The Randomness of Markets to see if you can figure this all out!
Wasn’t that something? It was amazing watching the chart of ESZ9 at the moment the Non Farm Payroll report came out. It was like watching a rocket lift off. But, it soon ran out of fuel and came down just about as fast as it went up. We had intraday new highs, but did not close anywhere near them. ES had some big volume we haven’t seen for a while.
The DZZ and TBT positions we had on Thursday’s close worked out very, very well…..totally unexpected, much like the NFP report and unemployment rate.
ES seems to be finding support in the 1108 area, making it down to 1107 this evening. I’m long from 1107.5 to see if I can catch a wave. If you recall, Mondays have been the big up days for the last month, so we’ll have to see if that new tradition continues. My thought is that we will have some upside this week….maybe a Santa Claus rally? But always looking for Scrooge to show up. Nimble. nimble.
This weekend the FDIC hit close to home for me, closing AmTrust Bank, the 4th largest closure this year, but only one of 130 closings. I didn’t have any deposits there or a mortgage, but there was a big branch just about 2 miles down the road. Regulators shut AmTrust Bank in Ohio, 5 others; 130 failures this year
Here’s another story about a local boy, Neel Kashkari. You may remember him from the TARP formation days. Interesting reading:
The $700 billion man
Happy trading, and have a profitable week.
We have the Dubai crash and the Tiger Woods crash to deal with…..the Woods crash will be easier to deal with because he is man enough to just say, “It’s my fault.” Bankers and politicians on the other hand, have to make sure they can blame it on something or someone. I think both these crashes will be less newsworthy as we go forward.
The holiday week was just like the recent weeks….big pop on Monday and a slow drain for the rest of the week. Of course the end of this week was a bit more severe. The futures this evening are looking like a pop for this Monday also. We’ll see if the pattern continues.
The upcoming week is full of economic data….including the big ones Nonfarm Payroll and Unemployment reports on Friday. Some of the others: Chicago PMI, Construction Spending, Auto & Truck Sales, Initial & Continuing Claims and Factory Orders, among others, will be moving the markets.
Some interesting reading:
Asia trip, Dubai news, T-Day wish! This is a great read about what the Asians think about the U.S.
Climate change: this is the worst scientific scandal of our generation
U.A.E. Will Support Banks in Dubai Credit Crisis
Sunday evening’s future action is looking good for Monday…but it’s still early. Monday has been the best day of the week for average daily returns in the S&P 500 for the past two months. Tuesday was the worst day of the week for the month to date, while Friday was the worst day of the week for the two-month period. We have a shortened week coming up and most likely volume will be low.
Last week started out with a bang, but fizzled out by Friday, although not giving back everything. Volume was below average for the week, unusual in that options expiration week gets active, expecially on Friday.
This week, all the news will be stuffed into the first 3 days. Monday has Existing Home Sales and Inventory, Tuesday has 3rd quarter GDP and Wednesday has Initial Claims moved up from its usual Thursday report. So have a fun holiday week. 
It was a pretty good week, especially that big move Monday, while the S&P meandered around its high. It looks to attack it again this week. The only issue I have with these markets is that the volume has been decrasing for the past two weeks.
And speaking of good Mondays, I’m expecting some more merger mania Mondays to give us a boost. The futures are already looking for something good…with the ES up over 7 points this evening.
Some interesting reading this weekend:
Something Big Is About To Happen?
Which big country will default first?
The worst is yet to come
Monday will bring retail sales reports and business inventories and the PPI on Tuesday. Oh yes, it’s options expiration week also. Happy trading
