All the indexes moved above their 20 day moving average and closed near their highs. now all we need is a follow-through day, not huge triple digit move although that would be nice, but a nice 30 to 50 point move on the Dow would be good!
The Stock Trader’s Almanac says February options expiration day, which is Friday, says the Dow has been down seven of the last 10 years. so if we have a follow-through day, seasonality says that the end of the week may move down.
If you’re a bull then congratulations on today…. And if you’re a bear, well you probably had your skin handed to you! For me, I booked profits from DBA TLB PSID. I also took partial profits on SEED when it got jiggy late this afternoon. I’m looking to get at leaast another $.60 to a dollar from SEED.
Some nice-looking charts I found in my scans this evening include: CNLG LEE DEAR UCBI ZAGG. Some of these have low-volume so do your own due diligence and check them out before entry…. But the charts look really nice.
And if you don’t feel like doing scans or looking at charts or any of that due diligence stuff, here’s some eye-opening reading for you:
U.S. Housing Aid Winds Down, and Cities Worry
How a New Jobless Era Will Transform America
See you on the playing field tomorrow 
China raises reserve requirements and then goes on vacation for a week! Happy Chinese New Year! But that news really sunk the markets this morning. By lunch they were acting like yesterday but with a bit less vigor….closing near the highs, although mixed. The RUT and Nasdaq closed green while the S&P and Dow remained in the red. And after the cash close the futures took off for the close 15 minutes later…all green…boding well for Tuesday. Of course a lot can happen on Monday while we celebrate President’s Day.
Investors Intelligence says only 34.1% of money managers are bullish. That is lowest since last March, just off the market lows….and we all know what happened after that. 
This weekend I’m studying software programs: StockFinder, Camtasia and Microsoft Scripting. I’m looking to automated some of my tasks so I’m always looking at learning some program skills. With Camtasia I’m looking to show off some of what I learn. I’m sure it will take more than a long weekend, but it’s a start.
If your not doing much this weekend you can watch Chinese New Year celebrations on the web. If you get bored, go to Rio Carnival in Brazil. 
Have a relaxing long weekend…the markets will be here Tuesday. Of course if you trade futures I may see you Sunday night.
Unemployment claims were larger than expected, which started the down move this morning, but it was the ISM numbers that started the big slide. And on Friday it will be the Non-farm Payroll report that will set the day…well, the morning at least.
Reading thru blogs and reports, it seems that everyone is a bear now. I’m sure today’s action has made them so. This morning we still had a whole herd of bulls and now, a den of bears. With so many talking bear talk, I’m starting to lean bullish.
Y’know, even if we do go down some more, the consensus says we take the indexes down to the 50 day moving average. Well the Dow’s 50ma is only down another 60 points and the S&P500’s 50ma is only down another 9 points. So with the 50ma a major average and if we bounce from there, and it’s a big if….well, tomorrow may not be such a bad day. And if the NFP report comes out better than expected, wow, we may just have as big an up day as we had down today 
Now here’s my conspiracy theory: some clandestine government office calls Goldman Sachs today and says the NFP number is going to be 250,000. The whisper number has been less than 200K all week. So GS puts out its “prediction” this afternoon and now everyone is expecting 250K. Now, if we get anything better than that, the markets, well, are okay. But if we hit the 200K number or better, the markets zoom up. So what do you think? Plausible? Probable? We’ll find out soon, at 8:30AM Friday morning.
So how am I playing this scenario? I have SPY calls and HOG puts….and play the S&P e-mini (ESZ9) in between. I’ll let you know this weekend how my conspiracy theory worked out for me. 
You would think with the Initial Jobless Claims going up, earnings reports getting stinkier and an unsettling week of treasury auctions, the markets would be a little bit more cautionary. But no! Good news is bad and bad news is good. Who would think the markets are so illogical? 
For the last couple days, or weeks, the markets meandered down in the morning and then came up in the last 15 minutes of the day. Well, we had the complete opposite today. We jumped up at the open and had a very exciting hour. After that, the markets stood still for the day, and then started to dive at the end of the day. It looks like the market’s only
Looking at the Dow and S&P charts, they both gave back half of their day’s run up. The Nasdaq looks like a shooting star doji, which usually isn’t very good, but needs a confirmation….and the QQQQs looked pretty much the same. But the completion of this week’s mayhem is seemingly all going to pivot around Friday morning’s GDP report. If it gets anywhere close to +0% we could have a bang up day. Anywhere close to last quarters numbers, -5.5%, we could go diving for a real correction. The number comes out an hour before the markets open. Be ready….and careful.
One more thing, speaking of illogical….It was announced today that banks, who had received TARP money, paid $32 billion in bonuses! Is this what we had to save? This was the “emergency, financial crisis” last fall that all our tax, future tax, and newly printed money went to? Nothing more I can say to that. What the $%@&* !
The feds got a 24% return from AXP using my tax money. They’ve received healthy returns from the returned TARP money from the banks. Shouldn’t I be getting a rebate on my taxes I paid, that they used to make that profit? I could use that money to stimulate the economy! But no! The government wants to give credits and rebates to those that didn’t pay taxes….and worse, are not even U.S. citizens….And they want to tax me even more! Does anybody find issue with that? It is hard for me to comprehend that there is a thought process out there that can rationalize it. What the $%@&* [getting off soapbox]
Back to trading….I’m still beating the markets via shorts, mostly TZA, making 5 round turns on Wednesday. I also scalped a few QQQQ puts. But still feels treacherous out there…and I’m getting real tired of that last half hour in the markets…just amazing…and it’s been the same for weeks now. Here’s a great article on HFT: Demystifying High Frequency Trading.
Did you see what gold and oil did the last day or two? I guess mostly because the dollar has strengthened, but I’d like to see another day of it just to get another 150 – 200 points out of the Dow and/or 15-20 points out of the S&P. Then I think we could load up for a big bull run. Of course, on the other hand, the market seldom does what I want it to do….So play the chart.
That’s all I heard today and read all weekend….Head & Shoulders. Well, it must be working, because none of my charts show any dandruff. Today also reminded me of the day after the Memorial Day holiday….which also happened to be an up day, strange market action, as twice now the market has been positive after a holiday weekend.
I went to cash before the holiday, so I didn’t care what happened this morning. But after I saw the futures down and the market going down at the open, I thought how nice it would have been if I had held on to my TZA and ERY!
During the morning I did see a scalp opportunity in BGZ so I quickly made 50 cents in about 10 minutes. But after that I couldn’t keep track of all the ups and downs I kept running into. So I sat back. After the markets started to recover I looked for some longs to get, but still was a little scared in any direction. At the end of the day I nibbled on some DYY, the commodity double long, which looked very oversold. We’ll see….
With the Dow and S&P500 closing up today, after being down so much in the morning, we may see some bouncing in the morning….another “turnaround Tuesday?” We’ll see….
We’ve had some wild rides the past couple of weeks, but we’re basically unchanged. The moves each day are volatile but the big picture is….we are running in place. The Dow has basically closed at 8750 for the past 2 weeks, even though we’ve been as high as 8877 and as low as 8501. So we have a 400 point range, but always closing at about the same level. How does the market do that? The Dow has been trying to close above 8800 and the S&P500 above 945 but they just can’t make it…close, but no cigar.
I traded BGZ several times on Thursday, grabbing 35 cents and 51 cents, and one time just breaking even. I also added to my QID position on the market rallies. I also nibbled on some stocks, CTIC and SQNM. You have to keep on your toes though, or this market will chop, chop you up.
With that drop late in the day, I’m thinking the market has some momentum to the down side. We’ve got Import/Export Prices Friday morning, not usually a market mover, but these days you never know. And maybe traders will keep basking in all the good news and reports this week! Y’know…the Beige book saying there is continued weakness, and “only” 601,000 lost their jobs last week, joining “only” 7 million other people collecting unemployment, and on and on. Traders are so happy the economy is doing this well, the market must go up
It was a down week for the markets, but an up week for my account. And I was trading the opposite direction of the market all week. I did come into the week fairly short with QID FAZ and QQQQ puts, making it a very successful Monday, but I didn’t think it would continue. So I started to get long by the end of Monday. It was QLD and BGU that made money by the end of the week. Every day held opportunities for the bulls and the bears. If I was a bit more nimble, I could have entered and exited faster to take advantage.
It was the worst week for the markets since the bottom in early March….and the S&P and Dow closed near the lows of the week. So I’m thinking we continue down. This notion is being confirmed with the futures this Sunday evening and a real poor start in the Asian markets. I’ll continue this week with the same tactics as last week…smaller positions and quick, small profits. Of course, just because it worked last week…how does that go….previous results do not guarantee future gains.
Many companies looking for money by diluting their outstanding shares…thus making their stock price go down. And they all were going down…until about 2PM EDT when the bulls came back from lunch and wanted to skin the shorts. But boy, what an opportunity.
So, as I wrote last night, I had QQQQ puts and FAZ from yesterday, which were looking pretty ugly in the pre-market, but turned at the open and made for a very profitable day. I also picked up some IWM puts during one of the intraday rallies. I covered all short positions during the lunch hour and thought I was done until about 1:30 when the Dow and S&P500 charts showed some bottoming action. About 30 minutes later it looked like a confirmation and quickly picked up some QLD and BGU. I held on for about 45 minutes and cashed out again on the long side. Oh what a glorious day….well, profitable anyway.
Tonight I sit in cash trying to figure out something with the market. Being options expiration week, and tomorrow being Wednesday, usually the most bullish of opex days, I’m looking for some bull action. If you take a look at the S&P500 5min chart, you can see a cup and handle formation, usually a bullish formation.
I’m just going to see what the market brings in the morning. 
The market is getting a bit bipolar here. Why the rally on Friday? Because we lost over a half a million jobs last month? Or is it because over half of the big banks are a little stressed? The tea leaves show that the labor market may be close to a bottom, or at least slowed its rate of decent….although last month’s rate got revised downward. Whatever it is, it will take several more months before anyone can say anything definite.
Did you notice how bad the technology stocks performed on Friday? Even as the S&P500 and Dow moved on up. And in turn, the QQQQ was also lackluster. That makes trading very interesting because you can go long and short at the same time and make money in both directions. Check the chart….the markets alternated up and down days all week…..isn’t that bipolar?
In the 8 weeks since the March lows, the markets have been going up at an annualized rate of about 500%. The Russell 2000 alone is running at a 1000% clip We can’t keep going like this for much longer.
So on the rallies I’ve been adding QID and QQQQ puts…just a few at a time. At the close on Friday, even though the indexes were all up, my short positions were in the green also.
Futures in early trading are on the downside, as is the Asian markets. The risk this week may be big, but the opportunities for traders to make money will be big also. Enjoy
This was a strange day….market reaction to swine flu….near-bankrupt GM gapping up and closing up….phony Air Force One flying around New York with a fighter jet escort….both QQQQ and QID closing in the green. After hours though the Q’s went red. Also after the market cash close, the S&P futures went up a quick 5 points, down a bit slower 7 points, then up again 5 points…and falling back again as Asia opened… Just a mixed up, crazy day.
This morning, futures were down, the markets opened on the downside, but then just grounded away to the upside. I think both bulls and bears were confused….and getting stopped out. The Dow had a 135 point up and down range finally ending down 51 points. I didn’t know which way to go, but I finally decided to buy some QID while the markets were going up. My thinking was it wasn’t going to last. Unfortunately, I got in only about halfway up, so the pain was a bit confining in my shorts 
By the end of the day though, all was okay as QID ended in the green and I held overnite. I guess I’m still looking for some downside this week. Indexes all looking like they’re running out of energy and wanting to fall back a bit.
And did you see the talking head on CNBC….he said he expected the 
