Didn’t trade much today…I was out of the office until mid-afternoon. I did get stopped out of some QQQQ calls I had entered on Monday, for a smaller profit than anticipated. Actually I just got my commisions paid. 
The markets ended stronger than it looked at lunch time….I did catch some updates on my Blackberry smartphone. I do have the capability to trade off my phone, but I haven’t excersized that option…yet.
I updated to the latest version of TradeStation to get ready for the change in options nomenclature next week, Friday, February 12, 2010, the first part of the Options Symbology Initiative. The biggest difference I’ve noticed so far is slower reaction time, but I guess they haven’t started using the new symbols. I hope their programmers are looking into that speed thing!
I’ve also downloaded the latest version of StockFinder from Worden. Looks interesting but I need to learn another program language. It sure would be nice if there was a universal trading program language. Then I could concentrate on the charts and indicators rather than how to program the damn things. 
Tomorrow Initial Claims will lead the way. We’ll also have to watch CSCO and V to see if their good reports this evening will follow thru…as well as all the Thursday reports. And don’t forget Friday for what turns out to be our “monthly curse” the NonFarm Payrolls and Unemployment Rate reports. Ugh!
Happy Trading!
The markets acted fairly well until the last hour. They sold off pretty hard, still ended in the green but well off their highs. The real fireworks started after the close. AAPL was halted pending their earnings report. They came out with “Blow Out” earnings….or so it seemed. The futures took off, especially NQ futures, along with QQQQ and QLD. But then word broke that Apple had changed their accounting method….dive, dive, dive.
It looked like a crash was taking place…futures dove hard. And then AAPL opened for trading…gapping down 10 dollars, draggging the Q’s and related stocks. But, just as fast, comparing apples to apples so to speak, AAPL still beat expectations using the new accounting, and everything reversed. AAPL, the Q’s and futures contracts returned to where they ended the cash day earlier. AAPL beat, but not as fantastically as first thought.
So, stocks ended up after three days of losses, but there was bad news like existing-home sales tumbling and some not-so-bad rumors like support for Fed chief Bernanke’s reappointment. It was still a mixed bag.
As I’m writing this, futures are diving pretty hard. Over night trading looks very, very volatile tonight. U.S. Dollar taking off. We’re in for some ugly stuff. 
I love it when a plan comes together….Earnings season is always something of a daily crapshoot based on the latest stock to report, and the first one out of the gate certainly did crap. Markets had a gap down and continued down….for a while. But then, as usual, “someone” started to buy up the futures and associated baskets of stocks, and the indexes moved up. Check the article below for the conspiracy theory.
Since I have been positioning myself to the short side for over a week, it finally paid off. It was my best day of the new year. AA puts, QQQQ puts, QID calls, EDZ, and TZA all got into the money….cashed some out completely and others just partially. Looking for some more downside.
I found this interesting: 10 times more 3-yr treasuries sold in 2009 vs 2008 and 15 times more compared to 2007. That’s some credit card! It’s going to be a bitch when we have to pay it back 
Not only are we losing jobs, companies are afraid to hire!
Many Firms Reluctant to Hire Because of New Taxes, Rules
And thus, confidence drops:
Confidence Drops Sharply, Erasing a Positive Trend
Finally, my conspiracy theory gains traction:
The Government Must Be Buying Shares, Because Private Demand Just Isn’t There
That stock fall at the close on New Year’s Eve turned into a big stampede of bulls for the new year markets…. It started in the futures markets Sunday overnight and continued thru the day. We moved quickly from an oversold position into overbought….all on low volume….crazy market!
Seasonally, today and tomorrow are strong days, but then, Santa’s rally ends. I’m actually looking for a reversal this week, so I started to enter some short positions via QID calls, QQQQ puts and EDZ. I hedged those positions by scalping ES futures….a few bucks from the long side while accumulating short positions.
I sure hope volume starts to pick up no matter which direction they choose to go. I would have thought everyone would be back from the holiday festivities. Maybe the holidays aren’t really over until the BCS Championship Bowl is done. 
Was anybody trading today? Volume was so low! I spent the day…and probably the week, just closing positions that I have been nursing….GS calls popped in the morning and PSID popped in the afternoon, allowing me to get out with a few bucks. I close out many positions here because I use mark-to-market accounting….even if I didn’t close out the positions I would still have to take the loss. So why not?
On the other hand, I did pick up some puts in QQQQ and calls in QID….just a few contracts each, looking for a correction soon.
ES usually trades a couple million contracts a day….today only 472K! Man, talk about low volume. 
Consumer Sentiment comes out tomorrow, Chicago PMI on Wednesday and Inital Claims will finish out this year on Thursday. And if the eco-data doesn’t stir things up, there’s always all the political shennanigans going on. Have a fun week…..and a Happy New Year
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.
Not even HPQ’s acquisition of COMS was enough to get the bulls running. They were too tired with 8 up days in a row. They just had to take a break…all that rallying can be tiring!
Stocks did try to move up in the morning, but the strength of the dollar was too much. You would think that a report stating another 500,000 people were laid off last week would be a downer, but the market rallied in the pre-market before running into the strong dollar. But now, how far do we go?
I tried to stay on the sidelines again, but the itch got to me. I had some mild success with the ES emini contract both up and down. My big winner was QQQQ puts which by a lot of luck I got in low and sold high all in about 60 minutes. For the S&P, that double top we talked about before seems to be working just like the books say. 
Looking for follow-thru on Friday the 13th. Watchout for ladders and black cats. 
Boy oh boy, lots of people wanted out of the market today….scattering for the exits! Funny I made more on my longs than I did my shorts. While I was trading today, I noticed that, at times, I had both TZA and TNA positions working. So I was both long and short the market. TZA was a position I held most of the day and TNA I was in and out four, maybe 5 times….all moneymakers, except for the small TNA position I am holding overnight, but I think it should get better tomorrow.
We’re down about 6% from the top just 6 days ago, which is the largest correction since this bull started back in March. It’s also one of only 3 times since then when we have had 4 down days in a row. We haven’t had 5, so tomorrow may be a “special” day. I’m thinking it is time for a bounce…maybe not a big one, but a bounce…thus my holding some TNA.
Some other ominous moves were GS breaking thru its 50ma, as did the S&P, Nasdaq, QQQQ. The Dow is still hanging tough, or at least tougher than the rest. This all started when GS lowered it’s GDP estimate, so Thursday morning will be exciting. And don’t forget Initial Claims!
So let’s get ready to rumble into the end of October. If we don’t move up in the next 2 days, we’ll finally have a down month, the first since February. Keep your finger on the mouse and happy trading.
The markets early this morning were thinking of reversing Wednesday’s sell-off, but then we heard about the housing market via existing home sales, which stunk by the way, and the markets sunk. Did you also notice the jobless claims? Recently the government has shown a nice drop in claims after revising the previous week’s numbers upward. Sorta confusing, but the less bad scenario is loved by traders. The scenario, or was that a dream, I laid out yesterday is progressing nicely!
Then at the end of the day, first PALM got slapped when VZ said they would not carry the Pre. After the close RIMM came out with bad earnings and bad estimates for the future. If this holds, the Nasdaq and the QQQQ’s should start the day on the downside. And me, still short, will be happier than I was today 
I sold off half of my short positions in TZA QID and UYG, and held half for, hopefully, greater profits tomorrow morning. I laso have a long position in OPXA and had a buy limit for NSM at 14.60 but it hasn’t been filled.
Okay, let’s get some more downside movement on Friday, maybe an ES down to 1035, and we can go long for next week for the money managers to dress up their portfolios.
I just noticed that I didn’t log in and post to the blog yesterday. I had such a great day trading yesterday I went out to eat, drink and be merry…..and I guess I did a bit too much of all
We’ve had two up days in the market, but I’ve been pulling out money using the short ETFs and taking a couple short moves in ES and NQ (S&P and Nasdaq emini futures). On Wednesday I traded S&P puts, TWM and BGZ a couple times and stayed overnite with QID and BGZ. Got out of all that early this morning….and then got back in and out and in TWM and added a few QQQ puts for overnite. Let’s see how that percolates. And I’ve taken a short position in ES this evening. I’ll see if I get out before going to bed, but if not, I’ll put a 4 point stop loss on it. (I’m short at 1015.50 if you’re following).
Both bulls and bears can make an argument for today’s action. That’s what makes a market! But how do you explain the lack of any pullback worth mentioning over the last month, during which the markets popped? The news has not been all peaches and cream during this time and the earnings numbers haven’t been universally stellar, and revenues have all been down. Even today, the futures were sky high but got tempered when the retail sales and job claims numbers came out…both bad. But the markets still closed green, but on very low volume.
The action this week looks very much like a top, but still hasn’t broken down. I guess that’s why I keep shorting. But there’s still a chance the markets pop to the upside. Some numbers for Friday are the CPI and Industrial production. Both will give clues to what the market does. So nimble is the word
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.
