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!
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.
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.
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
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!
Monday came through like it has for the past 7 weeks….another green Monday. And although the indexes weren’t up by big amounts, they did close at new highs, except for the Russell. But the Russelll was the strongest today, so it may just be trying to catch up.
Using the S&P 500 chart, you can see we’ve been in a channel now for over a month. 
And now it’s decision time….do we breakout or just time for another failure?
SEED wasn’t that exciting today, so I just waved in the wind and am still sitting in it. SIGA though was a surprise….doubling down near the bottom it didn’t take long to get out with a few dollars rather then giving up in the red.
Then the Prez sounded stupid today. First, Obama is talking like Allah today: “I asked them to come to Washington to let them know what I expect of them.” So I guess all those bank CEO’s had to come to the “mountain”. I wonder if they ever heard of a teleconference? And of course he told them something very profound: “You created this mess with too many bad loans, so you need to get us out of it by….here it comes…..loaning more.” What’s wrong with that picture??
Tuesday thru Thursday has a lot of economic news that moves markets: PPI, Industrial Production, Housing Starts and Building Permits, CPI, Initial Claims, Leading Indicators, and last, but not least, there’s a FOMC meeting this week. Plus there are some decent earnings reports this week: BBY JOYG HOV FDX RIMM NKE.
And, it’s quadruple witching week…options expiration. Markets have been up 22 of the last 25 years for December opex. So let’s have some fun.
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
Futures were down pretty big this morning until…..famed investor Buffet bought BNI. You must know though that Buffet already owned 30% of the outstanding stock. So to me, he was basically talking up his own book. Yes, the other 70% owners made out, but so did Buffet’s 30%. And, all of that hoopla blocked out JNJ’s announcement of restructuring and laying off 7% of its workforce!
Oh well, beside that, it was a fairly boring market day…another up move on a lower volume day, and not giving us any idea of what it’s doing. Tomorrow at 2PM we get the FOMC announcement. Now that should shove some volatility up our arses
I’m looking for some downside moves, but, according to the Stock Trader’s Almanac, November is the #1 month for S&P, #3 month for Dow, #2 for NASDAQ. So history says we may go up.
Remember….As Keynes famously once said “The market can stay irrational longer than you can stay solvent”. So be careful.
Published on
November 2, 2009,
3:29 am in
Trading and Weekly.
Tags: BGU, BGZ, ES, QID, QLD, Russell, SP500, TNA, TZA.
If you had slept through Thursday, the markets only went down a little bit on Friday. But if you got suckered in on Thursday’s trap, you probably got upset.
Remember that many mutual funds had their year end take place on Friday, which surely contributed to the selling pressure as they locked in gains and reallocated their portfolios. But Monday starts the historically strongest 3 months of the trading year. Of course last year wasn’t very inspirational. 
Reading articles and blogs over the weekend, it sounds ominous out there. But, when everyone gets scared, it may be time to pick up some cheap stocks. Looking at some charts, we look to be close to support in the S&P500, around the October lows.
The Russell has already cut through its October lows, after putting in a double top, and is approaching its September lows.
FOMC meeting this week and lots and lots of economic data with the monthly Non-farm Payroll report on Friday topping it off. The futures this evening have already put in a 10-point range and looking up. Should be the start of an exciting week. I’m going to concentrate on the ES futures this week and also watch the 2x and 3x ETFs like TNA / TZA, BGU / BGZ, QID / QLD. I’ll let you know how that pans out. 
