Trading thoughts, ideas, tips, musings, and pontifications. . .not necessarily in that order.
A long day if you were a bull…party time for bears! The PIIGS were a worry for everyone accompanied by some lousy employment info. Maybe Friday’s employment reports will be nicer to us.
Most notable today: NYSE Advance/Decline Volume….. -33:1 ! What the $%@&*!
Well after the markets put in their worst monthly performance in a year, February started out with a bang. In January there was no build up of new lows during the sell off. Over that same time new highs declined significantly, without a corresponding growth in new lows….leading me to think we may have just had an 8% correction from the highs, and it may be time to test those highs again. Of course, any political or economic news would disrupt anything the charts may do. 
The there’s the Monday pattern of being an up day for the past several months….it did not disappoint. But after a nice green Monday we run into a red Tuesday. I sure would like to buy and sell stocks based on the charts rather than the calendar!
AMZN was a big red island in a sea of green. After this weekends bugaboo with MacMillan books, traders got scared that it will all be coming out of Amazon’s bottom line…they hit it hard.
Volume was light, showing traders not going for advancing prices with any gusto. So the thought process is the trend is down until it isn’t.
Here’s some scary reading to support that trend:
All you can say is wow! 2 Graphs Showing Part of the Reason for the Christmas Eve Taxpayer Massacre.
Double Dip Risk Rises After Inventory Blowout. With more analysis here: What Normally Happens to GDP After Blowout Inventory Quarters?
Futures are working their way down as the dollar is moving up this evening. Australia did not raise rates which at this time looks to be helping the dollar. Sometimes I just don’t understand. 
…don’t short a dull market. And boy was it dull, until about 2:30PM EDT, and wow, did it take off. Isn’t this a sign of a bull market when even bad news can’t bring it down? Bad retail sales, bad CPI (unless you don’t eat or use a car), bad earnings, or any news for that matter can give the bears enough energy to tank this thing.
I sat and watched through it all. Yesterday, I made several months worth of profits on DNDN, so I didn’t really have the energy to trade….yes, a hangover 
But, with a clearer head, I would have bought the banks, especially HBAN and FITB, or the ETFs: FAS, UYG or XLF. The morning provided for some nice entries and the afternoon provided for some nice profit taking. Yes, I paper trade when I don’t feel like using real money 
Volume was down today on the upside, while it was up yesterday on the downside…a bit disconcerting. The VIX continued down, now in the mid-30’s…a good sign. The market relieved some of that overbought pressure. The Trader’s Almanac is showing that tomorrow and Friday to be bullish. In fact, April Expiration Day has been up the last 10 out of 12. We’ll see how that goes.
This evening the S&P futures (ESM9) are testing a strong support line 803….right on the nose….and so far it is holding. This being the low, we may just moce up during the regular cash hours Wednesday….although a retest is not out of the question.
I was out most of the day, so I did not get to trade much. But around 2PM I tried some scalps on ES. In about 15 minutes time, I took a short position and out for 2 points ….moments later took a long position for another 2 points. And then I was done for the day 
Volume is still lagging, but I’m surmising that is holiday-week volume. Lower markets on lower volume is generally bullish. Tomorrow the SEC is voting on short-selling rules, so there may be news about the uptick rule…..maybe a short-squeeze? Seasonally, the Wednesday before Good Friday is up 12 of the last 14….and up every time from 2001. That’s 8 straight. It would be a shame to break a record.
Yes, it seems like we just ended earnings season, and by golly, we’re starting another one. But all eyes and ears will want to hear about what may become our worst quarter ever for corporate earnings. And we want to hear what all these business mavens, company CEOs and stock analysts think and say about their future guidance. Tomorrow, AA takes the first swing of the bat after the market closes.
And the VIX…it went just a hair under 40 Friday after the close, and by the time markets opened this morning, it was back over 40. Oh well, it was fun while it lasted. Volume was low today also, maybe the lowest since January. I guess the holidays have started already.
I couldn’t make heads or tails of the S&P futures today, so I just sat on the sidelines. Stocks were a little bit easier to read so I got in to two: CDR and BDN.
Remember, we have a short week, with markets closed for Good Friday….and Thursday is Passover, so I expect volume to be holiday-style. I’ve got offsite meetings on Tuesday, so I hope I can get back fast enough to at least get some trading by afternoon. Happy trading to all 
Have you noticed how the market sells off just slightly and indicators correct to oversold…ready to turn again and go up? And that’s a bit different in our previous bear market rallies when volume was big on the downside and small on the upturns. That’s a big change from a couple months ago when we needed to see a 400 point dive to nudge the indicators into oversold, then some low volume upticks to get it overbought. And we haven’t seen the VIX with a 30-handle close since January.
On Friday we closed having the best 4-week gain in 70 years And the big markets have closed above major resistance lines. So if the Nasdaq can stay above 1600 and the S&P500 above 800, I think we’re still good to go…to the upside. Oh yeah, and the Dow above 8000
The only bad part is that people are getting bullish. Yes it makes us all feel good, but it also usually means a bear is waiting for us around the corner. Yes, trader sentiment is a contrarian indicator. So have we started a bull market or do we still need to test that “devil low” in the S&P in early March…666. I don’t think that would look good for the Prez and his administration (nor the Plunge Protection Team).
This week has been outstanding for my long-term/IRA accounts, more so than for my trading account. I try to siphon off trading profits and put them into long-term accounts…mainly because the retirement program as an entrepreneur is lousy But, that aside, I made some wonderful profits on DNDN, UYG and URE this week. DNDN is a speculative play waiting for the end of April for FDA announcements. But, on Friday some “announcement of an announcement” made the stock pop and I had to take advantage of it for a quick 100 percent return. Still have a position waiting for the FDA rulings that may give me a 1000% return in seconds. While I do trade URE and UYG on a regular basis, I’ve had some sitting for a month since those outrageous lows in the beginning of March….and again I just have to take some off the table when they double.
My trading account only had one “real” winner in RIMM….who had spectacular earnings report and guidance. This was a strict earnings play. It was tempered by some losing plays in the S&P futures (ESM09). Every loser was a counter-trend play. That is going short when the index was long….and vice versa. Monday was my worst day when I kept trying to go long even though the index was putting in a trend day down:!:
So before I go looking for some new plays, I have to review my mistakes and successes in all my trades. I also review some winners that I didn’t find in my scans, and see if I can modify them to pick up some of them. It seemed quite a few have slipped through the cracks for me anyway. Check these tickers out…I hope you caught them: TM HMC SHI JKHY DGS ZZ ASH SNE. Check out their charts. If you had got into any of them a month ago, you would be breaking the bank 
I’m going to work on refining some scans, then check into the futures markets and the early Asian market open. Happy Trading.
…you were wrong Except for maybe 10 minutes in the last half hour when the indexes took a wicked move down, but recovered. Everything was working well today and I had nothing that ended in the red….stock-wise. But, while I had a pretty good day in the S&P futures (ESM09), I got whipsawed in that crazy ending. I actually ended down 3 tics for the day. Not bad, considering I was down 10 points at one time
The banks worked well, including UYG and FAS, and was lucky I took profits early, because the afternoon brought about some weakness in the financials. Maybe it was anticipation of that lousy employment report we should be getting Friday morning. But of course it will stink and the futures will go down…knee-jerk style I hope. And then maybe we can continue on our merry way up the green ladder. Since it’s Friday, I’ll probably watch more than trade…but I’ll learn something either way. Happy trading y’all.
…In a low volume scenario, the market can skin you alive if you’re short. And boy could you hear the screams around lunch time 
And after the cash close at 4PM, the S&P futures started diving to the tune if 15 points and then continued to fall when the futures re-opened for another 15 points. It’s been an ugly couple of hours in the futures this evening.
So, does this show us what to expect tomorrow? If I knew that I’d be rich Early overseas markets are up, but that may be more of a reaction to what happened during the cash market hours here in the US.
Banks did do very well today: UYG FAS FITB HBAN C BAC WFC JPM and all the rest. And of course, MSFT got an analyst upgrade and popped a good 5% today. But, like the futures, the banks were showing weakness in the after hours session.
So I’ll leave you with this: the Trader’s Almanac says “First day in April, Dow up 11 of last 14. Up 300 points in 2000 and 400 last year (2008).” Sounds good, yes? But it also said “Last trading day in March, Dow down 10 of last 14.” And we know that didn’t carry today. We’ll see. Happy Trading
Friday was a mediocre consolidation day, with the lowest volume day in the month of March…but then, the entire week was low volume. The banks were a bit lethargic and the rest of the markets followed suit.
But, trading was profitable 
I had several great trades in ES, ending the week in positive territory for my P/L….which barely made up some lousy trades in the banking sector. I had a run in with FAZ during the week, which left a bad taste, but made it up with UYG. Still holding some UYG, but stops are in at breakeven…so it will end up a good trade no matter what it decides to do on Monday.
Some financial stocks came up on my scans this evening which I’ve added to my watch list for tomorrow: NFP TEN AIB WBS … along with some techs: RNWK ATML TNL.
Futures are moving to the downside this evening, along with the overseas markets. The government is showing its hand in business management, firing GM CEO Wagoner. I think we start off on shakey ground Monday morning 
I hadn’t traded any of the 3X Bear Financial ETFs, FAZ specifically….but I thought I would try today….and I got my ass kicked royally I’ve had good luck with the 3X Bull, FAS, and the 2X Bull, UYG. So I thought we would have some profittaking in the banks and thus thought FAZ would be a nice mover to the upside. I got in near $21 this morning and it proceeded to dive. I didn’t panic…I had a stop loss put in, but I didn’t think it would go directly there. This was totally my inexperience in watching how that stock moves and travels during the day. I tried for the easy buck and got beat. That’s the way it is sometimes. On the good side, later in the day, I was able to get in near the low and recoup about half my earlier loss. So the embarrassment was gone, but the sting was still there. FAZ is a super-fast mover and needs to be traded quick. Oh well, I’ll get the rest back tomorrow
Today’s down move in the markets was on lower volume, so I think that’s a positive. Tomorrow we have Durable Goods and New Home Sales reports, along with the usual Crude Inventories. Futures are holding up this evening and foreign markets are mixed, no big up or down moves. I guess there’s more consolidation in store, and I’ve got to work hard not to have 2 down days in a row
I think we need to call this “Ben’s Rally”. It started last week when Ben Bernanke hinted to Congress that the Fed was going to get tougher in playing a role in America’s Economic recovery. Then he talked nice in a TV interview over the weekend. And today he showed his hand….printing money to by the U.S. IOU’s, sometimes called Treasuries….a trillion dollars worth. Time will tell if this is a good strategy, but, at least in the short term, traders liked the news and the markets showed it, ending up, up, and away.
The day started on a down note and really meandered on very low volume. But, come 2:15PM, volume exploded and really drove the market upward. If you were in long, congrats. And even if you weren’t, you had plenty of time to get in and catch a part of the move…..and if you were on your toes, you got some on the subsequent pullback.
An interest side note: Bonds went up with stocks. Usually bonds are inverse to stocks. That is, when stocks go up, bonds go down…and vice versa. But, both stocks and bonds went up today. You can follow bonds with some ETFs like TLT, TBT, TIP, and TLO.
The banks continue to outshine them all: C, BAC, HBAN, WFC, FITB, along with financial ETFs: UYG, FAS and XLF….all opening their ATM machines to traders. Did you withdraw some cash?
Some profiteering here would not be a surprise…and may even be healthy. A pullback, maybe even suckering in a few more shorts, and we could be going to the races again. Well, the Kentucky Derby is only about 6 weeks away Happy Trading!
I had my best day in the S&P futures market today and did well in a couple of stocks, DNDN, FAS and HW. I guess having a profitable day is what makes it fun
The doji day yesterday told us to follow the market in the direction that it opens. Well it opened right where it closed yesterday and trickled down for the first few minutes. But it quickly reversed and never looked back. In matter of fact, it was hard to come up with a pullback to make an entry! The market continued to go up and closed near its highs.
The only negative was that volume was down. It did pick up near the end, but the trading during the day seemed like a holiday. Maybe today was the long lost Santa Claus rally
Doing some quick stock scans this evening I came up with a boatload of bullish engulfing patterns. My one scan looks for stock between $1 and $20 with an 10-day volume average of at least 220,000 shares. It came up with 468 stocks. If you look at all stocks at all price levels, there were nearly 700. I have to go and start tightening the criteria to get to a reasonable number of prospects.
My sympathies to those that suffer from paraskavedekatriaphobia, the fear of Friday the 13th. Yes…tomorrow…watch for the black cats and don’t walk under any ladders.
| DJIA | 10741.98 | |||||||
| NASDAQ | 2374.41 | |||||||
| S&P 500 | 1159.90 | |||||||
| ^RUT | 673.89 | |||||||
| QID | 17.26 | |||||||
| QQQQ | 47.49 | |||||||
| QLD | 63.61 | |||||||
| UYM | 34.55 | |||||||
| URE | 8.08 | |||||||
| UYG | 6.59 | |||||||
| SSO | 41.45 | |||||||
| XLK | 22.79 | |||||||
| XLF | 15.69 | |||||||
| FAS | 92.34 | |||||||
| FAZ | 14.17 | |||||||
| SKF | 19.87 | |||||||
| DRYS | 5.69 | |||||||
| GS | 177.90 | |||||||
| BGZ | 14.40 | |||||||
