4:00pm
Well… this was an interesting day: S&P +50 to 1206, +4.3% | NAS +100, +4.8% | DOW +410, +3.9%
3:50pm
Can someone please explain to me why the dollar is rallying on this news?
3:44pm
Personally, I don’t see how moving risk around from one balance sheet to another solves anything. But I’m not an economist and never studied RTC. I put on a 1/2 position in SDS when the ES hit 1214.
3:34pm
Volume in XLF is almost hard to believe. Huge!
3:15pm
ES approaching entry level for a short position (if that’s still allowed). Look to start building short position at 1214.
3:01pm
CNBC’s Gasparino: Paulson evaluating a Resolution Trust Corporation (RTC) type solution to crisis
~ No comment from Treasury yet
~ This follows reports of a financial market stabilization proposal that Sen Schumer is expected to announce later today
~ Markets rallying on the news
~ This is a huge story with huge implications
~ Gold and treasuries are diving, the US dollar is rallying (curiously)
2:49pm
Senator Schumer will reportedly announce a plan to calm markets in the financial sector at approximately 3:10pm
~ Schumer remarks that future bank infusions should be in combination with loan modifications
2:31pm
XLF looks to be forming a bull flag. It also may have formed a neat double bottom with July 15’s close. I doubt it holds, but it might give hope to bottom callers.
2:24pm
OK, enough distractions. How to make money on all this… The market is clearly in trouble (I think the S&P will be under 1000 very soon). I have a small short position from around 1180 that I will hold regardless of a squeeze. I actually hope the SEC makes some announcement on short selling and we get a huge options expiration squeeze today or tomorrow. I will be shorting all the way up. No more complaining. Let’s make money.
~ Gold is holding 900 and treasuries are creeping toward session highs.
2:23pm
NY State Comptroller remarks that they will take similar actions of other pension funds and limit short sellers from utilizing several stocks in ownership
2:15pm
Goldman analyst: bullish outlook on oil price unchanged
2:13pm
The more I think about it, the less surprised I am about the blame being placed on short-sellers. Scapegoating is a part of every bear market cycle, and it won’t make a difference to stock prices. It might cause small squeezes and delay the inevitable, but in the long-run, prices will go where prices should go. As traders, we need to factor ‘regulatory risk’ into our trading strategy and discipline.
2:06pm
NY AG Cuomo: To investigate short selling at Lehman and AIG, including the “spreading of false information”
~ Wants SEC to freeze short selling of financial stocks
~ I think the markets are selling off now as a sign of relief that Cuomo did not announce a ban on shorting financials in the US. I thought such an announcement would have to be made by the SEC, but it appears there was concern
~ By the way, traders I talk to are absolutely outraged by the UK’s announcement on short selling, and several of them lost a lot of money. I think the charts were warning of such an announcement, or at least a reversal.
2:05pm
US House has reportedly sent a bill to the Senate that would place limits on oil futures positions.
~ The White House threatened to veto the commodity trading bill earlier today
1:59pm
ES consolidating under 200MA (1177) on light volume. Looks poised to break above it.
1:54pm
Unconfirmed report: CEO of MS has told senior employees that he is not selling shares, urges employees to avoid selling shares
1:49pm
WSJ: Confirming earlier reports that CALPERS will no longer lend shares of GS and MS for shorting
1:35pm
Now above the 50MA. ES now approaching its 200MA (1177.50), which served as resistance this morning.
1:34pm
The market is ripping higher, now testing its 50MA (1170).
1:32pm
If you haven’t been watching STT, look at a chart. It rallied from 29 to 46 in about 14 minutes.
1:23pm
This rally does seem to coincide with announcement out of the UK regarding the prohibition of shorting financial stocks. Make no mistake about it, regulators are desperate. And we are not trading in a free market. That is very sad but complaining about it doesn’t make us any money.
~ Remember, there is an announcement on short selling by the NY Attorney General coming up at 2pm. Not sure this is going to be significant, but you never know.
1:18pm
ES just tested its 20MA (1160.70).
1:14pm
~ The last 10-minute candle was the strongest volume of the day.
~ NYT: Apologizing for earlier report about MS/C talks. Not accurate.
1:08pm
Looks like the bullish divergence on the stochastic is playing out. Huge reversal on the ES. Not seeing any news to account for this spike. It is likely a technical event. I am not interested in playing the long side. This is a great example of why its very risky to chase a move.
12:57pm
~ Gold trading above $900
~ VIX made a high of 41.54
12:51pm
Financial Times: UK’s FSA looking to prohibit short selling of financial stocks
~ Desperation move…
12:47pm
Treasuries at session highs. The dollar is weakening. The ES is making new lows. Volume picking up.
12:40pm
VIX just cracked 40, first time in more than 6 years
Note: The methodology of the VIX calculation was changed in Sep 2003. (Thank you Michael)
12:38pm
GS is puking, just hit $87.52
STT now down 38%, MS down 28%, KEY down 24.5%
12:34pm
ES making fresh session lows, but the volume is on the light side. Seeing a possible bullish divergence on stochastic.
12:31pm
Rumors circulating that GS may go private
12:27pm
In the past 5 minutes, we’ve seen some negative headlines on money market funds at Bank of NY Mellon (BK) and Putnam Investments.
~ Putnam is planning to close its institutional prime money market fund.
~ A BK institutional fund that works like a money market fund has fallen to less than $1/sh after suffering losses on debt issued by Lehman. Note that BNY is not registered as a money market but is managed like one.
12:21pm
Watch for a rally: Beautiful double bottom, taking out yesterday’s low. Selling has been on relatively light volume. ES 1-minute back above 50MA.
12:20pm
John McCain: SEC’s Christopher Cox should be fired (speaking of the devil).
Short sellers take notice: If this short selling announcement brings back the uptick rule, there may be a massive short squeeze. Not sure why this announcement wouldn’t come from the SEC’s Christopher Cox. This is interesting. It is not unlike our gov’t to pull out a wild card on options expiration. Just keep this in mind.
12:09pm
~ NY Attorney General to make announcement regarding short selling at 2pm
~ US 2Y interest rate swap spread widens to a record 137 basis points
12:03pm
VIX just 3 cents off its highs at 38.37
Gold looks to be forming a bull flag… thoughts from our gold traders?
12:00pm
ES 10-minute: Not overly impressive volume on potential bottoming candle. Let’s see if it holds.
11:57am
ES attempting to form a bottoming candle.
11:56am
STT now down 23%. MS down 20%. KEY down 15%. STI down 12%. GS down 11%.
11:51am
VIX above 38, market making fresh session lows.
11:49am
VIX just hit 37.97, highest level since Oct 2002.
11:44am
VIX at a new high, 37.77. It is important for the ES to break above its 1-minute 50MA. Otherwise, the 50MA (light pink line) may pace the decline all day:
11:25am
Double bottom? Yesterday’s low was 1157. We just hit 1157.25
~ We took profits on short position
11:23am
S&P into negative territory. Treasuries rallying.
11:19am
Selling picking up here. Falling below session lows on strong volume. Look out below!
11:10am
This market feels very weak. ES confirmed a break below its channel on the 10-minute. Still above session lows but no sign of buyers. I am short with a very tight stop.
11:08am
WSJ source: MS seeking a “creative deal” with WB, talks ongoing with Chinese investors for stake
11:02am
ES approaching session lows:
10:58am
ES threatening to break below channel. If the volume picks up, this could get ugly quickly.
10:51am
Shares of State Street (STT) are falling sharply today, down 13.5%.
~ STT is one of the largest holders of MS (16.4% stake as of June 30)
10:46am
ES testing the bottom of its channel.
10:35am
Nat gas inventory data: +67 bcf (inventory build higher than consensus range)
UNG initial reaction: lower
~ Crude moving lower to 97.20
~ The dollar has rallied steadily throughout the morning
10:24am
Natural gas inventory data due out at 10:35am. Expectations: +55 to +65 bcf
10:18am
Market trading choppy. ES is an upward sloping channel.
10:13am
Unconfirmed report: Mergers talks between MS and WB have reached a more formal stage, but MS is also discussing options with other financial companies.
~ This reiterates a CNBC report earlier this morning
We are awaiting remarks from President Bush. Don’t expect much here…
10:11am
Crude is sitting around $99 in what appears to be consolidation before another move higher. If oil breaks above $100, it may trigger a larger short squeeze.
10:04am
Reportedly, Bank of China executive states that they are not ready to invest in large foreign banks
10:00am
Sept. Philadelphia Fed Index: 3.8 v -10e
~ Market attempting to break above the 200MA on the data
~ GS into positive territory
9:57am
It’s starting to feel like options expiration. Treasuries reversed again, now pointing lower. The ES just pierced its 200MA (1183.75).
9:54am
China’s Citic reportedly looking to increase its stake in MS to 49%
9:50am
Treasuries have reversed higher. Does not bode well for the S&P. I’m looking for an entry point.
9:41am
Treasuries have turned higher while the market has rallied. Not sure if this is signaling a reversal.
~ 9:45am: it did signal a reversal, I’m still on the sidelines
9:40am
S&P E-Mini Futures (ES) approaching 200MA (1184). Market will likely slow down or consolidate at that level before moving higher. A bull flag would be ideal.
9:23am
WSJ: China will take direct action to prop up its stock market
~ This morning in the Chinese press, it was disclosed that the CIC in China will purchase stakes in state-owned banks.
9:22am
If the market attempts to rally, the first hurdle will be the 200MA (1184.25).
9:02am
I would like the opportunity to short somewhere in the red area. I will probably put on a 1/2 position at that level. I will exit half of that if a squeeze takes us past the 2nd fan line. Then I will add more to my short position if we approach the first fan-line. I just came up with this idea on the fly. You should create a strategy that suits your position management style and risk tolerance.
8:48am
Initial Jobless Claims: 455K v 440Ke
Note that the dollar is weak this morning, oil and nat gas (finally!) are higher, gold is slightly higher after yesterday’s squeeze, and treasuries are pointed lower. I think the markets can turn in a positive close today, or at least take a breather. But if the market starts to roll over, I will try to find a reasonable entry level and exit strategy.
8:32am
Good morning. New short selling restrictions are now in effect. The Fed announced coordinated liquidity measures with other central banks. And Morgan Stanley (MS) and Citigroup (C) are talking about a potential merger (reminds me of the Bucket List: two terminally ill patents want to go out with a bang, but at least they’ll share some good times together). MS is also in talks with Wachovia (WB).
12:53am
Just can’t sleep. I need sleep, but my eyes would rather stare at sinking quotes of the Asian markets. I was reading some research from Bespoke Investment Group. The S&P has closed down 4% in two out of the last three trading days. This has only happened a handful of times, mostly during the Great Depression. The last time it occurred was during the 1987 crash. What’s most Interesting is that in the last four occurrences, the following day was an up day.
September 18th, 2008 at 3:05 am
Just found your website. Yahoo bloggers led me here.
I have listened to your recap/futures post and now your sleepless night comment, which I totally appreciate. Are you reversing yourself or are you saying market will test the top Fib Fan band?
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September 18th, 2008 at 8:44 am
No, I’m not reversing my stance. This market is going down. But today could be an up day. I’ll be watching the Feb bands closely to see if they work out.
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September 18th, 2008 at 3:55 am
Hey Craig,
Do you know a good way to short treasuries? Some of them seem very over-extended.
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September 18th, 2008 at 8:45 am
You can short IEF (7-10 year). Other than that, I’m not sure. Anyone else know any ETFs to short treasuries?
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September 18th, 2008 at 8:52 am
TLT is 20+ yrs, SHY is 1-3 yrs.
SHY has by far the biggest market cap of the 3, so it’s likely more liquid, but it may not have the duration you are looking for.
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September 18th, 2008 at 4:38 am
This could have been a trigger for a short squeeze, but so far the reaction has been mute.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aFtYei.gesn0&refer=home
However, European markets are higher and the day is still young.
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September 18th, 2008 at 8:11 am
Craig,
In regards to eliot wave theory. I know you have stated that both time and price matter. Therefore is it possible we see some upside for a couple weeks and then a final flush of wave 3 to 1075 for the oct 20th date that you have stated in previous videos. How important is the time concept in eliot wave theory.
Thanks again for all your hard work. We all need some rest.
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September 18th, 2008 at 8:48 am
Great questions. From what I understand, the time often works out similarly to price, meaning that there can be equal lengths (X1) or Fibonacci time lengths (1.382, 1.5, 1.618). But this is not a science. I have my doubts Oct. 20 will serve as a turning point, but we’ll see.
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September 18th, 2008 at 8:57 am
Good morning everyone. Are we all ready for another stellar day?
Craig, let us know what you see heading into trading this am. I remember a scenario a week or so ago where we had light volume buying before the open and wound up falling pretty hard. With options ex this is a dangerous time.
I hope we get 3(4) started up here. Like hurricane Ike, the AIG storm is gone, but the dammage lingers. Hopefully the short minded public shakes it off and moves on.
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September 18th, 2008 at 9:04 am
Craig,
Do you see a short covering bounce here? Any effect of the short rule taking affect today?
Thanks. The site is great. More than happy to contribute $$.
John
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September 18th, 2008 at 9:09 am
Appreciate that, John!
I think a small bounce is possible. I would use a bounce to short into. See post above.
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September 18th, 2008 at 9:15 am
Craig
Are you playing SKF or shorting the S&P ETF’s?
Would be interested to know what you are looking to focus your short position on.
Disclaimer: Not asking for trading advice per se. More interested in learning what others look at to trade in the market.
Thanks
John
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September 18th, 2008 at 9:17 am
I like trading the S&P using SSO (long) and SDS (short). These are leveraged 2X. Other guys here trade SKF. There are also some options traders as well.
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September 18th, 2008 at 9:22 am
John, personally today I’m looking at the S&P and commodity/energy plays. I’m going to stay away from any XLF/SKF plays until next week, post op-ex.
With oil pushing close to $100 pre-market, I’m happy with my XLE that I bought late yesterday afternoon.
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September 18th, 2008 at 9:29 am
Yeah I’m also staying away from financials today.. I’m in on the DXO since yesterday.. Hopefully Oil breaks 100 before the market opens..
Just the pure psychology of that mark will push shorts to cover and we might see it close above 103 today.
If that should happen, I’ll sell at first sign of resistance, cause I’m not keeping it overnight.
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September 18th, 2008 at 9:17 am
Good morning Craig,
I’ve been enjoying your service on youtube for a while now and I finally came here to check your blog. I’ll be keeping an eye on it today.
Question: With GS down almost 8% in Pre-market, You still think the S&P can hold onto a positive day today? or might it just consolidate and close a couple of points lower?
Greetings from Amsterdam,
Ruben
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September 18th, 2008 at 9:20 am
I don’t know. GS can move 8 points in about 10 seconds these days…
I’m anticipating a small up day. But if the market wants to roll over, I will try to participate without sacrificing discipline.
Awesome to know we have a fan in Amsterdam. I’m a pretty big fan of Amsterdam.
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September 18th, 2008 at 9:43 am
Can someone explain how the 10-year bond is working as an indicator. Does it move in the same direction as the stock markets or in inverse correlation. The logic should be that the more risky the stocks seem to bee, the stronger the tendency to by bonds. Am I wrong here? I’m totally confused.
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September 18th, 2008 at 9:45 am
You have it right. Treasury bonds and the stock market generally move inverse to each other.
I may have confused you by sometimes talking about bond yields, which generally move with the stock market.
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September 18th, 2008 at 9:49 am
hi
Treasury bonds normally work as inverse to riskier investments such as stocks. When stocks rise, you should see the price of the bond fall, and the yield of the bond increase. The yield and the price of the bond ae also inverses to one another. Example - The last week, the price of the 10 yr. bond has increased because it is in demand as a flight to safety, therefore the yield that people are willing to accept has fallen in exchange for safety.
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September 18th, 2008 at 9:57 am
Thanks guys! I’m still confused but on a higher level.
It seems that I need to read a little bit more about the difference between bonds and yields. But now at least I’ve got it straight about the way their movements correlate to the rest of the market.
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September 18th, 2008 at 9:45 am
~ This morning in the Chinese press, it was disclosed that the CIC in China will purchase stakes in state-owned banks.
- They are also cutting a tax on stock profits.
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September 18th, 2008 at 9:46 am
Went long (for long term) GG and ABX this morning. Sensational support levels especially under ABX. Have not added to GLD.
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September 18th, 2008 at 9:53 am
Watch out for a dollar up day today and gold neutral to slightly up.
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September 18th, 2008 at 9:53 am
Also china yesterday night had a mega reversal. Craig, do you think it is bottoming?
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September 18th, 2008 at 9:57 am
I loaded up on swn yesterday, has been treating me well here.
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September 18th, 2008 at 10:00 am
China just cut lending rates for the first time a few days ago. They may be behind the U.S. on the curve sicne their economy is just beginning to slow (on a relative basis). If that’s the case, there unfortunately may be more pain to go in the long term. In the short term the sell off has been extreme, and the Chinese indexes are likely due for some time of tradable bounce
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September 18th, 2008 at 10:21 am
Why do you think there is more pain in the long term? Infact in my drawings, we are nearing a decent size bounce in china, maybe not new highs but definitely a decent 30-40%
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September 18th, 2008 at 11:00 am
In the short - mid term there is most certainly a tradable bounce. I’m in agreement.
Long term -The Chinese economy is still growing in the high single digits. They cut lending rates for the first time because this growth rate is down from a series of over 10% annual increases in GDP. Their inflation rate is in the high single digits. If the global economy continues to slow, they will eventually feel the full repurcussion. Many Chinese stocks have already corrected, but if growth slows further, their prices will follow suit.
This has happened before, China went through a period from 1999-2001 (?) where their market corrected 75% all the while growth was at 10% per year. This recent run up that culminated in late 2007, was due to many factors, but one that stands out is that the Chinese were a nation of savers with a savings rate of nearly 30%. This began to change. At the height of the bubble, the government made it that their 1 year note payed almost half the real inflation rate. What did that cause this nation of savers to do? Throw money into the market. That was the fuel behind that run up that saw tens of thousands per day open brokerage accounts throughtout 2006-2007. Most of the Chinese A- class Shanghai shares are not available to foreigners. Foreigners have to invest through H- class Hong Kong Shares . At the height of the run up many A class shares sold for 50-100% premium to their globally traded counterparts. Keep this in mind when choosing which tracking ETF you choose.
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September 18th, 2008 at 11:34 am
Hey Michael,
very good points. I need to go look at long term monthly charts now to see. My charts only extend as long as FXI, which is not of much use. I will hunt for them and relabel my waves.
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September 18th, 2008 at 10:03 am
‘China’s Citic reportedly looking to increase its stake in MS to 49%’
- I knoe a lot of people may not agree with this, but foreign investment dollars will help us out of this situation. They are almost at a point, where these firms can’t turn them away.
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September 18th, 2008 at 10:04 am
I agree. We need to take it wherever we can get it. Anything is better than more bailouts/bankruptcies.
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September 18th, 2008 at 10:51 am
This is an extremely sad state of affairs, as it feels like there is a yard sale going on. It will only make America poorer and the chinese richer. Well one shall reap what one sows.
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September 18th, 2008 at 11:07 am
Mav, you are exactly right. Corporate America controls our government. It’s only a matter of time before the exchange of power takes place. (The United States of Communist China).
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September 18th, 2008 at 10:08 am
Hi guys,
What do you guys think about the enormous h&s on the dow (daily) with a neckline around 11000. Please correct me if I am wrong. Best of luck to all.
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September 18th, 2008 at 10:22 am
Long term mortgage rates continue to fall… Applications continue to rise… Attractive lending should assist borrowers who want to avoid or who are at risk of delinquencies.
http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B9704E3E1%2DB925%2D4BC9%2DA5CE%2DF52C9F589F01%7D&siteid=mktw
FRE 0.39, +0.12, +44.4%) said Thursday the 30-year fixed-rate mortgage average dropped from last week to its lowest point since February. The average rate was 5.78% with an average 0.6 point for the week ending Sept. 18, compared with 5.93% last week. Last year at this time, the average rate was 6.34%. “Interest rates for 30-year fixed-rate mortgages fell for the 5th consecutive week, amounting to a total decline of about 0.75 percentage points,” said Frank Nothaft, Freddie Mac chief economist, in a statement. “As a result, mortgage applications surged nearly 58 percent since August 15th, largely led by a 122 percent gain in applications for refinancing, according to the Mortgage Bankers Association.”
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September 18th, 2008 at 10:42 am
sol UNG around 36.36. Waiting to reload.
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September 18th, 2008 at 10:45 am
How paradoxical? As dollar strengthens the markets weaken (and ofcourse energy fades). There is no doubt who the leader in this market is.
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September 18th, 2008 at 10:51 am
Craig, you have an awesome site and I thank you for all your hard work and dedication. I’m new to trading and wondered what ticker you use for Crude @ 97.20?
Also, it would be very helpful if you could somehow flip the “responses to intraday commentary” section from showing the 1st comment 1st - over to show the last comment 1st. That way we wouldn’t have to scroll down so far away from “your” great commentary updates to read new responses.
Thank You again for a great site and all your work!
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September 18th, 2008 at 10:56 am
Great idea. I’m going to talk to my tech man, Scott, to see if that’s possible.
For crude, I use the /QM ~ NYMEX Light Sweet Crude E-Mini contract.
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September 18th, 2008 at 11:21 am
Certainly possible to flip the comments round, it’s a bit of a hack. Only thing is you’re still going to have to scroll to the bottom to enter a new comment. Replies will remain in-comment.
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September 18th, 2008 at 10:52 am
I got in for some 70/75 call spreads on the TWM, also bought some october citi puts.
I got in for GLD yesterday, but also purchased 300 shares of DGP today.
Gold at 1000 by the end of october is a possibility. The open interest for GLD shows that there are 52,000+ open contracts on the 100 October calls. I do not think those are written calls.
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September 18th, 2008 at 12:08 pm
How much is that trading for? Oct 100? Do they have options on DGP?
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September 18th, 2008 at 10:54 am
Craige,
Notice the USO forming a bottoming candle after filling the gap on the 15 minute chart?
Moving higher?
I’m still in on the DXO. I don’t want to be greedy, but I don’t see an indicator pointing resistance..
But ofcourse good news can kill the oil trend in a second..
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September 18th, 2008 at 10:58 am
I see that candle. You may be right, but the volume of the candle was not impressive. I like to see more volume on bottoming candles.
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September 18th, 2008 at 11:02 am
We should see a rally here.
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September 18th, 2008 at 11:16 am
out
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September 18th, 2008 at 11:37 am
I’m still holding and up on my XLE…
For USO, to me it looks like it could be a bottoming candle, but the next level of resistance downward is ~76. I’m watching that and might be looking to get in there.
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September 18th, 2008 at 11:48 am
I am out of SWN at 33.14 today. Neat 10% from yesterday. I still believe SWN can reach 35 or so in 2 days, waiting for a trigger, I am guessing somewhere near 30.7-31.
Also keep an eye on EWZ. Some of these emerging markets have gotten very oversold - thrashed on the commodity sell off and also on this sell off. We will see a decent bounce in them soon. Waiting for a trigger. Possible that FXI had a reversal yesterday. Waiting for a confirmation.
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September 18th, 2008 at 11:49 am
Also out of my DTO short at 42, loaded in yesterday around 45 and change. Will reload again as consolidates for a move higher
September 18th, 2008 at 11:56 am
As of now, I am pair trading short insurers and long energy. It has been very extremely profitable today. Energy is catching most of the upmoves and insurers the down.
September 18th, 2008 at 12:17 pm
mav, not sure what exactly you are planning on using for a trigger on EWZ… Looking at it, I see that the Fib retracement from the 2-yr high to low is at $51.07. That might be a good point to look for a bounce.
September 18th, 2008 at 12:48 pm
51 is my target too, the bollinger band bottom too. May be start accumulating there. By trigger, I means, some sign of +ve divergence or accumulation etc. Usually like 3-4 additional reasons to get into a stock, other than oversold.
September 18th, 2008 at 11:49 am
I’m already in the money,.. I’m only selling DXO if the USO should close under 77.08, if not then I think there’s another rally coming in later on today.. Might be the last one for the week too..
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September 18th, 2008 at 11:51 am
And by that I do mean if a 10 minute candle should close under 77.08!
September 18th, 2008 at 11:55 am
Nice trade. I am slightly averse to DXO because it has violent moves. May be I will take a small position sometime along with DTO short/USO long.
September 18th, 2008 at 11:21 am
do you guys know what happened to GS? Thanks,
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September 18th, 2008 at 11:45 am
added a 3rd SSO position at 1157
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September 18th, 2008 at 12:15 pm
Thanks for the tip. I’m watching the IEF. It is Down. That means the SDS should be going Down. That’s my strategy and it looks like it is working.
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September 18th, 2008 at 12:53 pm
The falling knife got me . Now watch the sucker rally.
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September 18th, 2008 at 11:53 am
Craig,
What is the next support level for S&P ? As far as I know, it is 1130-1140.
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September 18th, 2008 at 11:55 am
I’m looking at 1121, but support levels don’t mean much in this environment of fear and liquidation.
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September 18th, 2008 at 12:10 pm
Not chasing Gold here. I sold GG at 33.04 (in @24 - though I think there is some more ways to go. There is no clear direction on the dollar. The dollar just dropped 2% yesterday. Dollar resistance first at 77.41. Bevy of gap fill resistance in GDX upto 37. I’d rather wait for a pullback or a breakout.
On another front, look at dry shippers - DRYS has broken down from a triangle.
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September 18th, 2008 at 12:11 pm
correction GG - 25.4
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September 18th, 2008 at 12:15 pm
I was thinking the same thing there..
I made 13% on a DGP swing and sold yesterday right before the 3rd rally..
But I’m not getting in until I see noteable consolidation..
Plus it hit a double top there..
Volume is low on the pullback here though..
What does the rest of you think?
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September 18th, 2008 at 12:13 pm
Yeah i’m going to let gold consolidate some more, but i’ll definetly pile in on the break out, I’m long the SPY using Calls, with a stop under last candle’s low of 115.2 ish.
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September 18th, 2008 at 12:29 pm
actually I like silver more going forward, eventhough it may be that gold outperforms silver in a panic. My first target for silver is the 13.5-14 gap fill regions.
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September 18th, 2008 at 12:38 pm
short drys:Long GLD pair
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September 18th, 2008 at 12:38 pm
and smaller position of SLV
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September 18th, 2008 at 12:38 pm
Craig,
The news on Money Market funds will be a big blow for the confidence on main street. Many people who don’t understand Lehman clearly understand money markets.
Till now only the pros and those who know are selling. Average Joes are holding on. This news may cause the real panic on the main street.
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September 18th, 2008 at 12:43 pm
But there is already panic. Also I don’t think wave 3(3) has the crash type panics, if you are implying that by real panic. Characteristics of wave 3 are not knee jerk reactions but strong sustained moves. Crashes usually occur in wave 1 or 5, either signalling a top or a possible bottom. I am guessing this will be more like sustained torture
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September 18th, 2008 at 2:23 pm
Hmmm.
Interesting take. What I mean is that mutual fund and 401(k) investors are holding on so far. Will they start pulling out?
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September 18th, 2008 at 12:40 pm
VIX getting close to 40…keep an eye on that!
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September 18th, 2008 at 12:40 pm
just hit 40
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September 18th, 2008 at 12:47 pm
I’m buying UYG if XLF hits a 16 handle. Keep in mind it hit a low of 16.99 intraday on 7/15.
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September 18th, 2008 at 12:52 pm
You may be right on that trade..
I also believe that there’s going to be a turn around day next week and a likely up day tomorrow.
So if you should jump in today, you might make a nice swing..
But on the other hand, with all these rumors around about GS going private..
I don’t know what to expect next week..
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September 18th, 2008 at 12:56 pm
With a VIX of 40 I have time on my side…I will hold until profitable. Could be a week or so but should do well.
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September 18th, 2008 at 1:38 pm
Did you make the trade?
It would have been pretty nice!
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September 18th, 2008 at 12:49 pm
Energy lights out.
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September 18th, 2008 at 12:58 pm
Craig.. why would GS fall on news that it wants to privatize? Wouldn’t that mean that GS will have to pay a premium for it’s own shares?
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September 18th, 2008 at 1:02 pm
reloaded wee bit of swn
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September 18th, 2008 at 1:02 pm
offloaded slv
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September 18th, 2008 at 1:10 pm
Is the 3 minute GLD forming another Bull Flag?
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September 18th, 2008 at 1:14 pm
I don’t know, I’d rather play for a rally here. I bought energy since SPY is forming a descending wedge on the 10-day chart. We are just back from a trip to the lower trendline. If it work out, we could have a breakout from this and neat little pop upto 1170 or so.
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September 18th, 2008 at 1:18 pm
Hmm, I’m not going there.. I’m trading financials next week..
But the GLD is still forming something pretty nice there..
I might jump in.
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September 18th, 2008 at 1:19 pm
Craig,
I think the huge and sudden spike up is because the UK is banning short selling until Jan 2009. The spike occured @ 1:08 pm which coincides with the spike up.
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September 18th, 2008 at 1:20 pm
Agreed. This is signicant news. Lets see if some of the panic begins to abate.
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September 18th, 2008 at 1:22 pm
Interesting…
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September 18th, 2008 at 1:27 pm
This is very sad. They should also ban puts then?
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September 18th, 2008 at 1:19 pm
For longer term Investors - Some boring but strong names trading at, near, or below book value . (Book value is a *guideline* not a bottom) .
IR - Ingersol Rand
CX - Cemex
ADM - Archer Daniels Midland
NS - NuStar
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September 18th, 2008 at 1:44 pm
In regards to the UK emergency ban on short selling. You also cannot short sell in Shanghai (Chinese A- class shares, which has been the case). In the case of China it certainly hasn’t stopped a market from falling 60-70% in under a year!
The uptick rule was established by the SEC in 1934 for a reason. There were abuses that took place during the run up to the 1929 crash and after that mostly had to do with inflated leverage. These safeguards should never have been repealed. We’ve had both crashes and booms for over ~75 years with this safeguard in place. Maybe it’s human nature, but when markets are roaring ahead like they were in July of 2007, maybe people don’t voice the level of necessary opposition that they should have when this rule was repealed last July.
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September 18th, 2008 at 1:49 pm
I agree with you. There have been abuses.
BUT, the markets must be improved/regulated to allow short selling. The technology must be improved to ensure every single shorted share is borrowed against.
And you can’t tell me short-sellers are responsible for the collapse of the financial sector. Maybe it sped up the process, but their demise came from their own risk taking.
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September 18th, 2008 at 2:01 pm
agreed. we’ll talk more after the close.!
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September 18th, 2008 at 2:05 pm
Looks like perfect test of 17.17 of XLF low on July 15. to me that is significant mark. Last time at this level got a 30% rally.
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September 18th, 2008 at 2:05 pm
hey guys!…i can’t short anymore on indices !!!! somebody with same problem on trading platform???
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September 18th, 2008 at 2:18 pm
Craig,
I wouldn’t be surprised if they come out with some sort of a short selling ban announcement after the market close today to catch people off guard for tomorrow’s OE!!! Just a thought after the recent announcement.
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September 18th, 2008 at 2:23 pm
I agree. The uptick rule would be somewhere in between doing nothing and banning short-selling on financial stocks
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September 18th, 2008 at 2:32 pm
Wachovia up 34%?
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September 18th, 2008 at 2:34 pm
Craig, suprisingly I dont agree with the being stubborn argument.
Vix is incredibly high, and psychology is extremely bearish and public. why not at least take a neutral stance?
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September 18th, 2008 at 2:36 pm
Good point. This market is longing for ANY good news. You never know what kinda stuff could be concocted after hours. gotta be careful either way.
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September 18th, 2008 at 2:40 pm
Sal, I would call myself neutral today and tomorrow. Since this morning I have been anticipating a rally towards 1200 (Fibonacci fan line).
But over the next 2 weeks, I think we are going much lower. I don’t have a crystal ball and I’ve been wrong in the past, but that is what I see from the charts.
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September 18th, 2008 at 2:43 pm
Michael,
Can you help me out on this.
If the methodology of calculating the VIX was modified in 2003, then the current VIX is in unprecedented territory, indicating that we are in the midst of something much worse and much more serious than the tech bubble.
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September 18th, 2008 at 3:00 pm
Can you pull up the current VXO. This is the old calculation and would be the metric used to value the 2002 bottom / 2003 retest and other events from that time period. Off the top of my head, the VXO only looked out one month for implied volatility of options. Therefore, it trends with the VIX but separates itself at the most extreme times further.
Fun fact! - The VXO started in 1993 I believe, and a few scholars have back filled the data to the October 1987 crash. The VXO had it been in existence hit 172 …. That’s a point of perspective.
…
My perspective? - We had gold make a +$100 move in 24 hours… That has to say something significant. I would never have imagined that happening in any situation other than a war. We had short term paper paying the lowest yield since WW2 in a flight to safety. A money market fund fell below $1.00 NAV for only the third time I believ