4:00pm
Nice job, everyone. Great contributions all around. Hope most of us managed to make some money. I will be posting a video today, so stay tuned for that.
Volume was lighter today as the S&P pulled back and filled its gap from Friday. Could be a bullish setup. Would not surprise me to see another day of consolidation, perhaps towards 1200 (50% retrace and important psychological level). This remains a very uncertain environment. The rules have been changed, and it will take some time before having full conviction in any trade ideas. Market continues to be a day-trading environment.
~ The dollar got slammed, with the dollar index falling down to potential support at 76.
~ Gold and oil rallied strong. Treasuries rallied. VIX spiked above 34. Theme of risk aversion.
~ XLF traded lower by 7.5%, despite the short-selling ban.
3:52pm
VIX above 34. Added a bit too SSO (L) near gap fill support. Willing to hold down to 1200. Stop below that level. Stop loss if so far away only because my position size is so small. Risk management is huge in this market.
3:51pm
Toronto Dominion (TD) consider a bid for WM.
3:47pm
SPX has filled the gap. Next support level is 50% retracement near 1200.
3:40pm
The VIX continues to move higher, now at 33.50.
3:33pm
VIX above 33. Gold trading at session highs, $912.80. Took a small SSO position, about 1/5 of a position.
~ Reminder, a weak dollar is not bad for stocks. Neither is a bounce in commodities. The stabilization of commodity prices can be beneficial to equities.
3:20pm
Just covered SDS position on the volume spike lower around 1215.
3:18pm
Dollar still falling. ES at session lows. Monday flowing into treasuries. VIX at session highs near 32.50.
3:09pm
Oil breakout?
2:27pm
I plan to cover my SDS position at 1215 (maybe sooner if volume buying comes into the market). I am not planning to take any long position in the S&P. This remains a day trader’s market and I don’t think an overnight position in this uncertain environment is worth the risk. If we get another day of light volume consolidation, I would feel a bit more comfortable building a long position, but not yet. SPY still in falling wedge:
2:54pm
Dollar continues to fall, approaching $76 level.
2:44pm
Fitch cuts GM’s issuer default rating to CCC from B-, outlook negative. They do not see GM reaching its minimum required level of liquidity.
2:30pm
In the comments section, Dawkins made a great point about the gap fill level. It is very obvious and a lot of traders are probably watching that level to cover shorts or get long. Therefore, we might not fill the gap. I may cover my SDS at 1215, which is a 38.2% retrace. Will I get long? Probably not yet.
2:20pm
Front-month October crude contract has gone limit up, up 24% to $130! Now, that’s a short squeeze! November crude is higher by 7% to $110.
2:03pm
ES 10-minute finding resistance at 20MA. SPY is in a falling wedge pattern (nice bounce call Zen). Volume on daily chart very light. Today looks like consolidation setting up for a move higher. But do we need a gap fill first to 1206.50? I think so.
1:47pm
Spokesperson: Goldman Sachs (GS) has no immediate plans to raise capital, but may raise capital to buy assets on an opportunistic basis.
1:45pm
Barnie Frank: Administration agrees on share warrant stipulations (gov’t takes equity stake in companies). Rescue plan will cost less than $700B when all is said and done (How???). House and Senate plans are “pretty close”. Does not believe hedge funds will be able to participate (what a surprise…). Treasury opposed to executive pay, bankruptcy proposals. Does not believe it is essential that Congress complete the plan this week. Plans to pass legislation related to excessive risk next year. A stimulus package is on the table.
1:36pm
NYMEX has halted crude oil trading, temporarily. The front month contract is soaring above $116 while the October contract is still under $110.
1:34pm
ES making fresh session lows.
1:20pm
Moody’s: US AAA rating is ‘unshaken’. US debt rating unambiguously continues to belong in AAA category. US faces very limited liquidity risk. Cites the US’s exception economic and financial resistance.
1:16pm
EUR/USD falls 2%, largest one-day decline in 7 years. Dollar index may find some support near $76.
1:14pm
Dollar continues to weaken. Oil on the move higher, recently spiking above $109. Gold trading near $905.
12:57pm
SPY moving into resistance at intraday VWAP (Volume Weighted Average Price).
12:30pm
Note the light volume of today’s action. NYSE volume 19% below its 3-month average. Although the market is weak, hard to consider this action anything other than consolidation after excess gains.
12:06pm
Fitch: US can maintain AAA sovereign rating even with the impact of the financial market rescue plan. US rating is supported by a diversified, high-income economy as well as the USD’s status as a reserve currency.
12:05pm
Something is wrong with SKF. Not trading inversely with UYG. UYG near new low. SKF not close to making a new high. (Thank you John K for noticing this!)
~ SDS/SSO relationship still in tact. No concerns there.
12:01pm
Crude oil at a new session high to $107.35. Expect more weakness in the dollar and renewed interest in commodities.
11:57am
May see a bounce here and there in the S&P, but no reason not to expect further weakness throughout the day. I am holding my SDS position and am actually in the money on it. My target is to cover near the gap fill at 1206.50
11:46am
Fed: MS is capitalized adequately.
11:44am
VIX rising steadily throughout the morning, back above 32.
11:36am
Where will this market find support? Consider these potential levels. The red lines are Fib levels. The blue line is the gap fill at 1206.50
11:25am
US Treasury spokesperson: Secretary Paulson had “good” talks with Congress, confident Congress will pass the buyout bill this week.
11:14am
ES approaching session lows (1232.25).
11:13am
Unshortable financials down more than 10%: SOV, WM, WB, WFC, BCS
10:52am
ES finding resistance at its 50MA.
10:43am
WSJ: Senate financial bailout package draft indicates there would be limits of executive compensation, with oversight led by Board encompassing Fed, SEC, FDIC
~ Oversight only applies to firms who choose to accept the bailout
10:36am
Gold making session highs, near $900. ES bouncing off the lows but still looks weak.
10:23am
10:18am
XLF testing Monday’s low (21.26).
10:15am
S&P testing bottom of flag. A break under 1235 may be sold with a stop near 1237.
10:05am
What I’m Watching
9:47am
Gold continues to rally while the US dollar weakens. This inverse relationship is well in tact.
9:40am
ES slipping into all three of its major moving averages, which are bunched together near 1241.
9:36am
Dollar making fresh session lows against the euro. Oil is trading higher above $106. Gold near session highs at $891.
9:30am
S&P E-Mini Futures (ES) essentially flat at the open. MS up 16%.
SPY still in flag formation. Buy a break above. Sell a break below.
On a breakout, I will cover my short position and take a loss on my SDS position. Don’t fight the tape.
Good morning!
The focus today will be on the status of pending legislation for the $700B Bailout, which will actually cost well over $700B.
Watch these S&P levels for potential support:
Also, watch to see where we open. A bull flag formed on Friday, and it will be interesting to see if we open below, within, or above the flag.
Sunday night, news broke that Goldman Sachs (GS) and Morgan Stanley (MS) will become bank holding companies. The move will make it harder for these companies to make (or lose) money because their leverage will be reduced to 12:1 (rather than 30 or 40:1).
Barrons Econoday: Late Sunday night, the Federal Reserve Board announced its approval of separate applications by investment banks Goldman Sachs and Morgan Stanley to become bank holding companies. Subject to a 5 day waiting period for potential anti-trust issues, these two investment banks will become bank holding companies and will be subject to direct regulation by the Fed.
They also will have greater access to the Fed’s discount window. By becoming bank holding companies, these institutions will be subject to bank capital requirements.
The moves by Goldman Sachs and Morgan Stanley are monumental - their applications and Fed approvals essentially end an age of little-regulated, major investment houses on Wall Street. The only pure investment houses left in the U.S. are small.
By becoming bank holding companies, liquidity will be improved for them by increased access to the discount window and also by being able to take deposits from savers. The Fed is extending access to the existing Primary Dealer Credit Facility (PDCF) to the U.S. broker-dealer subsidiaries of Goldman Sachs and Morgan Stanley while the applications are in transitions.
These arrangements were also made available to the broker-dealer subsidiary of Merrill Lynch. The extended credit also applies to the London-based broker-dealer subsidiaries of Goldman Sachs, Morgan Stanley, and Merrill Lynch.
~ CNBC: The Fed’s decision to enable Morgan Stanley to become a bank holding company may make a merger between Morgan Stanley and Wachovia less likely
~ JP Morgan in a note to clients: The speed with which policymakers in the U.S. have moved offers hope that the risks to the financial system may now be genuinely fading
~ Yuji Saito at Societe Generale: The move at least eliminates a risk of another near-term bankruptcy like Lehman Brothers
September 22nd, 2008 at 8:00 am
Let’s not forget that this gigantic 1100pts move happened in about 4 hrs. Unless you got inside info, not a lot of traders got in on this huge move. The market has to consolidate and allow more traders in at a lower price. I don’t see how this rally can sustain without going much lower.
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September 22nd, 2008 at 8:30 am
Reuters:
The Treasury plan, which follows a new federal guarantee for money market fund holdings, would push Washington’s potential bailout tab to $1.8 trillion.
Following are details of actions, proposals and amounts:
—Up to $700 billion to buy assets from struggling institutions. The plan is aimed at sopping up residential and commercial mortgages from financial institutions but gives Treasury broad latitude.
—Up to $50 billion from the Great Depression-era Exchange Stabilization Fund to guarantee principal in money market mutual funds to provide the same confidence that consumers have in federally insured bank deposits.
—The Fed committed to make unspecified discount window loans to financial institutions to finance the purchase of assets from money market funds to aid redemptions.
—At least $10 billion in Treasury direct purchases of mortgage-backed securities in September. In doubling the program on Friday, the Treasury said it may purchase even more in the months ahead.
—Up to $144 billion in additional MBS purchases by Fannie Mae and Freddie Mac.The Treasury announced they would increase purchases up to the newly expanded investment portfolio limits of $850 billion each. On July 30, the Fannie portfolio stood at $758.1 billion with Freddie’s at $798.2 billion.
—$85 billion loan for AIG, which would give the Federal government a 79.9 percent stake and avoid a bankruptcy filing for the embattled insurer. AIG management will be dismissed.
—At least $87 billion in repayments to JPMorgan Chase [JPM 47.05 --- UNCH (0) ] for providing financing to underpin trades with units of bankrupt investment bank Lehman Brothers [LEH 0.2151 --- UNCH (0) ]. Paulson said over the weekend he was adamant that public funds not be used to rescue the firm.
—$200 billion for Fannie Mae and Freddie Mac. The Treasury will inject up to $100 billion into each institution by purchasing preferred stock to shore up their capital as needed. The deal puts the two housing finance firms under government control.
—$300 billion for the Federal Housing Administration to refinance failing mortgage into new, reduced-principal loans with a federal guarantee, passed as part of a broad housing rescue bill.
—$4 billion in grants to local communities to help them buy and repair homes abandoned due to mortgage foreclosures.
—$29 billion in financing for JPMorgan Chase’s government-brokered buyout of Bear Stearns in March. The Fed agreed to take $30 billion in questionable Bear assets as collateral, making JPMorgan liable for the first $1 billion in losses, while agreeing to shoulder any further losses.
—At least $200 billion of currently outstanding loans to banks issued through the Fed’s Term Auction Facility, which was recently expanded to allow for longer loans of 84 days alongside the previous 28-day credits.
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September 22nd, 2008 at 8:34 am
Per CNBC, Capital One, GE, GM and CIT are added to no-short list
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September 22nd, 2008 at 9:03 am
Craig,
A flat or higher open is bearish for the day. What do you think?
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September 22nd, 2008 at 9:24 am
Gold up premarket. Does it hold, or possible short?
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September 22nd, 2008 at 9:54 am
AUY broke out of downward trendline. Resistance at 10.27, then going to 10.70 (hopefully).
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September 22nd, 2008 at 9:58 am
Nice call out
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September 22nd, 2008 at 1:32 pm
Mike, I’m long AUY from 10.13 thanks to your call out. Appreciate it.
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September 22nd, 2008 at 2:12 pm
Good to hear. I’m selling 1/2 my position at the break of the 1 min upward trendline (currently 10.54 and rising ~.003 cents a minute) or right before close to capture profits.
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September 22nd, 2008 at 2:28 pm
Out at 10.65
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September 22nd, 2008 at 2:46 pm
Break of trendline just occured. Sell off occuring. Gap was filled when 10.70 was reached.
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September 22nd, 2008 at 2:50 pm
Out at 10.58
September 22nd, 2008 at 9:45 am
Long ACI for a trade . . . watch the aussie dollar vs. the yen for strength in commodities and oil for the next 3 to 5 days.
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September 22nd, 2008 at 10:55 am
Out of ACI calls; made a quick buck in 45 minutes. I will re-enter the trade when she comes back a bit. Commodities will be the name of my game for the remainder of the week and into next month; short at times when they get ahead of themselves and long at other times when they come back in. These will be trades held for less than 48 hours.
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September 22nd, 2008 at 10:04 am
This is a nice weak pullback on the GM if you want to get long at support.
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September 22nd, 2008 at 10:21 am
Look what happened to VIX now - it’s negative when market is down. What a mess…
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September 22nd, 2008 at 10:45 am
The VIX is down b/c of option plays on SPY I believe. Part of it is post-OE from last week and part is just the fact that premiums on options are decreasing with less implied volatility.
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September 22nd, 2008 at 10:43 am
SPY looks like it broke a desc. triangle and is testing it from underneath. However, these triangle reversal patterns have been unreliable lately.
I do not trust gold.
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September 22nd, 2008 at 10:44 am
Bond yields (5 and 10 yr) up all day so far.
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September 22nd, 2008 at 10:44 am
but with gold up and bond yields up I’m not sure if this is equity rotation or gold rotation. Treasuries are certainly a bubble right now, and if the market rallies gold may be too.
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September 22nd, 2008 at 11:06 am
Hey Craig,
You playing the SSO if the triangle supports?
Let us know..
Greetings,
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September 22nd, 2008 at 11:19 am
I don’t see how SPY can go up without at least closing some of the gap from friday. I’m playing SDS until SPY hits at least 122.0.
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September 22nd, 2008 at 11:21 am
I agree with you, Thai. I’ve been improving my cost basis on SDS, anticipating a gap fill.
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September 22nd, 2008 at 11:59 am
Dollar index down nearly 1%
http://finance.yahoo.com/echarts?s=DX-Y.NYB#chart1:symbol=dx-y.nyb;range=1d;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined
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September 22nd, 2008 at 12:00 pm
And this makes sense. I’m expecting more weakness in the dollar in the weeks ahead and agree with HumbleDukes that the commodity trade is back on.
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September 22nd, 2008 at 3:32 pm
What happens in socialist market? Price of an asset is low, even there is not enough of an asset. Gold was very low - buying was very high. I got buyback e-mail from my physical gold distributor “to replenish reserves”.
Oil. Two hurricanes. One hit the right ventricle of oil production in USA (Texas) and oil was still going lower. I heard that it was a short squeeze, but what caused it is that companies demanded physical delivery of oil. Very interesting if it’s true.
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September 22nd, 2008 at 12:03 pm
May be too early to call it a run on the dollar. But 1% move in one day is a significant move.
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September 22nd, 2008 at 12:30 pm
My opinion on the dollar if it matters ( I did short the dollar when it was at 80 and change). I am looking to cover my short today. The wave 4 target is within sight. I would expect a “time” correction, but the price target is probably there. Not worth the risk for me a 1% decrease or so, because I think the next major move in the dollar is going to be upwards of 80.
As for gold, GDX has met my gap fill area target, which I noted about mid last week. Out/ (close) trailing stop on all my Gld, silver positions. Still have some oil and UNG left. If you want a commodity trade look at sugar. It think that trade is going to be very sweet in the next few weeks.
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September 22nd, 2008 at 12:53 pm
USD is going much lower. I’m short and looking for much lower levels.
Two week’s ago the DXY tested the long term resistance level at 80.40 and failed. It posted a gravestone doji pattern by closing towards the lows of that week (reflecting weakness) and
the subsequent down week last week has meant that we now have an evening star pattern further indicating a trend reversal. Technicals patterns are suggesting that the next directional move for the USD will likely be down. Momentum crossing from over-bought levels also adds to the bearish bias.
I’m currently long AUD/USD and EUR/USD.
Pete
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September 22nd, 2008 at 1:01 pm
what is your target?
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September 22nd, 2008 at 1:16 pm
My targe on EUR is 1.5300 where we have good chart resistance. If we go above there, then we will likely test the all time highs again.
My target on AUD is .9000 I’m going to be a bit more patient with this one. Just holding AUD earns a good carry everyday, so I get paid well to wait.
Pete
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September 22nd, 2008 at 1:43 pm
Wow!! I then exited too early mate. I was in short dollar trade, when it was at 1.39. I loaded up on commodities etc. My target was around 147 and change. We hit that and I exited. I am looking at trendline support. Well either ways, lets see, I still cannot see the dollar index taking out 76.
September 22nd, 2008 at 12:02 pm
Hey,
I am interested in hearing opinions on the SKF situation.
It normally trades almost perfectly inverse to UYG.
Is it broken with the short sell ban in effect??
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September 22nd, 2008 at 12:07 pm
I traded it for 2 months. Hard enough to trade it when everything was in order. With short-selling ban, I wouldn’t touch it with a 10-foot pole. Everything in the financial stocks is distorted. I am trading puts on some individual financial stocks. (COF)
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September 22nd, 2008 at 12:08 pm
John, thank you for noticing this. SKF is not working correctly.
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September 22nd, 2008 at 12:09 pm
That is b/c ProShares announced on Friday that they would not be issuing new shares because the underlying short ban has prevented it from working. It is effectively a closed end financials short ETF at this point but people will sell it because there is no way for it to work as intended until the short ban is lifted.
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September 22nd, 2008 at 12:17 pm
The SKF’s NAV was around $85 close on Friday and was trading at $100. That’s the reason for the correction today. Currently, it is trading at NAV.
In hindsight, Friday was a great day to short the SKF. Should have been watching the NAV intraday via ^SKF-IV
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September 22nd, 2008 at 12:10 pm
In other words when folks bought it they anticipated it to be a 2X short ETF and now it is just a bunch of short positions that will probably be held until Oct. 2nd.
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September 22nd, 2008 at 12:21 pm
Ideas and comments on UDN:AMEX please
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September 22nd, 2008 at 12:24 pm
A bit extended for new entry, buy buy on pullback.
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September 22nd, 2008 at 12:28 pm
Thanks, Craig. Do you know of a good discussion board for UDN?
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September 22nd, 2008 at 12:32 pm
I do not… anyone else?
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September 22nd, 2008 at 12:44 pm
stocktock? no kidding mate. We got the pullback on the dollar and gold spot on.
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September 22nd, 2008 at 12:22 pm
I am using tech stocks, dollar and commodities as the control group(s) to make sense out of the market action - not S&P 500 and definitely not financials stocks.
RIMM breaking below 100;
Apple down 4.5 to 136
Google down 10 to 439.
Dollar index down 1%
Gold up 24 to 895
No key supports breached. But this (especially dollar index) action is bearish for the market.
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September 22nd, 2008 at 1:42 pm
What about Volumn & the 10 year bond yield?
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September 22nd, 2008 at 12:32 pm
Is this the bounce?
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September 22nd, 2008 at 12:42 pm
I don’t think so.. I’m looking into going long for the week on the SSO. It’s slightly higher off its lows today, but I’m still favoring the downside now so it can fill that gap and then jumping in.
There’s some resistance at around 56.59
I wouldn’t go short on the market (SDS) but I dont think it’s THE bounce we’re looking for neither..
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September 22nd, 2008 at 1:18 pm
when do you plan on jumping in SSO?
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September 22nd, 2008 at 1:48 pm
Well I have an order 167 shares at: 53.83 with a hiddenstop at: 52.10
I might evaluate that order once I come in closer.. The stop might stay right there though..
Not sure if it’ll hit it.. the 200MA is gonna act as major support there..
We’ll see what happens..
Oh I’m not going to chase it though.. either it comes to me or too bad!
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September 22nd, 2008 at 2:27 pm
Ruben or anyone how do you do a ‘hidden stop’ I have to place my stops because I’m not always there to catch them and I would say 80% of the time they get hit only to move up, very fustrating. For example IMG.TO my stop at 5.95 got hit this morning
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September 22nd, 2008 at 2:35 pm
Depends what trading platform you’re using Ve,
I use Power Etrade Pro and I have a bunch of ways I can set a stop loss in order. Trailing stops, hidden stops.. and I guess that’s it..
But if you use something which doesn’t offer you the possibility of placing a hidden stop loss, then I would strongly recommend to use something else cause its the nr 1 thing all traders must learn to do at all times..
First analyze the chart
place your order
Set a stop loss!
Regards,
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September 22nd, 2008 at 2:56 pm
Thanks for the info. I very much agree with you about having a stop, my discount brokerage here in Canada (BMO) must be behind the times with no ‘hidden stops’, but I think I’m going to pester them about it because I reallly think the market makers can see my stops, they are called ‘Sell on Stop’
September 22nd, 2008 at 12:45 pm
Dollar index setting new lows.
http://finance.yahoo.com/echarts?s=DX-Y.NYB#chart1:symbol=dx-y.nyb;range=1d;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined
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September 22nd, 2008 at 12:52 pm
well, it will have a difficult time penetrating 76.
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September 22nd, 2008 at 2:11 pm
We may pause or correct a bit. A 2% move in one day is huge. Longer term if EUR can brake 1.5300 Then we’ll be off to the races.
I expect gold to test $990 soon. Oil is bid and should go higher over the next few months. The USD should sell off. If you believe the commodity story is not done and this is just a correction then USD should be much weaker in the long run.
I’m looking at a very long term chart of the USD Index going back to the mid 1980’s. From the mid 80’s up till 2007 80 on the USD Index was good support. We dipped down to 80.34 in 1991 then in late 1992 we briefly broke 80 but it was a false brake cause we went back to 95 in 1994. Then we went as low at 80.05 in 1995. Then we corrected higher to above 120 in 2001, in 2004 we went to 80.39 then back to 93 in 2005. We finally broke 80 last year and went down to 71 this year. Then a few weeks ago we tested 80 and now back down here again.
Just as 80 has held as support in the USD Index for over 30 years, now I believe it’s going to be major resistance going forward. You had the correct idea to sell USD when it hit 80, but now we should make new lows over the the next 1-2 years.
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September 22nd, 2008 at 2:32 pm
I still think by the year end, we are going to take out 80 on the dollar. Long term, no surprise the dollar goes down. But wave 4 of the dollar pullback is on its last legs imo. Get ready for wambo number 5
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September 22nd, 2008 at 2:37 pm
You may be right. Near term I’m going to cover my long EUR before we get to 1.5300
Good luck,
Pete
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September 22nd, 2008 at 1:03 pm
There are disconnects with the inverse ETFs QID, QLD, SDS, and SSO relative to their underlying index. None of them are near the double of the index precentage move today, almost one to one only.
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September 22nd, 2008 at 1:08 pm
Eli, SSO/SDS looks ok to me. But QID/QLD are closer to 1:1 than 2:1. Very interesting… There are some financial stocks on the NASDAQ, but not very many.
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September 22nd, 2008 at 1:21 pm
Hey Craig what do you use that shows VWAP? StockCharts does not have it.
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September 22nd, 2008 at 1:24 pm
I’m using ThinkorSwim. They dont have it either so I wrote it myself:
plot Data = TotalSum(Volume * Close) / TotalSum(Volume);
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September 22nd, 2008 at 1:24 pm
Most useful on 1-minute time frame beginning at 9:30.
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September 22nd, 2008 at 1:26 pm
thanks… does thinkorswim give live feed for free? or is it delayed?
muchas gracias for all you do…
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September 22nd, 2008 at 1:29 pm
I think its delayed unless you open an account with them, unfortunately.
StockCharts.com should get with the program on VWAP. It’s very useful.
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September 22nd, 2008 at 2:14 pm
Thanks to Craig I found the ThinkorSwim Platform. I currently get prophet at real time. Quotes are delayed.
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September 22nd, 2008 at 1:35 pm
SPY hitting the bottom of a falling wedge. 122ish may bounce
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September 22nd, 2008 at 1:58 pm
look at the volume on the daily!!!
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September 22nd, 2008 at 1:42 pm
SP500 - we’re almost in range of closing the friday morning gap. It’s in sight if we get a steep sell off. Maybe today is one of those 2:30 PM reversal days.
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September 22nd, 2008 at 2:10 pm
Nice call.
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September 22nd, 2008 at 2:05 pm
The Dems are piling on conditions now (forfeiting equity, clamping exit pay, homeowner help, ice cream for all), possibly to the point that few banks will bite.
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September 22nd, 2008 at 2:09 pm
Craig,
I think that we fill the gap tomorrow morn and then go higher. . . keep up the good work. There is a ton of money to be made in these volatile times . . .
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September 22nd, 2008 at 2:26 pm
If everybody is waiting for the gap to be filled, then I don’t think we are going to fill it…
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September 22nd, 2008 at 2:30 pm
Dawkins, great point. I was thinking the same thing.
I’m going to cover ahead of the gap fill, maybe around 1215, 38.2% retrace.
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September 22nd, 2008 at 2:36 pm
Today’s 5-min may break trend and break to the upside from here. At least in my little two cents. Not too much higher for a higher high intraday and a break on the channel.
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September 22nd, 2008 at 2:23 pm
Barney Frank thinks this will cost less? I used to think he was an idiot. I was wrong. He’s a moran.
If Paulson gets his way, he gets a constant 700B balance, which allows him to buy and sell any of his old cronnies toxic paper: sell it off to the treasury, get it off his books, and go back and bail out someone else. 700B is only the begining
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September 22nd, 2008 at 2:27 pm
Frank’s comment makes no sense to me. I wish he would explain that statement.
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September 22nd, 2008 at 2:42 pm
I think Frank’s intention is that the government will eventually try to re-coup some of the initial costs by selling some of these re-purchased marked down products down the road at a profit. How much, and exactly when, relative to the $700B, remains to be seen and is anyone’s guess.
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September 22nd, 2008 at 2:43 pm
That what I figured, but it seems odd to assume a profit. That’s like saying a $500K house will cost less than $500K.
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September 22nd, 2008 at 3:24 pm
I think, if they manage this right (if) we have the possibility of at least breaking even, less the cost of capital. If thats the case then this is a huge win for everyone.
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September 22nd, 2008 at 2:47 pm
Therefore, we might not fill the gap. I may cover my SDS at 1215, which is a 38.2% retrace. Will I get long? Probably not yet.
- I’m not going long on SSO for short term trades until we fill that gap. I’m in no hurry. That two day run up was huge and on historic volume, and the gap needs to eventually fill. My core long holdings are postioned nicely, I won’t care waiting.
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September 22nd, 2008 at 2:53 pm
Can I ask about your “core” holdings? What are they and how long are you holding for?
Thanks
John
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September 22nd, 2008 at 3:08 pm
I have a high dividend portfoilio of core hodling that I add to. I’m always 100 % invested. My short term trades are margin trades (non daytrade Reg-T) atop the portolio. Here are some names I added to last week in that category IR, CX, ADM, NS, VE . Boring names, but strong companies selling at or near price to book, and at low/mid single digit price to cash flow rations. Many of these companies when viewed on a 10 yr. monthly candle chart are at or below their 200 moving averages. I have another 25 names across various sectors as well.
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September 22nd, 2008 at 2:57 pm
Craig
Are you comfortable with going long before congress performs their “magic”? There is a lot unknown here….
John
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September 22nd, 2008 at 3:06 pm
Just posted on this.
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September 22nd, 2008 at 3:03 pm
Is oil right under it’s DTL at 109 here on the chart or am I using the wrong chart, I am working hard to learn from many of you because there are some darn good traders here. Thanks
http://tinyurl.com/4ggvb3
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September 22nd, 2008 at 3:11 pm
Thanks for the chart. I posted my chart in the commentary. Looks like we are above the trendline.
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September 22nd, 2008 at 3:10 pm
SSO seems like its priced too high today - relative to where the SP500 is when compared to trades and price points I made over the past week.
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September 22nd, 2008 at 3:11 pm
The leveraged ETFs are having some issues.
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September 22nd, 2008 at 3:18 pm
The slower the markets drip lower, the more inclined I am to hold my SDS…1215 may be too soon to cover…
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September 22nd, 2008 at 3:24 pm
SPY S1 is 121.052 and is providing support at the moment.
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September 22nd, 2008 at 3:26 pm
May have been early, but that’s trading… I’m content with my profit on a bad position.
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September 22nd, 2008 at 3:27 pm
How did you calculate S1 as 121.052? I’ve got it much lower.
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September 22nd, 2008 at 3:28 pm
Just jumped into SSO at 54.22
Somewhat higher then previously anticipated..
Got a tight stop set!
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September 22nd, 2008 at 3:23 pm
‘Just covered SDS position on volume spike lower.’
- Nice job waiting to cover in the face of all the noise.
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September 22nd, 2008 at 3:26 pm
Thanks Michael.
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September 22nd, 2008 at 3:28 pm
Took one SSO postion ~ 1213.
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September 22nd, 2008 at 3:29 pm
Craig,
If it gets to 1206.50 today, would you get long ? or wait until tomorrow ?
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September 22nd, 2008 at 3:29 pm
SPY filled gap, indicators showing oversold, possible bounce/reversal here. Hasn’t happened yet just something to be aware of.
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September 22nd, 2008 at 3:31 pm
Filled intraday gap from Friday, but not the close at 1206.51
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September 22nd, 2008 at 3:32 pm
Hourly SPX is far from oversold, so likely will head lower imo. XLF just broke below it’s S1 pivot.
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September 22nd, 2008 at 3:31 pm
Credit-card concern Capital One Financial Corp. (COF: View sentiment for COFsentiment, chart, options) was slapped with a tidal wave of bearish option volume last Friday, even as the stock enjoyed a 3.8%