Today’s Drama…
…will be a potential attempt by the S&P 500 to regain the October 2002 intra-day low of 768.67. (I predicted that we would fall through that level on October 15th in 768.67 – Coming Soon to a Screen Near You – yet another one of my fulfilled prophecies.)
Failure to recapture 768.67 would likely lead to despair amongst investors, and more aggressive shorting by technical traders.
A lot of bulls got trapped up around 820 on Thursday and I’m sure that they are just itching to get out even, so that will be a strong resistance area if the market can get that high.
Don’t Forget Iran
We are now in the “window of opportunity” period where many analysts have speculated that Israel would strike Iran: After the election and before the Democrats take over in January. And now Iran has enough uranium for a bomb. Shorting oil seems easy now, but it isn’t without risks.
when i see bloggers i have followed for a while say they have pulled out… i can;t wait to get in more.
http://www.getrichslick.com/2008/11/20/pulling-money-out-of-the-market/
gapping up might be bad i think. we set ourselves up for gap closing later in the day and even lower lows. but this is schoolboy talking so
As I type this, Asia is up. Hong Kong is up over 500 pts. Quite surprising. Futures are up too. Crash won’t happen yet or.. the PPT around the world will pull a rabbit out of their collective hats to prevent billions of losses for the put options they wrote.
Charlie, futures is a thin market. Nice to have if you need to offload some crap in HK or Tokyo.
Having said that, I’m long overnight and I want some government cheese.
80 Cash/20 Double-Bull
So far this morning, FTSE is up and it hasn’t broken below yesterdays lows.
There was high volume coming in on the FTSE future yesterday afternoon, so it makes me think that maybe there was some buying / short-term accumulation.
Thanks to whoever is playing around with the U.S. Futures I got out of that stupid Long position in Europe with a 12% gain.
90% Cash, 10% Gold.
Matt, what was the Oct 02 intraday low ? You have two different #’s there: “786.67″ or “768.67″
Nice pattern in the DAX. We will see the same in the DOW.
http://www1.deutsche-boerse.com/parkett/DAX_chart_realtime.jpg
D, exact same as Oslo. I got out of longs as that hat developed. The futures are a joke.
I had a typo up at the top and fixed the 2002 low to now read: 768.67.
3 mth t-bills at 0.03%
BDI flatlining around 830.
Futures are pointing to the fact that we hit your number Matt almost to a T.
Is that a double-top in the VIX?
Hey Matt.. do you think we’re going to make it through this upward resistance?
C 4.35 -7%
C -11%
Right Larry.. This market can’t rally too far with C practicing cliff diving. Down over 11% now.
Charlie, can you have a look at the VIX in a 6 mth perspective? What do you see?
when dow hits 7777 then things will go back to their normal trend… down down down
if it breaks through 8000 then might be seeing something else. but is a friday and if am not mistaken options expire.
C -20%
ICE in the daily is at the bottom of it’s bollinger band set at 100. it could go down to high 40′s but if/when it turns around to mid 50′s and has a nice trend $80′s here we come. again this is daily. am trying to discover a new technique for myself that could work
Hi Matt-
Hope you watched Louise Yamada on Fast
Money last nite. In my opinion she is one
of the greats when it comes to reading
chart patterns. And she made me feel good
since her analysis of the SPX moving into
the 400 to 600 area agrees with one of
my charts.
The strong dollar caused by foreign redemptions
is not good for stocks.
And now a question for Larry…
China needs money for their stimulus package…
Will they get it by selling U.S. paper???????
Have a great trading day.
Sherry
Hey Larry,
There seem to be a few possibilities. I see that it is right now touching the RSI support line that is formed from the start of Nov. If it bounces from here, it is likely the RSI will go into overbought territory (which would be bad for the markets). I see the MACD is also still rising this past week, but the day isn’t over yet. It will be important to see where we close today. There is a potential stoch cross, but it is not quite ready to cross just yet. Based on the current the primary trend (which is up), I would tend to think that we’re going to hang around the top here a bit longer. Also, if you look at the last peak, the top of the VIX wasn’t reached until the indicators on the VIX started to trend downwards. This might be because it takes time for the fear to dissipate.
This is just my opinion though. I may be totally off. Hey Matt.. what are you seeing?
Thanks Charlie. It is a lagging indicator I assume. We just have to wait.
Sherry: I hope not. But I am a bit scared about it. And that’s why I don’t like shorting commodity stocks anymore. In addition to what Matt mentioned this morning of Iran/Israel.
C coming a bit back -14%. Get to work Charlie.
Nasdaq leading the way today.
Goooo nasdaq! LOL
We might as well just watch C today…this market is going anywhere with them down 20%. They were trying to make a run up until the CEO opened his yapper.
So it looks like SPY is just going to fight to stay above 75…I’ll wait until the last hour to see if there is any action.
cant wait for apple below $80
i have to make a confession i did Buy some ICE even though I am sure if i leave water outside it’ll turn into ice for free. haha
Poof! All reddish now!
C -22%
http://www.youtube.com/watch?v=h7GHxyRx4fw
c is showing a little sign of life.. See how the SPX moves to the same tune?
Hey Larry,
I know you were asking about the VIX earlier. You may be interested in the VIX chart posted on StockTock.com
http://www.stocktock.com/2008/11/20/elliot-wave-update-7/
Buy aapl calls at 71.50
Citi’s up over 40 cents in the last 20 mins. Impressive!
Gold has taken off. Happy weekend.
90 cash, 10 gold.
After watching the charts a bit more carefully, I think that C’s definitely leading the market. I see that the SPX even lags it by a few seconds.
http://stockcharts.com/h-sc/ui?s=$SPX&p=10&yr=0&mn=0&dy=5&id=p91118941500&a=155374000&listNum=3
divergences showing up
Hope George is on the mend.
Hi Matt
What are your thoughts on a last hour short squeeze as it’s option expiry today? The potential for a waterfall decline is unreal!
JO
Market showing some signs of bottoming. But still very weak. Needs to make a higher low here.
and a higher high.
I guess George is still sick today
Market might be trying for another run at the 2002 lows.. was rejected twice today. Doesn’t look like it has the strength right now.
Pooch, JG, K, Larry, Matt.. anyone out there..
HULLOOO!!??!!
Hey Charlie. Getting lulled to sleep here and missed my play on SDS George-style. Waiting for another set-up.
Citi’s fall below $4 seems speculative and is vulnerable to a short squeeze.
Charlie, no that involved today. Action is too random for me and I had some hickup with my trades going through. Dax and s&p diverging with s&p being weaker… Dax confirmed Oct lows today so this divergence is still not sorted (confuses me more than you I’m sure
) I’ll reassess before the close. Good luck 
Thanks for responding! Just feels so lonely when I’m the only one posting
Market seems very weak right now. There is a good chance that we take out the lows for today again. The 10 min chart is cycling and unless there is some miracle, there isn’t enough time to rescue the chart before the close. There might also be frenzied buying into the close by the big boys, but that could also be met by frenzied selling too keep options in the money. A lot of people are going to bleed at the end of today based on the $$ they lost on options. That in itself might spark off the next leg down.
C was back near the intraday low. Bouncing off that now.. but back to being down more than 20%. The market is glued to C and there is no way there will be heavy buying due to it’s uncertain future.
It appears that you cannot short SSO, SDS, QLD or QID. In other words, SSO and QLD have to be used if you want to go long instead of shorting SDS or QID. Can someone confirm this ?
Thanks.
Hey Bob.. I’ve shorted SKF before, but it all depends on the availability of shares.
At these frothy levels, it will be hard to find shares. Not sure about the other ones you mentioned though.
Wow.. wasn’t watching, but C took a massive dive. Down over 30% now.
and some sudden MASSIVE buying on C in just the last 2 mins. Up almost 30 cents in a blink of an eye.. Is something happening?
Gold acting funny as if holding paper gold amounts to much.
Yeah, C just barfed hard. Looks like SPX finally decoupled from it though…I wonder if SKF can close above 300.
C has FRE and FNM all over it. I would expect a day or two next week with massive short covering and it will pop 20%. Not sure how the market would react to them being bought out….
My money is on closing above SPX 750 today.
SPY jumped up the very moment the TNX stopped trading at 3pm.
CNBC reported that there are sell order imbalances for C on the trading floor. C should fall into the close because of that unless some large buyers show up soon.
Feast your eyes on PPT action at it’s best! Buckle up.. we’re going into OPTIONS X.
The market seems to have jumped right after CNBC announced that Obama has selected Tim Geithner for Treasury Secretary, though I don’t know why that would be. Maybe he likes Citi.
C is burning shorts big time right now Matt.. up almost 90 cents off lows. Doesn’t sound like much, but this is < $4 stock now.
Market slammed into the 2002 lows again. Will probably gather strength and go for it again. It needs to take this out as probably a lot of shorts have cover buys right above this level.
I think it is because Tim Geithner is big on bailouts. Some say it was him that engineered the bailout for BS to be bought by JPM and not the treasury.
There we go. Through the lows. Now it will probably rocket through to 800 level.
That was a nice little engineered backtest of the 2002 lows to show that the resistance is now support again. Off we go!
Wow.. Hillary to be the secretary of state!
Obama’s picks so far ensure that we will see the s&p lower than we can imagine today.
Merging BS into JPM was the first mistake and then came the mess they created with LEH.
yeah.. I know Yerk.. you’re speaking reality, but we’re made to believe that we live in this dreamland where our politicians will make everything all better for us
I wonder if the PPT has the balls to push the markets back up to a 8 handle?
Hillary’s good at fundraising, isn’t she?
SPX at the 2 day VWAP right now. 785. If it can make it over this.. that would be a huge huge milestone.
I wonder what the government does with all the stock they buy these days..??
Charlie, expectations in Europe are at least an order of magnitude higher than in the US. This reflects on our politicians and our belief all rescue will come from the US. And then you got this Bush guy…
dax lagging the s&p. I think adding some puts might be reasonable if we close above 784.
I’ll have to do some testing over the weekend but given the technical damage you should be on the safe side if your puts expire late enough.
I was thinking he same thing.. 1 hour of trading on options ex week hardly mandates a changes in trend.
They are trying to kill those SPY 80 puts.
209,000 puts were just “put” under water.
Dow above 8000.. let’s see if the SPX can do it too.. almost there.
last 5 mins. anyone buying C for overweekend bailout ? heheheh
my ICE and AAPL and UYG will sleep in my accounts over the weekend
sorry about earlier charlie at that time I was enjoying a nice swim hehe. temps freezing outside meanwhile Krazy K buys ICE and goes swimming
I must say I am very impressed.. SPX above 800
not that I knew for sure but I called if it broke 8000 then we’d break out.
7% rally in the last hour – the bottom is in
A week ago, I wrote this:
All those traders who bought SPY 80 puts during yesterday’s plunge obviously weren’t listening.
I wonder how much money institutions saved by this crazy rally this past hr?
charlie I gotta ask..
did you get some juicy ice? I know I probably made some decent kachingos but am not home right now. limited amount of shares I did decent.
if only George could at least respond and say he’s recovering
BTW another great call Matt. I called dow at 7500 not sure if on this board but I preached it for 2 weeks at the investing club. am just happy that’s all. almost whole week off next week I might go crazy. gonna be a birthday boy tuesday not schoolboy.
. gona are the …teen years.
That was a nice trade there K and good that you hung onto your UYG at the end.
BTW Yerk,
I don’t know if options X rabid buying by the PPT constitutes a pattern for a sustainable rally. I could be wrong though. I see the market topping at 820 tops and then more downside. Just my thoughts though.
Matt.. what is your outlook on things right now?
I stayed on the sidelines K. I should have anticipated the rally, but was too absorbed with work today. When 3pm rolled around, I wasn’t sure I wanted to play the options X game anymore.
“# Charlie Says:
November 21st, 2008 at 3:15 pm
Now it will probably rocket through to 800 level.”
Not rocket but still a fantastic call
Thx for sharing your vision
Charlie,
The pattern for these geysers is to go sideways for a few hours and flop over. Rumor has that gold and bonds are soaring because money is fleeing Citi all over the world. Not exactly stuff of which sustainable rallies are made.
Matt
I agree Charlie. I don’t see this going past SPX 820. Had I been near the computer at rally time I would have jumped aboard. Instead, I snagged some puts at the very end of the day. Options expiration and a new Treasury secretary in two months doesn’t change anything.
I went short via some BGZ right at the close. That’s 3X Bear Large Caps.. Crazy.. yes.. but I don’t see anything changing. I also noticed on the dailly SPX chart that we just touched a downward resistance line that was formed on the RSI since breaking the recent uptrend.
The RSI most likely will go into oversold levels before a real bounce can be had. That should put us somewhere in the SPX 700 range..
Just my opinion though.
BTW.. Matt.. where do you get your options info from. That is nice information to know about
Charlie 810-820 is my target, 850 if the world is saved over the weekend. I scale into and out of positions.
To C or not to C. File it under AIG or China buying gold as reserve currency.
Besides CMBS blowing up this is the biggest nail in the global economy’s coffin this week: http://money.cnn.com/news/newsfeeds/articles/djf500/200811201437DOWJONESDJONLINE000820_FORTUNE5.htm
BASF said end-of-October the recession would not be as severe as in 02. This week they announced they close down twice as many facilities as they did in 02. Those early in the supply-chain are cutting by 25% – how will the tail be doing?
I’m open to any rally for technical reasons / being oversold etc. But the fundamentals are sickening. Bond markets as always are a step ahead of the gamblers and they know their client’s books far better.
Matt – your 3 o’clock observation: excellent!
Charlie,
I get options quotes from my broker. It’s very standard. Are there brokers out there that don’t offer options? Seems crazy since they would be missing out on a huge market.
Matt
Thanks Yerk. It also was probably no coincidence that the Geithner announcement was made at the same time that the bond pits closed. I think the Feds, including Obama, work with the big hedge funds and mutual funds to make these things happen. I’m sure that it was all planned out. The put-purveyors get to weasel out of the puts they sold yesterday and make a killing. The big funds not only get a jump on next week’s end-of-month window dressing, but they also get to tell their clients this weekend that the market “bounced off the 2002 lows and the bottom is in.” And of course, Obama gets to look like a genius because the market rallied 500 points “because” of his brilliant political decision.
Picking Geithner was hardly a surprise, and maybe not that great of an idea for stocks since Cramer said it was Geithner’s decision to put Lehman down. Maybe he will put a bullet it in Citi’s head too!
Matt
Matt LOL. As icing on the cake some quotes from Mr Paulson last week on NPR:
“I believe the banking system has been stabilized. No one is asking themselves anymore, is there some major institution that might fail, and that we would not be able to do anything about it. So I think that is a positive.” When the interviewer pressed Paulson on the idea of another major failure, the Treasury chief didn’t flinch. “I got to tell you, I think our major institutions have been stabilized,” he said. “I believe that very strongly.”
and then came Citi sneaking up behind Paulson…
This explains why bank stocks imploded – the ABX indices tell the story.
The Simple Arithmetic of Hank Paulson’s Financial Disaster
http://www.huffingtonpost.com/david-fiderer/the-simple-arithmetic-of_b_145389.html
interesting.. Goldman just said that they are NOT interested in buying Citi even if the government backs the deal. Citi is not sure what it will do and are pondering replacing their CEO now. Noticed that Citi just started tanking After hours. Was trading upwards of $4 and now is around $3.70 ish.
Well at least we can look forward to directing our rage towards someone who doesn’t buy scalp wax.
“……………if in the next few days, there comes a moment where you feel that you absolutely, positively must have some puts, you might be better off with some calls…….”
Quite good.
Just don’t be hasty with buying puts yet. People are expecting Black Monday!
Better off with letting this wave complete its bounce before shorting again.
and not failing on the weekend bailout schedule….
Georgia Bank Is 20th to Fail This Year
http://online.wsj.com/article/SB122731059649249257.html