Thursday’s Trading – 12/24/09

Yesterday, I mentioned that Exxon was the boat anchor holding down the SPX and Dow. And sure enough, XOM was down again on Wednesday. But why Exxon? Why is Exxon being sold?

I believe I have solved the mystery. Almost two months ago, I wrote about how the mutual funds were suffering redemptions. Well, guess what? The redemptions have not stopped. In fact, mutual funds that invest in US stocks have now suffered redemptions for 18 weeks in a row. Hard to believe, right?

So who’s buying stocks? Pension funds? Hedge funds? Sovereign-wealth funds? The Fed? Beats me. If you have a theory, I’d be interested to hear how the the market can levitate while the mutual funds bleed out. This is a very odd market.

In any case, fund managers are likely selling Exxon to raise cash to meet redemptions. Exxon is actually down 16.4% this year, so tax-wise, it’s better than selling Apple, which is up 122.7%.

What happens in 2010 if the redemptions don’t let up? Something else has to be thrown overboard, right?

52 Responses to “Thursday’s Trading – 12/24/09”

  1. K says:

    you’d be interested?
    Think TARP ?
    Banks invested perhaps got 60% returns then returned the interest free money to treasury.

  2. Sam says:

    nice, Matt

  3. Julie says:

    Merry Christmas!!!

  4. Yerk says:

    Merry Christmas everyone!

    So who of you bought the missing 500bln?
    http://www.tradersnarrative.com/is-it-all-just-a-ponzi-scheme-3393.html

  5. Julie says:

    Yerk,
    Thanks for the link. It was K.

  6. after says:

    your 7:25 am futes, Merry Christmas to all !!!
    Futures Prices
    Market Last Change %
    Crude Oil 76.69 +0.02 +0.03
    Natural Gas 5.886 +0.034 +0.58
    Corn 404.75 +6.00 +1.48
    Soybeans 1009.0 +10.5 +1.04
    30yr Bond 116.03125 +0.09375 +0.08
    10yr Note 116.125 -0.109375 -0.09
    NY Gold 1103.4 +9.4 +0.86
    NY Silver 17.335 +0.145 +0.84
    Emini S&P 1119.25 +3.75 +0.34
    Emini Nasdaq 1855.5 +3.25 +0.18
    Emini Dow 10435 +31 +0.30

  7. Stringm says:

    Merry Christmas to all, and be careful in your travels!

    Matt:

    Here is a link on how they are pushing the market higher.

    http://www.zerohedge.com/article/three-month-flat-market-yesif-you-exclude-constant-after-hours-manipulation

  8. Stringm says:

    Yerk

    I think it was Phil. Him and Bill Gross are the bond kings.

    String

  9. Yerk says:

    String, yes it must be him. Bill Gross went to cash.

  10. after says:

    ndx has surpassed my theoretical stop pt now which is 1858 for ndx100…so i will not add, but not going to cave on position either. i see nas up 6 % for the month ? wow…
    TLT – bidding 90.30 for more – 90.30 was the bid so i’ll join there.

  11. after says:

    filled on TLT @ 90.30

    happy holidays

  12. 'K says:

    I wanted to make my AAPL blog post last night but my host was having troubles. Anyways I will post it later but its of no use. From 200 I expected apple to go to 220.

  13. K says:

    Needles to say on AAPL

    In Last night for a 230 Jan call at 0.23
    out today at 0.55
    140% Gain.

    it’s heading higher now (0.6+ aka 160%) but i have learned not to be greedy.

  14. phil says:

    i want to sell all TBT bought yesterday on the next surge

  15. phil says:

    dont like the looks of tbt here….sold all for 86c gain………..merry christmas all…..hasta

  16. Mitch says:

    Phil,

    Merry Christmas to you and all!

  17. K says:

    Here it is late but here at last
    New Blog Post: Apple Poised For a Big Move $AAPL http://tinyurl.com/yedbnwc

  18. K says:

    crap i took 140% and its now 252% NOOOOOOOOO hahaha

  19. George says:

    MERRY CHRISTMAS EVERYONE!

    K, outstanding analysis on AAPL.

    Santa has rosey green cheeks instead of red. :)

  20. K says:

    Here is your Christmas Present!!

    The Treasury said it would provide capital as needed to Fannie Mae and Freddie Mac over the next three years, in a move aimed at soothing investors’ concerns about the government’s continued support of the mortgage giants.

  21. K says:

    also after falling, TED today made a nice bounce of 7% followed by a bounce of 10% yesterday that is yummy.

    the MA’s still didnt cross upwards and my hand is itching waiting for the moment to go more short but i dont expect it for at least middle part of january

  22. 2thfixr says:

    Turns out my triangle target was met today, even after it seemed to fizzle. SDS was stopped out yesterday. Sitting mostly in cash (200 TBT is working well though!).

    Merry Christmas everyone. Be naughty, be nice…just enjoy the Season and count your Blessings!

  23. Sam says:

    Not sure if I understand zero hedge article. Can someone please help explain the mechanics hes referring to?

  24. Julie says:

    K,
    You may have a better insight into America
    than we do. What will it take for Americans
    to do something about their corrupt govt.?

    The latest health bill has about 19 new taxes
    phased in at different times. Health insurance
    companies will make unlimited payouts and
    charge less for insurance. Only Americans
    would believe that lie. Aussies would storm
    the gates.

  25. Julie says:

    When the market is moving up, experts
    will have price targets well above the top.
    And when the market is moving down, experts
    will have price targets well below the low. The
    only expert who is always correct is “THE TAPE.”

  26. K says:

    you nailed the last sentence Julie.
    and you answered your own question!

    i think making insurance mandatory or charging fines when tax time comes around is one thing..

    but govt run healthcare? HOLY COW!!

    what am I supposed to do? This might not be Iran where they take you to jail for going against the big guy but its similar as the freedom i saw here (i landed about 6 months before sept 11) before slowly eroded into a country of (i dont even have the words to describe it)

    it’s ugly and it’s here to stay with so many americans being lazy in their education (usually resulting in “mr. good speech” getting elected for just empty promises )

    post christmas rant! enjoy :D

    Disclaimer: i voted for “mr good speech” so this is no straight shot. the change is for the worst! :)

  27. Julie says:

    K,
    When you have some time, google…
    …swing trading rules…and click on
    the LBR link…read several times…
    printout and post it on your mirror.

    On the hardrightedge.com, you will
    find 20 rules for successful trading
    (takes searching on the site). I have
    this and LBR’s trading rules printed
    out, and they are the first thing I
    read every morning.

    Stay green and grow.

  28. K says:

    skimmed both of those julie and starred. will print and have there to read

  29. Julie says:

    MERRY CHRISTMAS!!! K.

  30. Julie says:

    K,
    THANKS!!! for the great links.

  31. K says:

    Merry Christmas to you too Julie!

    Santa has come and gone so time to be naughty again. :P

    Although as a christian… christ is born and all rejoice!!!

    Have a good night Julie although it’s just starting to be christmas day here and its christmas night over in Kangaroo land!

  32. Julie says:

    Good night K. Take care.

  33. admin says:

    Japan’s deflationary death spiral is still going strong:

    “Falling wages and a worsening job outlook are discouraging spending by households and prompting companies to cut prices to attract customers.”

    http://www.bloomberg.com/apps/news?pid=20601068&sid=avflaBLy_zzA

  34. admin says:

    Sam,

    That’s a typical Zero Hedge article – it sounds important, but probably isn’t. Futures are leveraged, and there is arbitrage between the markets, so if you wanted to trigger a short squeeze in the stock market in the morning, you could try to buy futures overnight. But if mutual funds are getting redemptions, they are going to sell no matter what happens in the futures market.

    Matt

  35. admin says:

    OSR,

    If you are right, and money-market managers and bond-fund managers are gambling in the stock market, then that could easily outweigh the flows out of mutual funds. It would also indicate an extreme gambling mentality among managers who are supposed to be conservative.

    Matt

  36. K says:

    Julie,
    I’m drinking South Australian wine its called Yellow Tail

    http://en.wikipedia.org/wiki/Yellow_Tail_(wine)

    This next sip is for you!

  37. Julie says:

    K.
    Thank you. Here’s to you.
    Grandmother on my Mother’s side was an Aussie.
    When she passed away, Grandfather almost did
    also. Mother told him he needed to go back to
    Grandmother’s home. She would make sure he
    had all the money he needed and he would not
    have to worry about anything. Mother was right.
    When I finally found him it was like he was 40 years
    old again instead of 76.
    The Aussies have a spirit. Mother and Grandmother
    made life fun…Mother still does. She has something
    new for Paula and me every day.

  38. Julie says:

    K,
    By the way. I think you hiy the nail on the
    head about the Americans being lazy. The
    Community College here has free weekend
    courses. From time to time we teach a 12
    week trading course using “Trading For
    A Living.” We are always surprised on how
    few people take advabtage of the opportunity
    to help themselves…also suprised by the
    “thank you” notes.

  39. K says:

    Julie,
    I’m amazed how many of my friends think just getting through school with mediocre grades is ok. I’d rather not graduate and learn something than have a degree and know nothing.

    Speaking of which i asked for a raise at my seasonal job since i’ve been working there for a few years and also i have some college now instead of just highschool degree.

    No reply from the CIO, it’s been a week and no reply so he has till new year’s eve and i will say “thank you for your reply and good luck in the new year” My demands might have been somewhat agressive in such a bad environment but saying sorry cant give you raise is better than nothing.

    When I visit Australia, and I hope we keep in touch somehow… i’d like a personal tour so i wont have to do the boring tourist activities :)

  40. Julie says:

    K,
    Good luck. Hope you get your raise.

  41. K says:

    Julie,
    I’m losing hope but without it i’ll look for job elsewhere.

    Odds are 1:6 now but i believe i’m that 1.

    :D if not… my own part time business has boomed since i sent the “thank you” notes to customers in november.

    Have a happy Post Christmas and be on the lookout for links… oh wait.. lol 27th to 2nd I will not read news and trade just charts.

    ok 1 more day of potential links guys/gals

  42. K says:

    if you dont feel like clicking my link here are a few things sent out to all airlines now

    - Not allowed to have any items or anything on your lap for the last 1 hour of flight
    - Not allowed to go to toilet during that time either
    - Crew doesn’t tell about cities or landmarks so passengers don’t know where they are flying (it’s so hard to time that on clock)

    so if the flight from boston to new york is less than 1hr it seems like i’ll need to sit down the entire trip?

    I know my option to detroit now… rent-a-car!

    Hasta la vista airlines! i’ll wait for my moon rocket next time i Fly

  43. K says:

    I’m in the process of closing my forex accounts to focus on equities… stocks + options.

    hoping in a few years to have enough capital to take a stab at futures.

  44. Julie says:

    K,
    A good indicator to look at every trading
    day is the SPX full sto (5,3,3). A lot of
    people tell us they don’t trade futures
    because they don’t like margin. I don’t
    see any difference between margin and
    the money you need in your account to
    trade stocks or options.
    Hope you got your raise.

  45. George says:

    Here’s the SPY up-gap from November 9 on a weekly chart. It is very narrow, ~.40+ cents. On the daily it looks more significant. An outstanding gap on the daily and weekly in itself is significant.

    I would expect it to be filled at some point.

    http://i48.tinypic.com/2rpsf8o.jpg

  46. dressguard says:

    Hi folks,

    you guys must be multi-millionaires by now! Prospero ano y felicidad! :mrgreen:

  47. Self Similar Idiot says:

    A programming question for Matt – eSignal has a code block for their FDI which I think is in javascript. This can be inserted into NinjaTrader’s custom indicator wizard which is meant to take C#. It gives just 5 lines with any errors – all “expects ;” . With these fixed, there is only an error on the last line of the eSignal block that says “expects statement”. If you supply this ending statement, would this code compile and produce the FDI? What statement needs to go there?

  48. admin says:

    SSI,

    I really don’t know. I have never used eSignal or NinjaTrader. I would guess though that copying code from one to the other wouldn’t work.

    Matt

  49. George says:

    I’m a gapaholic.

    Phil challenged the “every gap will be filled sooner-or-later” axiom by pointing out that AAPL had several daily gaps years ago that have not been filled – yet. :)

    I checked on those gaps. I don’t have the link that Phil gave but I did some research on AAPL with two of the gaps the author pointed out. Sure enough, they were filled.

    http://i49.tinypic.com/33aqioy.jpg

    http://i46.tinypic.com/2m816qu.jpg

    Then, later on I found some that were not filled on the daily (yet). Surprise!

    http://i49.tinypic.com/2l8e0at.jpg

    So I looked at the weekly and there were NO GAPS where there were daily gaps. I couldn’t figure that one out until I noticed those daily gaps were, what I call, “back-filled”, meaning, during that week, they had a previous low or high that nulled the daily gap.

    A light bulb went off and I immediately checked SPY’s current daily gaps to see if there was a lingering weekly gap. Sure enough, the weekly gap I posted earlier is in line with the daily. I’m figuring that is going to be a big deal.

    So the conclusion is that while some time frame gaps will be unfilled, another time frame during that period may or may not have a gap and that will lessen or strengthen its affect.

    Thanks Phil for giving me another technical challenge. Best way to learn.