Tuesday’s Trading
The Missing Rally
On “Fast Money” Monday night, they had a chart analyst on who was mystified as to why we can’t generate a lasting bear-market rally. We can have a sharp short-covering rally, but not one that will last for more than a few days.
I think that there is a simple answer to this mystery: the public is not being roped in. The only months where there were net inflows into mutual funds that invest in US stocks this year were April and May.
Joe Average wants nothing to do with this market, and until he can be persuaded to buy stocks again, lasting rallies may be very few and far between if we get any at all.
Silly Call of the Century
Cramer was expecting only a mild pullback before the market opened Monday morning. Here is what he wrote in a piece titled “Any Downside Should Now be Muted“:
“…the market will be kinder and gentler.”
The Dow then plunged 680 points!
Whitney Charts
Meredith Whitney is forecasting a major contraction in consumer credit. See this Bloomberg story, and make sure to click the “graphic” tab to see the charts.
December 1st, 2008 at 11:58 pm
I think that Monday’s volume was sufficient to validate the selling since the Monday after Thanksgiving is not a high-volume day, and volume accelerated into the close.
I also think that the market intends to test the November low. However, the market may turn out to only be on a mission to fill the gap left on the morning of November 24th, so that is an important level to watch. If the market falls into the gap and fills it on increasing volume, and then makes a feeble bounce on light volume, that might be a good short entry point for a trip down to the lows.
If the market can make a strong bounce from the gap, then it should be able to at least put in a decent retracement of Monday’s plunge.
SPY closed at 79.54 on the 21st, and then gapped-up to open at 81.89 on the 24th.
December 2nd, 2008 at 12:29 am
thanks matt especially for the Whitney charts. she’s great. i saw her video later on. she is blunt and that’s what makes her talks to important to the market.
December 2nd, 2008 at 12:56 am
Expectations need to be adjusted further down before we can get a sustained bounce. At the end of October on this board, Rich suggested 690s by mid-December; that would keep us in the down channel. If we go below 700, I’ll likely cover and go long.
December 2nd, 2008 at 1:04 am
Hedge funds are increasingly blocking redemptions, a move that creates a strategic response among investors to want to get out at any price.
December 2nd, 2008 at 1:09 am
Matt, I am not sure if this adds any value, but while the SPY did gap-up to open at 81.89 on the 24th, it had a low of 80.36, which almost closed the GAP.
December 2nd, 2008 at 1:14 am
I wonder if this will happen instead.
http://www.stocktock.com/2008/12/02/intraday-commentary-12208/
December 2nd, 2008 at 1:18 am
just trying to lighten the mood.
http://www.amazon.com/s/ref=nb_ss_gw?url=search-alias%3Daps&field-keywords=New+Mario+Italian+2+Button+Men+Suits+Virgin+Wool+140s+~&x=18&y=21
check original price and sale price. i guess wallstreet fatcats stopped buying suits
92% savings!
December 2nd, 2008 at 1:23 am
Matt, You wrote “It’s a rare trader who never has to endure pain, and in fact, your ability to endure pain and not barf-up is by far the most important trading skill that there is.”
Thank you so much for that note!
I held a short since 11/25 on the SPY at $87.3, and I added shorts Friday. I gained much more in enduring that pain than I did in dollars.
BTW, I am in the black for the year and only cashed in 20% of my shorts.
What a great site for gaining trading wisdom, not to mention market analysis!
December 2nd, 2008 at 2:31 am
Newbie, that comment from Matt helped me too to stay in when everyone were screaming mega-rally.
Welcome to the 1% club.
1% = Investors in black in 2008.
December 2nd, 2008 at 2:50 am
Futures flat. Europe opens in 10 minutes and it won’t be pretty, even though they took most of the losses yesterday.
Brent Crude at 46.2
WTI at 47.6
The fundamentally worthless Yen is stronger and stronger (worthless compared to what?). I think we have liquidation mode here folks
December 2nd, 2008 at 3:01 am
Japan -6.35%. Black mood spreading.
Hussman argues stocks are now undervalued, assuming the underlying trend of 6% dividend growth continues.
December 2nd, 2008 at 3:03 am
Larry, this is definitely liquidation mode. Private Equity funds, hedge funds, Citi and AIG and their ilk all need to raise cash and pay loans. We’re setting up for a fireball decent at high volume.
December 2nd, 2008 at 3:14 am
Oslo diving again. Let’s see if oil will bounce of 45.
Dressguard/Yerk: What are you doing? Are you in?
December 2nd, 2008 at 4:33 am
I’m still short. My personal TA didn’t give me a signal to sell my shorts. But could happen today or tomorrow. Maybe I’m too late though.
December 2nd, 2008 at 5:05 am
Meredeath’s appearance on CNBC yesterday:
http://www.cnbc.com/id/15840232?video=946475488&play=1
December 2nd, 2008 at 5:15 am
Squirt pattern in the DAX:
http://www1.deutsche-boerse.com/parkett/DAX_chart_realtime.jpg
December 2nd, 2008 at 6:31 am
Matt, anybody - for some reason Bloomberg won’t pull up the Whitney chart on my Firefox. Any chance somebody could clip it and post it ? Thanks.
December 2nd, 2008 at 6:58 am
Larry, short but nervous. I do dislike what I see… Fundamentally this is going down the drains - FAZ today had a side story about a Mittelstand company needing liquidity, got of course nothing from the banks which claim they have eased lending, so the biggest customer extended the maturity of his debt. Someone keeps the debt…
Market technics show the potential for a massive swings down (770/680) or up (930/1000) which is bit too much for my taste. First 680 then 1000 is my preferred game plan but a bit obvious.
Kailash, can Hussman prove his model applies in the current context? Reversion to mean in a historic crisis might take a bit longer…
This one is a week old but might be of interest to the folks in the US betting on a meltdown:
http://www.moneyandmarkets.com/citigroup-collapses-banking-shutdown-possible-28325
December 2nd, 2008 at 7:34 am
Most of these valuation models are probably now useless. The absurd and sustained low interest rates of treasuries as well as the sustained high VIX levels are the tell. Technical analysis without any insight will also be doomed to fail in an epic bear market. If systemic dislocations abound how can any reasonable person expect models born in relatively sedate economic times be trusted. Say goodbye to the market analytics crowd.
December 2nd, 2008 at 8:24 am
Yerk, if the market is given a choice between “massive swings down (770/680) or up (930/1000)”, I’m comfortable we’re headed down, but you’re of course right the volatility is neckbreaking.
Hussman takes the long view; he’s not making an argument about this month’s stock prices, or even next year’s. He also points out that the drop has been entirely justified; stocks were historically overvalued.
There’s no doubt that markets are frequently not fairly valued for extended time periods (years), on either side. His point is simply that in the long run, the valuations are remarkably predictable.
Going forward, he could be wrong about the 6% dividend growth assumption; in the long run, expensive energy may drain that figure.
I’m now up an astounding (to me) 54% this year, almost half of it from yesterday. All of it is still in play, double short in RYIRX. I’m very risk tolerant, but try to keep the money out of it anyway, just look at the market on its own terms. The profile of this last bounce and yesterday’s drop tells me there’s enormous pent-up selling pressure that’s nowhere near exhausted, artificially dammed up over Thanksgiving in a way that (predictably) gave us a historic entry point.
In my small and risk-sensitive account I exited within half an hour yesterday, as a 15% drop was too good to stand up. A bit hasty, of course, but I’m trying to build it up, and can’t afford to follow the market all day — I have a fun real job! If we really bounce back into the 840 area today, I may reenter, but I don’t want a big distraction.
In my main accounts, I’ll try this time to get the execution right. My dream is to flip at the phoenix moment, somewhere just below 700, and go long, but for that to work it has to happen at the permissible trading times of Rydex funds!
If you rode yesterday down and are risk averse, surely it’s a good time to take profits. If not, we should have a spectacularly fun week ahead of us!
December 2nd, 2008 at 8:33 am
Dollar down a bit Last trade 86.622 Change -0.369 (-0.47%)
Futures up for a bounce S&P 500 DEC08 831.60 +1580
Asia solid red, led by the Nikkei, but Europe green, led by oils (and Oslo).
Likely retrace to around 840.
December 2nd, 2008 at 8:41 am
Baltic Dry -2.3% to 684
December 2nd, 2008 at 8:56 am
Bears should be concerned that there were less than 100 new lows yesterday.
December 2nd, 2008 at 9:03 am
That’s good. So more room to go down.
December 2nd, 2008 at 9:08 am
Do I see a chink in the DAX’s armour?
December 2nd, 2008 at 9:08 am
Kailash,
congratulations to your performance! Easy to get burnt during these erratic actions so taking profits is not the worst thing to do.
Re Hussman, normal market cycles and how long can the market deviate from “true” valuations of 6%. I read him from time to time but I doubt the market always gravitates around his identified true valuations. Not that I am convinced we are headed this way this time but last century provides quite a few examples of extraordinary moves in the markets following severe dislocations in the system: http://www.dhm.de/lemo/objekte/statistik/aktien23/index.html
Larry - oil failed again at 800. Now heading below 600?
December 2nd, 2008 at 9:09 am
newbie,
Your welcome. Shorting a rising wedge is usually painful, but they almost always pay off big.
Matt
December 2nd, 2008 at 9:09 am
right now premarket spy is hitting MA36 and not breaking over. we’ll see. should be fun. using fib retracement we might go up to 85.10 maybe since there aren’t that many bad news today yet and that the 60, 30,15 min charts are oversold in stochastic.
December 2nd, 2008 at 9:11 am
btw charlie we gonna get some of george’s ice today? it looks oversold in so many levels other than daily
george where art thou hope youre getting better.
December 2nd, 2008 at 9:17 am
hey k, I would only get ice to play scalps right now. I’m fearful of going long on anything in this market right now..
December 2nd, 2008 at 9:20 am
not long just scalps
December 2nd, 2008 at 9:26 am
ahh i do see we closed near a bollinger band at 100,2 so that might cause some consolidation until we make our way to 80
December 2nd, 2008 at 9:34 am
827. Everyone excited. Let’s see how much redemption selling we get.
December 2nd, 2008 at 9:42 am
Typical premarket idiocy.
December 2nd, 2008 at 9:45 am
Yerk, LOL — if the Fed keeps at it, perhaps we’ll get Weimar-style hyperinflation. This history may be part of the reason Merkel speaks up against the Fed’s actions.
December 2nd, 2008 at 9:47 am
Merkel doesn’t have a friggin’ clue. She should resign immediately to make things not worse.
December 2nd, 2008 at 9:47 am
Crimson, are you seeing a rally back up to 900 from here? And then up an onwards?
December 2nd, 2008 at 9:50 am
i love this analogy!!! http://bespokeinvest.typepad.com/bespoke/2008/12/irony-of-yesterdays-ism.html
December 2nd, 2008 at 9:57 am
Dressguard, be kind with her. She personally guarantees the money you have foolishly trusted to insolvent American banks
Me thinks we are going down today
December 2nd, 2008 at 10:05 am
Larry’s Oil report - December 2, 2008
Price per Barrel of Oil:
July 1, 2003 - 0.10 Ounces of Gold
July 4, 2008 - 0.16 Ounces of Gold
Dec 2, 2008 - 0.06 Ounces of Gold
The price reduction since 2003 is 38%. Global demand is up 9% in the same period, but demand is falling like a rock. The market is pricing in the decline after going bananas in the summer.
The wild speculation caused prices to shoot up 60% at the peak, even though no shortages were reported.
The OPEC Cartel wants prices to stay at half the price (147/2) it was at the peak this summer. Which by the way is 0.10 Ounces of Gold, same as 2003.
TV Pundits are confused by the wild swings in the oil price, while 1/3 the world’s oil tankers are now being used for storage, as traders say the price is now in so-called contango.
Federal Reserve meanwhile are pumping massive amounts into Banks. However, these banks are dead (as in no heartbeat) because of the infamous Credit Default Swap scandal. Therefore these money will not reach the consumer. Look for oil to fall to 1/3 of the price of oil in 2003.
Price target: 0.033 Ounces of Gold per Barrel of oil
December 2nd, 2008 at 10:06 am
K — that’s very funny. We have a growth industry!
This bounce is anemic — merely licking wounds.
December 2nd, 2008 at 10:10 am
well they do want to stimulate the economy so i guess they are stimulating an industry! now we should be happy the bailouts are working hahahaha
December 2nd, 2008 at 10:13 am
Crimson, I may be missing somwthing here. Is it a surprise that we saw few lows so far above the last bottom?
December 2nd, 2008 at 10:17 am
Another squirt pattern in the DAX (goes in sync with US):
http://www1.deutsche-boerse.com/parkett/DAX_chart_realtime.jpg
December 2nd, 2008 at 10:23 am
Volume up in the uptrend. Is this a short-squeeze or actual panic-buying?
December 2nd, 2008 at 10:29 am
Some comic relief is in order after a serious drop like yesterday’s. Let’s see if we can get back up to yesterday’s platau.
December 2nd, 2008 at 10:39 am
Larry,
Yen down against $, $ down against Euro/Pound. Yields on 10 year up slightly. This is consistent with an up market.
I see the higher volume compared to yesterday. Let see what happens as we approach 840. If we get through to 850 on high volume, perhaps we rally.
Personally, I still don’t understand who is buying and why…I remain 95%+ cash.
December 2nd, 2008 at 10:49 am
since yesterdays crash a 38.2% upwards retracement leads us to 85.09 so we shall see is that’s the point we head south again am 10% short i guess.
December 2nd, 2008 at 11:03 am
I just went short via some SRS calls myself, but if the action smells funny.. I will cover.
What I found interesting was that there wasn’t much buying on yesterday’s weakness per the Money Flow data from WSJ. There also wasn’t a whole lot of selling on the strength if you look at the short ETFs.. so that leads me to believe we have further down to go.
Right now, volume is decent with the SPY already having reached the total volume from last Friday (2 hrs early).
BTW.. does anyone have a good way to view of intraday advancing volume vs. declining volume in terms of $$ exchanged?
December 2nd, 2008 at 11:10 am
Volume on SPY heading down, SPY itself turning down from 840. Possibly was a backtest of previous support…
December 2nd, 2008 at 11:10 am
Someone just pointed out to me that with the market up as much as it is today, USO (oil) is still making new lows. That is a very bearish sign given that Oil prices are driven by demand and economic growth. With oil sinking further, people are very pessimistic of the coming economic conditions = bad for markets.
BTW.. let me take a look at RIMM now.. oh! $37.. with a intraday low of $35+ … I’m sure glad I talked by boss from not going ‘All In’ @ $50. I told him to expect the price to go to the 30’s…
I should have shorted this when I had the chance…
December 2nd, 2008 at 11:11 am
I will just hold on to my TZA. nice job on srs charlie. just remember dont barf up too quick if you have confidence in yourself. I knot my TZA seens like its about to break some stuff to the low.
but also paulson speaks at 11:30 and plosser at 12:30 so lets hope these bastards dont rally too hard.
December 2nd, 2008 at 11:12 am
hmm rimm is the opposite of apple. wonder why
December 2nd, 2008 at 11:14 am
Oil doesn’t want to move up with market. 10 year treasuries at 2.71%.
It doesn’t look great for the bulls.
December 2nd, 2008 at 11:16 am
Great one Charlie. Job number one in 2009 will be to keep our jobs.
December 2nd, 2008 at 11:18 am
this is another hilarious headline.
Ford says CEO will work for $1 to get loans (AP)
HAHAH “will work for loans!!”
December 2nd, 2008 at 11:19 am
I think with all the corporate layoffs, growth for RIMM is probably grimm right now. Growth will come from today’s youth who don’t realize how bad things are. That is where apple trumphs them. Also, palm warned yesterday of slowing groth, layoffs. They are in the same market segment as RIMM which might also explain some of this weakness today.
December 2nd, 2008 at 11:22 am
Palm is a dead man walking. No competitive products. Not even in the pipeline. I assume they don’t have a pipeline any more.
December 2nd, 2008 at 11:23 am
cant wait for plosser’s speech at 12:30 till then today’s youth will go play video games as stress reliever :P.
December 2nd, 2008 at 11:37 am
840 turned away again.. but I wonder if the market is going to make it through today. I think 4 is the magic number and if it keeps hitting it’s head against that ceiling, it might just make it though.
Matt.. do you have any thoughts on today’s “rally”?
December 2nd, 2008 at 11:37 am
I think a lot of yesterday afternoon’s sell-off was inspired by worries about GE. The traders who got short in anticipation of GE’s announcement this morning then had to cover in a hurry when GE didn’t drop any bombs. That would explain the sharpness of this morning’s rally.
December 2nd, 2008 at 11:41 am
Brent Crude fell to 46.50
There’s no way SPX market can hold at these levels.
December 2nd, 2008 at 11:42 am
charlie you might be right. but then again.. today most news werent too important. the next 3days will be interesting.
December 2nd, 2008 at 11:49 am
well i guess we will rally.
December 2nd, 2008 at 11:52 am
I don’t think we’ll rally, so I got some FAZ.
December 2nd, 2008 at 11:54 am
How high do you expect this ‘rally’ to extend Matt.. or do you have key levels you’re watching where you’ll cash in your shorts?
December 2nd, 2008 at 11:56 am
For me.. hitting 840 was pretty obvious. The next level to watch would be for the 50% retracement of yesterday’s down move which is around 85.91 on the SPY or around 855 I think. If it goes above that.. then we run the risk of heavy rallying.
December 2nd, 2008 at 12:05 pm
After yesterday’s fall I really don’t see much chance of a sustained rally. We may make it to 850 at the outside, and likely end quite a bit lower, closer to flat for the day.
According to this scenario, we’re headed down, but it will take several days, and bounces like this are shorting opportunities.
December 2nd, 2008 at 12:13 pm
charlie i think the best way to cheieve high gains is to wait till the trend really breaks. i think that’s what matt mainly does.
December 2nd, 2008 at 12:13 pm
and i cant even spell achieve
December 2nd, 2008 at 12:26 pm
this is very familiar. look at 60 min spy volume and price :P.. reminds me of the rally we had the last 5 days.
volume down 3 price climbing great short opportunity me thinks.
December 2nd, 2008 at 12:33 pm
plosser speech
now let’s go after lunch sell volume please pick up. thanks.
http://www.philadelphiafed.org/publications/speeches/plosser/2008/12-02-08_university-of-rochester.cfm very nice.
December 2nd, 2008 at 12:42 pm
Key points to speech:
12:34 p.m. Plosser: Deflation is not a serious threat for U.S. economy
12:33 p.m. Plosser: Housing sector will finally hit bottom in 2009
12:33 p.m. Plosser: Jobless rate will peak above 7% in 2009
12:32 p.m. Plosser: ‘09 growth below 2% rate on Q4-Q4 basis
Courtesy of Marketwatch.
December 2nd, 2008 at 1:18 pm
from barry ritholtz
Ford’s November sales down 30.6%; Toyota sales down 33.9%.
Volvo sales tumbled 46.5%
GM and Chrysler report later today.
December 2nd, 2008 at 1:26 pm
Well, I’ve been monitoring but not able to respond. Film at 11:00.
Looks like Ford did better than the others. Of course, 30% of nothing is nothing.
Disclaimer: I own 1 share of Ford.
December 2nd, 2008 at 1:31 pm
GEORGE welcome.
December 2nd, 2008 at 1:33 pm
Something just happened and I don’t know what.. but i see stocks are practicing some cliff diving.. all of a sudden..
December 2nd, 2008 at 1:35 pm
GOOO GEORGE!!!.. That share of Ford may someday be able to buy you a happy meal
December 2nd, 2008 at 1:35 pm
more like traders came back from lunch and saw auto news?
December 2nd, 2008 at 1:45 pm
That 1 share of Ford is the only losing stock I’ve had all year.
December 2nd, 2008 at 1:53 pm
darn george. one day i will be like you
December 2nd, 2008 at 2:01 pm
That’s gosh darn good trading George !
December 2nd, 2008 at 2:04 pm
Do I see a cliff pattern in the DOW?
December 2nd, 2008 at 2:05 pm
SRS is going nuts.. my call options are showing me the luv
December 2nd, 2008 at 2:21 pm
Divebombing — and the dollar is moving back up.
“GS fourth quarter losses could be as much as $2 billion.”
December 2nd, 2008 at 2:22 pm
And for those of you that don’t know or care, I hear that coalition parties are joining together to oust the current Canadian Prime Minister out of office. He was just elected to a minority government a few months ago and now they want to kick him out with a non-confidence vote. Talk about chaotic times..
December 2nd, 2008 at 2:22 pm
That’s because I had to buy the 1 share of Ford and keep it. I can’t sell it because I use it to keep my tradin account from being inactive and to show me outstanding lots - long story, but it works.
December 2nd, 2008 at 2:23 pm
@Charlie: Who cares about an US-American outpost?
December 2nd, 2008 at 2:25 pm
SDS going for double tops on multiple timeframes.
December 2nd, 2008 at 2:26 pm
Charlie,
That snap you saw at 1:33pm was the intra-day rising-wedge pattern breaking down. K pointed it out at 12:26pm. Wedges often snap for no apparent reason, and fall back to their base. I think that the best time to short them is either immediately after they snap, or when they start to get “pointy” when the the price range narrows.
Matt
December 2nd, 2008 at 2:28 pm
Those tops are ~103 - 104 area. If it goes past that, it’s going for a gap-fill at ~110.
December 2nd, 2008 at 2:29 pm
Kailash,
Nice call on FAZ at 11:52am. I added to my position earlier also.
Matt
December 2nd, 2008 at 2:31 pm
Make sure to have GS on your watch list. It might lead us through the next panic-plunge-bailout-rally cycle. If you see it drop into single digits on a Friday, cover your shorts, and go long at the close for a Sunday bailout just like with C.
December 2nd, 2008 at 2:42 pm
GS to single digits.. wow.. that would be something…
December 2nd, 2008 at 2:43 pm
Matt, I had kind of fun today. I got some more FAZ (following your example — I hadn’t traded it before — and to avoid trading TZA within the same few days) an hour later, around 67.50 — didn’t quite catch the bottom, but close enough. I maxed out on my small account and got a margin warning, but I was never far under water. Then the turn around is dramatic, so it was entertaining. It’s amazing how fast FAZ moves once the market picks a direction.
GS may indeed be the trendsetter for this plunge.
I’m also interested to see where we go once we hit the zero line today; we could resume the plunge in the last half hour.
Now I’m back to being short 110%, on margin (not much actually), some tripled and mostly doubled. I haven’t seen such a nice trading opportunity in a long time.
December 2nd, 2008 at 2:44 pm
YAY i got mentioned for a good call. Kailash thanks i bought when i saw wedge break 30 mins after you made the call.
Matt, GS really going into single digits? WOW that would be something
December 2nd, 2008 at 2:47 pm
i got FAZ at 65.60 lol.almost sold at 80 i guess i’ll hold?
December 2nd, 2008 at 2:50 pm
That’s a sweet entry on FAZ K!
December 2nd, 2008 at 2:52 pm
Hey K, good grab! It’s fun to get the timing right.
We could have an interesting ending today, after some stalling above 820.
December 2nd, 2008 at 2:52 pm
I don’t know if GS will go into single digits, but that seems to be how the game is played. The WSJ published an article on MS, I think, last week. Basically, all the banks and brokers turn on the weakest player and short them down into the single digits. They are cannibals. GS may be next because they are probably going to have a bad earnings report.
December 2nd, 2008 at 2:54 pm
spy 5 mins seems like is gonna make a hit for 84
December 2nd, 2008 at 2:57 pm
actually all from 1-15 mins seem oversold.. hmm
and yes we seem to have support at 82
December 2nd, 2008 at 2:58 pm
wow serious buying volume
December 2nd, 2008 at 2:59 pm
K;
How’s your FOREX trading? Have you heard of FAP Turbo - FX auto trader?
December 2nd, 2008 at 3:01 pm
Matt, if the GS scenario plays out, it would be fitting — they are the architects of much of the shadow banking system, and have their man at the Treasury. Grinding Goldman Sachs into single digits is a perfect capitulation moment and a great place to start the Xmas rally.
GS will be the firebird
December 2nd, 2008 at 3:02 pm
BTW, I have raked it in on UYG. MOOO to that cash cow.
December 2nd, 2008 at 3:05 pm
I’ve missed a lot of trading in the past two weeks though. Should be getting in full swing by next week.
December 2nd, 2008 at 3:06 pm
@ K Nice FAZ buy.
I am ashamed to admit it, but I got stop out of most of my shorts around 10:30.
Added some back at 12:59 with SDS at $99.5
December 2nd, 2008 at 3:06 pm
george forex went for crap on one trade and i decided to take a break.
no i havent heard of that. i raked in on uyg early but like you say scalp is a scalp.
December 2nd, 2008 at 3:09 pm
George,
Have you tried the triple financial FAS yet?
http://direxionshares.com/etfs
Matt
December 2nd, 2008 at 3:11 pm
Added more SDS at $101.0
December 2nd, 2008 at 3:12 pm
isnt a spinning top candlestick a sign of reversal?
December 2nd, 2008 at 3:17 pm
Matt;
No I haven’t. I like the price though… SKF is getting pricey. I like that FAZ, too.
Thanks
December 2nd, 2008 at 3:17 pm
Here we go…
December 2nd, 2008 at 3:18 pm
oh noessssss
December 2nd, 2008 at 3:18 pm
george you’re long? my shorts are falling LOL NOOO is cold. change the mood george.
December 2nd, 2008 at 3:20 pm
LOL; Just doing my thing with SSO during the Stochastic dips… Last hour and all that…
December 2nd, 2008 at 3:20 pm
newbie, it’s hard to know how to even preserve capital in this market, much less come out ahead. I make it a rule of thumb not to invest unless I’m confident in the overall direction of the market. That way you can stomach smaller bounces. The market plays on uncertainty, so if you get thrown off easily, it’s someone else’s gain. I tell myself, “It’s almost impossible to make money in the market.” Don’t ever think it’s easy — there are lots of smart people doing everything they can to outwit you. Most of the time, it’s really unpredictable. It’s really easy to lose. Very occasionally, there’s a really obvious case, and then I go whole hog, like now — that’s almost never. There’s a reason Nobel laureates go bust — there’s no system of any magnitude that will reliably work over long periods, since someone will see the pattern and exploit it.
Lots of different styles of course. I try to trade very rarely and get the timing just right. Of course, I don’t get up to K’s level
December 2nd, 2008 at 3:21 pm
Kailash haha, i dont think you want to get to K’s level. it burns you up here where i like to play.
December 2nd, 2008 at 3:23 pm
i think bulls are trying to reclaim 84 as support
December 2nd, 2008 at 3:24 pm
I want $23.60 on SSO.
December 2nd, 2008 at 3:24 pm
GS may be the head cannibal though, it’s certainly got enough Washington clout.
December 2nd, 2008 at 3:25 pm
+ george is back so there goes K’s luck
December 2nd, 2008 at 3:26 pm
there soon you’ll get a better price than K
December 2nd, 2008 at 3:27 pm
nah, I should be good luck.
December 2nd, 2008 at 3:29 pm
I think in September some action was taken to prevent the use of certain market practices against MS and GS - no one cared until they topped the short list.
December 2nd, 2008 at 3:31 pm
Matt, what are your thoughts on the rally with no news? It looks like more short covering.
December 2nd, 2008 at 3:31 pm
Man, if SDS loses this support area, it’s all uphill for the market.
December 2nd, 2008 at 3:35 pm
i told you george is bad luck
December 2nd, 2008 at 3:37 pm
@ Kailash, you so right, I tried to get cute and I got burned.
December 2nd, 2008 at 3:39 pm
LOL K; If it weren’t for bad luck, you’d have no luck at all.
December 2nd, 2008 at 3:41 pm
I think I just blinked and the market fell like 5 pt off the spx.
December 2nd, 2008 at 3:42 pm
Hey, SDS hasn’t lost that support area… yet. down around 95.50. Needs to hold.
December 2nd, 2008 at 3:45 pm
charlie blink some more
December 2nd, 2008 at 3:47 pm
SV,
It might be short covering considering that we probably built up a lot of shorts yesterday afternoon. It would be unusual to see the market fail to retrace some of yesterday’s historic plunge.
Matt
December 2nd, 2008 at 3:47 pm
lol K.. George.. are you in SDS right now or swinging between SDS and SSO?
December 2nd, 2008 at 3:48 pm
GO SDS… K is rootin’ for ya. Me too.
December 2nd, 2008 at 3:49 pm
In SDS
December 2nd, 2008 at 3:49 pm
Hey Matt,
at what point would you be concerned that the retracement of the plunge was too much and that you should exit your shorts?
December 2nd, 2008 at 3:50 pm
down she goes
December 2nd, 2008 at 3:50 pm
Charlie, yes, swinging between the two.
December 2nd, 2008 at 3:52 pm
all i ask for a close below 840
pleeeezeeeeeeeeeeeeeeee
am off to set up a router and make some more $ LOL
December 2nd, 2008 at 3:54 pm
charlie blink i said!!!!!!!!!!!!!!!!!!
December 2nd, 2008 at 3:55 pm
Looks like you will get your wish, K.
A fun push, but I have a feeling it will be gone by tomorrow. A close below 840 is not good for the bulls (above 850 would have me concerned). Between 840-850 is some nether region I don’t really want to think about.
December 2nd, 2008 at 3:56 pm
Stating the obvious there was support for SPY at $82.25
December 2nd, 2008 at 3:57 pm
Wow, what an ending. K, the market beat us to it!
December 2nd, 2008 at 3:58 pm
Oh, Oh, there goes support for SDS.
December 2nd, 2008 at 3:58 pm
Got my 23.65 on SSO
December 2nd, 2008 at 3:59 pm
Barely
December 2nd, 2008 at 3:59 pm
Got stopped out of SDS at $95.28. No more day trading for me, I gave back half my gains.
December 2nd, 2008 at 4:00 pm
oh well worth a try
guess we’re not david and goliath today.. george is. haha
December 2nd, 2008 at 4:00 pm
FAZ in at 63.02. Anyone for a gap up tomorrow and then a sell-off?
December 2nd, 2008 at 4:01 pm
i’d get some but i dont know. forget it for tonight i guess. if it goes up am not too far off
December 2nd, 2008 at 4:01 pm
@ Larry, I am no longer in the 1% club.
December 2nd, 2008 at 4:02 pm
I’m just sayin’…
December 2nd, 2008 at 4:04 pm
junglegirl,
Yes, we had a gap-up and sell-off on November 10th under similar conditions.
Matt
December 2nd, 2008 at 4:04 pm
One last spam: At least I did recoup half the years losses, and I learned a lot. Thanks to everyone on this great board
December 2nd, 2008 at 4:07 pm
And there’s that evil nether region I spoke of earlier…looks like I jinxed myself.
December 2nd, 2008 at 4:08 pm
Volume picked up today, except for IWM, and that’s an important non-confirmation.
December 2nd, 2008 at 4:11 pm
Junglegirl, I’m with you — this was a short squeeze and we’re still headed down. Let’s not expect them to go gentle into that good night.
December 2nd, 2008 at 4:18 pm
Hey K.. I tried blinking as many times as I could..but the market just kept on going higher
Hopefully we get our sell-off tomorrow. We almost touched the lows of yesterday today. Still curious to see what the Money Flow charts will look like for today. Were bulls running for the exits or were they buying into this rebound? …
December 2nd, 2008 at 4:21 pm
Hey Matt.. can you provide some insight into the $TRIN for us?
December 2nd, 2008 at 4:24 pm
Charlie,
The TRIN went off the charts yesterday. I thought that there might be a data problem since the NYSE was having a problem with the TICK count in the morning, but in any case the TRIN was very high.
In a bull market, you would take a TRIN spike as a selling-climax buy signal. But in this bear market, these spikes have preceded new lows, so in a bear market it might be better to interpret them as warnings.
Matt
December 2nd, 2008 at 4:26 pm
Hey Charlie, can you enlighten me on the flow charts?
December 2nd, 2008 at 4:35 pm
Matt do you have any comments on the aftermarket action and the long tails?
December 2nd, 2008 at 4:44 pm
Hey SV..
I’ve been recently using a combination of the Chalkin Money Flow indicator as well as the data that WSJ provides via here:
http://online.wsj.com/mdc/public/page/2_3022-mflppg-moneyflow-20080910.html?mod=mdc_pastcalendar
to see what if accumulation or distribution is occurring and in what areas.
December 2nd, 2008 at 4:55 pm
Man that is really cool. So it looks bearish. In that there was more outflow. Right?
December 2nd, 2008 at 5:14 pm
Make sure you look at the right chart.. but yes.. if there is selling on strength of key indexed instruments such as SPY, IWM, QQQQ, etc.. then you know that someone wants out.
If you just look at the CMF on the SPY over the few days on the SPY daily, you’ll also notice that it remained mostly in distribution mode for most of the rally days (from Wed onwards). It was also mostly in the money outflow mode for most of today.
I am seeing the same for the financials too. eg. Checkout C and how people were selling it for most of the day though it was up over 10% today.
What’s important to note that the CMF works in that it shows data based on the trend so you have to see if there is increased buying or selling and what the trend is. I still need more work on this thing though to make it really useful for me as a trading tool.
December 2nd, 2008 at 5:19 pm
Im sorry, what is the CMF? I have seen you speak of it before.
December 2nd, 2008 at 5:22 pm
SV, yesterday the money flow into SPDR S&P 500 (SPY) was neutral (not listed either way), but today it’s clearly negative, along with a bunch of top tech stocks. There hasn’t been a big positive money flow into S&P for a while.
Neckbreaking volatility persists, like a bucking bronco trying to shake off the shorts.
December 2nd, 2008 at 5:27 pm
No this looks really good. Take a look at November 4th. Im comparing them now
December 2nd, 2008 at 5:28 pm
The 4th was the tuesday run up before it took a nice dive. If spy continues on the pace as it did then, we might in for a nice ride down.
December 2nd, 2008 at 5:36 pm
For today, though the market was up, the selling was the most intense on the SPY
Dec 2nd: $-224.65.. that is in millions my friends..
December 2nd, 2008 at 5:40 pm
instead of barfing up my shorts i will eat more real food
December 2nd, 2008 at 5:53 pm
The short squeeze continued into the aftermarket, keeping futures up 3400 (34 points) on the S&P, but now they’re flat to down. It’s not an accident it’s hard for us to make money in this market; it’s quite by design! Someone is having to lose a lot of money as this market liquidates, and nobody wants to be left with the Old Maid cards.
Of course George beats them all
December 2nd, 2008 at 5:59 pm
Agreed but let’s not jinx George. let’s agree to disagree that we’re distributing the wealth around in this blog. George i hope it trickles down to me
December 2nd, 2008 at 5:59 pm
SV,
ChartSchool on CMF:
http://stockcharts.com/school/doku.php?id=chart_school:technical_indicators:chaikin_money_flow_c
December 2nd, 2008 at 6:01 pm
Those metrics look similar to november 4th which was the first tuesday of november. November 4th is on top. Today is below
$$ Flo Tic Up Tic Dn Up/Dn $$ Flo Tic Up Tic Dn Up/Dn
-283.95 3088.16 3372.1 92/100 -332.34 405.57 737.9 55/100
-224.65 3582.8 3807.5 94/100 -278.5 573.3 851.8 67/100
December 2nd, 2008 at 7:08 pm
Scott,
The VIX chart also looks very similar to Nov 4th.
December 2nd, 2008 at 7:58 pm
TRIN plunged today after yesterday’s spike.
December 2nd, 2008 at 8:26 pm
While on the topic of the CMF, have any of you guys used this for your trading?
Also, Matt, I know you were going to add P&F charts to your trading analysis last week. Any bits of wisdom that you care to share on that?
December 2nd, 2008 at 9:18 pm
this is getting exciting
http://news.yahoo.com/s/ap/20081203/ap_on_go_co/financial_meltdown