Tuesday’s Trading
Will today be a Turnaround Tuesday? Oil is threatening to bounce, so maybe it will be.
Watch the comments for updates throughout the day.
Will today be a Turnaround Tuesday? Oil is threatening to bounce, so maybe it will be.
Watch the comments for updates throughout the day.
August 12th, 2008 at 9:12 am
the dollar is not happy anymore, and the market is long dollars.
the financials are in a foul mood, should be a tepid open.
August 12th, 2008 at 10:11 am
The XLF looks like it may pull down the market today.
August 12th, 2008 at 10:12 am
How many more days can tech hold up the market?
Goo job on the triangle, Matt. It is easy for people to spot chart patterns - after the fact. Watching them play out in real time is much more educational.
August 12th, 2008 at 10:15 am
One mistake I made: I thought that the brokers lost their anti-short protection Monday, but that doesn’t happen until tomorrow.
http://money.cnn.com/2008/08/11/markets/short_selling/index.htm
Maybe if war with Russia is not a big deal, headlines like ths:
“BP shutters Georgian pipeline” (http://money.cnn.com/2008/08/12/markets/bp_pipeline.ap/index.htm)
will get the market’s attention.
August 12th, 2008 at 10:20 am
Larry-
When will the world start to make us pay
for the toxic waste we dumped on them???
MEB
August 12th, 2008 at 10:22 am
Matt-
KUDOS!!! on your call.
MEB
August 12th, 2008 at 10:31 am
Matt, XLF didn’t hold the support at $22 very well at all. We’ll ave to see if the other sectors can hold spy above $130 (and then $129).
Oppenheimer cut GS’s earnings. I guess everything Gold is falling.
JPM thinks airline stocks could be profitable next year??!!! Technology (video-conferencing) is rapidly reducing their profitable business seats; it will take more than cheaper (but expensive) oil to change that.
August 12th, 2008 at 10:32 am
MATT!!!!! thanks for making me nervous yesterday ……i sold out all longs for nice profit……..just watching now……….
August 12th, 2008 at 10:36 am
@meb: never, the dollar is up. The Asians prefer gilding the toxic waste in their books… Fools gold that is as real gold has no value in this crisis.
@Matt: Congrats - very well done!
August 12th, 2008 at 10:37 am
Meb, are you referring to the world reserve currency?
2. Bdi -0.9%. 23 days. The bulk investors are hoping for a bottom here.
August 12th, 2008 at 10:48 am
Larry,
Hoping for a bottom or seeing one?
Railroads are taking a dive today, probably starting to experience the same shipping volume and price drops as BDI is showing.
August 12th, 2008 at 10:49 am
paul…………..the market has responded to bp shutters pipeline……..OIL IS UP 26 cents!!!!!!!!!!!!!
August 12th, 2008 at 10:51 am
Larry-
I’m talking about cutting down on buying
our paper forcing higher interest rates here.
MEB
August 12th, 2008 at 11:13 am
Meb, the problem is that all central banks followed Greenspan. So in relative terms USD looks ok. I think we have to wait until Bernanke starts to inflate the monetary base in 6-12 mths? And for the Chinese to realize that’s the only way to pay down the U.S. national debt. So another 2-3 years? Party on.
In the meantime I’m short. Especially on the commodity countries feeding those soon-to-be empty factories in China.
August 12th, 2008 at 11:18 am
Larry-
THANKS!!!
MEB
August 12th, 2008 at 11:31 am
Oil just can’t catch a break. If this keeps up, stocks will run higher.
August 12th, 2008 at 11:32 am
Paul, VIX at 20. Do you think we have to go all the way down to 15 this time like in May? It peaked at 28 in July (excl intraday), so one could argue we don’t have to.
Wishful thinking.
August 12th, 2008 at 11:38 am
It is hard to say for sure, but it looks like someone just made a HUGE bet that the VIX will be above 25 in October. The cost was a net credit of $400k (paid to tak this bet, but with LOTS of risk).
What it looks like happened is that someone bought **20000** VIX 30 puts for $8 and sold **40000** VIX 25 puts ($3.9). The volume on this trade is GIGANTIC for 2-month out options. For every point below 25, this bet loses $2 MILLION. For every point point between 25-30, gains $2 million. Above 30 keeps the initial $400k.
http://finance.yahoo.com/q/op?s=VIX-X.W&m=2008-10
August 12th, 2008 at 11:41 am
Larry,
I really doubt that we will get to 15, maybe 17/18. That was a “problems over” rally. This seems more of a technical (oversold in July) + “problems not as bad” kind of rally.
August 12th, 2008 at 11:43 am
USO is bouncing, but so far, it is a bear-flag pattern.
August 12th, 2008 at 12:12 pm
USO is hanging in; bad news for stocks.
August 12th, 2008 at 12:20 pm
Ok. So oil at 100 usd and VIX at 18. Sounds like a good target to be ready for the slaughter.
August 12th, 2008 at 12:22 pm
The market has worked off its short-term overbought condition. Normally, it would wind down further, but since we are in rally-mode, this may be it. I don’t have a bet either way, but if we get to short-term oversold, I will look for a long-side entry point.
August 12th, 2008 at 12:30 pm
The selling in SPY this morning has been on the light side. So, this is bullish action.
August 12th, 2008 at 12:39 pm
The Q’s have lost their intra-day uptrend line, so maybe they have peaked for the day. If the market moves down some more, I will be watching the volume. If it remains light, then the rally is still in play.
August 12th, 2008 at 1:00 pm
The bears (with a 1-2 mth perspective) should soon start going short. What you think Matt?
August 12th, 2008 at 1:04 pm
Matt,
If I see jumps in the chart at one single point, are those real? For instance, on my SPY charts, I see trades at 130.7027 in the last 30 minutes
August 12th, 2008 at 1:12 pm
I’m thinking that XLF in the last hour will be very telling for tomorrow: see how many people want to hold their postions in the face of naked shorting tomorrow and today’s finacial news.
August 12th, 2008 at 1:17 pm
Larry,
I like to see a reversal pattern develop on the charts first. The bear-wedge that formed at the end of the March-May rally was a very nice signal, so I am waiting for something like that.
Matt
August 12th, 2008 at 1:18 pm
Paul,
I don’t know for sure about those SPY trades, but I’m guessing that they are fat-fingered trades.
Matt
August 12th, 2008 at 1:20 pm
Paul, thats a good question. when you see the very long candles on the intraday minute charts, are those actual prints? for example, SPY could be trading at 129 but you see an extended candle down to 128 on the minute chart. did someone really get filled at 128? this is why i hesitate tu use stop loss orders.
August 12th, 2008 at 1:22 pm
The Q’s may have a double-top on their 60-minute chart.
August 12th, 2008 at 1:41 pm
The XLF is falling apart. It is right at the second fan-line that I have drawn from the July low. It isn’t rolling over just yet, but is perhaps 33% of the way there. The selling volume hasn’t been excessive today, but it is picking up now.
August 12th, 2008 at 1:44 pm
The XLF 50 and 20 MAs are both at $21.38, with a downtrending 50 MA. If it closes below that point, I would think this ETF is going lower, at least to support at $21.00.
August 12th, 2008 at 3:48 pm
WHOOSH….
Matt,
How does the rally look from a technical perspective?
August 12th, 2008 at 3:55 pm
Paul,
SPY is holding $129, and we are now pretty oversold short-term, so the market should be able to bounce here.
I just bought some SPY calls (SFBHZ).
Matt
August 12th, 2008 at 4:14 pm
Thanks, Matt.
I finally closed out my “overnight” VIX trade fom last week. I’m thinking that since the shine is off the top bank stock (JPM) and top broker (GS), the financials will keep pulling the market down (and bouncing the VIX up) tomorrow. However, given the oversold condition that you mentioned, I decided it is best not to push my luck much further.
I eeked out a gain (I averaged down and bought more), but it wasn’t worth the stress…definitely staying away from current-month VIX options: too volatile for my blood pressure. Hopefully, the market will go up, and I can buy some October SPY puts or VIX calls tomorrow.
Good luck with your trade, Matt. I think that SPY will test $130 again, so you should be okay. One thing is that you should really sell by 10:30 or so, because you will be rapidly loosing time value on that option, as you know. Even if it reaches $130 later in the day, the option may lose money.
August 12th, 2008 at 4:23 pm
Paul,
That’s true. I didn’t leave myself much time to be right, but I like to make one trade like this during expiration week just for the fun of it.
I’m glad that your VIX trade turned out OK.
Matt
August 12th, 2008 at 4:52 pm
phil,
I’m glad that you did well with your long trades. You made the trades, so you get the credit.
Matt
August 12th, 2008 at 6:09 pm
Matt, it something was wrong with the website today. i wasn’t getting updates.
August 12th, 2008 at 6:54 pm
Tony G,
It seemed to be working normally. What did you see? Did comments show up after a delay? If so, how long, and was it all day, or just part of the day?
Did anybody else see any problems?
Matt
August 12th, 2008 at 7:48 pm
Yep, there was a delay in comment visibility during the last 2-3 hours of trading… at least that’s what I saw.
August 12th, 2008 at 8:01 pm
Hi Mechie,
What about now? Did you post your last comment at 7:48 as the time stamp shows?
Matt
August 12th, 2008 at 8:47 pm
eli,
Nice call on XLF. How long do you think the bounce off of $21 before close on Tuesday will last?
Matt
August 12th, 2008 at 9:04 pm
Matt,
Looks like there is another wedge pattern forming on the SPY (Top Line start July 9 and bottom start July 15)? Would you agree?
BTW, great blog…Thanks
August 12th, 2008 at 9:14 pm
It’s fine now. There was just a short period where new posts weren’t visible (to me).
The members of this blog have done a nice job keeping the comments positive and free of aggro. That’s hard to find. Congrats to all.
August 12th, 2008 at 9:16 pm
Dink,
I don’t think that is the right way to look at it for several reasons. For one thing, the Q’s and IWM don’t have patterns that match.
Matt
August 12th, 2008 at 9:53 pm
Hi Matt, a technical question, is there a way to have your site open and see updates as they come in, i.e. automatic refreshes and updates ?
thank you !
August 12th, 2008 at 10:10 pm
Hi after,
If you use FireFox, there is an add-on called “ReloadEvery”. You can set it to reload the page every couple of minutes. I use it all the time on sites that want to log me out after a few minutes.
Matt
August 12th, 2008 at 11:53 pm
Matt
Sorry I didn’t get back to you on the XLF, as I also had troble getting the site updated the last few hours of the day.
I’d say back up to $21.18 or so (since I saw that it closed there
Shelly
August 13th, 2008 at 3:35 am
@after: AutoRefresher is a similar add-on for IE7 (older versions do not support add-ons)