Wednesday’s Trading

Another FOMC Rally?
If we have another one-day wonder rally like we did for the last FOMC meeting, a potential target is SPY $87.26. That is the top of the gap that was created at the open on January 14th.

Banks Saved Again
This is the CNBC story that rallied the futures Tuesday after the close. It appears that the banks will be saved yet again. Our government has been “saving” the banks for almost a year now. I reckon we are nearing the first anniversary of our lost decade. Only nine more years to go!

193 Responses to “Wednesday’s Trading”

  1. K says:

    and i should mention i had a limit buy at 73.02 since early this morning when i drew the fibs.

  2. K says:

    George you’re hitting SKF? :P

  3. meb/Sherry says:

    Dave-
    Just checked my account and didn’t see
    any bonds…did we have a breakdown
    with Matt?

    Sherry

  4. dave says:

    scoundrel absconded; let loose the bloodhounds !!

  5. dave says:

    narrowminds,
    Below is from late yesterday.

    dave Says:

    January 27th, 2009 at 3:22 pm
    Charlie; K,

    TBT’s got hit at 1PM because that’s what time the Treasury auction results were announced.

    As for the move up in bonds (TLT), it was to be expected as a “return move” to the area of the 50dma which had been crossed to the downside several days ago.

    “Return move” is an important concept. Usually you see an important resistence, support, moving average, trendline when crossed revisited in “Return move” to test the break’s valididty. If anyone has ever been fishing at a farmer’s pond, he’ll usually say “As long as you close the fence behind you”. That’s the way i think of a “Return move”.

  6. George says:

    K;

    I’ve hit SKF twice today. I’m waiting on “the big one”. MOAR in SKF.

  7. George says:

    I’ve bought everything that is low and sold everything that is high. Small positions until the second leg of movement after the Fed-Speak.

  8. narrowminds says:

    Dave, now that makes sense… I was wondering if I was wrong in my assessment on TBT…

  9. George says:

    Can you feel the tension in the charts? Kool.

  10. K says:

    fed speak is 2:30?

  11. George says:

    ICE is just a little show-off today.

    BBT spiking on the good bank news(?)

  12. dave says:

    narrowminds,

    I just hope it’s the way a friend of mine describes bad trades, “took the escalater up & the elevator shaft down”.

    More, Sherry ?

  13. dave says:

    Sherry,

    You’re not picking up your phone ! I even told your assistant to tell you that “It’s Lehman calling”

  14. meb/Sherry says:

    Dave-
    FED will now buy any liabilities you may have.

    Sherry

  15. dave says:

    Sherry,

    Is that restricted to financial liabilities ?

  16. K says:

    george you weren’t kidding about the tension!!

  17. meb/Sherry says:

    Dave-
    Sorry…financial only…run them
    up before you call the FED.

    Sherry

  18. George says:

    K, yeah, but not as volatile as I’d like. Kinda disappointing.

  19. JO says:

    Sherry, just back in from shovelling about a foot of snow …I do think the market has room to run to at least 944, and possibly until 1006 like you..as for the coins..our Maple Leafs are beauties…I have been trading gold through a closed end fund on the TSX (GTU.UN) that owns bullions bars but not holding any right now..am looking at a short term GLD at the money/slightly in the money calls as a way to play a re test of 1033 through Mar/April..I think gold will touch 880’s before bouncing stringly again..i do have a long term plan to buy gold and silver coins but am betting gold / silver will break down into 2010/in 2010 by 30-40 %. Who knows..if gold breaks 1033 and holds I will jump back in as something else may be happening..as for using my address..of course !…given this is global and central banks being the parasites they are, i am sure any confiscation attempt will involve most countries..that said, you never know..i do not expect the Fed to celebrate its 100th..in fact, i am pretty sure they will be gone by end of 2011..i heard there are companies that open post office boxes in different countries for a fee and allow you to keep confidential items in there..may be worth researching.

    Good luck.
    JO
    JO

  20. dave says:

    Sherry,

    I’m calling the WaPost financial editor and telling him that we’re going to have a balanced budget, but i’m using your name.

  21. dblwyo says:

    JO – how do you come up with those price levels ? ~940s and 1066 ?

    narrow – you’re counter-arguments would be ?

  22. meb/Sherry says:

    Jo-
    I’m only kidding about the address thing.
    I’m not into gold and will have to depend
    on you and Dave.
    THANKS! for the gold overview…
    sorry you had to shovel snow…
    how about a snow blower???

    Sherry

  23. George says:

    OMG, $33 spike to the upside on SKF. Oops, that was a market order. You always get screwed at the drive-thru.

  24. narrowminds says:

    I am just looking at nw right now, they are saying that the current wave should end short of the 940s, but it can go to 1006, but if it goes higher then all bets are off on the downtrend..

  25. meb/Sherry says:

    Jo-
    Some people claim that the U.S. defaulted
    on its debt in the 1930’s when bond holders
    were not allowed to redeem in gold as promised.

    Sherry

  26. narrowminds says:

    they are also predicting the big move down will not happen till Q3

  27. Yerk says:

    ROFL – quant model gone berserk

    S&P500 Fair Value Estimate – January 1, 2008
    ….
    The model continues to signal a strong buy signal with fair value for the market as a whole at 2330, some 58% higher than where it currently trades. Our confidence in the model remains low for the reasons pointed out…

  28. narrowminds says:

    they are also predicting the crash of Treasuries which has begin….

  29. K says:

    george i saw that too i wish i had a sell order :D

  30. meb/Sherry says:

    narrowminds-
    Collapse should happen in Q1…but
    will not if SPX goes above 1006.

    Sherry

  31. JO says:

    944 is high of 09 so far on intraday basis. it was 935 on a closing basis -date jan 6 …1006 is nov 08 high..both very important..i would be willing to start buying puts at 930 or so but only if macd h / macd lines, sentiment, and volume look bearish enough.

    Sherry, if you live up here, a blower is a must as you can imagine..we do not have one..my parents are old school..did it the old fashioned way..lol…gold has room to break 880 and if it does, could reach 850’s..either way..there is good support for a run to 1033 in the next two months but only after the short term correction IMO.

  32. George says:

    3rd leg not developing as usual unless it is holding off until 3:30. Bummer.

  33. dave says:

    i’m solvent !!; Matt, give the futon to someone on South Beach

  34. Yerk says:

    Sherry, you’re right. So many calls for extreme moves but things are connected… Btw why should treasuries collapse in Q1? I’d rather buy US treasuries and pocket the currency gains than buy UK treasuries…

  35. meb/Sherry says:

    Dave-
    I looked at money flow this morning and
    said this could be a 25-35 point SPX day.
    But I took profits at 15…would have stayed
    for more if I had known the FED would buy
    your liabilities.
    Can you track money flow in the bond market???

    WaPost just called me for an interview. Thanks!

    Sherry

  36. JO says:

    Yerk,..the CDS spreads on UK bonds has been looking real bad..UK by several measures seems much worse than US and they are not reserve currency..you live in Europe from your past comments..any thoughts ? It seems to me Italy and UK are headed to national bankruptcy by end of 2010..maybe sooner..Soros said today he had shorted the pound (will be called the gram one day) from 200 down to about 1.40 but has exited for now. Western Europe is looking rough IMO.
    JO

  37. meb/Sherry says:

    Yerk-
    I don’t have a clue about treasuries…
    …only follow the SPX.

    Sherry

  38. JO says:

    Matt, I am no chart expert.but as of right now..it looks like a good chance we will have softenss into the close and for the next 2-3 days..MACD H / Lines and slow stoch do not look bullish for next day or two..maybe a good time to try a fade….
    JO

  39. meb/Sherry says:

    Jo-
    Buy a snow blower…your Mother and Dad
    will forgive you…spend your time trading.

    Sherry

  40. dblwyo says:

    Jo, narrow, sherry: ran a Fib on the market from Sep to date. If one uses the Citi hoha as the bottom 940 and 1060 fall out beautifully. But, following Matt’s argument which I share (and have so said publicly in posts), you discard that the levels could be 975 and 1022/1076 or so (38, 50, 61% levels I thimkp). Hangs together for me but feels wrong. If Mauldin’s got it right we’re likely to see the next big bust late Q2/early Q3.

  41. meb/Sherry says:

    narrowminds-
    Can you explain the NeoWave X wave
    thing to me??? They’re looking for
    the X wave to complete before the
    collapse.

    Sherry

  42. Yerk says:

    Sherry, this should not prevent you from giving me advice. I’ll follow you.

    I swore I’d never short financials again. Couldn’t resist today. I hope I get a bail-out if I need one.

  43. admin says:

    A few minutes ago, the Republicans said that they had a better stimulus plan than the Dems. They said it will create 6 million new jobs instead of Obama’s paltry 3 million. So, it must be twice as good, right? :-) In any case, if you look at SPY’s 15-minute chart, you will see a bearish engulfing candle at 3pm. You can thank the pubs for that.

  44. meb/Sherry says:

    Hope you do too Yerk.
    I don’t like to short the S&P 500 futures
    unless I see a reason to…SPX fails on
    test of prior high…SPX makes a high on
    lower momentum…big increase in negative
    money flow…etc.
    Good luck with your position.
    By the way…I would never tell another trader
    what to do…maybe Dave.

    Sherry

  45. meb/Sherry says:

    Matt-
    Republican plan…no one who makes over
    $100K will have to pay taxes…that includes
    the SS tax.

    Sherry

  46. narrowminds says:

    Sherry – We are in the E-wave with the target at X (unknown), projected at below 940’s for the trend to continue downwards.

  47. George says:

    TNX is up +1.37 today.

  48. JO says:

    narrowminds, my understanding is that glen neely is calling for the rally to end no higher than 1006 too…it seems now neowave is stating 940’s as the max high point ? Can you clarify for me? Thanks

  49. K says:

    George, you holding skf overnight or chance of another $30 drop tomorrow? :P

  50. meb/Sherry says:

    Thanks!!! narrowminds…
    How did you come-up with
    your BLOG name??? Your
    posts project the opposite.

    Sherry

  51. George says:

    K; very tempting to tak SKF home, but will not do it with the upward bias.

  52. Yerk says:

    JO, you get the picture… Western Europe looks better than Southern than Eastern Europe. Western Europe finances Southern and Eastern Europe. Uups. UK does not belong to Europe but to the US ;-)

  53. K says:

    are you taking a loss on it tho? :)

  54. dave says:

    Sherry, Mommy, i’ve finished my spinach. Can i go outside & play now ? Should i wait for the plane to land ?

  55. K says:

    i stepped out for 10 minutes only to come back see spx jumed back into 870’s

  56. meb/Sherry says:

    Jo-
    Buy that snow blower tonight.

    Sherry

  57. K says:

    SRS is same price now that it was january 7th when the S&P downturn began.

  58. meb/Sherry says:

    Dave-
    Go out and play as soon as you
    answer my bond money flow
    question.

    Sherry

  59. dave says:

    Sorry, do not get “money flow”

  60. dave says:

    Sherry,

    I thought the Republican plan was that no one who makes over $100k has to ever die ?

    Signed,

    registered Republican

  61. admin says:

    SPY closed a bit higher than my target of $87.26, which I mentioned up at the top. 875 is the important resistance area for the SPX now; 872 for the futures.

  62. admin says:

    Sherry,

    One thing you could do is use your various money-flow indicators on the bond ETF’s.

    Matt

  63. Yerk says:

    Sherry, not the s&p, European banks up +20% because the us rumours about a bad bank. BS move.

  64. JO says:

    thanks for those levels Matt..so much for the fade for today…not looking good…i’m still trying to improve my short term trading skills…i usually focus on longer time frames…but hey can’t get them all right..

    Since we are in deflation, i think it is a good time to go shopping for that blower sherry..they might have it half off…lol

  65. meb/Sherry says:

    Dave-
    No money flow…no bonds for me.
    I think you’re right about the
    Republican plan…but also no
    taxes.

  66. narrowminds says:

    Sherry, Just the name which popped in my head when I was signings for the blog – Strange as it maybe, but a lot of people are quite narrow minded in their views/understanding, one does needs to step back and look at all perspectives in life… Albeit I was/am a bull at heart, i guess goes with my personality which is an ultra optimists, but lost quite a lot of money (my retirement) with the bozo brokers.. so now trying to see if I can do any better, and potentially recover the loss… the first few attempts were not good as I lost even more, so started digging and found you guys…

    JO, It states that the current wave should end below 940, but can potentially go as high as 1006 – which is the max. Above 1006 the downward trend is in question…

  67. meb/Sherry says:

    Matt-
    I’m not going to trade bonds, but if
    I did you make a good suggestion
    about following ETF volume.

    Sherry

  68. meb/Sherry says:

    narrowminds-
    Hope you make back your loss.
    Always use tight stops. Do not
    be afraid to take a small loss.
    Cut your losses quickly…let
    your profits run…use trailing
    stop on running profits. When
    you hit a lot of singles, you will
    get your fair share of home runs.

    Sherry

  69. Yerk says:

    Read the Fed statement. Maybe we see 950 again, but please show me someone from the value side of things who thinks the market is priced attractively at 900…

    … the economy has weakened further. Industrial production, housing starts, and employment have continued to decline steeply … Furthermore, global demand appears to be slowing significantly. [You're kidding. That is all covered with the bad bank] … The Committee anticipates that a gradual recovery in economic activity will begin later this year, but the downside risks to that outlook are significant. [The second half recovery is certain, they are just talking the markets down]

    950 / 42 = 12 so we got our typical bear market valuation. Where is this Fairfield Greenwich prospectus, I’ll put my money where it is safe…

  70. meb/Sherry says:

    narrowminds-
    By the way Dave can give you good
    trading advice…pick his brain.

    Sherry

  71. meb/Sherry says:

    narrowminds-

    …bulls make money.
    …bears make money.
    …pigs get slaughtered.

    Sherry

  72. meb/Sherry says:

    Yerk-
    Never follow me. I only trade the
    S&P 500 futures…but do have
    a keen interest in economic conditions.

    Got a letter from my Credit Union telling
    me that due to the low Treasury bill
    rates they cannot pay the interest
    rate they were paying…they hope
    members do not jump ship.

    Sherry

  73. dave says:

    Sherry,

    Quit complaining. At least it’s not an IOU from Arnold.

  74. meb/Sherry says:

    Dave-
    You are the best. When I get my TV
    show, I’ll hire you as a writer…
    will pay you more than the Republican
    min.

    Sherry

  75. meb/Sherry says:

    Dave-
    Love my Credit Union. When PA did not
    pass their budget and could not pay
    the state employees…the Credit Union
    did.

    Sherry

  76. dave says:

    Republican min. = Greul; porridge on holidays.

  77. dave says:

    Sherry,

    Seriously, it’s interesting that so far no horror stories coming from cu’s. Must mean the folks wearing hush puppies were wiser than the tasseled loafer set.

  78. dave says:

    Sherry,

    Btw, saw where the man from Brandywine Andrew Wyeth died :(

  79. meb/Sherry says:

    Dave-
    A really great painter in my opinion.
    My Credit Union’s numbers look
    good.

    You have the Republican min right.

    Sherry

  80. meb/Sherry says:

    Dave-
    Have a great Republican meal.

    Sherry

  81. dave says:

    Sherry,

    and a bottle of Sonoma County’s best to you !

  82. Danny says:

    those were cool pictures.

  83. K says:

    looks like not a single republican voted yes for this
    http://thinkprogress.org/2009/01/28/stimulus-house-vote/

  84. K says:

    1 more note SDS closed above 73.02 which is where my fib line put support. so we shall see the next day for confirmation.

  85. K says:

    utilized the fibs in forex and made a quick $12 :). i put a sell right below the big fib line and thats all it reached :).

    note to self is make lunch money every day in forex and dont overdo it.

  86. admin says:

    Nicely done K.

  87. K says:

    Matt. how do you think the jobless data tomorrow will affect the market? am unavailable for most of the first half of market due to school and am a bit short so just curious on your opinion most i’ve heard say its priced in and market will go up further.

  88. admin says:

    K,

    I don’t know, but I’m short and staying that way.

    Matt

  89. newbie says:

    Amen brother!

  90. newbie says:

    I think that longer term the # unemployed is not as a big factor as the sentiment of the much larger employed group. The unemployed still need to eat etc. They will curtail spending to greater degree than the employed but in aggregate, the bigger employed group will have a much larger impact on the reduction of consumption.

  91. K says:

    Jan. 29 (Bloomberg) — Indian exporters have shed as many as 1 million jobs, more than 15 times a December estimate, amid the most protracted decline in overseas sales in a decade, the commerce ministry said.

    oh yes things like these are defenetly priced in… LOL