The is probably already priced into the market(though currently sinking the futures), if that is the case we will probably not open with a gap up. WE are more likely to open flat, i will have my eyes on JPM and the solar's. Specifically FSLR, which got smashed after hours yesterday. ON days like today volume will be NIL, most traders are spending winnings on vacations and or are just sitting at home not participating. This is what is responsible for price gaps in the books translating into violent erratic non trending moves. Hedge Accordingly.

Today the market is bid, and has been bid basically all week. My take on all of this is approach everything with cautious optimism, it would be great for traders if the market just kept ripping up and we all were long. The contrarian view is the bar was set so low for earnings how could anyone really even miss? No one really dropped the ball, personally i think Q3 earnings will be more of a market barometer than Q2.

Every so ofter, well not so ofter now days, we get a day with a slew of bearish news. Even the news has to oscillate, though the futures are not down much, as i type this we are down 47 on the DOW. WE had a tight range of trading yesterday, we did not deviate + or - 500 on NYSE tick very neutral, i have never seen this before, something is up... He is a quick list of morning news reading. I am focusing on the Viacom news and Office Depot.

The past few weeks of trading have revealed many things about this market, some good some bad. The good: ??? The bad: violent moves on low volume, market moving up on non fundamental data more than likely causing false confidence in the "trade". Carl Denninger is on spot with his analysis of these markets in regards to the "trade", i fear for retail getting blown out again on another equally violent move downward. It looks like today is going to be another choppy trade, no really notable earnings today will move the markets as a whole. Anyone remember the because of some false news? Take a look at this, the guy who allegedly disseminated the false news was found dead in his Kuwait City home. I'm glad i live in America.

We are near highs in all the indexs, yesterday was 65% program trading. S&P levels on deck are 957 and 963 on the upside. 943, 930 on the downside. I expect a choppy trade today. keep these few news stories in mind when interpreting the tape:

Caterpillar reported this morning before the bell, subsequently pushing the futures up and CAT up around 4 points. As much as i hate to say this i look at CAT's numbers as semi bullish because they make the equipment which creates new infrastructure etc etc. The economy may be slowly clawing back as contractors and builders place new orders for the equipment. This directly relates to growth in new development. As Roubini said, its looking more and more like we are going to be in a slow grind upwards on a very shallow slope. IF earnings keep coming out with a positive spin we are not going to see the march lows. Most of you might think i am crazy but, the market has been acting crazy in the last week. So now i am moving into a trading cycle of trade when i see not what i think i see because ill spend most of my time fighting the tape and trend. ONly the smart will win, "smart" in the sense you know when to change trading styles to adapt to what the market throws at you.

There is an art to trading no matter who you ask. Trading is not a cut and dry thing you learn and then you do you job, as a trading you are always learning and figuring out the markets. What makes them tick, judging the tape and most importantly knowing when to get in and when to get out. As a day trader like myself i trade from day to day, i do not in most circumstances hold positions over night. You eliminate many variables and lower your risk exposure by flattening out before the close. I feel this is a way to beat the market if you DO NOT fight the tape. I know everyone who reads HedgeAccording.ly knows i have a bearish sentiment, though on days like today you just gotta trade with the current. You would never paddle up river if the river is rushing in the other direction? This is what fighting the tape will feel like, it will beat you down, test your stress tolerance and in the worst, blow up your account. So the take here is, if you want an "easier" trade and understand the tape.

Yesterday was quite the push up, on low volume and much manipulation. Though you cant fight the tape no matter how much the move goes against your views on market direction. The was actually up on yesterday, im guessing this was trading taking out protection on the SPY. This can be construed and bullish, but my gut tells me some more news is gonna out on Friday.






As for whats on the plate today here is a few news items which will affect the tape today.
CIT groups fall apart (im glad)


Marriott's (further signs of weakening middle class spending)


beats estimates


Nokia drops 66%


slips even further

Large up moves on I am always skeptical of. If the real market participants were participating it would be a worthy rally, but if its only trading programs using massive amounts of money to toy with the markets then its all worthless. WHY not let the market rest where the natural levels are. Traders who trade this market relying on liquidity and decent spreads are being blown out because you simply cannot compete with massive arb trading programs which will try SO hard to push any trade into your face. THIS is because there isn't anyone to trade. Options markets are stagnant after the first 30 min of trading.


are in play today
Financials in play today
Market is gapping on CPI numbers

Yeah Goldman so what? They are a trading firm with a massive trading program creating liquidity in a market with no real liquidity? Remind of stealing candy from a baby. If you read the tape and understand it correctly you know the ride is over for "Golden boys" over at Government Sachs. Currently pre market the almighty one is down 1%. Goldman has been the precedent for this market since before the March lows, it has had an incredible ride of over 100%, it cannot sustain it's overbought, overweight and outperform status.




Trade ideas for today include fading whatever gap we get at the open, then trading the tape accordingly.









The Spy is down pre market also, lots of hedging goes down with the spy some smart guys are in those trades, REMEMBER this phrase, "follow the gorilla". A gorilla someone I call in the options market who is making a large bet on a direction of the underlying and price, the gorillas i have seen are betting on a down week towards the end of this week. ALA expiration!









UNG im looking for a technical bounce



OIL will be up with the market, ultimately because the USD is down



USD will be down because of basket trading..



DUG will see profit taking from its great ride and breakout

For the past four weeks bears have been in control of the markets, for the this week that might change. Goldman is expected to blow out earnings on profits from trading, kinda funny how a trading based firm (which is what i consider GS and others) reports before the bell. This will make for decent trading if GS really blows out. On the contrary side Goldman's earnings may be priced into the stock because it has been up 100% since its lows. I feel a lot of people front ran this trade,and will dump on the numbers release. I am kinda leaning towards this happening, but i will be bullish the market tomorrow regardless. Trading today in Goldman has been strong up until it topped out around 2:30 eastern. Since we are up so much today i am looking for a pop into the close, unless traders dump GS at the close.





As for the rest of my trades

The above charts of UNG, SPY(vix overlay), DUG are all charts which have been in play both on my screens and others. I posted these charts previously here: (click symbol 2 view my previous thoughts on the charts) DUG, VIX, SPY(vix overlay), UNG. The best action on all of these charts is by far the breakdown of UNG and the break out of DUG on falling oil prices. As far as UNG goes I am expecting a technical bounce around these levels, then down probably below 10pps. I fully expect OIL to continue the slide down to around the 50ish level on the back of the strengthening dollar. IF the fed pushes another stimulus coupled with printing more money this trend will reverse, as for now i believe the fed is keeping its bullets in the magazine. Thoughts on the SPY: yesterday there was very bearish action all day and going into the close, there were no heavy buy programs but there was a program buying the low tick which made for some hairy trading. Believe me its not mom and pop buying 5000 SPY shares on every low tick of the day. Keep this in mind, use it to your advantage when the sell or buy programs kick in. Trade with the direction of the market. Hedge Accordingly.

UPDATE: UNG CHART DAILY





I have been speaking about the market selling off after July 1 for quite sometime. As we speak futures are down 75 pts. The reason behind the sell off is clearly reallocation coupled with a massive market wide sentiment change. At the tops of rallies bull/bear sentiment is always a struggle for the fittest, the struggle usually plays out in a crescendo until the bears take over. My theory behind this is it takes some convincing to get mom and pop traders on board by way the funds selling into their buying. Mom and pop thinks we are bullish, not the case. The flight to safety trade for the bulls was UNG, trade is now over unless you are short.






as the UPP caught hold. There is time left in this trade if you are diligent in watching your positions. I strongly believe this market is poised for further down trading.






In other tech news.. The founder of beloved dinosaur Netscape Marc Andreeson and his fund partner Ben Horowitz have . He cites increased market weakness over the next 10 years. This guy is smart, very smart.

Today has been a very slow day after the initial came out crushing the market in the AM. One of the on the SPY and market to date. Today is historically an up day going into the holiday, though as we all know the market is not trading according to historical data. Anemic volume days are one which you can get your ass handed to you because of wild price spikes since there are gaps in the order books, especially in the SPY. The unemployment numbers are going to keep getting worse in my opinion nothing has changed, employers are still scared as to what will happen int he future, commentators on cnbc are trying to persuade the public into thinking things are fine. Things would be fine if we had some real market volume.