Friday, July 31, 2009

GDP numbers -1% vs. 1.5% expected for quarter

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.

Thursday, July 30, 2009

Extreme bullishness translates into extreme cautiousness

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.

Today I traded a mostly all to the long side, a i dabbled in some XOM puts but they really did not work considering the VIX was getting hammered. My best trades were in speculative chatter from the squawk box. Again bio tech and pharmaceutical stocks have had some legs, to me TECH is dead until the NASDAQ makes a move.

Tuesday, July 28, 2009

Bearish news day, will this push us under -500 on the NYSE tick

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.


World markets run out of steam ()

Office Depot post wider than expected loss ()

Viacom's 2Q profit falls 32 percent ()

US reports 2Q loss ()

BP 2Q profit down 32 percent ()


US may limit energy trading ()

Spring to buy Virgin Mobile USA ()

Monday, July 27, 2009

Another week of uncertainty, market wide correction or breakout?

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.

Thursday, July 23, 2009

Trading thoughts for July 23, 2009 (mixed signals)

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:

were up a bit.(bearish)

a huge jump in profit (bullish)

surges past estimates (bullish)

down on Iphone competition (bearish/bullish)

plunged 49% (bearish

Tuesday, July 21, 2009

Caterpillar earnings pushing the pre market up...

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.

My ideas for today are to scalp CAT at the open and find breakouts and or weakness and get into these names from the open and hold. This may or may not work all depends on where the the market opens, if we open flat you must become much more selective if you are trading intra day. HedgeAccordingly

Thursday, July 16, 2009

Art of trading.... Google and IBM reported after close

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 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.

PRE market round up. JPMorgan beats, Marriot profit slides

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

Wednesday, July 15, 2009

Futures UP through the night and into AM. LOW volume

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

Tuesday, July 14, 2009

Pre market update for July 14, 2009.. Goldman Sachs beats

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

Monday, July 13, 2009

Goldman Sachs Earnings tomorrow before bell. Blow-out expected

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
I have been long (puts) in ung since near 15, the trade is still working. I am also still bearish on OIL and oil services. Why? Because , employment is still down.

Thursday, July 9, 2009

Trading Recap: Vix crushed today, traders disagree with Alcoa earnings

If you remember from after the bell , which were spun with a positive note. They lost 450,000 in revenue but beat expectations! WHAT? are you kidding me... the bar was set so low it was impossible to completely miss expectations. Things like this really get me going because it shows how the analyst system is flawed. Many people follow these recommendations, but if you traded Alcoa on the news today you would have got smoked today on higher than average volume. This is because traders knew this was spun and it was BS. I traded today on the short side(put), not because i am a "perma bear" but because the trend was down. Onto other things, the volume today across the board was anemic, nothing was really trading. traded down like a rock after they announced another offering. The problem with markets like these is it wreaks havoc on the options markets because everyone actively trading options are afraid to cross the market, so you never get filled on the bid or the offer you gotta hit and take. Liquidity = profits no liquidity = paper profits which evaporate quickly.

Correlation observations today:
Dollar down = up
UNG up = technical bounce
equities up = oil up = dollar up

Tuesday, July 7, 2009

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.

Monday, July 6, 2009

UNG toast, Oil following suit.. Recovery = nul


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.

Thursday, July 2, 2009

UNG break down. Traders have left the building

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.

Thoughts on OIL, UNG, DOLLAR:

Iv been short OIL:by way of DUG, UNG, and long USD by way of UUP for the greater part of June. The basis of this trade has been betting on the dollars support and the over supply of UNG. Like it or not, believe it or not the dollar is what is driving these commodity plays. The stronger the dollar the lower oil will go, though the dollar is not quite as connected to UNG as it is to oil... BUT with the new finagled addition of liquefied natural gas being added into the supply chain, economics 101 takes hold. More supply = lower prices.

As i type this the market is falling off down about 200 points, clearly bearish and selling pressure has been equal all day. I feel next week we touch 850 then rally on re allocation.. hedge accordingly.

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