Before the Open (Oct 27)

Posted on by Jason Leavitt

Good morning. Happy Thursday.
The Asian/Pacific markets closed with solid across-the-board gains. Hong Kong rallied more than 3%…Australia, Indonesia, Japan and Malaysia more than 2%. Europe is doing even better. Austria and France are up 5%, Germany and Stockholm 4%. Futures here in the States point towards a huge gap up open for the cash market.
When the market closed yesterday I was thinking today would be a semi important day. The market broke out Monday, pulled back Tuesday and then moved up again yesterday. A down day today would continue the boring action where the market jumps and then grinds for several days before continuing. A solid up day would constitute follow through from Monday’s breakout. I was thinking the market was going to establish an uptrend personality, and today would be a day that hinted at what that personality would be.
But news out of Europe is trumping everything. Greek bondholders will be accepting a 50% write down on Greek debt and Europe boosted their rescue fund’s capacity to $1.4 trillion. Who wins and losses with this news isn’t something that concerns me. Wall St. doesn’t like uncertainty, and this clears things up. Whether they’re just kicking the can down the road until Greece needs more help in a year or so or whether they’re setting a terrible precedent for the next country to fall isn’t something Wall St. cares about right now. For now, the odds a Greek default ripples through Europe is small, so Wall St. is relieved.
My bias has been up for almost this entire month. If you’ve listened to me, you’ve been on the right side of the market and have probably registered your best month of the year. As of today’s open, the S&P will be 200 points off its early-October low, and we have yet to get back-to-back down days this entire month. You couldn’t ask for a better situation. Trade what happens, not what you think should happen. More after the open.
headlines at Yahoo Finance
today’s upgrades/downgrades
this week’s Earnings
this week’s Economic Numbers

0 thoughts on “Before the Open (Oct 27)”

  2. Funny thing about Jason. He is always there to take credit when he is a bull
    (and he let’s you know that of course), and on the flip side of the equation
    when the market is trending down he is the first one to let you know, “See guys
    I told you so.” But what is hidden and what we don’t see is Jason’s 1) actual
    results and; 2) the trading downtime when he is transitioning between going
    from short to going long (i.e., the old whipsaw effect). HW

    1. I’m not taking credit for anything. I’m not smart enough to predict the future, so I’m stuck being agnostic and reading the charts. When the trend is up, I go long. When the trend is down, I favor shorts. When I’m not sure, I’m the first to admit I’m not sure (rather than pretending like I know what’s going to happen).
      It sounds like you’re pissed off your trial period ended two weeks ago and you missed out on a couple dozen great set ups.

      1. I have traded successfully for over 20 years. I have subscribed to Jason’s site and found him to be honest, straight forward, willing to admit if he made a mistake and generally a person I would be honored to have as a next store neighbor. Howard, I appreciate your comments, but Jason’s comments are provided free of charge here. He has no reason to show you his actual results anymore then I do if I post here. Whipsaws occur to everyone in trading and you know it. I have seen him take credit when credit is due and I have also seen him admit when he was wrong. There is no one on Wall Street that can tell you what the market will do. Jason’s just reading the signposts that he thinks will get him to the destination and posting them. NO ONE is ever correct all the time on Wall Street. Take the lower risk trades, play good defense if they do not work out, and move on to the next.

  3. I beliebe the ripples in Greece ill surely effect everyone. The agreement with the IIF is not binding on the banks. The IIF has yet to deliver the voluntary participation. Many banks would be better off if the haircut was involuntary, given their offsetting positions in credit default swaps. the agreement with the IIF is not binding on the banks. The IIF has yet to deliver the voluntary participation. Many banks would be better off if the haircut was involuntary, given their offsetting positions in credit default swaps

  4. One of the reasons I follow this site is because I value Jason’s perspective. He’s been consistent with his observations since the SPX 1075 low so I don’t know what there is to criticize. In fact, it was his observations that convinced me to cover my first full unleveraged short position at a 20 point SPX profit, after which I put on another 2/3 full unleveraged short position which is still open and at a big loss. The lesson is that I made the mistake of thinking that an unleveraged position afforded me less risk, so I held on. Another lesson learned.
    Anyway, let’s get back to this intresting market. Yesterday’s support in the 1222 area was an indication that new highs were probable. SPX is up against the 200 day SMA at 1275 (with the 200 day EMA now support at 1235ish). I have another upside projection of 1285 which is dependent on this rally being a corrective rally in a bear market that began in MAY. I also note that, on the daily chart, I see 5 waves up in the rally from 1298. If there ever was a time & price level for this market to reverse it is now, assuming I’m correct that this a bear market rally in a long term down trend.

    1. Thanks PeteM, get us back on track. I’m playing today as a retrace day and shorting the lunch hour.
      Howard, Jason isn’t a chauffeur. I’m assuming you’re not a seasoned trader. Jason’s trading record doesn’t matter. What matters is your trading record with Jason’s suggestions.

  5. As we approach 2PM (EDT) & push for SPX 1285, I’m looking for any sign of a reversal and downside acceleration to find a place to go short, this time if only for a day trade.

    1. We should get a Short opportunity both Friday and Monday. Not sure about today’s close. I expected today’s lunch bunch to go South of the Border, but they didn’t.
      Daytrading: it’s not like you’re becoming a pagan.

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