Good morning. Happy Wednesday.
The Asian/Pacific markets closed mostly up. Australia, Hong Kong, Indonesia and Japan each gained ore than 1%. India dropped 1.2%. Europe is getting clobbered. Austria is down 3.6%, and Germany, Amsterdam, Norway and Stockholm are down more than 2%. Futures here in the States point towards a very big gap down for the cash market.
The euro is getting hit hard; the dollar is up 1% and trading near a 3-week high.
News has shifted from Greece to Italy where 10-year yields moved above 7%. Greece is a small country, so although there was lots of debate and negotiation, containing their debt and preventing it from spreading wasn’t/isn’t very hard. Italy is a different story. It’s debt is probably too big for Europe to bailout, so the survival of the eurozone has come into question.
I’ve said for several weeks the market is doing well from a technical standpoint and barring very negative news from Europe, odds favor a continuation of the uptrend and another leg up for the market. But this isn’t a time where news doesn’t exist, and I’ve warned many times we could wake up any morning and see the S&P futures either up or down 50 points. Right now they’re down 35.
My bias remains the same, but I’m still being conservative. I’m net long but am in no hurry to be aggressive. This is the stance I will have until things in Europe clear up. The unknown event risk is too high for us to trade any other way. 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 (Nov 9)”
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35 points times $50.00/point = $1,750. I got $1,410 of that. Brag, brag. Anyway, I don’t see a pattern on the EUR/USD so I’ll make one up, ‘El Mesa Rojo’. From yesterday’s close (4:30PM ET) to today (9:30AM ET) it looks like a mesa (table top). Rojo means red in Spanish implying the market went down. So, ‘El Mesa Rojo’ will be a flat top with a sharp, large down.
ESZ1: I think it’s going to stay between 1240 and 1250 trying to make up its mind if it wants to be a Bull or Bear. Whatever! I’m going to 7-11 and buy some doughnuts and coffee. later
Congrats to RichE. Unfortunately for me, I never got short again in the PM yesterday since I had to see clients. Anyway, from the longer term perspective, I’ve been getting clients out of stocks on a systematic basis on this rally from the OCT lows and into U.S. Treasuries when the 10 yr T-Note gets over 2% & the 30 yr T-Bond is over 3%. But that’s based on my longer term perspective into and through 2012.
Now back to trading. SPX 1240ish is at/around the .618 retrace of the rally from 1215ish to yesterday’s high. I won’t chase here to get short and I won’t try to get long for an intraday trade. Rather, I’ll look for a rally that fails to try the short side again, looking for a test, at minimum, of the 1210-1215 area and quite possible lower.
kunta kinte – Before I forget, yesterday you mentioned “TF” lagging which implied that stocks usually “tank”. Well, I guess today’s action qualifies as a “tank”. Can you clarify “TF” and expand on yesterday’s comment? As I said yesterday, your comments are always interesting and seem to be well informed. Thanks!
PeteM – i did clarify my comment yesterday in response to your question. please see yesterday’s thread. there is probably more (downside) where this came from, but i wouldn’t bet my life on it. at the end of the day, i see this as a flat market right now so SPX or RUT can go up 50 points as easily as it can go down 50. there are better trades in other markets.
I’m short SPX at 1249 with my usual close stop loss at 1252, which I’ll lower to breakeven quickly if SPX can’t at least break below and stay below 1246.
From another blog that I follow there is going to forced liquidation
at the end of the bell today which should push prices down further
at least through tomorrow, Thursday, during the first hour of trading.
The past 2 days, I’ve left for appointments at 1:30PM (EST) as the stock market began its post 1PM upside move and either covered at breakeven or never re-entered the short side. Today I’ll be around, so I covered my SPX 1249 short at 1247 and I’ll wait for a shorting opportunity again in what I hope will be higher levels in the 1255-1263 area.
Overnight short should work. Looks like the 10/4 rally is over.
From my perspective, if this mornings sharp sell off is the beginning of an accelerated downside move of larger proportions, the later morning rally was completed (and knocked me out of my short positio before 1PM) and we should now see downside acceleration picking up. There could be some support at SPX 1225-1235 and lower at 1215-1220 but the move down would be expected to be persistent. Too late to short?
I hope Howard’s info is correct because I’m short at 1235 with another breakeven stop loss and looking for the day’s low to be taken out.
I’m disappointed and out at 1228 for a small profit.
kunta-kinte – I missed your response yesterday as I was probably getting ready to leave when you responded. Anyway, I saved yesterday and went back and found it. Thanks!