Intra-Day Update: Now We Wait

UPDATE 10:25am EDT: Nothing much to do but wait until about 2:00pm when we get the ‘word’ regarding the FOMC meeting. Obviously everyone expects a rate cut here – fundamentally it really wouldn’t change anything as the ‘effective fed funds rate’ has been below 1% for over a week now. But we need to keep up appearances, smoke and mirrors baby! Anyway, in the interim here are two reading assingments for you guys – you will be tested:

Clusterfuck (I like the sound of that one)

My favorite quote on that one:

[Millions of Joe-the-Plumber types] will be watching the official proceedings in the federal courtrooms with jaundiced eyes as they hunch in their tent cities, in the rain, sipping amateur-brand raisin wine bartered for a few snared rock doves.

Short Sellers Aren’t Jackals, They’re Bears

This is Berk’s favorite quote from this one:

[The grizzly bear was wearing a ``Dow 10,000'' baseball cap when the index was still at 11,000. A large sign on the wall of Fleckenstein's three-room office suite advises, ``Protect Your Right to Arm Bears.' ' ]

Enjoy!

UPDATE 11:07am EDT: I forgot to mention – Gold futures reached equality this morning (c wave equal length of a wave) and I might just nibble on some GLD puts after the FOMC meeting. ZG/CG futures will have ceased trading by then but I think this is a pretty defensible position right here. Remember that it is extremely difficult to pick a good entry with Gold lately – it’s been extremely volatile and erratic. Sometimes it’s easy to get scared out of a position, so take nibbles and be prepared to lose a large part of your premium while you’re holding it. Trading Gold like equities doesn’t seem to work – you set a mental stop and it’s almost guaranteed to get hit, just to watch the metal take a tailspin a day later (or rally like mad if you were banking on the long side).

UPDATE 1:00pm EDT: Someone alerted me to an old resistance line in the NDX this morning – seems like it was breached just now:

UPDATE 2:44pm EDT: So, the mouth breathes got their coveted 0.5% fed funds rate cut. Life is fantastic now and all our economic problems are over – you heard it here first. BTW, may I point out that the 1.5% rate lasted for 21 days exactly – 3 weeks. The intervals between cuts are getting narrower. When are we cutting to 0.5%? A week from now after the election?

Anyway – not sure which way things are going to swing – my indicators are diverging again. I hate to sit here all week and not do anything but I don’t want to jump in unless I see a clear direction. Breaking the upper ranges and pushing through the lines I painted yesterday would give me more confidence.

UPDATE 3:54pm EDT: I just grabbed some GOOG puts.

This entry was posted on Wednesday, October 29th, 2008 at 10:28 am. Both comments and pings are currently closed.


  • http://moontrader.wordpress.com/ Moontrader

    Here is a couple of notes on my call yesterday for a bottom and what signs to look for in the next days that the market might give in case I´m wrong and we'll be having more lows for the year (in my opinion, low chances).

    http://moontrader.wordpress.com

  • molecool

    What timeframe are we looking at on that chart?

  • http://moontrader.wordpress.com/ Moontrader

    It's a daily chart. I was referring to the 8 days timeframe that Joe DiNapoli suggests for the “Double RePo.”

  • http://www.retracementlevels.com 2SWTrading

    Correct setups for today are here:
    http://retracementlevels.blogspot.com/2008/10/g

    Plus, you can receive daily the correct setups in your email, if you want, read the post on the blog.

    For all the lazy traders around…
    ;-)

  • http://investingadventures.com Jorge

    I don't see them cutting rates. I'm bold like that.

    Sitting on hands today anyways. FOMC days are wonderful because I actually get real work done.

  • molecool

    Gold update above.

  • molecool

    I think I'm going to wash the cats today.

  • molecool

    That name makes me hungry – pasta anyone?

    Do you have a link for what you speak of?

  • http://investingadventures.com Jorge
  • molecool

    Colbert rules – period.

  • C.C. Rider

    Moon, I have to disagree with your statement about the VIX. I think it is preparing for a final wave 5 up.

    http://www.screencast.com/users/texana44/folder

  • BigHouse(Aka Mr Vix)

    I like that blow off. I am long Calls as you know.Go go go Mr Vix

  • http://www.evilspeculator.com berkshire

    Nobody ask me a question today that you do not want a 5 paragraph essay answer for. I don't know why, but that is all that is coming out today. Apologies for those of you who don't like to read….you know who you are!! :-)

    Skål!

  • http://www.evilspeculator.com berkshire

    Amen…+1 for real life!

  • BigHouse(Aka Mr Vix)

    Imagine if they raised rates lol

  • DMS425

    BA is in play today, strike will be over very soon. The stock should be an easy point.

  • http://moontrader.wordpress.com/ Moontrader

    Joe Dinapoli has a book, pretty interesting: Trading with DiNapoli Levels. Pretty expensive as well. I got it on eBay.

  • Ukla the Mokk

    Do you scale into and out of trades? And if so, what are some general criteria (for lack of a better word) or how do you do it? I like scaling in and out and it has saved and helped me.

  • http://www.evilspeculator.com berkshire

    Yes…sometimes. With MA, I scaled in and out by buying different strikes at different times. And selling them separately also. It worked well and allowed be to trade MA all the way to target without exiting or even rolling.

    However, in this market, I would recommend trading only in very small lots. The worst thing that can happen while you scale is is that you finally get a loaded position, and boom, markets reverse. Right now, that happens all the time, so I would recommend being a one-lot wonder. Once volatility has settled out, I will revert back to the trend-trading style I used to use, in which I scale in and out of positions at regular intervals to keep profits.

    For me, one of the easiest ways to do this (since I HATE dollar-cost averaging on WINNING positions) is to buy a different strike. This allows you to keep investing a “standard” amount each time you add. Another big boo-boo is putting more money in as you go. It should really be the opposite. As the move goes in your favor more and more, it most likely has less reward to give you, so you should not sink MORE capital into waning momentum.

    Hope that gives you a little insight.

    Skål!

  • molecool

    We will address that in more detail further down the line. Berk and I pyramid orders during normal market conditions. As trend traders this allows us to get leveraged into a winning positions that keeps moving your way.

    However, as Berk pointed out – right now is not the time to do this.

  • molecool

    Trading with DiNapoli Levels, by Joe DiNapoli, foreword by Joe DiNapoli.

    “A must have for the advanced option trader “- Joe DiNapoli.

    j/k

  • molecool

    What's the meaning of life?

  • http://moontrader.wordpress.com/ Moontrader

    I'm peeing my pants off. He was probably the first one to buy the book as well.

  • lisa

    If you think the bottom is in please think twice. We are going much lower from here. The economic pictures tell all. Please read the link below.

    http://www.stocktiming.com/Wednesday-DailyMarke

  • http://moontrader.wordpress.com/ Moontrader

    Mole, you know how I am. I take what this guys offer and adapt to my needs. No mechanical method is flawless, far from that, but they offer other tools which can give you extra edges.

  • http://moontrader.wordpress.com/ Moontrader

    CC, you're anticipating a VIX movement, which is fine. I'm just saying that, for the odds of a past bottom increase, VIX has to be tamed, down below 50. It's very high right now, so your scenario is absolutely valid.

  • molecool

    Did I ever say that? If you are looking for bottom callers you're on the wrong blog ;-)

  • lisa

    I did not mean that you said that. I just remind people to be careful because there are so many bottom callers out there on TV and on the blogs. Since I read your blog every day that's why I put my opinion here.

  • http://z-stock.blogspot.com/ zstock

    Hi Lisa, I'm getting a 404 page load error on the link.

  • malusDiaz

    That's only 4 paragraphs!

  • http://moontrader.wordpress.com/ Moontrader

    link not working for me.

  • lisa
  • http://moontrader.wordpress.com/ Moontrader

    In any case, I wouldn't short right now.

  • C.C. Rider

    Anybody else see this ascending wedge. Bounded by 9225 and 9100.

    http://www.screencast.com/users/texana44/folder

  • malusDiaz

    That's a realllllly big stretch, over 50% of the data points are outside the range lines.

  • C.C. Rider

    Whatever. VIX is confirming on the one minute chart.

  • Growler

    uh…yeah. Sorry all about the Dr. Phil moment in the previous post. Didn't mean to take up the whole freaking blog.

  • http://www.evilspeculator.com berkshire

    No worries. I would much rather people spit out novels than not get the help or advice they seek.

    Stop….Fed time…. Ooohhh.

    Skål!

  • http://www.evilspeculator.com berkshire

    Wow…I guess the Fed is confused…Ahh…3 minutes late…typical government.

    Skål!

  • BigHouse(Aka Mr Vix)

    Just shorted the qqqq's

  • BigHouse(Aka Mr Vix)

    Its going down…bye bye..Time to push Mr Vix up up and away

  • boomer55

    Moon
    I have never seen analysis from him before, thanks.

    It is strange though. In Elliott parlance your first break of the 3/3 DMA is a wave 3-4 at subminuette degree. The second is again a wave 3-4 at minuette degree. The third break above is again the wave 3 down to wave 4 at minute degree. Appears we did complete minor 3. I feel we are in a C wave up to complete minor 4; which should complete in the area of the series of three's and four's. Down in wave five to complete the count( maybe a short pop after the announcement) There after I would entertain a prolonged rally.

  • C.C. Rider

    I think we are going to 7200. Very quickly.

  • http://investingadventures.com Jorge

    Someone's keeping the markets propped up at Dow 9000.

  • BigHouse(Aka Mr Vix)

    watch this market is going to end up doeing nothing today. It will just chop around

  • C.C. Rider

    Ask yourself one question. Who's buying this crap?

  • malusDiaz

    Like i said, i'm an idiot throwing my 2 c, I don't have a good understanding of markets or fundamentals!

    More like an inquiring n3wb.
    What makes it a rising wedge?

  • BigHouse(Aka Mr Vix)

    Folks its looking alot of nothing going on.

  • Ukla the Mokk

    Berk, if you wouldn't mind, please email my yahoo account (headbanger51) when you get a chance…I want to learn more about this and have a few questions that I don't want to take up the entire blogosphere with. As for the trades, given my recent near death experience, I will be adhering quite rigidly to a strict method of risk management…and with my account size, that almost guarantees “1-lots” for just about any trade.

  • C.C. Rider

    True direction won't be revealed until 3:15 est.

  • molecool

    Yup. So far. The unruly masses might stage another rally though – thus far I don't see any serious sellers step in. No surprise, as even hardcore bears like TK have converted to the bull camp.

  • molecool

    I don't think anything will transpire until the election. I might as well take the damn week off.

  • lisa

    I agree.

  • http://investingadventures.com Jorge

    Could use a good power nap right about now..

  • C.C. Rider

    Containment for the bulltards. TK included!

    http://www.screencast.com/users/texana44/folder

  • BigHouse(Aka Mr Vix)

    I shorted qqqq at 32.40 .If this makes a new high i am out

  • http://www.hervey-bay-holiday.com kea11

    Me too.

  • BigHouse(Aka Mr Vix)

    zzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzz

  • BigHouse(Aka Mr Vix)

    Volume is weak today

  • molecool

    Sorry, the zzzzz post was messing up the page.

  • C.C. Rider

    T-1 until meltdown.

  • ProZachJ

    Im still betting on a significant reversal around 986

  • http://z-stock.blogspot.com/ zstock

    DOW support is 89–so thats' my cover price__ GDP and beannies black thursday, are all aligning themselves very nicely

  • http://z-stock.blogspot.com/ zstock

    IWM shorting right here at 50.7, might be 0.50 too soon. Will cover 47 or lower

  • molecool

    R2? ;-)

  • Ukla the Mokk

    Poll question:
    I have a suggestion for a poll question…
    How do you think the markets will react to McCain being elected? Obama? I'm sure there's a better way this can be phrased.

  • molecool

    How about:

    How will the market react if Obama wins?

    Market will tank.
    No effect.
    Market will rally.

  • molecool

    Damn it – looks like I'll have to write the medium term indicator this weekend. Grrrr….

  • Ukla the Mokk

    I'm showing IWM possibly breaking down at a confluence of R1, a long-term, and a mid-term fib level. I'm chilling out only because I'm a little gunshy right now.

  • Ukla the Mokk

    Sounds fine to me.

  • molecool

    ALERT: Grabbed some GOOG puts.

  • http://z-stock.blogspot.com/ zstock

    Go short 1% of something, Please go short something. GDP is going to KILL the bulls, I guarantee it__
    Well I can't exactly guarantee that, but It looks bad for the bulls tomorrow.

  • http://investingadventures.com Jorge

    Wow…

  • molecool

    Nice I just added 1% to my portfolio with one trade in five minutes :-)

  • molecool

    That's good trading right there. You sit there all day watching the market bounce around and then you strike the minute you see the probabilities align in your favor. In this case this was when I saw the Dow bounce off the 9300 level, which was a major resistance line on the P&F.

    I'm quite pleased with myself right now. Have not made a lot today, but my trades today were all spot on. Also sold a DIA call right at the top – good day in my book.

  • BigHouse(Aka Mr Vix)

    Went back to shorting qqqq's and went long some more VIx. That was not good for the bulls that reversal. Its gong down.

  • C.C. Rider

    That WAS a reversal. I ended up 10 percent after being down huge. I need someone to help carry my balls around if I get too many more days like this! Males excluded!!

  • Ukla the Mokk

    I wish I would have…I was right on IWM. Oh well, there will be other opportunities in the future.

  • jcoors

    I'm in cash but I expect a large gap down tomorrow. GDP expected is -0.5% I think it's going to be -1.5% (unless it's heavily manipulated. It's right before the election. That's why I'm in cash).

    EDIT: possibility of gap down tomorrow. We're still inside the triangle people. Knife catchers are going to PAY.

  • BigHouse(Aka Mr Vix)

    Wait till asia opens. They are going to see that we were up nicely on the Fed news and then sold it off in the red. They are going to beat down there markets. Can't wait till Japan opens.

  • Growler

    Nice.

  • http://investingadventures.com Jorge

    P&F printed a buy signal though.

  • molecool

    CLEAN CUPS and screenshots of the new TOS iPhone app :-)

  • SteveInChicago (spsnomad)

    My thoughts are that the triangle is waiting for this to complete, and then it's wave 5 down, either way. I don't think that the market really cares who gets elected. Whoever gets elected is getting dropped into a minefield, and the alphabet soup with today's Fed action pretty much insure that they will be out of ammo.

  • SteveInChicago (spsnomad)

    My thoughts are that the triangle is waiting for this to complete, and then it's wave 5 down, either way. I don't think that the market really cares who gets elected. Whoever gets elected is getting dropped into a minefield, and the alphabet soup with today's Fed action pretty much insure that they will be out of ammo.





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