Now Reading
Intra-Day Update: Now We Wait
Contents
85

Intra-Day Update: Now We Wait

by The MoleOctober 29, 2008

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.


About The Author
The Mole
Mole created Evil Speculator amidst the chaos of the financial crisis in early August of 2008. His vision for Evil Speculator is a refuge of reason, hands-on trading knowledge, and inspiration for traders of all ages and stripes. You can follow him and his nefarious schemes at various social media waterholes below.