Intra-Day Update: Day Trader’s Tropicana

UPDATE 1:06pm EDT. Today’s tape is like watching paint dry. Something’s gonna break either way. The Yen is moving ALONG with the averages, so no clear indication as to what’s happening. The TNX is up a little but it seems the bond traders are sitting and waiting for direction. Be careful out there – this market could pop either way any second now.

UPDATE 1:40pm: We seem to be breaking out of a channel on the DJI. I would probably start hedging here or perhaps cut some of your short positions:

Something I’ve noticed today is that the usual inverse indicators like the Yen or TNX are inconclusive or lag behind. So price action is king as usual and all we can rely on at this point. However, having said that, as I was watching the Yen drop I realized that the averages kind of stayed flat and didn’t give much back, in particular the NQ futures. So, in my mind this market WANTS to pop right now and bears should be extremely careful out there. If things continue in this fashion and if we break the next pivot at 1686 with confidence I might grab some GOOG, BIDU, and perhaps some CME calls.

For the record: This market is REALLY starting to get on my nerves, which might also be an indicator that a big move is about to happen. It’s pretty clear that day traders are dominating the action right now, as we are bouncing between pivot points. Due to all those sideways tape my frustration level is reaching a peak, and I’m sure I’m not alone. These are PRECISELY the kind of times when big moves happen. Just when you decided to step on the sidelines. Remember, the bus moves fastest once everyone got off. Having said that however, there is no harm in going into cash. Once we break there will be plenty of upside (or downside) to play with.

UPDATE 3:22pm. The NQ futures just dropped through their pivot support after much up/down gyration and are now heading down. I clipped my cubes I bought earlier today at a small loss and decided to stay mostly in cash for the remainder of the week. Unless you are a day trader, this market is toxic in my opinion and we need to see a strong signal here before I jump back in.

Cash is a position.