Intra-Day Update: Pre-Senate-Vote-Day

UPDATE 9:56am EDT: Yawn…… please wake me up when this kabuki theater is done and over. Seriously, this market is turning into a regular basket case. So, the spin as of this writing is that the vote is most likely going to pass. And it’s fair to say that a positive vote would push the markets up, although there is some disagreement on that front as well. But let’s not forget that a House vote will follow an approval of the bill by the Senate, so that would be the next emotional damocles sword Wall Street will be jittery about.

I have to say that all this is beginning to wear on me – and I can’t believe we’re still talking about this bailout boondoggle almost 2 weeks after it has been proposed. I for one would like to get on with trading – don’t really enjoy this limbo state much as Mr. VIX keeps clinging to the 40 mark, making life very expensive for option buyers. Then again, if we naughty bears can get a bailout rally out of this I would be in tears of joy, so let’s try to be patient and keep our powder dry.

UPDATE 10:33am EDT: Market looking sickly right now – what’s interesting is the TNX, which has been dropping steadily since the open. Again, personally I doubt that we’ll get a major drop today, but money flowing into bonds BEFORE the vote just shows that investor sentiment is all over the map today again (or maybe they know something we don’t).

UPDATE 12:22pm EDT: I’m watching the market gyrate up and down but beside the direction something very notable is the sensitivity and apparent weakness of the Nasdaq futures (NQ) which seem more affected than the COMPQ cash index. Something to remember when we get closer to loading up on puts again. Berk already posted our tech shopping list yesterday, so keep that bookmark handy. BTW, I would appreciate for you leeches to post your own picks as well. I’m seeing a lot of political and market related comments lately, but we should be working hard right now to pick our future victims.

UPDATE 1:15pm EDT: Okay, I’ve been browsing around the blogosphere much of today (for the lack of much else to do) and something that strikes me to be a ubiquitous sentiment is the need to be doing ‘something’ right now. Let’s look at where we are – the market is in complete limbo right now and daily fluctuations are fueld by emotion and political news. Mr. VIX is doing bong hits at around 40 and the option markets are pretty much broken (i.e. outlandish bid/ask spreads). What’s wrong with doing nothing? It’s a typical human cognitive bias to be wanting to do to something in order to either profit or to avoid losses. And in most cases any frantic action taken during such times is inversely correlated to any exepected result, or worse. Cash is a position! If you expect a bailout bounce, then simply nothing – wait for the market to come to you.

UPDATE 1:50pm EDT: The Dow just rallied by 150 points in one minute. We all know there’s only one place that has that much cash to throw at the markets right now. That’s right – your tax Dollars at work – or actually, it’s freshly minted funny money. I think this makes the point of my comment posted at 1:15pm – wait this thing out. This market is toxic. Remember those funny little noisy people on the 1st floor? Those are your children – this is a good time to get to know them and learn their names before they graduate and move out.