Wednesday, September 2, 2009
I was very excited for Wednesday this week because I would have all morning to trade. Turns out things were very very choppy. I ended up taking a short at 11:30 from 998.50. It was just a scalp set up though and I closed it out 15 minutes later for 2 points. BORING....
The big stories today were gold and AIG. Gold was rocking, up 2.5% or so! 27 million shares of GLD traded. This is obviously because the dollar shit the bed. People are talking about bank failures again, Europe looks like trash, and don't even get me started on China. They're "stimulus" money definitely made its way into the stock market over there, driving the price up 80% this year. I read a little about China and from what I can grasp, they have overcapacity EVERYWHERE. Without us buying their crap from Target and Walmart they don't even have an economy. A correction in Chinese markets was inevitable. However, I wouldn't short it with the proverbial 10 foot pole. Why? Cause the government could step right in and start buying up the market and cut your head off in the process. They do that here in America but at least we get a little wool pulled over our eyes by first giving "bailout" money to the banks and have them bid up SPY the last 15 minutes of every Friday. Enough about all that though, I want to talk about the S&P 500
Last week, ( 08/24 to be exact) I said the top is in and went short the ES. I closed the position a few days later and never got back in. So sad. Of course we are down 30+ points from that very day (still falling in after hours as I write this). But what can you do. I don't have an account with $1 million in it (imagine that right), so I'm not going to hold leveraged S&P contracts for weeks at a time. By the way if you feel like letting me manage your futures account feel free to email me...No? ok I'll move on :)
Well, The pullback is here. All the "September sucks for equities" talk feeds on itself, so keep that in mind. I'm going to make a few predictions about where we are headed. First off, this move is almost over. IN TERMS OF PRICE, not time. It could take the rest of this week or even the next, but we aren't going much lower than 980. I honestly expect that price by Friday when the job(less) numbers come out and people start to realize the mess we are in. Then at some point next week the "everything is fine" crowd will be back, and we will fill Monday's gap, moving back up to 1001-1005. That will be a great time to get short again in my opinion. I drew out how I expect price action to look on today's chart. Am I the man with MS Paint or what!
Lets see how things play out. There are always wild cards out there. If you are trading this mess keep an eye on Gold and Oil. Also remember the 50 day moving average is closing in and all those IBD reading hotshot fund managers will be plowing into the markets when we get there. I'm sure of it. Its all just squiggly lines on charts to them. Thanks for reading