Archive for December, 2009
Say Good-bye To A Crazy Decade - Happy New Year!
After seven consecutive rallies, the market is taking a breather. It could not move to new highs yesterday and even with a positive initial jobless claims number this morning, it can’t break out. As I mentioned yesterday, the NASDAQ has posted a loss on the last trading day of the year for nine consecutive years. Given today’s action, it looks like 10 in a row. If you took my advice and shorted stocks early this morning, you are finishing the year on a positive note. Take profits before the close and avoid the long weekend. It’s been one of the wildest …
Look For Profit Taking Into Year End - A Close Below SPY 112 Today Would Spark Selling!
This morning, the market is taking a small breather after seven consecutive gains. The breakout to new highs for 2009 was miniscule and profit takers are nearby. We have been in a news vacuum and traders don’t have much to go on. Normally, Chicago PMI would be lost in the shuffle and this week it is in the spotlight. The number came out much better than expected, but it did not have much of a market impact. Tomorrow, initial claims will drive the early action on the last trading day of the year. Last week’s number came in below expectations. I …
Interesting Trading Opportunity Heading Into Thursday!
Yesterday, the market tried to push higher in very light volume. At the end of the day, the gains were negligible. Today’s action feels like déjà vu. The market opened marginally higher and now it has drifted back to unchanged. We are at the highs for 2009, but shorts have not scrambled to cover positions. That is because they covered months ago and they have not re-established positions. If they had, we would see rising (not falling) implied volatilities. Resistance at this level is strong and profit-taking is keeping this rally contained. There might be a trading pattern that we can …
The Biggest Bailout News Is Swept Under The Carpet. FRE, FNM, GMAC and AIG Could Hit $1 Trillion.
In quiet trading, the market is making a new high for 2009. Seasonal strength is offsetting any weak news. GDP and durable goods orders both came in lighter than expected last week. This morning, a botched terrorist attack on a Northwest flight from Amsterdam to Detroit did not rekindle fear. Airport security and a multitude of other security measures failed to prevent the incident and if not for a failed detonator, 300 people would’ve lost their lives. MasterCard showed that retail sales increased 3.4% from November 1 through Christmas. That piece of news along with better than expected Japanese factory output …
Controlling Risk in Options Trading
How can I mitigate the risk as much as possible when I trade options?