Archive for February, 2010
Testing Your Options Trading Skills
How can I test the waters without getting burned?
Cover Shorts But Don’t Get Sucked Into This Rally - The Next Big Move Is Down!
The first trading day of the week continues to be strong. Over the last four months it has consistently opened higher. Today, decent earnings and a little M&A activity helped to boost the market. The situation in Greece has not improved and laborers plan to strike. Meanwhile, the EU has taken a hard line approach and Greece has until May 15 to prove that it is serious about balancing its budget. If Greece cannot materially cut spending, financial support will be withdrawn. Germany is in the best position to help and citizens are not enthused about bailing out a country that …
Europe’s GDP Was Flat In Q4 - The Pressure Will Mount - Stay Short!
Yesterday, the market had a light volume snapback rally. Heavy snow across the Midwest and East Coast resulted in lightly staffed trading desks this week and the volume has dropped off. The news yesterday was not particularly good and the move was simply an oversold bounce. Once the buying momentum took hold, sellers stepped aside. This morning, the S&P futures are down 15 points on the open. China raised its bank reserve requirements to head off a runaway economy for the second time this year. In January, they mandated that banks stop originating new loans the last two weeks of the …
Europe’s Credit Issues Run Deep - Aid To Greece Will Spark A Small “Pop” - Sell The Rally!
This week, the market has been able to tread water after a stretch of heavy selling. The technical damage has been done and a long-term uptrend has been violated, horizontal support has been breached and we are trading below the 100-day moving average. Last year, these pullbacks represented a buying opportunity and we saw aggressive buying on major intraday reversals. Those dips were briefed and the snap back rallies were furious. The character of the market has changed and we did not get a snap back rally after last Friday’s reversal. Fear has resurfaced. Credit issues are looming again and this …
No Aid for Greece Would Be Bearish - Fed Exit Strategy Could Also Be Bearish!
In the last few weeks, Greece has gone from relative obscurity to center stage. This small EU member only accounts for 2% of Europe’s GDP, but it is a microcosm of the entire EU. It has spent beyond its means and enormous debt levels have investors scared. Greece is a socialist country and liberal spending will be tough to stop. They have pledged to cut their deficit to less than 3% of GDP in the next few years. It is currently above 10% of GDP. Greek citizens don’t like the thought of layoffs, payroll cuts for government employees, or waiting an …