Archive for March, 2010
The PIIGS Are Lining Up Big Bond Auctions - Greece Was Just The Beginning!
Yesterday, the market posted strong early gains and it made a new 18-month high. The momentum is strong and it looked like we might have a runaway market. However, as I mentioned in yesterday’s comments, we still had to get through the bond auction. The U.S. Treasury auctioned $32 billion in seven-year notes. The bid to cover was 2.6 and yields went up. Some would argue that this is a great sign. Higher interest rates mean that the economy is recovering. Corporate profits and tax revenues would rebound in that scenario. However, this is contrary to what the Fed Chairman said …
Watch The Bond Auction This Afternoon - It Could Be A Warning Sign!
After a day of rest, the market is resuming its rally. It has broken out above horizontal resistance at SPY $115 and is making a new high for the year. The momentum is strong and the path of least resistance is up. There are many bullish influences and they are the focal point. Corporate earnings are strong and year-over-year comparisons are favorable. Companies have slashed payrolls and any increase in revenue goes right to the bottom line. Balance sheets are strong and corporations have been aggressively paying down debt. They are using some of that cash for M&A and stock buyback …
Early Weakness and Late Day Strength - That Pattern Should Continue Today!
Yesterday, the trading action was about as dull as it gets. For most of the day, prices stayed within a very narrow range and the volume was light. Late in the day, a small rally pushed us to new highs. The momentum is fairly strong and bullish sentiment is everywhere. Analysts are finding the silver lining in just about every release. Strong rallies are typified by early weakness and strength into the close. We are likely to see that pattern today. The market is trading lower on news that Portugal’s debt is being downgraded by Fitch. This news was expected and …
The Market Is Waiting For A Catalyst - Sit Tight And Don’t Force A Trade!
I wish I had some spicy commentary to add today, but I don’t. The market is waiting for a catalyst and the volume has dropped off dramatically. The momentum is strong. Yesterday, the market was ready to sell off after the new healthcare bill was passed. After an early decline, the market snapped right back and finished higher. Apparently, bulls believe the Congressional Budget Office (CBO) and the program will pay for itself. Traders want to see strong signs of economic improvement before they buy stocks. The unemployment picture has not improved the last three months and we have not seen …
The Options Trader: Who’s Involved
Who is involved in options trading?