It's not unusual for people to be nervous before they make a big purchase or to have a tooth ache feel better just before they get to the dentist's office. These same defense mechanisms kick in and toy with a trader's psychology. You've gathered information and made a sound decision, but you start second guessing yourself before the event. For the last month, I have been waiting for this moment because I believe the probability for a breakdown is high. I did not like the price action the last two days and I had to zoom out to a longer timeframe …
CBOE HOLDINGS' C2 OPTIONS EXCHANGE TO LAUNCH IN LATE OCTOBER
This is the calm before the storm. Trading volumes normally slow down ahead of a major holiday, but this week may be different. Major economic releases will impact the market and traders will not stray too far from their computers. Tuesday, China will release its PMI. I am expecting it to fall below 50. That will signal economic contraction. The entire world is counting on China to pull us out of this recession and a slowdown would dash those hopes. Tomorrow, Chicago PMI and consumer confidence will also be released and both numbers have been relatively soft. If overseas markets are …
Yesterday, the market rallied on better-than-expected initial jobless claims. This week, 473,000 new claims for unemployment were filed. That was 25,000 less than a week before, but this was not a good number. The market rallied early in the day. That move ran out of steam and sellers unloaded stocks in the afternoon. The market drifted down to major support ahead of the GDP release. This morning, Q2 GDP was revised down to 1.6% from 2.4%. Analysts were expecting 1.4% and the market rallied on the “beat”. Although the revision was better-than-expected, this was not a good number. The market is …
In the last two weeks, the market has weakened considerably. The negative news is mounting and stocks are trying desperately to tread water. Earnings season is almost over and the backend was not very encouraging. Cisco CEO John Chambers said that business have never been more difficult to forecast. He has been cheering about a “global recovery” for more than a year and his tune changed suddenly. Retailers have been lowering Q3 guidance and shoppers are focusing on necessities. Consumer goods companies like Procter & Gamble and Colgate have noticed that customers are trading down to off brand products. These trends …
