3 replies to this topic

[thespookyone]

Got stopped out by my trailing stop on my May 46 Q puts real quick this morning. Made 11 cents on the bulk, and 3 cents on the rest. Not what I was looking for, but it is harder to go broke taking profits-so I take them. I'm looking for a quick reshorting of the Q's, though, somewhere near these new prices. Todays rally may be the funniest yet. Characterized by CNN as a response to the weak retail sales numbers,which point to a weaker economy, leading investors to believe the Fed may cut rates. Sure they will, a little after the recession hits. Correct me if I'm wrong, but, when has the Fed been ahead of the curve? And is a rate cut truly important to a population like ours-overborrowed and under saved to the hilt? I guess Joe Sixpack also liked the ppi numbers. A .7 rise in a month-sure that's a positive for the markets-NOT. I suppose the real problem is our weakened educational system in the U.S.- one that produces investors that can't connect simple dots. Somehow, they feel that high inflation, and a weakened consumer will not affect U.S. corporations bottom lines. Don't get me wrong, I know they'll figuire it out in several months, at the actual top-right after their stock bag gets filled right up to the brim-at exhorbetant prices. And yet, todays rally convinced me of NOTHING, short term. Inside days on both the DOW and the Q's, with the Q's rising on a bit better than HALF the volume they got lit up on yesterday. We still have not broken out of the RST, and I don't feel we will until we correct first. Sometimes the best trading comes from simple observations. I got paid for noticing the bulge in the PC ratio(while I guess many thought "it would be different this time"). I think the simple thing to notice here is options expiration, which Da Chief touched on. And, by the way, I'm starting to learn more and more from what he casually mentions-than what he stands on a soapbox and screams. My experience tells me that options ex week can get crazy, and I'm thinking-it WON'T be "different this time". I'll be waiting at the bus stop for the big boys to pick me up-whichever direction they are traveling-because I only trade for money, not to be a bull or bear, or to be correct-just $$$$. But, I must say, experience tells me they like the bus empty when they make their journey-it travels faster that way-and by sheer coincidence(LOL) I think they threw a ton of shorts off the bus today-so my guess is-this week won't be pretty. Today has not changed my view that all I'm looking at is a rounding short term top, and until it breaks the top long term top trendline in the RST-I have absolutely no reason to feel otherwise. Sure it's a bit choppy here-so what's new? Good trading to all. Spooky

[Jnavin]

That's a good summary of my thinking right here as well. Interest rate cut? You bet.

[skott]

the fed can come up with all kinds of reasons to cut rates and they can be fictional.

[ONEGOAL]

i think a fed cut may be linked to action in the yen should that suddenly rise and force the hands of the "carry" traders stuffing themselves by borrowing cheap yen and buying virtually anything else and pocketing the difference. fed cut may be used to add liquidity which may disappear overnight when all those short the yen are forced to cover. think ltcm. we could see a day very soon of "sell everything" to raise cash to cover short yen positions. of course when walking down the street and seeing a group of screaming currency traders running the other way is NOT the time to become a contrarian !!! oh well, time to wash another car.