Tuesday, June 21, 2011

Turn and Burn!

I have plans for tomorrow night and Friday night so probably no posts on those nights. Will have to do a Saturday blog instead!

Turn and Burn!
How about that for a ripper to the upside? I have not used the term "panic buying" in a while but that is sure how it seemed today, except for the crappy volume. Two years of low volume moves up make this one not alone.

I will probably get my two shorts closed out tomorrow. I am down 1% in SH and up .5% in PSQ. On Sunday night I had worked on two rebound ideas, CERP and MAKO. I did nothing on Monday and at today's open MAKO was already up 2% plus. I figured why not? I placed my order via my new smart phone (I can trade during the day!) and proceeded to rack up a nice 6% win when I sold near the close! Not bad for a few minutes work, this stuff is easy! I stayed away from CERP because I had not realized how small a company it was, so I left it alone.

Here is the chart for MAKO I worked on Sunday night, notice the price pin action (click for larger view):
Nice setup at $27 and all it needed was an up market, BOOM!

So what happened today? I have no idea. The easy answer is that the impending Greek vote on the government giving in to the bankers was a big positive catalyst. Hard to think that was not already factored in though. Looking around the past few days I have seen evidence of perhaps another reason markets are pepping up. Well besides Barry Ritholtz closing his short positions.

It all started with Bill Gross (my favorite, lol) Tweeting some crap about the FED moving to cap the 2 and 3 year interest rates via some new exotic monetary game, known as Operation Twist 2. Mr. Gross is far better connected than most, so of course this off note was taken very seriously. Is the FED already getting set to intervene in markets more? They said no way, but we all know how that goes.

Then we have some real action in commodities, and I don't mean metals and energy:
These things are really going up. Do people smell more liquidity and higher prices going forward? Hard to tell, this is not my area.

It was my theorem that political pressures and an exploded balance sheet would keep the FED on hold until things got pretty ugly. Instead a small market correction and some weakening market indicators have the buzz going around that some kind of "stimulus" is now in play. If the FED meeting tomorrow unveils any new plans, it will only make sense to get triple dog dare you long. I mean go long and lever that all up as well. If 6% down and a weak Philly Fed report causes instant action, no one can ever lose ever again. Respected FED watchers like Calculated Risk do not see tomorrow's announcement as anything new at this point. Someone has to be wrong.

In any case, the downtrend lines and channels I have drawn for the S&P 500 and Nasdaq were pierced a tiny bit today. With confirmation over the next few days I will have to proclaim my move down idea dead. Volatile times so be careful out there if you are in this market.

Have a good night.


Watchtower said...

Orange juice...I can't help but think of the movie 'Trading Places' and Anon's comment he made awhile back, lol.

getyourselfconnected said...

Yes, maybe I included that one on purpose, HA!

David Batista said...

You forgot the chart on the appreciation of robots. Because, dude, they're COMING!!!

Hope you're having a good week. The fish are calling you to get back out there this weekend . . .