Kudos to Matrix today for his great observation at 11:06 this morning: "That Bob Pisani on CNBC seems to be less of a cheerleader than before. . Normally has a real bullish mood about him, but you could tell between the lines that he thinks this rally is just a headfake. .. "
We had a few clues ahead of Mr. Pisani’s lack of enthusiasm; At 9:53 CNBC put of some frightening numbers on sub-prime delinquencies, which are accelerating by more than 100% since October. The transports were lethargic despite oil being down $1.26. At 10:05 I said: "Home inventories up 5% highest since 1992 (8.9 month supply), prices down 2% from last year. Overall sales off 10% from last year. This is horrible but expected but still horrible so somehow you would think that’s the overriding consideration… "
As far as head-fakes go, this one was a big one but we weren’t buying it and at 10:22 MJ23 noted: "Markets up and guess what the VIX is also up! Not a good sign?" At 10:47 I warned: "There is no way I take a long based on today’s trading. We’d have to at least retake Friday first." At 12:26 I said under 13,500 was not a Dow recovery and the last straw for us was at 2:12 when I said: "Now BSC really breaking down. That means sub-prime not over. Make sure you have protects if you don’t already!"
To some extent oil pushing back over $69 was also to blame but most of the energy sector stocks weren’t buying that price so why should the broader markets? It’s all about the housing/lending crisis and it will be interesting to see what kind of spin the Fed puts on this in Thursday’s statement but for now we’ll just check our levels:
|
|
|
Day’s |
Must |
Comfort |
Break |
Next |
|
Index |
Current |
Move |
Hold |
Zone |
Out |
Goal |
|
13,352 |
-8 |
13,000 |
13,300 |
13,500 |
14,000 |
|
|
2,878 |
8 |
2,800 |
2,900 |
3,000 |
3,250 |
|
|
1,497 |
-4 |
1,470 |
1,505 |
1,530 |
1,550 |
|
|
9,807 |
-41 |
9,400 |
9,800 |
10,000 |
10,250 |
|
|
2,577 |
-11 |
2,525 |
2,550 |
2,600 |
2,750 |
|
|
497 |
-7 |
480 |
490 |
500 |
560 |
|
|
827 |
-7 |
810 |
830 |
850 |
900 |
|
|
21,853 |
31 |
20,250 |
20,750 |
21,000 |
22,000 |
|
|
18,031 |
-56 |
17,400 |
17,700 |
18,300 |
18,500 |
|
|
14,487 |
20 |
13,500 |
14,100 |
14,725 |
15,000 |
|
|
7,930 |
-19 |
7,300 |
7,600 |
8,000 |
8,200 |
|
|
6,002 |
-20 |
5,750 |
6,000 |
6,100 |
6,300 |
|
|
6,588 |
-21 |
6,400 |
6,550 |
6,600 |
7,000 |
Only a strong close in Europe kept our chart from drifting over 50% red so we need to keep a very close eye on the CAC tomorrow as well as the our own NYSE, SOX and Russell as they struggle with critical levels.
The dollar is not getting any interest as very poor housing numbers put a damper on demand for cash and a brief retest of 52.50 was quickly rejected. Gold got stuck at $655 and oil made a spectacular recovery from a low of $67.55 to finish the day at $69.18.
Needless to say I’m less than enthusiastic about picking up new positions. Although we made a few good day trades in our intraday chat session, on the whole I’m just sitting on the sidelines trying to guess which way the tide is going to go.
|
Description |
Cost |
Open |
Sale |
Sold |
Gain/Loss |
Gain/Loss |
|
Basis |
Price |
$ |
% |
|||
| 200 JUL 47.00 QQQQ PUT (QQQSU) | $13,410.00 | 6/22 | $11,990.00 | 6/25 | ($1,420.00) | -10.60% |
| 10 SEP 510.00 GOOG CALL (GOPIU) | $13,010.00 | 4/18 | $43,990.00 | 6/25 | $30,980.00 | 238.10% |
| 50 JUL 80.00 XOM PUT (XOMSP) | $260.00 | 6/21 | $4,240.00 | 6/25 | $3,980.00 | 1530.80% |
| 150 JUL 135.00 DIA CALL (DAWGE) | $24,910.00 | 6/22 | $27,740.00 | 6/25 | $2,830.00 | 11.40% |
