Just as we expected, talk loudly and don't even bother pretending you have a stick.
We had fun in the intraday as we realized the initial reaction was unwarranted but, unfortunately, I had to go and missed the rally, which was bigger than I expected but a very nice 100-point snap back from the initial reaction. Anyone who thinks the market is an efficient pricing mechanism should take a look at the swing in the Dow from 13,350 to 13,280 to 13,365 to 13,310 to 13,380 that occurred between 2:15 and 2:45 today as this is an interesting sort of efficiency. This is reason number 11 of why I hate hard stops…
I don't like the fact that most of our big gains are just based on M&A mania, now coupled with the commodity bubble to bring us amazing moves in companies like RTP, which gained $11Bn in market cap on the rumor that BHP will buy them to create a $250Bn mining operation. The fact that RTP denies getting a $100Bn plus offer to buy the company for 3 times it's 2005 value didn't dissuade 400,000 shares from changing hands at close to $300 per share.
Oil fell another .71 to $61.55 with very few barrels being cancelled and a last minute .50 rally saved oil from a possible finish below $61. We are already shifting our attention to the July contracts, which did not rally at the end (no point in pumping a contract you're not looking at).
On the whole, it was another fine day in the markets but I'm very glad I tightened up my DIA puts (now June $132s) as it just sort of has that late-stage Jenga feel to it:
|
|
|
Day's |
Must |
Comfort |
Break |
Next |
|
Index |
Current |
Move |
Hold |
Zone |
Out |
Goal |
| Dow | 13,362 | 53 | 12,468 | 12,600 | 13,000 | 13,500 |
| Transports | 2,910 | -4 | 2,825 | 2,900 | 3,000 | 3,250 |
| S&P | 1,512 | 4 | 1,430 | 1,460 | 1,500 | 1,550 |
| NYSE | 9,827 | 40 | 9,218 | 9,465 | 9,600 | 10,000 |
| Nasdaq | 2,576 | 4 | 2,454 | 2,500 | 2,600 | 2,750 |
| SOX | 509 | 8 | 477 | 490 | 500 | 560 |
| Russell | 834 | 3 | 803 | 820 | 850 | 900 |
Everything that can reasonably be expected to be green is green. We really just need the Russell and the Nasdaq to perk up and I'm fairly sure the Transports will follow (oil willing) and we can break out a whole new chart!
Thank goodness for this chart because I'm very bearish on the fundamentals but this chart has kept me from shorting for the last month despite the crazy-looking values we're seeing on individual stocks.
The dollar held 82 exactly but not for long as the EU has a rate hike coming up which will trigger a global round of hikes and kill the dollar. Last round the EU showed us mercy but they have their own inflation concerns now (as does China) and they probably can't afford to be charitable. As we expected gold tested $680 and settled down $5 for the day and we'll keep a close eye on that metal to see what the World really thinks of the Fed statement.
TXN had a huge day and led a SOX rally, helping to offset CSCO's disaster and RIMM shot up as people obviously had early indications that they would release a statement at the close that their restated earnings would have 'no material impact." Will anyone investigate how this stock went from $130 to $154 in the 5 days ahead of this news?
