Yesterday was a good show.
Despite the fact that nothing changed, the Dow plunged 300 points from the open and then recovered 300 points into the close and now (8:02 am) it's up 130 points pre-market ahead of the Fed Minutes, which will be released at 2pm this afternoon. As you know, we called for shorting the indexes in yesterday morning's post (which you can have delivered to you pre-market by clicking here), saying:
They are having more meetings with Greece but who cares with China collapsing. Crazy we should be up this much so I like shorting our Futures at 17,700 on /YM, 2,075 on /ES, 4,440 on /NQ and 1,250 on /TF. Tight stops over, shorting the laggard is always a good plan and then getting out if any of the others cross over.
As you can see from the Russell chart, our initial call was good for the top of a $2,750 run on /TF (Russell Futures) and we caught the dead bottom at 11:14 in our Live Chat Room, when I said to our Members:
Indexes looking bottomy at 17,400, 2,040, 4,350 and 1,225 – a good day's work so I'll be leaving early this afternoon to go have fun at the park!
I'm on vacation at Disney this week. That's the great thing about our style of playing the markets – we can do it even when we're on vacation! Aside from catching a $2,750 gain PER CONTRACT on the Russell for our Members, the Dow paid $1,500 per contact, S&P $1,750 per contract and Nasdaq made $1,800 per contract.
Of course I also mentioned, FOR FREE, right in the morning post, that we were short the China ETF (FXI), which opened at $42 and will be much lower today as well as our short on the ultra-long China ETF (CHAU), which was $28.39 in the morning and I mentioned we're long on the ultra-short China ETF (FXP), which opened at $37.37 and should also be doing well.
Remember – I can only tell you what is likely to happen and how to profit from it – the rest is up to you!
Europe is up about 1% on excitement over more discussions with Greece this weekend – as if fixing Greece will make China go away… Well, China might go away because 19 more days like they had this morning (-5%) and their markets will be at ZERO! Not only are the Chinese markets still in free-fall but the Chinese Government is doing everything it can to stop it. In fact, they have now halted trading on over 2,100 companies, roughly 2/3 of the 3,300-stock index. This morning, they didn't even open trading on 1,331 companies but then they had to halt 700 (1/3) of the remaining stocks as they fell below the 10% daily limit.
See my commentary from yesterday morning that exactly explains what happened this morning. I don't point this stuff out to brag – it's my job to predict the market and find ways to profit from it – I do it because, hopefully, next time I we see a similar situation, you'll have a little more faith in the trades and then you won't be just reading about them the next day but actually making money off the news!
We saw this crash coming a mile away and yes, we were early with our call but we stuck with the shorts on China and they are now fantastic winners. Now we have to follow the action and try to determine when the markets stabilize but not today – as they are simply trying the same stuff they tried yesterday that didn't work. As noted by Bloomberg:
The suspensions, which cast doubt on authorities’ pledge to give markets a greater role in the world’s second-largest economy, mean that the Shanghai Composite Index’s 5.9 percent tumble on Wednesday was probably understated. Investors who got stuck in their positions are turning elsewhere to raise cash, fueling the biggest drop in a month in Chinese government bonds and helping send Hong Kong’s Hang Seng Index to a 5.8 percent tumble.
“It’s absurd, stopping trading just because they don’t want stocks to fall,” said Tsutomu Yamada of Kabu.com Securities, “They’re going all out in trying to stop stocks from falling but it’s not working.”
The selloff has overwhelmed efforts by policy makers to restore confidence. China Securities Finance, which manages the nation’s short selling and margin trading, is seeking at least 500Bn Yuanuan ($80.5Bn) to shore up equities. The central bank said this morning that it would provide “ample liquidity” to the market and the Government ordered state-owned companies not to sell shares. Between unprecedented government intervention to prop up the $6.5Tn (down from over $10Tn a month ago!) equity market and trading suspensions in more than 1,300 companies, analysts can no longer rely on share prices as an indicator of corporate value in the world’s second-largest economy.
"The authorities have not only failed to stabilize the market, they have actually increased panic levels,” said Alex Wong at the now-ironically-named Ample Capital in Hong Kong.
Meanwhile – it's not just Greece – check out the OXI signs ("No") that are popping up in support of Greece by other nations at the EU Parliament. This can snowball out of control very quickly:
This is being hidden from you by the Bankster-controlled Mainstream Media in the US. Things are much worse than you think…
Do I really need to tell you to be careful out there?
