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To make a shower analogy (okay I may be reaching here); if Monday and most of last week was as pleasant as standing in freezing cold water with only a miniscule spray, Tuesday’s market action can be described as a tepid trickle. Better than standing shriveled and waiting for some real water pressure, but not really all that satisfying.
Our like- minded friends at Zero Hedge summed up the day perfectly on their blog.
http://www.zerohedge.com/news/sp-500-futures-plunge-125-points-most-10-days
Don't panic. Change is good. The S&P 500 futures market somehow dropped 1.25 points today - its worst in 10 days! - and yet, shock horror, data was positive, European leaders offered more jawboning support, and Treasuries weakened. NYSE volume remained bleak but S&P 500 e-mini futures (ES) volume rose to its highest in over a week (yes - we were stunned too - volume picked up as selling began) amid reasonable average trade size (especially as ES lost 1400).
After VIX's implosion yesterday, it ramped over 1.25 vols higher today - testing back to 15% late on. The USD leaked higher all day, back to unchanged on the week (while Copper/Gold/Silver are all down 1.2-1.3% on the week - having gapped down on positive data this morning). Oil remains green on the week and spurted modestly higher on the day. Treasuries are still under pressure - not getting much back as equities sold off into the close - higher/steeper in yield by 4-8bps on the week now. Of course - the closing rampfest was inevitable as that stunning 4 point drop in ES was rapidly 'tickled' back up to near VWAP into the day-session close - though we note that ES was unable to get green and unable to reach the safety of VWAP with heavy 'down' volume after-hours. Cue 'Asian-opening-gap-worm' algo. Trade well and follow the trend, not the so-called “experts.”
Behold the age of infinite moral hazard! On April 2nd, 2009 CONgress forced FASB to suspend rule 157 in favor of deceitful accounting for the TBTF banking mafia.
larrylevin@tradingadvantage.com
Trading Advantage
(888) 755-3846  |  Larry Levin's Trading Advantage is a leading investment education firm that empowers traders to achieve and surpass their financial goals. More than 50,000 students have used Larry Levin's proven techniques for powerful results. |
Trading Signals from the Electronic (ES) mini-SP 500
- No “Secrets” signals today.
- Algorithm positions (4)
- “Reading the Tape” positions (0)…combined Secret’s, Algo, & “Reading the Tape” total… +1.25
Click Here to See Yesterday's Detailed Results
ES 1405.50 / 1401.00
POC... 1404.00
YM 13166 / 13136
NQ 2739.25 / 2727.75
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Keep a civil tongue.