MrktObserver4U's Journal

Discussion in 'Journals' started by MrktObserver4u, Oct 27, 2008.

  1. Ok this is my first journal entry.

    Just a little information:
    I been trading the markets since 1980's and have been a long time investor moving in and out of markets. I was fortunate to catch the 1980's mutual funds wave and prospered nicely on the wings of the Peter Lynch and Sir John Templeton days. I held most of my investments all the way up to 1999 when I pretty much dumped everything. I have dabbled in and out of the markets ever since holding core stock positions but never fully going full 100% into the markets with my equity. Today, I tend to swing trade and daytrade when certain situations present themselves on the extremes.

    Now onto the first entry:

    Last Friday we had a lock limit down across the board - a trifecta with the ES, NQ, and YM. Watching the action, it looked very suspect to me - almost bear trappish in nature over a shorter time frame. On Friday the market bounced to keep its head above water and green paint appeared.

    Sitting here watching futures overnight, it looks like a replay of Thursday night/Friday morning. However, I don't feel we lock limit down. That would be utter devastation to the markets, this on the heels within a week away from the US presidential vote. Doing so would ruin all chances for the Republican Party to recapture the seat even though McCain is far behind in the polls. Undecided voters that could change the course of the elections would no doubt weigh very heavily on the current situation and an Obama win would be certain.

    Short term outlook:
    I am looking at the recent sell off the past few weeks and feel that ES 830 is an area of good support in the near term, at least into elections. Anything over ES 900 is bullish but for the most part it looks like short the spikes and buy the dips. VIX continues to remain high and looks way overdone at these levels. VIX 50 stabilization over the next few weeks wouldn't surprise me.

    This weekend, Barron's came out on the front page to their online site to say that Fridays action was too close for comfort. Well if they looked at this mornings futures action they may had to rewrite that story because ES has hit a new low.

    In that article they cited 10 times earnings for US stocks (no idea where they came up with this) but historically, that is very reasonable for buying stocks.

    Monitoring chat channels and message boards, there is an overwhelming scream from the bears to take ES down to the mid 700 levels and Dow 6500. Whenever I see this sort of thing, I liken this the overexcited bull when the Dow hits 12,000 screaming for 15,000.
  2. 10:52 AM EST
    ESZ8 continues to ping pong around 860 and actually looks strong at these levels. Follow through over 900 puts the market in a strong position.

    This could be setting up to be a big day.
  3. Stock watch:

    GS looks very dangerous here to the long side. Would look for a dip off current $96 levels.

    NCC is bouncing off $2 levels and looks to be heading to test overhead resistance at $2.40. Currently trading $2.14

    GOOG pulling back after hitting $350 on Friday. Currently trading $330 and is actually starting to look good on the long side for dip buys in the $320's.

    AIG off some 18% and is trading very wea. Currently $1.39.
  4. 11:38AM EST

    Looking at 865 ES support and significant follow through as technicals are starting to look better. May take some time to work out as early stages of a potential pennant pattern looks to be forming. Follow through over next few hours could encroach 900 levels.

    S&P 500 earning season comes into play this week with over 1/3 of the companies reporting.

    11:45AM EST
    General Electric (GE) attempting to make a bottom. Ascending triangle breakout pattern off the hourly and pullback is a welcome sight. GE maybe finally bottoming. I'd look to accumulate mid to high $17's later in the day.

    11:55AM EST
    Fannie Mae (FNM) looks like it has bounce potential. Currently trading up at $0.69. Freddie Mac (FRE) off -$0.05 at $0.69 and looking close to a bottom. Potential accumulate.

    12:00AM EST
    ES, YM, NQ futs all green . Dippy buyers look to be getting giddy. QID is looking very weak here at $85 levels and I foresee it getting pummeled to $60 in the next few weeks.
  5. 12:46PM EST
    ES 880: I feel a big short squeeze coming on. Lets watch the bears scramble :D

    1:00PM EST
    ESZ8 new highs 885. New supporting coming in at 878. Pound the table bulls, pound the tables.
  6. 1:26PM EST
    ES trading near highs at 886.25 after bouncing off 878 lows on this wave. Continuance looks like a real possibility here. Volume remains light but looking like it is setting up for a huge pop. Shorting is death here, imho.

    Pound the table!
  7. 2:15PM EST
    ES support 878 continues to hold. Pullbacks into 880-881 land should be bought imho.
  8. Lucrum


  9. Today, in most eyes, is shaping up to be an event day situated around the FOMC announcement this afternoon.

    Many are expecting a 50 basis point cut but who really cares at this point. Given the volatility in this market, whatever number it is, I expect something completely different to happen - the pricing to be put in leading up to the announcement.

    Enjoy the wild ride and see you at the close.
  10. After an overnight dip, ES wiggled its way to new a new high off its Monday bottom but struggled in the last hour today after FOMC announcement to reduce Fed funds rate 50 basis to 1%.

    This is a tough area here for both sides testing the intermediate term trend (down) with the short term trend of recent (up). Bias sets in here. I am one to believe that everything at any period in time is fully priced into the markets. I continue to feel that ES 900 is bullish in nature.

    Stocks are oversold. By how much I do know historically from research. And while times like these seem like fear, its that fear that has to keep your head in the other direction and staying on course.

    The last hour resembles a trick - a throwback. Throwbacks are harsh, quick short term in nature. They punish bulls that are unfaithful to the trend and tease bears into thinking that movement is continued to head down. Throwbacks keep weak hands second guessing until the next move of when they are forced to chase at higher prices. It is a "shock and awe" at the time of move, and a pisser after the move continues up. It forces buying if one wants to stay in the game. I believe that is what is happening here.

    Throwbacks wash out limits above and below the playing field setting a very short term range. Very short term traders get far too caught up in this movement. Bears in glee, bulls in panic. Both sides lose in the long run.

    Remember, I am primarily a swing trader, not a daytrader. This is a swing trader's journal, not a daytraders journal.

    Have a nice night.
    #10     Oct 29, 2008