The market didn't hit 874 today with a high of 861. It looks like the down trend started to form. I almost added some SDS in after hour trading. However, it's not an excellent entry point at 843, and plus, I am more concerned with the possible earlier announcement of stress test results. It looks like Fed wanted to jump eagerly, and I don't want to gamble it.
During this rally, everytime the market was forming a top, some big news popped out: first, it was Fed announce pumping huge amount of money, then the bad-asset detail kicked in on the following Monday, then there was M2M and uptick short rule change, finally, WFC ER (not FED this time).
These events pretty much made up all my recent loss. Obviously, I am not good at gambling big events.
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I agree with you that the market of late has been driven by big news items. Everyone says that the stress test will "show" that most of the banks are in good shape - Geithner has already said so. Now, the question is how would the market react to this baloney. And, no body knows that. All three possibilities are equally probable - (1) Yawn - nothing happens, (2) Market likes it a lot (more likely if there is some other good news in the press), and (3) Market senses a liar and goes down big. But, if market goes down big, I will be a buyer of SSO at least a 1/2 a position by the end of that day. If the market goes up big on this fake news and reaches near 900 on SP500 then I will a buyer of SDS, again 1/2 a position. I will decide on the rest the next day depending on the market.
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