Wall Street Crack

For Those Addicted to the Wall Street Game

Posts Tagged ‘SPY’

Government Shutdown Looms. What will the market do? $SPY

Posted by Dino on April 8, 2011

As the 2 sides bicker back and forth over a few billion dollars, it appears that we are destined for the US Federal Government business to come to a halt.  Regardless of who is at fault, millions of Americans will be affected.  What will the market do?  How will it be affected?  The only thing we can do is take a look at past shut downs to give us an idea of what may take place.

In 1995 & 1996 a Democratic President fought with a Republican controlled Congress over the federal budget resulting in 2 shutdowns from November 14 through November 18, 1995 and December 16, 1195 through January 6, 1996. The only difference between the participants then and now is that the Republicans controlled both the Senate and the House and today, the Democrats control the Senate and the Republicans control the House.

The SPY was still in its infancy and only traded about 100k-300k shares per day.  This is minuscule when compared to todays average of  176 million shares per day but it gives us a decent representation of what was taking place.   As you can see, back then the shut down didn’t appear to have much affect at all on the day-to-day trading of the markets.  Lets hope this shut down has little bearing on trading next week.

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Rough Start to the Month: $SPY $EEM $EDZ

Posted by Dino on March 1, 2011

So the month ended yesterday and we finished with a green bar on what appears to be below average volume.  When uptrends are occurring, it’s typically good to see an increasing volume but that hasn’t really happened the past couple of months.  It makes the move a bit suspect but we get paid on price and not on volume.

 

 

 

 

 

 

 

 

 

The past week has me cautious with the 5 distribution days but until we start establishing a lower low I will continue holding longs unless I get stopped out or hit profit targets.  The spy has to hold the previous low of 129.70 for me to continue feeling comfortable holding longs.  I would appreciate a couple of days of consolidation before the all important Non-Farm Payrolls comes out on Friday which may give a better idea of where we’re heading.

 

 

 

 

 

 

 

 

One thing that has me optimistic about longs is the action in the emerging markets.  Last week I closed out my EDZ position due to the divergences between the EEM and SPY.   That divergence has been confirmed the past 10 days.  The SPY is down 1.3% and the EEM is only down 0.2%.  This may be nothing and the EEM may catch up with the SPY but this also may be a signal the emerging markets have finished their correction and will continue upwards.  If there were a market that would seem to be hit hard by the unrest in the middle east you might think it was the emerging markets.  Increases in food prices have put the hurts to them and an increase in energy may be the straw that broke the camels back but so far, they’re holding.

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Further Thoughts on $EDZ Hedge $SPY $EEM

Posted by Dino on January 14, 2011

So yesterday I put on a hedge to my current longs via the EDZ 3x Emerging Bear ETF and I wanted to put down some more thoughts on that decision.

The chart to the left shows a comparison of the EEM vs. the SPY.  EEM is the MSCI Emerging Markets index ETF and the SPY is obviously the S&P 500 ETF.  My EDZ hedge is the 3x inverse of the EEM so it’s my downside play to the Emerging market index.  The last somewhat significant pause to this rally was in November where new 2 year highs were established and then a month long consolidation ensued.  EEM also put in a new high and consolidated along with the S&P.  The divergence came when the SPY continued on to take out those November highs and make new ones where as EEM was never able to breach that high and has since appeared to be the weaker index.  When looking to make a profit on a reversal or correction, it makes sense to pick on the weakest since that is more likely to lead the run down.

 

 

 

 

One of the things that I have noticed about the EEM is that it is forming a longer-term wedge and has stuck to the trend lines quite well.  The most conservative tactic would probably be a play back down to the rising trendline, sell EDZ for my profit the hedge and let the wedge play out.  If it does break up out of the wedge it could be a runner but it could also bread down out of the wedge and have a pretty decent drop back down to support around $44-45.

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Lots of News Still to be Released Today $SPY $ES_F

Posted by Dino on December 1, 2010

Always know what can make or lose you money today.

We still have a ton of news left this week.  Probably the most important are the NFP Friday morning.

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Drop and Chop w/ a twist of Reversal & Breakout $SPY $ES_F $RIG $ATPG $IGOI

Posted by Dino on November 29, 2010

What looked to be a potential rally day today turned into a drop and chop today with almost picture perfect bounce off the 50 day SMA for the $SPY.  Many buy orders were sitting there waiting to pounce and they did just that.

While the bounce was very nice and it may have saved us from a precipitous drop in the short term, we are now back into the range bound area of the past 2 weeks. So……what now?  Recent history tells us that we should expect a rally between now and Christmas.  @ChessNwine wrote a somewhat succinct piece on the same time period for the past 8 years and if history repeats itself we should be in for a bit of a rally into the new year.

With the exception of BIDU, most of my holdings had at least a decent day.  IGOI broke out again today on tremendous volume.  RIG and ATPG ended the day with very respectable gains.  And while DFS and ACTG were down most of the day they climbed back to be nearly flat which is a positive in my book.

With a slew of relatively substantial economic releases to come over the next week I would expect us to stay range bound for a few days in the general market with the exception of Oil and Oil related equities.  The entire industry appears to be ready for a break out and rising oil prices may be the impetus for the break out.

 

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11/29/10 – Futures Lower $ES_F $YM_F $SPY $DIA

Posted by Dino on November 29, 2010

Futures on their lows after being up most of the overnight trading session.  Apparently the Ireland bailout and Black Friday weren’t enough to lift the markets as of now.  Will need the S&P to hold 1173 on a daily close in order for me to have at least some confidence in my current longs.

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Market Morning 10/6/10 $ES_F $SPX $SPY $YM_F $USDX $USO

Posted by Dino on October 6, 2010

Always know what can make, (or more importantly) lose you money today.

Yesterday the S&P sliced through the 1150 level and held like a champ during the day and in overnight trading.  Those overnight gains were likely sustained by overseas trading which most major indices showed fairly substantial gains.  Japans style of QE2 has apparently buoyed the expectations that other governments will enact some sort of market stimulus but is this sustainable?  Was the markets rally in September based upon the hope of QE2 and the now continuation of that rally based upon an expectation of further easing?

There are still technical and fundamental obstacles in the way.  The 200 week SMA for the S&P & the Dow lay ahead and 52 week highs represent the levels at which the “Flash Crash” occurred and that may provide some hesitation for traders.  The Nasdaq and the Russel 2k have already passed their 200 levels and they are now acting as support.  Most of todays economic news is out and the ADP employment numbers were at best a disappointment with a reading of -39K drop in payrolls.  The futures took a bit of a hit and are off their highs but most traders will wait for the more influential Inital and Continuing Claims tomorrow morning and the September Employment Situation on Friday.

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Market Morning 10/5/10 $ES_F $SPY $SPX $YM_F $GC_F $GLD $CL_F $USD $QQQQ

Posted by Dino on October 5, 2010

Always know what can make, (or more importantly) lose you money today.

European and Asian markets are primarily up after the Bank of Japan cut its interest rates and pledged to by $60 billion of assets.  Futures are currently up and it appears that we may be battling back and forth between the S&P 1130 & 1150 levels.  Yesterday selling dominated but we did not breach that 1130 level.  I’m guessing we may stay between these two levels until Thursday or Friday when the Employment situation is announced.

Crude continues its recent climb as Gold yet again makes new highs.  This continues to be an Equity, Treasury and Commodity rally while the dollar continues to get smacked down.

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Market Morning 10/4/10 $SPY $SPX $ES_F $YM_F $IWM $QQQQ $GLD

Posted by Dino on October 4, 2010

Always know what can make, (or more importantly) lose you money today.

Futures down slightly this morning as it looks like we may stay a bit range bound for a short time.  1150 appears to be the overhead level of supply and 1130 looks to be support in the S&P 500.  Near the end of this week there will be a bunch of employment news that may provide the catalyst for the move into the next move.  Weekly Initial & Continuing Claims and ADP Employment numbers are expected Thursday and the September employment picture on Friday may set the tone for October.

With all the choppiness of the markets lately and the upcoming news releases I’m going to sit back a wait for a little while before committing capital to some new trades.  Most of the market leaders like BIDU, AMZN, AAPL, PCLN et. al. are pulling back on decent volume while the overall market remains unchanged.  This could either be a nice buying opportunity for the leaders or a sign of things to come.  I will be sitting back and watching and try to listen to what the market is telling us for the next day or two.  I may mIss out on some moves.  The market may take off with out me but right now I would rather sit back and wish I was in than be in and wish I was out.

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Market Morning 10/1/10 $SPY $ES_F $SPX $YM_F $GLD $USO $USD

Posted by Dino on October 1, 2010

Always know what can make, (or more importantly) lose you money today.

So yesterday seemed to be a bit of a distribution day with a number of market leaders selling off on decent volume.   The major indices escaped with out any major technical damage but if we continue to sell off today we may drop back into the summer trading range.  So far it appears that things will open higher but we’ll have to wait and see if the sellers let it rise before pulling it back down as they did yesterday.

I’m raising some cash and closing some positions.  Most are involuntary closings but that’s why we have stops inplace and some profits were taken off the table and losses cut short waiting to decide where we want to position ourselves for next leg.

I will work on a watch list this weekend and post it prior to Monday’s open.  I’ll probably have some time on my hands because the Lions are playing Green Bay and since they haven’t won in Wisconsin since 1991 (I was a freshman in high school) luck isn’t on their side….neither are probabilities, statistics or fate cause they suck.  Alright….enough of the depressing stuff…..

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