Monday, June 30, 2008

Tuesday roller coaster

A real roller coaster big volume day featuring a hairy bottom, a hairy top, another hairy bottom and a gap fade proxy at 14:45. I hope you kept you eye on the NYAD if you were tempted to join the rally. . . it was a pretty good tell that buying was muted and probably more the product of short covering rather than "value" buying. The failure of the NYAD to penetrate PP overhead resistance was the clue.
I was listening to Cramer at noon, pounding the table and yelling that this was a real buying opportunity. . . sorry, jimbo, I not buying it. (I personally find his hyper dramatic yelling so annoying that I tend to bias everything he says with a negative spin however, so be advised.)
Here's the new yearly lows today about 30 minutes before the close and of interest in slot #1 for volume is MSFT, which at one point was down over .90. This is real institutional selling and, once begun, tends to continue in 3 day runs. Not a value stock yet IMHO.

Despite catching a couple good pivot swings today, I'm reluctant to take any positions for the remainder of the week as you can almost taste the volatility risk. Although the VIX managed to spike to 25.57 early on, it retreated to close down 1% for the day.
Although the pre-holidays tend to be bullish, I consider those historical patterns irrelevant in this unique market and while the market did manage to pull a rabbit out of the hat today I'm doubtful that today's modest gains can be sustained through the end of the trading week Thursday.

The cat pretty well sums up my attitude about the market (check out the nose plugs), although I like the pool more than he does.


Marc said...

We didn't fade too much at the end. In fact, closing was at or near the highs of the day.

I did note that volume was almost double the average. That counts for something, IMHO.

One question, why do you mention the VIX when looking at the Q's. I would look at the VXN.


bzbtrader said...

I did note the volume surge, but I'm not sure that's a bullish tell.
Yes, the Qs closed at the high of the day, but got there on the last 2 bars.
With the shenanigans that usually accompanies the closing bars I'm reluctant to carry anything overnight.
I've studied both the VIX and VXN; I just use the VIX as I have found little predictive edge using the VXN. I use the VIX only to help dicipher the longer term trend (10 days); the VIX has zero value for my daytrading except when it experiences 10%+ intraday spurts either way.

Cucca said...

AAAAAWWWW, the little kitty cat looks exactly like my little buddy that dissappeared a few months ago, snif snif!

bzbtrader said...

I've got a stronger bond with my cat than with most people (trading tends to make you weird). I found the cat in my woodshed when only 2 weeks old. I suspect a coyote got the mom, but I've been a surrogate dad for 9 years. My constant companion and a great source of stress relief. Highly recommended.