Wednesday, October 26, 2011

Up, down, up...

We opened with a big gap up that got faded at the open. We even undercut yesterday's low. A small bounce brought us back near those lows and just when it seemed that the market would turn down again, the reversal came. And what a reversal it was! After news came out that China would invest in the euro bailout fund (EFSF), we went about 1% higher in no time, bringing us back to the morning highs.

5m-chart SPY hereunder. Brake lower of the yellow trendline wasn't that successfull. Brake higher of the white trendline however...

Daily charts DIA, QQQ and SMH:

Gold and silver went moderately higher, while oil was one of the losers today. Copper gave back some of it's morning gains, but it's still up nicely. The euro of course rebounded on the China-bailout news.

My TZA-position opened yesterday, hit it's stop in premarket (see here).

The second hour of the session showed lots of strength in most inverse ETF's (big strong closing candles on good volume), so I waited for a pullback and opened small/half positions in TZA, FZA, SPXU, BGZ, EDZ and SKF. However, the news that China would invest in EFSF, made my stops pop one by one, except for EDZ and SKF. Those 2 followed a little later, so back to 100% cash.
TZA: long 34.86, out 33.90 (-2.75%)
FAZ: long 45.23, out 43.97 (-2.79%)
SPXU: long 15.45, out 14.99 (-2.98%)
BGZ: long 34.67, out 33.57 (-3.17%)
SKF: long 66.30, out 64.90 (-2.11%)
EDZ: long 21.04, out 20.28 (-3.61%)

No need in trying to trade longer-term, if even hourly charts don't work... Daytrading it is, I will settle for 5 minute SPY-charts from now on... untill this thing clears...
Here's how Barry Ritholtz sees the current trading environment.

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