Tuesday, November 1, 2011

Greece once again spoils the party

Greece's PM George Papandreou decided to call for a referendum on the fresh bailout plans. This led to fury among the European partners and lot's of red on the screens... Huge monster gaps were the result at the session opening.

At that point, lot's of buyers came in, pushing the price back up. The move ended halfway in between yesterday's close and the morning (and pre-market) lows. The reversal that followed, got us back near the morning lows. When price started to base at that level, it felt like trouble (another break lower) was coming. But then news came that the idea for a Greece referendum was dead and price spiked up big time. And so we raced back to the morning high (talking about volatility). That high held, so once again we reversed (sometimes people compare the stockmarket with a rollercoaster, I wonder why?!) And yes, in the last 15 minutes of the session we were back near the low of the day.

Economic data didn't help the bulls this morning (see table below)

5m-chart SPY:

Daily charts DIA, QQQ and SMH:

Gold gapped down huge as well, but rallied nicely during the morning. In the afternoon, gold was back to breakeven. Silver however opened even lower, and just like copper, suffered substantial losses. Same story for oil; a bounce together with stocks, back down and up again.

The euro was down for the second day in a row (third if you would count Sunday evening as well). It bounced on the Greece referendum news, but not that much...

Although it was just a small positon, I sold half my TZA in pre-market and the other half in the first minutes of the session. I also took profits in EUO.
TZA: long 29.80, out 33.80 and 33.17.
EUO: long 17.89, sold 1/4 @18.28 and 1/4 @18.13. Holding the rest and moved SL to 17.99.

I scaled in TZA again after it sold off in the first hour.
TZA: long 32.50 and 32.18, SL31.00 (2/5 position now, would have scaled in some more at lower prices, but that didn't happen). I sold @32.97 when the market spiked up with the euro (damn, that went up fast!). I wanted to go long SPY, but I didn't fancy the risk/reward when price kept going higher - too fast to execute my order.

With all these news-related spikes and price changes in the market, it's extemely difficult to swingtrade. I prefer daytrading at this level, and often with smaller positions. Patience is needed, but someday all these problems (and crises) will be solved. In the meantime, we'll have to be satisfied with smaller gains...

An interesting read about volatility: All or nothing days.

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