Tuesday, November 8, 2011

Market rallies on news that Berlusconi will resign

We opened with a small gap up, edger higher for half an hour and than sold off rather heavy (on bigger volume). We didn't even came close to yesterday's lows, but price started moving sideways/slightly up. When news was released that Berlusconi will resign after a new budget law is approved, stocks rallied hard. In about half an hour we started basing under the morning high and than broke higher. Nice rally towards end of day and a good close.

5m-chart SPY (see trades-section below).

Daily charts DIA, QQQ and SMH:

As news came out that Berlusconi would resign, stocks shot up, but gold and silver dropped! The safe havens sold off and money went to stocks. Oil was successfully moving higher after breaking out yesterday.

3 trades today in SPY. A loser, a breakeven and a nice win, see chart below for entries and exits.
1st trade: SPY long 126.13, out 125.88 (stop just a little too tight)
2nd trade: SPY long 126.18, out 126.20
3rd trade: SPY long 126.41, out 126.65 (1/4), 126.79 (1/4), 127.07 (1/4), holding the last part.

5m-chart SPY:

I sold a NOV 129-call and bought a NOV 125-put towards the close in case we go lower tomorrow at/after the open. Will cover if that happens for some extra's and hold on to the remaining SPY's, anticipating higher prices.

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