Friday, January 13, 2012

Back to normal

After the recent weakening correlation between the euro and US stocks, this morning everything was back to normal. The euro as well as indices sold off big on the news that S&P would likely downgrade some EU-countries today.

Because of the bearish news this morning, we started with a gap down. After some chop up and down, indices went lower. The Tuesday gap up got filled before price bounced. It was a decent bounce that retraced to the morning highs, but that high now acted as resistance (for Dow and S&P, tech and small caps lagged and didn't reach the morning high at that point). So we went down again to make a higher low.

The last hour of the session began and we touched the morning high once more. And the third time was the charm, through we went. But because we already made a nice run from the low and the close of the session (and the week) came near, not much happened above this resistance. Also, with a 3-day weekend coming, no one wants to take any risk here.

5m-chart SPY:

Daily charts DIA, SPY, QQQ and IWM:

Metals and oil went lower, some follow-through from yesterday. But oil and copper recovered good while gold and silver couldn't find buyers.
The euro sold off big on the S&P downgrade news, down 1% and making new lows!

I sold my remaining half of GLD just above breakeven in premarket (@159.07, I was long 158.75).
I sold my SPY as well, also in PM, just under breakeven. Luckily I sold a weekly 129-call and bought a weekly 129-put yesterday towards the close. I acted too early then, and I also covered too soon this morning, but still a decent hedge to hold on to the unrealized profits from yesterday. I forgot to mention the option-trade yesterday, but here's the proof ;-)

A few articles to end the workweek:
S&P Downgrades Coming
A Fat Pitch in the Euro
Debt Talks Greece Falter

Have a great weekend!

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