No no bears, we're still going higher!

In premarket, ES-futures went exactly to the level of the Friday-lows which held as support. Some choppy trading in the first half hour, but then the bulls went for it. An amazing rip higher, right back to the previous highs/resistance. Indices even made new highs right before the end of the session.

We have seen some very volatile days this week. No wonder the VIX aka fear-index is going higher. Tuesday was a big rip up that totally got faded yesterday. But today brought an even bigger rip right back to market highs => very bullish. Wanna bet we open lower tomorrow?!? But since most indices were trading near the same levels for two weeks now, overbought conditions are worked off well and we're ready for new highs. Unless Greece finally defaults overnight or something to that effect...

5m-chart SPY:

Daily charts DIA, SPY, QQQ and IWM:

Metals, euro, oil were all opening with a gap down. Oil and the euro were back in the green near lunch time, but precious metals had all the trouble in the world to get back to yesterday's closing levels. Silver and copper eventually did go green, but gold was breakeven.


Tonight's articles:
Europe's big buyers cut ties with Iran oil

Another huge range day on the indices

The debt ceiling story is finally over, the Senate passed it and Obama signed it. But we didn't get the effect most people apparantly were expecting (many people on Twitter expected a bounce).

After a rather small gap down, we ran up into resistance, being yesterday's close. From there on, it mostly went down. There was some basing near pre-market lows, but once that broke (half an hour before the vote) the bears were in control.
Bulls gave it three weak shots to stop the bleeding, but to no avail. The last hour downfall was very impressive, about 15 points straight down on the S&P. Indices dived between 2.2% and 2.9%.

So we closed near the lows on major volume. This was the second day in a row that we've seen a huge range on indices.Chances for a bounce are increasing, since most indices are sitting at some sort of support (plus the fact that we've seen about 7 straight down days in a row). Two questions remain, when will the bounce come, and how far up will it get us?

One can say, things have changed recently. We're sitting under the 200 day movering average on the indices, we're printing lower lows and the dips are not bought (yet). Obviously it's too late for shorts here, but a bounce for 2-3 days could bring some nice setups.

Trades
I tried a long in LULU early on, since the stock moved up on good volume, trying to break a 10-day trendline. The trendline actually proved to be resistance once more and I got stopped out on a new low of day.

A little later, the S&P made a new low and I shorted the ES-futures (E-mini S&P500) at 1272.25.
I'm still in the trade after a nice +20-point run, giving it some room here. Bought some SPY-calls at the close in case we turn here.


Edit: one more thing. Despite the huge drop on increasing volume, VIX (the 'fear'-index) didn't go that much higher. Actually, the intraday-highs of the past 2 days exceeded the high for today. This divergence with the market could point to a coming bounce.

Taking a dive

Indices dropped in pre-market and continued to do so during regular trading hours. No late day rally and prices closed near their lows, which could mean we'll see more downside tomorrow.

I sold my VIX-calls, bought 07/01, for a 66.6% gain.
As said before, I gave TZA-shares another try, buying them with an average price of 33.10. Let's hope for a follow-thru day tomorrow.

Pullback

Indices sold off in the morning and managed to rally near the close, limitting the damage. The only exception was the Dow, which hovered around the previous close all day long, thus forming a doji on the daily chart.

Biggest news was probably the continuous sell off silver underwent. Gold and oil also corrected further.
The volume in silver and all it's derivatives is immense. These volumes are normally only seen at the beginning and the end of a trend. This doesn't mean the rally in silver is over, but one should definitely be carefull with long positions or any position all together, considering the enormous volatility now seen.

Swingtrades
I closed the remaining VIX-calls for a nice gain. I regretted I sold my ZSL-calls yesterday, and maybe buying the ETF itself was even more interesting (I bought the June-calls, not the May-calls).

Daytrades
I nibbled some AGQ-shares when I noticed a rangebound move. Although I made a small gain, it felt more like gambling and I won't get involved again, as long as volatility won't ease.

I made several trades in YM, all shorts, but with mixed results. Overall a small loss, but some lessons learned (I which I had more time to get more into detail, maybe later).

Monday: start of a correction

Before the market opened on Monday, news was spreading that Osama Bin Laden had been killed by US Forces. This caused the indices to gap up at the open, a gap that soon got faded. As a result, most indices are now printing bearish candles on the daily charts, esp. NASDAQ and the Russell 2000. This means we might get some more downside this week.

Commodities sold off, but the hardest hit was for silver. Down 6% at the open, it managed to erase some of the losses, but after the morning rally price started to reverse and silver ended the day -8.6%.

Swingtrades
I covered BIDU and SINA in pre-market, not having a good feeling about this. Very small gain here.
I sold the ZSL-calls for a nice profit, but could have gotten more out of it if I held untill the close. And there's probably more downside for silver to come.
I also covered 1/4 of my position in the VIX-calls.

Daytrades
I made a small long trade in YM-futures (mini-Dow) for a quick little gain. Covered too soon, before my target was reached. Got in 12760 after the midday bounce on support and covered 12764 and 12765. Target was 12770 but price even got over 12780.

Friday: The only way is up...

...or so it seems. Well, this shows us the power of the bulls. The markets keeps ripping higher, getting overbought at this point. But there will always be some kind of catalyst that triggers a correction/pullback. The question is, when will this happen and will it be a sideways correction (in time), or a real pullback?

One concern for the silver bulls: gold rallied higher on Friday, but silver actually went lower. That must be the first time silver is not leading gold. Also the reason why I bought some ZSL-calls and looking at the futures this Monday-morning, they're probably going to pay off nicely.

Swingtrades
Despite my words on Thursday (I'll wait for a pullback before buying stocks), I went long BIDU and SINA. Both stocks seemed to bounce on support.
Like stated above, I bought ZSL-calls and I also went long some VIX-calls. The VIX is near it's lowest point since June 2007. That doesn't mean it can't get any lower, but I expect at least a temporary bounce higher in the coming week.

Daytrades
I went long the E-mini futures in pre-market for a small gain. Raised my stop up aggessively at one point, which stopped me out. Of course my target was met afterwards. Next time I'll use 'set and forget'-orders and leave my computer for at least half an hour. That should work.

One other daytrade, SIMO. Long at 12.87 but we went down soon, thru my stop of 12.65. I pulled the buy-trigger way too fast on this one. It might be a good idea to stop daytrading for a while and focus more on futures and swingtrading.