Quick update

Markets are looking scary but there are a lot of technical indicators which point to a short term bounce. In fact there are those who follow DeMark indicators and they think we are up for a 3-4 month Bounce.
So while there is no gaurantee that we will stop going down , for traders like me, there is enough evidence imo that we will see higher prices. So I would not short anything here and buy a few things which look good for a bounce.
Trade small and quick, more later.

Nice Rally off the lows on good volume

As I said on Monday we were near a Rally, we got that rally and in fact we now have better volume on the upside.
ALl indicators point to a good rally even now as we are pretty oversold and sentiment is pretty negative.
Oil has rallied very well and I am looking to take some profits . I buy calls so all I will do is sell what I have and get some calls further out of the money as my out of money calls come near the money.
If folks readin this do not understand options well, then let me know by emailing me or writing comments here and I will respond in detail.
Tech should do well now but remember to keep taking profits , this is a trading market not a investing market.
So to be clear I will be looking for the upside to continue for a while.

Back at Nov. 08 lows.

So here we o , S&P500 near Nov intra-day lows and the Dow below those lows. the nasdaq is above well those lows.
Also the VIX is lower, which ca be a good or a bad thing.
Lets worry but a bit later maybe. Why? because we are oversold and many indicators point to a rally, at least a short one.
Once we get that we will know the staying power of that rally. I got some USO calls today as I think Oil is looking pretty good.
But honestly other than technical rallies there is nothing else which can take the markets up as of now. Just when you think it cannot get worse the banks and the economy show their true side.
So its just trade technical atterns for me, nothing else.

Wow what a market

The Dow went below its November lows but the SP500 and Nasdaq did not it seems.
I was looking for a short rally earlier but this market went straight down.
Notice how Nasdaq did not tumble, AAPL AMZN etc remained above their lows.
The markets have turned around and I would not short anything here. I would wait for anything except trades on the buy side.
Gold touched $1000, lets see if it keeps chugging higher or takes a breather. There are some smart people saying Gold will go lower . Lets see.
AAPL , if it closes above it 50 dma , will be a great trade.
I am looking at Oil but not doing anything yet.

Put/Call goes high as markets bounce

Yesterdays action was good short term, and the p/c was very high.
This shows that we are not going down in a hurry and can in fact rally a bit.
So I am not in a hurry to short or buy puts. I will see if I can buy some good short term calls. But mind you , the markets have in no way bottomed yet, and can really tumble without any notice.

Markets falling apart

The markets are down and S&P500 went as low at 789. This has made everyone call for a re-test of the low in Nov of around 740.
But a few veteran traders are warning of even lower levels, around 660 or so on the S&P500.
Today's action will show if we are headed there, normally markets do not fall that far very fast but times are different and in fact going there faster might be a good thing for everyone as that will create such a panic that the indicators will become favorable for a bounce/bull run.
If we go there slowly people are going to get complacent, keeping the fear indicators low. Remember when tarders/investors panic they sell everything which creates a better buying opportunity. But when will that temporary bottom appear? No clue, wait and watch.
As of now I own nothing , on any bounce I might get some puts. But at this stage nothing is a given, risk/reward is not conclusive , so keep trades to a minimum and very small.

Amazing volatility, intra-day

The Day started with futures down and markets opening down and the fell hard , then tech started rising, I had aapl and qqqq puts which I thought might make me a lot but aapl turned green within the first 30 mins and started running away, as soon as it came back down I got rid of the puts and then qqqq puts for a small gain.
Then looking at the strength I got some aapl calls.
A trader has to be prepared to turn on a dime , I got rewarded for my trade as appl closed strong.
I also got some GLD as GOLD has clearly broken out.After hours its down but GOLD seems to be running away.
My opinion is that the markets will not run away now and will test the support at 800.
But todays volume was higher than yesterdays at least on the stocks and ETFs I follow.
Overall it looks like the markets do have some strength and can more up a bit , but the resistance is strong.
I wish it was as simple as up or down but its not , I would buy the strong stocks and short the weak ones, meaning buy AAPL short RIMM , buy GLD short USO etc.
USO is funny though, did not fall much compared to Crude oil, but the trend is down. I would short with a very tight stop . Of course when I say say long or buy I usually buy calls and short would be buying puts for me.
Of course for every trade one has to wait for a good entry point .
I am fed up the daily volatility as I like to keep a trade for at least a few days. But for many traders this is a good time if they are nimble.
On crude I would be very careful shorting , as geo-political events can change the picture. SO small trades and tight stops.

RIMM gets Knocked out just like Buster Douglas KO'ed Mike Tyson on this very day in 1990

James Buster Douglas knocked out the formidable Mike Tyson in his Prime in 1990 on Feb 11th.
RIMM also got knocked down today,Read it here, from marketwatch.com., well it was not as bad as when it got KO'ed from 125 or so to below 100 .
I had some feb 45 puts from 2 weeks ago which were 8 to 10 cents yesterday. it would have cost me more to sell them so I hung on and now I have a good profit on them.
Also I got some qqqq and aapl puts in the strength this am , as they've gotta go down man, come on .AFter this RIMM SHOCK, why would people buy more tech stuff?
Gold seems like its broken out. I will wait for some consolidation before getting some calls. It will come to 925 hopefully before taking off imo.

What a whack, this is more than a minor pullback

Wow, the markets fell huge and on huge volume, we had a 90:10 distribution day.
What is that? That means the volume on falling stocks was over 90% of the overall volume on Nasdaq and pretty close to that but below 90% on NYSE. For more info on that check this link and go to page 3 there.
That shows this was no ordinary pullback but massive distribution. We might bounce a bit but this drop now puts us back in a defensive position, if you trade only long.
For shorts it was great.
Further Crude Oil and hence USO fell below recent lows making new lows. This puts crude in a very tough spot. Looks like 35 is now the next stop. But before shorting USO keep in mind its very oversold , can rally anytime. But the path downward would be the path of least resistance imo.
I am going to buy a few UNG calls as it approaches 18 for a quick trade.
Gold is just oscilatting between 925 and 890 or so, a clear break in one direction would be tradeable BUT buying puts/shorting Gold in this environment is risky imo.

Buy the Rumor sell the news?

The markets rallied hard and now seem to be overbought and need at least some kind of breather . It has rallied , it seems, in anticipation of the stimulus plan to be announced tomorrow. So once its announced the markets might go down as those who bought in for that reason now have no reason to hold .
Also the plan would have to be very good or would have to beat expectations for the markets to rally. Anything which is expected or less will end the markets down , at least that's my opinion.
That is what happened on Friday when the NFP data was bad but that was expected and so the markets rallied.
The p/c has been low for a few days now.
Oil rallied Friday and Monday morning but could not keep it up. I had to sell my calls in USO , I did make a good profit but way less than what I would have made if I had sold it Friday afternoon.
USO is now 28.2 or so, another trip to 27.5 or around there and I will buy a few calls with a tight stop.
I got rid of my BRCM calls for a loss to but got more than what I would have last week.
If the markets are flat or up tomorrow and start showing weakness around the announcement , I will get some puts, on what? no clue maybe qqqq.
Also I have started watching UNG along with CAT to get long, buy calls on any good pullback.

What a rally, looks like short covering .

So as the economy worsens , at least according to the news, the stock markets rally. Well maybe this is already priced in, or maybe big money wants the markets to go higher. There are many targets out there, 920, 950 and so on, I am a skeptic for now and I think this move in temporary and we will see weakness before the markets ramp higher.
I got some more USO calls this am as it made a new intraday low and I checked that on 03 it had support at 27.54.
My Rimm puts are very low now but my BRCM calls and original USO calls bought last week are doing good.
I am going to sell most by markets close but I will keep some USO calls. The p/c is very low now and I am sure we will go down and consolidate a bit at least next week.

High volatiltiy and we have NFP data tomorrow

NFP = non farm payrolls also knows as the jobs data . Tomorrow we will get the Jobs data for Jan09 and many are predicting a very high number , around 500K just like they did in Dec08. In dec it came in low and that makes it interesting this time.
If it comes in low again then we will rally I think, but if it comes in as expected then what do we do? If its very very high , higher than expected then of course people will sell.
But honestly is ti news now that the economy is losing many jobs? Markets have discounted that, problem is we keep losing jobs so the forward looking mechanism of the markets might not find any signs of the economy picking up.
I am not doing much and just watching. The p/c is low again and we are not oversold.
The markets can rally and traders should try to make use of that but I think the risk/reward here is not that great.
But look at stocks like aapl, amzn , akam which are going higher after earnings. Also lots of folks pushing CAT higher. All in all, it can be a self-fulling mechanism as traders push markets higher.
My view is this market is for the very nimble traders who can have some longs and shorts at the same time, with tight stops and remember to allocate very less capital to each trade.
Lastly do not forget to take profits.

Here are some good trading "lessons" from a veteran

I find Todd Harrisons trading rules or lessons very helpful, here is a link to check them out. They are helpful not just for traders but for anyone who cares enough to learn how to make money in the markets, any markets anywhere in the world.

Here is a link of a good website to check realtime prices of Gold and Crude oil.

I am not doing much as I do not find good trades

I was waiting for an entry into AAPl and AMZN, well AAPL zoomed ahead and AMZN fell through today.
Notive how the markets ripped higher and now are turning lower.
I follow many veteran analysts and some feel we arfe overbought and some feel we could see the rally continue.
I feel the p/c is very low and though the rally might continue , if you do not get the right stocks, you might suffer. Once we are truly overbought then lets see what happens, i will get some puts and we might or might not see new lows , but in an that should set up a good rally. Sentiment is getting more and more important here .
But in general whe one does not see any good risk/reward its better to sit it out.
AAPL though would have been a great trade and I totally missed it. I wanted it to come down a bit more but I should have bought it when it tested its 50 dma, it did that almost three times.
Anyways like Todd Harrison of minyanville.com says , opportunities are made up faster than losses.

Gold falling hard and fast.

Gold fell from 902 to 889 in about 20 minutes. Good thing I got out yesterday.
This is the problem many traders face and this is a pure example of a 'churning' and maybe also a 'bull trap' . I am not calling it that yet but it looks like one.
It broke through resistnace, held there for a while and then broke down pretty quickly.
There are various targets on Gold but lets see how it behaves , I am not buying puts yet but if this downtrend catches speed it has a lot lower to go.

I do not see a good risk/reward here

I sold my GLD calls for a bit of a loss. Looks like GLD could not manage to maintain the breakthrough out of resistance and fell right back under it. Well I think there will be better buying points .
Oil, no clue what its doing, but I will be patient. Not easy but worth it, unless it falls below support.
I am just not willing to risk anything here as the p/c is low and we are not seeing any major weakness or strength . BRCM showed good strength today but it needs a major move for me to recover some of my money from that trade.
The vetereans say" when in doubt , stay out". So keep you cash ready for another day.

Posting after a while

I did not post anything this weekend, took the time off, sometimes its good to take a break. But this morning everything I owned is kinda off.
GLD going down, Oil going down. I am not concerned about Gold as I know it will go up but Oil is weird. It looks like there are lot of sellers.
Markets are in no mans land , do not breakdown or breakout. The p/c is low again .
A good whack below 800 should correct that. We had 2 down days but people are still bullish, man -oh- man.
RIMM showed some strength but now its showing weakness as it sells off at a fatser pace than the other high-beta ( highly volatile ) tech.
I thought of buying AAPL or AMZN but I cannot buy anything as the p/c looks bad and we are not oversold. If we go below 800 that would be a good buy set-up.