Look at the VIX and the Bonds. There is no risk of interest rate rise in the immediate future and the risk trade is on. We are not a resistance and there are many shorts that need to close out their positions today. With the lack of sellers the market should continue to drift higher and then covering at close.
If anyone caught this segment, this is exactly the reason why we have the unemployment situation in this country. It is novel that this robot delivery system can be done. It certainly saves the hotel costs. It also replaces a human job. I am not against technology making businesses more efficient but when you remove a job in the marketplace and not replace it with another, you take another consumer out of the economy.
This country needs to make a solid investment in education to move people to higher tech, better paying jobs. At this rate, we will make ourselves obsolete and our economy will continue to shrink.
Breath is decisively positive, VIX is negative, bonds rates are lower, FXE is up. Massive short positions into yesterday, added last evening by the news of US air strikes. Look for 3 - 4 points on SPX into close on puts options closings and short covering.
Last evening when everyone tried to get in front of the news of strategic bombing of insurgents, there was huge short positions taken in the SPX indexes. Although we have moved higher, the holders are hoping that some additional negative news will come out today so they can get out. The market will drift higher into 3 PM and then everyone will attempt to cover before the close. The market should be up about 150 at the close.
Overseas traders will now push SPY up hedge into weekend as significant political defusing in Russia and Israel progress.
Economically it is a non-event. It does not stop oil from flowing, it doesn't put boots on the ground, it doesn't stop trade. The market rose significantly while we were bombing Afghanistan and we had actual troops on the ground. This also has nothing to do with the Russian Ukraine conflict or the Israel Palestine conflict. The other thing to keep in mind is that we partnered with ISIS against Syria and that is why we will not fully engage. This is just flexing by the administration saying it is keeping its options open. This will not be an event to cause a huge market sell off once the Fed and the professionals start trading in the morning.
The Fed buys future contracts causing a discount to the underlying stocks. Then the arbitragers come in and move the underlying up on low volume to take the profit between the cash and the futures. They have been doing this for the last 18 months and it is very effective. When you have an unlimited balance sheet and the ability to electronically create currency there is no way to fight the Fed.
If this was a major conflict, futures would be down limited. It a few traders trying to get ahead of the news. First, we are air striking insurgents, not a country's army. It will mostly be air cover for humanitarian aid drops. Second, the Fed will not allow such a deep sell off in a market that they have supported with worst news in the past. Third, Obama had probably dipped off the Fed knowing the knee jerk reaction so that they are ready in the morning to buy up any weakness.
I am going to predict that once the reality of what "airstrikes" actually means, the futures pare their losses significantly and between the short covering and the fed buying we end up tomorrow.
Look at the volume of SPX and OEX options. They are loading up on s/t puts for tmrw. This is an extremely bullish indicator. You will see a massive short covering rally into expiration tomorrow.
That for months when we got bad economic indicators and poor earnings and guidance, fundamentals and technicals were not part of a trading strategy. The same thing applies now with geo-political issues. It is not about overvalued or fundamentals or technicals. It is about HFT and algos. So many are short right now because logically it would seem that is the correct postion. But looking at the trading patterns for the last 18 months, it could also be said the same. The HFT will move this up quickly on any news that can be spun for the bulls and they will squeeze all the shorts and put holders into tomorrow's expiration.
It will never get past economic sanctions with Russia. Too many Russians here and there with money and the money controls politics. If you watch any gangster movie, when the guy who has big aspirations starts to cost the bosses money, they tell him to back off or take him out. Putin may think he is the king, but there are bigger players that are getting hit in the pocketbook. All of a sudden you will see a solution. Putin is just trying to find out how not to lose face.
Higher lows and moving above support on BOL. A lot of Friday put holders will expire worthless and they move it up into tomorrow.
He is a perma bull who is back tracking. All these clowns they will out should work at Baskin Robbins. Each is the flavor of the day to justify their bull stance no matter what is actually going on in the economy.
He is spouting fundamentals and it is a sound market. He has no clue about valuations and funamentals. He better go back to the nursing home and take a nap.
Although I think the market will trend down a few more percent, there are a lot of people with puts and with the weekly options, they try to move the indexes to strike prices with the largest open interests.
wheel out the party planners and tell everyone how great the economy is for the 1%. The rest of us watch our home values decrease, lack of wage pressures, food & energy inflation and war in two major countries.
that is before all the college students making minimum wages for PT work go back to school. Did you also see wage inflation at zero. where are the consumers getting money to buy all the #$%$ that they don't need. consumer credit is no expanding so it means that consumers are not buying.
but linkedin beat earnings so I guess all these websites are going to put people to work and save the economy after 8 years on ineffective QE.
as smart money realizes this is a dead cat bounce and selling will continue hard next week.
Even though the bulls are in complete shock and denial, you cant ignore the rule. Now that we have broken the 100 and 50 DMA, the professionals are looking for a confirmed multi trading session bounce off a number before they commit substantial investment. Already the CNBC clowns are being wheeled out to say it is overdone and we will get a bounce, but based on how far we have come in the last 18 months and the consistent ignoring of poor economic data, interest rates moving up, QE being ended and geo-political events, you probably have another 5% down for a s/t bottom. There are a lot of people sitting with calls into expiration today so there is no urgency to move the underlying up in this sell off so they can at least keep their option premiums as income this month.