Woo hoo!
Get ready for a wild one today. We have the GDP at 8:30 and they’re expecting -4.7%, an improvement from last quarter’s -6.7% butQ4 started out at -3.1% with the advance figure (which is what we have today) and was revised lower and lower, easing us into the catastrophe. I pointed out to members last night that inventories and other items worried me that we may miss and we did head into the close 55% bearish as planned. We had another good day of turn calling as I send out an Alert to Members at 10:00 am titled: “DIA Adjustment Bullish,” catching the nice move up we got in the morning and our 2:49 Alert was: “Back to 1/2 covers on long DIA puts,” catching the drop-off into the close.
It seemed like the right strategy given our GDP concerns but the pre-markets are back up to those 2:49 levels but we’ll just have to see what sticks. I already sent out an Alert this morning detailing our watch levels for the day and, at the bottom of this post is our new2.5% rule chart (amini version of ourBig Chart),where I noted that NONE of the US indexes have made it back to the 40% off line while the Nikkei is still 50% off as is the Hang Seng with the Shanghai dancing around that line this week. The FTSE is the only EU index above the 40% line and just by 100 points so they would be most likely to show us weakness and we’ll be keeping an eye on the UK until we feel a little safer at our levels.
The markets are up in pre-market trading but mainly because the dollar is sharply down on expectations of another round of quantitative easing by the the Fed in their 2:15 statement. Gold is back to testing $900 and oil popped back to $51 (up 4%) as the dollar has dropped a point against almost every major currency except the Yen, where it is being desperately propped up by the BOJ before it sends the Japanese economy off a cliff. The weak dollar caused the Nikkei to fall another 2.5% today (232 points) but the Hang Seng and Shanghai went 2.5% the other way led by a rebound in Transports, especially airlines, which will hopefully make yesterday’s plays on UAUA and CAL look smart.”Swine flu continues to dominate market chatter, if…
