What a crazy week!
The markets were bucking like a bronco but were they trying to throw off the shorts prior to a move back down or trying to flush out the weak-handed longs prior to a big breakout to new levels? After gapping open to 10,900 on Monday morning we went up to 10,950, down to 10,830 and back to 10,950 – all to finish the week at 10,927, which is up 39 points since March 23rd so don’t tell me we’re wasting out time as that’s 5 points a day baby (if we round up).
We had the day off on Friday but we did get the critical Non-Farm Payroll data for March but, as noted in my report (and in the Member Chat), despite the very excited reaction from the futures, there is no clear indication there that either the Bulls or Bears have a lasting point. So perhaps the wild market action is nothing more than good old-fashioned indecision – the futures flew up but then Goldman said they saw “Little Underlying Improvement” in the data and that “Productivity Gains Have Diminished Sharply” – clearly mixed signals that may take some time to resolve.
Last weekend, I complained that it was a “6-Point Weekly Wrap-Up” as that’s all we got from the S&P, which finished at 1,166. This week I am happy to report that we gained 12 points – all the way to 1,178 and we are closing in on that 1,080 mark, which we did touch briefly at Thursday’s open (which gave us the great shorting opportunity we had looked for in Thursday morning’s post!). It’s not that I don’t respect the rally – technically, you have to respect the rally but that’s why we’re in cash: We can take advantage of these huge intra-day moves down (and sometimes up) – getting our 6-second bull rides and scoring as many points as we can before the rodeo clowns turn on the buy programs and stop the ride.
Overall, it’s a pretty mindless market. You can go long at about about 2pm and flip short about 10 am the next morning – in the futures that can add up to shocking amounts of money and it sure isn’t bad when you are using options for leverage either. We’re sure the game will collapse one day and hopefully we’ll be able to pull the rip cord without making too much damage but, as you can see from…
