Interesting action today across the markets. As I write this, the markets have been closed for hours now, and I am doing my market recap kind of late. Its about 1:15 AM, but I had a night out with the kids to go see a Christmas Carol play. Decided to take some time before hitting the sack and do a market recap.
I had some computer issues after about 12PM today, as my cable modem slowed down to a crawl this morning. Apparently when the temperature drops from 50 degrees one day to 20 degrees the next, and it snows to boot, the cable connection gets funky. Obviously as I write this, thankfully the issue was resolved.
Ok, so the stock indexes all rallied on the unemployment number, posted new 9-month highs and then just took a pounding through the afternoon, rallying back into the close to capture a good percentage of its intra-day loss.
On the daily charts, we had Outside-day-downmoves in the indexes. New 9-month highs were rejected after the bullish number. People took the head fake of the bullish unemployment figure, and then the market does what it does so well.
Punished the analysts and “thinkers” who decided that bullish news demands bullish price action.
In reality, the markets exist to deliver the most pain and mental anguish to both the bulls and the bears, or so it seems to me after 18 years studying and watching markets move.
DJZ opened at 10480, spiked to a new 9-month high by 5 ticks at 10510, proceeded to bleed through 190 ticks to its low of 10305 before rallying after 2PMCST back to the 10430 level. This kind of action is what we had on a daily basis back in the dot com days in 1998, 1999, 2000 and 2001. We enjoyed 200 to 300 point trading ranges almost every day. Certainly at least an average of 150 to 200 every single day. With those moves came at least 3 or 4 shots a day at catching a move for some good profits.
SPZ opened at 111350, jumped to a high at 1119.00 after the number, melted through 23 handles like a relentless pac man eating into the hopes of all the fundamental analysts out there who insisted that “because of the good employment number, stocks just had to rally”… Once the bonds closed at 2PMCST, we had a reversal of fortune again, just to punish those traders who either 1) turned bullish too late or 2) were too stubborn and tried to stay short through the afternoon. We had a 12 handle rally, basically halving the down move for the day.
One thing as a trader you should always look for is the 50 percent retracement during a volatile trading day, with a large range. That is a rule which is a 90 percent winner over time.
Gold and Silver jumped around quite a bit as well, Gold opened at 1208.70 then posted a high at 1213.90 before really having a nice pullback to the low of the day at 1147.4. True to form, it caught weak shorts late in the day and rallied to 1,169.40, for a 21 point bounce, just to make sure every one had some pain to day, bulls and bears alike.
Silver opened at 18.910, had an early high at 18.990, found resistance at the 19 dollar level, smoked lower with the gold to a session low at 18.30 before finding traction and settling at 18.52 for an overall loss of -60.8 on the day.
Over all, the uptrend is still in tact for the metals and the stock indexes. At these levels, you have to look for some decent retracements. Today was all about buying the rumor and selling the fact in the stock indexes.
