What a fun day yesterday was.
I called it “Which Way Wednesday – For Oil” and we got huge moves in both directions as oil fell from $71 to $69 and then back to $71, all the way to $71.60 early this morning where I called on another short in the oil futures (now $70.83 so, yay!). As I said in Tuesday’s post: “We’ll take the $2 daily swingsif they want tokeep giving it to us.” It’s not just oil prices thatgive us a thrill-ride, the Dow itself continues to go up and down 100+ points at the drop of a hat and we spread that to take advantages of moves either way but, generally, we found ourselves going short again and, sadly, winning again on the short side as the market continues to be very weak.
While we WANT to see a healthy correction in the markets, there’s a fine line between a healthy correction and yet another panic sell-off and we, like our government, would like to have our cake and eat it too. Can the markets make a proper test of May lows (Dow 8,200, S&P 880, Nasdaq 1,700, NYSE 5,600 and Russell 480 – roughly) without breaking down and heading to our March lows? Sure it’s a slippery slope, but it’s one we need to take in order to see if the rally is real. Manipulating the market every day to keep that from happening only serves to sideline $11Tn in capital of “smart money” while all the dumb money pours in to prop up this fantasy market.
Even yesterday, 1/3 of the day’s volume came in the last 25 minutes of trading. Just like a basketball game, the whole thing is a pointless waste of time until the last few minutes. Is that how we want to run our markets? We’ve gotten into the swing of things by taking advantage of oil (play for the pump at 1:30 into the 2:35 NYMEX close) as well as the Dow (look for the stick around 2:30-3pm on any low-volume, down day) but that’s just playing a scam. It’s like watching a game of 3-card Monty and making side bets that the sucker can’t find the red queen. Is that what the markets have been reduced to – a suckers game where a few insiders get rich and the general public gets fleeced on the principal that another sucker will be…
