Wednesday, November 12, 2008
If you are still in the SBUX trade keep your stops underneath 9. I am holding a very small amount of Jan calls but if this baby doesnt confirm strength Thurs into Friday we cut and run and find the next opportunity.
Anyway, what a terrible tape we have dont we? Like I said yesterday if we break 900 on the SPX then watch for 860. Well we blew right thru that like a hot knife thru butter and finished the day at 852. Now after hours we have INTC coming out and lowering revenue estimates and saying demand is falling off a cliff, lol good timing Intel, thanks. We are in the danger zone here folks. If the market was playing the role of Goose then I'm not so sure Maverick could help him if he tried.
I was expecting a big move in either direction today and wanted to go long an SDS strangle but I was a day late on that play as the SDS just ran away like a scalded dog from the open today and ended higher by about 10%. Unreal action we are seeing lately. Looks ugly out there and we are going to test those October lows imminently it appears. Closing low on the cash SPX was 846 and the intraday low on the cash on Oct 10 was 839. However the ES futures got down to like 825 that morning I believe. Either way you slice it we NEED to hold these lows or else you will some unpresecented selling action that could have us challenge the lows of the end of 2002. Yikes.
Futures are already down in the 840s as I type and Asia should not make things better when it opens up. I fully expect a gap down scenario in the morning but it will be very interesting just to see how much we open down. I kinda wanna see a massive washout tomorrow so we can just flush out who ever is left and plant the flag so to speak. Its like the market has food poisoning and just cant quite puke, lol. Interesting to see the VIX only at 66 today even as we get back to the lows of last month when the VIX of course hit 89. Hmm not quite sure what to make of the divergence just yet. Initial claims out premarket so that could affect the market. Sit tight and watch for relative strength whereever you see it. Otherwise watch out for volatility into the weekend and dont be scared to scalp the futures to the downside perhaps on weak bounces.