Friday, November 12, 2010


Update:  Sold OXY swing for 3 points.   Sold XLF for 6 cents. Sold TZOO av 40 cent loss. 
We're short SPY 121.26 daytrade and have covered a portion but will swing if market pulls back.  Stops at breakeven.  
Out of everything -- think best action is done for the day and we'll be heading out into the weekend 100% cash.

We are long 3 partial positions into tomorrow (XLF OXY TZOO) with stops over breakeven -- we expect all of them to get hit tomorrow AM.

Last night CSCO stank up the after hours session, NQ ES were down significantly but copper, oil, gold and silver were all up (copper 2.7%!).  Copper is our number one tell and we couldn't feel too scared with it ripping overnight.  Tonight very different scenario as index futures are down but this time commodities are down even more, many opening limit down with China's open. Last night China was rallying hard on the CPI number.  Tonight it's selling off even harder.

As we've been saying for a while, the US market at this time has been irrelevant.  The bottoms and tops this year have been in the overnight sessions led by China.  CSCO?  irrelevant as market shrugged it off today with ease.   But a commodity sell-off would be much more of a red flag.

Last night we weren't too worried but going into tomorrow with copper down limit, gold, silver, crude hit hard, and Asian markets red across the board, we feel different and  much more cautious.   So what does this mean?  It means we will be more careful about buying dips in case we get a trend-day down. We'll still put out feelers and if support buyers show up, fantastic.   However, for the first time in a while we believe in the possibility that support buyers won't show up as readily.    We also won't be putting bids out at areas we like -- we're going to be more conservative and wait for reversals before entering support with stop under.   Again, switching to more conservative stance.   Hopefully we'll be wrong and dip buyers will show up with the same enthusiasm as they have in this rally.

The first line in sand is SPY 120 -- gap fill and 20SMA.   How easily the market bounces or fails there will be the best tell for rest of the day.   We'll go long ON reversal in that zone with stop under.

There are some support places we think will be hit in the intermediate future SLW 30, SLV 24.5, GDX 58, OIH 122.   We would try all of these long on reversals.

Copper has been our main tell this year.   We're not going to stop ignoring it now!