The market doesn’t want to let go. It is chopping around even.
I am a bit “‘on tilt” this morning. I have been stalking an exit on MFE. I was forecasting a move down to the trend line this morning. And it happened just as I forcasted, to the penny. I would have been a beautiful exit with one day to go. What happened?
About 4 minutes before the open I was “asked” to Iron my daughter’s dress for school pictures. I did it relatively quickly, I came back to the computer @ 7:36. The move had already happened, and the stock had reversed, and broke above yesterday’s consolidation. I missed out on a very sizeable gain, and ended getting out for a price a little worse than I could have yesterday. Grrrrr.
OK, now that I got that out, MFE is reversing further and moving up. So my decision to exit my calendar for .95 was well founded. XLE continues to ramp. Setting all time highs. Wow, that is strong like bull. A variety of other trades seem to be all over the map. I am feeling very good to have my UST hedged, as it is moving down again. I am effectively short the IWM and SPY. Dow would be nice. I have my short game plan in case of a break below yesterday’s lows. But I do see support @ 1383.
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I am looking for some trades with an edge. I don’t see any specific trades. But I am quite bearish after yesterday. If the S&P breaks below yesterday’s Gravestone doji. I am also looking for the Resistance level of 1419 to be very significant.
I think Rev Shark is saying it correctly here:
The market has had a tendency lately to shake off weakness in the morning and gain strength throughout the day. So, I’m not too quick to react to this opening action. It already looks like dip buyers are starting to show up, and I have no interest in trying to short the indices until they are less confident.
It has been interesting how the market recently rallied supposedly because oil took a dip, but seems unperturbed when it is strong like it is this morning. That is a pretty good example of the optimistic mindset that has been dominating the market lately. All news is good news right now. At some point, that illogic will correct, but it doesn’t pay to fight it until the price action starts to shift.
This is an interesting explanation for the push in Oil today.
Trading at the Intercontinental Exchange (ICE) has been halted due to a power failure. The all electronic exchange feature product are energy futures such as oil and gas. But it also trades some agriculture products such as cotton and wheat.
Be curious if these causes an increase in volatility as traders will be forced onto the Nymex, whose crude contracts are not the exact same and therefore not fungible with the ICE contracts.
Today is also an expiration for options on May futures and open interest is near record levels. There has been big increase in the 130 strike in recent days. That still seems to far out-of-the money to get there today but someone might try to gun it heading into the close.
It may be an interesting move to short into. I am actually looking for a BWB style trade into XLE. I must be crazy, but I am looking.
Trades:
MFE – Exited remainder of May/June 35p calendar for .95. Nice 100%+ profit.
FCMN – I am looking for some short exposure, and I have entered a first order to go short this issue. My target to the downside is 31. I am buying a put spread between 41.10 and 42.
At S&P 1422, I am delta negative 289. Churning market conditions. I am still sitting mostly in cash, but damn. Drop already.
Theta positive 77
BTW, it is snowing in Breckenridge.