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02.10.10
Thanks to the Euro - Pre Market

Yesterday we concluded that bad news had already done a reasonable amount of damage to the indices, setting up conditions for a rally. Sure enough it came.

The advance was attributed to indications that the EU will somehow bailout Greece, which caused a 1-2% relief rally in the Euro and the British pound, and pushed the Dollar Index down 0.7%. The good news coincided with sufficiently bearish sentiment to create short covering momentum and some bargain hunting. Currency dynamics are driving U.S. market movements these days and much of the drama occurs overnight.

02.05.10
Running for the Exits - Pre Market
There is a growing sense of negativity among investors and, for a change, bad news matters. The market did not wait for today’s "all important" jobs report to make up its mind where it needed to go. With unemployment claims unexpectedly rising, no one is looking for a turnaround in the jobs data yet, so there was a rush to the exits.  
02.02.10
Bounce Underway - Pre Market

The Dow rallied more than 100 points on Monday, with commodities in the lead. The ISM Manufacturing Index for January came in at 58.4, up from 55.9 in December. This is the highest reading for the index in 5 years, but don’t forget that manufacturing now accounts for less than 20% of the U.S. economy. Still, the news spurred buying in commodities. A decline in the dollar gave the hardgoods rally a tailwind.

01.29.10
Hotline Alert

It doesn't seem like there will be much more volatility in the aftermarket, because of extremely low volume, typical of Friday, and we are going to hold our position unless we get a spike to the upside. While the aftermarket price as of this writing is down from the close, it is up some 30 cents from the low, so that supports my feeling that weekend news will be bullish and the opening will be high, once again. 4:42 PM

We're out at 69.40 and have orders in to buy back considerably lower. 4:52 PM

01.28.10
Pre Market Commentary

The major indices made new lows on Wednesday, but the selling was not serious. After another benign FOMC announcement, the Dow managed to rally 150 points from the low of the day, closing up 42. The technical pattern is called ‘3 drives to a low’ and you can see a chart of it below. The pattern is bullish and suggests that today we will get the best bounce since the decline started.

01.27.10
Pre Market Commentary

The market started off in the red on Tuesday due to weakness in Asia. Not only are China's bank regulators tightening credit, but Japan's sovereign debt was put on ‘negative outlook’ by Standard & Poor's. That boosted the dollar a bit, pressuring other assets.

01.19.10
Controlling Risk and Maximizing Profit in Day Trading

I don’t know if there is any such thing as a fool-proof day-trading strategy, but if there is one, I imagine that it doesn’t make much money, or that it requires enormous resources and/or connections to inside information that are not accessible to the average investor.

01.19.10
Pre Market Commentary
The Dow fell 100 points on Friday, the worst decline of the year. We think we are approaching a top in the indices, but there is no telling how long it will take to form or what the topping pattern will look like.

01.14.10
Earnings Kickoff

Earnings season is upon us. The companies in the S&P 500 are expected to post ‘operating’ earnings of $15.80 per share for Q4, up from $5.62 in the same quarter last year. Operating earnings do not account for one-time charges and other types of write-downs. If the figure is attained, it would bring full year earnings to just under $60, about 10% less than 2008, but 30% less than the peak posted in 2006.

01.14.10
Main Street vs. Wall Street

Main Street is struggling with a very weak jobs market, but Wall Street does not particularly care. It is not that Wall Street is heartless; it is just that it knows that a weakened labor force puts operating leverage back in the hands of corporate management. It means greater productivity per dollar of wages, which flows directly to the bottom line.