It was a really boring day on the market with hardly anything to report. But I'll try to scrape together a few tidbits from an otherwise completely humdrum day:
- The US executed the biggest bailout in business history, causing FNM to lose 90% (more….) of its value on a modest volume of 571 million shares (remember Black Monday in 1987? That was the volume of the entire stock market on that day).
- The London Stock Exchange had to shutter trading for seven hours due to technical issues with ICE (at least they picked a quiet day for troubles)
- The Florida Sentinel royally screwed up and accidentally printed a story from years ago about United Airlines (UAUA) going bankrupt; the stock briefly collapsed, only to be halted and resume trading right where it was before.
- After a completely wild day (mostly higher) the S&P 500 closed at 1267.79. Do you want to know the value of the 38.2% Fibonacci level that was (importantly) broken last week? 1267.64. Fifteen hundredths of a single point difference. Yeah, I think that's close enough to say "exactly the same."
So, like I said most traders took the day off since there was absolutely nothing going on. (In actuality, this is my 9th post today, the first one being drafted before 4 in the morning, and today will definitely be record readership on the site).
Anyway, the graph below shows the S&P 500 in candlestick form. As I said, the close today was precisely at the retracement level. Spooky.
As for the $UTIL, today's action gave stronger credence to the lower of my two possible necklines, because the high today exactly matched the level of the red line. I had 1,000 SDP, but I bought 500 more. I love this trade.
Time for more Fibonacci spookiness. Here is the IWM in candlestick form. Today's high precisely matched – – not 99.99% close, but 100% – – one of the retracement levels. In addition, having this gigantic black body is hardly bullish, in spite of the Dow's nearly 300 point rise. (And let's remember, the NASDAQ 100 actually closed in the red!)
One thing that has me a little skittish and confounded is the EUR/USD and its relation to oil and gold. Looking at this chart, I am thinking EUR/USD is preparing to push higher (meaning, of course, the dollar would move lower). This would mean higher oil (and, in all likelihood, higher gold). I bought a ton of calls on Friday based on this notion, but it didn't work out as well as I thought (although I dumped most of my OIH calls first thing this morning for a very nice profit). In any case, this graph bears continued watching.
Setting that aside, even the most elementary technical analysis would affirm that the world of commodities is in a bearish mode, and this major trendline, shattered last week, spells lower prices ahead.
Using candlesticks once again, we can see a bearish engulfing pattern on OIH. I was really positioning for a robust move on the OIH up to, say, about $183. That obviously didn't happen.
Phew. OK, that's enough. No more posts today. Thanks for all the terrific comments, and I look forward to seeing you here again bright and early on Tuesday!
