Resistance met in Stock Indexes

We reached some decent resistance in S&P at the 1210/1211 level . 12,425 target hit as well in the Dow Futures.

Not saying the top is in, by any means, but i think we are over done a bit on this “relief” rally.

August, as usual, was a month where the program traders take advantage of the market’s dirty little secret. 1/2 of Europe is gone on vacation. Traders and managers who are up money on the year after 6 months are taking a chunk of vacation time off as well.

Generally, the only people active in August are […]

Before Bernanke Speaks

Tomorrow Bernanke Speaks.

My guess is it will be a non-event.

Unless things un ravel more, and i define unravel, as unemployment accelerating above 10% or 2) Europe Defaulting on its debt: I can’t see a reason for a QE3.

I think, you might see a push for a debt forgiveness act, or something along those lines, where, basically, US consumers can clear the decks once and for all.

There is a feeling that the banks are sitting on a ton of cash. There might be a push to let them use that cash and write off […]

Just 6 Days Left in August- I’d sit tight

I wrote before how the month of August is typically horrendous for volatility. Program traders with their “disruptor” programs push thin markets around.

I found it interesting about a month ago I was doing my weekly taping from the floor of the cme. I mentioned that the markets could get thin. The moderator, who’s pay check is signed by the cme, asked me not to mention that, because they like to talk up their liquidity. What a joke.

Any how, the stock indexes still look ill. I imagine they will remain so until November 2012 when we get through this election.

USDA Bullish for Corn and Beans

The call sides of the straddles will be worth a chunck today.

Corn yield estimated dropped almost 7 bushels an acre.

Yield for corn 153 vs. 158 pencils out to a 12.9 crop

Yield for beans 41.4 down from 43.4

Corn and beans should be 30 to 60 higher for the first five minutes of trade

Once caveat: This could be a chance for Funds who have gotten crushed in other positions, to take massive profits in grains.

This could set up a higher opening, lower close scenario.

Watch for that action.

I’d be exiting the straddles […]

500 pts higher- 400 pts lower– SERIOUSLY??

More silliness in Stocks as markets try to decide which way to go.. as of this writing its 450 lower in the Dow. S&P’s down 44 at 1128.. Remember S&P at 1300? For 6 months, starting last February, S&P cash could not get above 13.50 or below 12.50

The break out below was painful.

I bring this up because it looks suspiciously like the November Bean Chart. Beans have been stuck between 12.80 and 14.00 for ?? 7 months.

The break out above or below will be impressive.

Corn has been in a 1.50 range for 2 months, 5.50 up to […]

2348 points lower in 13 Days—18% Drop???

On July 22, 2011 we had a high tick at 12,749 in the Dow Futures. Last night’s low at 10,401 came at around 2 AM, Fortunately for me, I was sleeping and missed witnessing that tick first hand.

My long position at 10800 was long since exited, thanks to my stops. I had only wanted to risk a certain amount. That stop was triggered. We settled to day at 11,215, which would have been a 400 point profit. But at what cost?

I am glad I took my loss.

Taking a loss is key to long term success trading. […]

High Frequency Trading Is Destroying Liquidity

Enough Already!

On Friday, Aug 5, 2011, we processed 1 trillion bytes of data for all U.S. equities, options, futures, and indexes. This is insane. A year ago, when we processed half of that, we thought it was madness. A year before that, when it was 250 billion bytes, we thought the same. There is no new beneficial information in this monstrous pile of data compared to 3 years ago. It is noise, subterfuge, manipulation. The root of all that is wrong with today’s markets.

HFT is sucking the life blood out of the markets: liquidity. It is almost comical, because this is […]