Thursday, October 2, 2008

10.02.08 - Shakedown, Breakdown

Bob Seger would be proud. VIX back up to mid-40's as we replumb the depths. No sign of a bottom on the day yet other than the magnitude of the change, but that means little in these times of fat tails. I tried to buy some at pivot levels, unsuccessfully. Probably an overshoot, but still feels risky just now. Patience will pay.

Just about the time you’re thinkin it's alright
Breakdown, takedown, your busted

Ted Spread hit 3.60 today and Nas 100 broke prior lows.

8:55AM PST: Little bit of stability found with a higher low or two, maybe a safer play for the longs between here and the lows (with a mental stop set there). Keep an eye on the slope of the TNX and watch out for possible resistance at the falling VWAPs. Oil (USO) is down over -3%. [Add: Note that unlike the last pullback, gold is down today (GLD -3.5%). Obviously Europe holding rates has a role in this with the USD +0.69%... but nevertheless not overwhelmed by fear!]

10:15AM PST: As highlighted above, hit those VWAPs and, surprise, surprise... back down to the lows. Tick is very negative - Vix back on the rise.

11:25AM PST: So now Ms. Pelosi says she'll hold the vote until she knows it will pass. Brilliant. I'm flabbergasted they had to follow their bill-hold rule for tomorrow (so pork could be added)... and on top of Jobs! Come on guys, entire industry verticals are choking for air. VIX 55+ anyone? At this rate I have to put SPY support at $111 for today. What a puke.

12:50PM PST: IRX is at 59bps (low of 25bps Monday)! I will carry long overnight inspite of the jobs risk. Now get the popcorn and tequila ready for tonight's "debate."

PREOPEN FRI: Bad jobs, but price is holding higher. On one hand, I have been concerned about low volume for these large downdrafts, on the other, cumulatively that's still a lot of selling. Also, I suspect the market may be anticipating federal maneuvers beyond the passage of the bill to occur soon... something to think about. Did you see this?

Never Investment Advice

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