Wednesday, October 22, 2008

10.22.08 - Under Pressure

Negative Tick and Volume are far worse than we are seeing in price action. It seems the only thing propping us up from a technical perspective is trend support from the 10/10 and 10/16 lows. We are trading in a narrowing range/wedge and a breakout is possible. To the upside, look to the 5-day MAs as resistance, to the downside look to the 10/10 close as support.

9:40AM PST: Difficulty at S2 (SPY $93.10/ overhead resistance).

11:30AM PST: Trying to trade anything but the short side today has been a joke unless you trade only the shortest time frames.

12:05PM PST: The range of these moves continues to amaze me. VIX is 65 and climbing. I need to fact check this, but apparently only $5-6B changed hands yesterday on the Lehman CDS, no problems noted. WAMU prices tomorrow.

o VIX & More - Put Carpet Bomb

12:40PM PST: Downside target breached! No sign of support. Volume light, all things considered.

12:55PM PST: Caught a bid about the time I posted this, but I'm always reluctant to catch a last minute bounce. Too easy to peel back on days this weak, best to wait until the close. Ahhh... short covering. I'm not buying it.

POST CLOSE: OK, didn't peel back and put a little on in the intersession. Something about a Quant fund blowing up today... if they knew they were going to be selling, may explain the "put carpet bomb" (see above)?

Never Investment Advice

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