Tuesday, April 7, 2015

SPY Hits the Wall...04.07.15

Dave Moenning hit the nail on the head today...meet the bi-polar market.  Traders are poised on every grunt and burp from the Fed governors, which is what drove this morning's sudden collapse 30 minutes in.  Lessons to be learned from this morning>  1) the HFT algos all trade in sync and woe to those on the wrong side of the trip wire. 2) the game is rigged against the little guy and technical analysis has eroded into chaos theory during the past few months.  Any good news?  Not yet.  Cash is still king. We did manage to score a few bucks on the M3 overnight XIV position but closed that after only 45 minutes in based on the special ALERT emailed to subscribers.
The last hour sell off yesterday and especially today offers a scary hint as to what may be coming once those big multi-nationals start crying about the last earnings quarter. Some of the saner heads on CNBC say don't worry...that last quarter those same firms warned of slow downs and an expected 6% pullback in earnings.  Traders memories are very short however, something in the neighborhood of 2 minutes if you follow some of the latest brain research. SOOOOOO...don't be surprised when those past warnings are long forgotten and poor earnings are greeted with shrieks and panic selling. Just a little warning here.