Wednesday
April 1, 2015
1-855-RWT-0008
Prepared by the good people at Random Walk, LLC. (and Scott)
Great Morning!
Closing Prices From Yesterday
Yesterday and Today
YESTERDAY
A messy day where the Dow and S&P gave back 2/3 of the previous day’s ridiculous games. Monday’s gains were more a matter of neophyte money managers trying to get a day ahead of each other in their end of quarter window dressing to make their accounts look good ā and in some cases get bonus. Of course they bought the top, at least in the short term. This is precisely why these largely academically educated and small common sense individuals never (as a whole) beat the S&P500.
Oil was down about $1 and the Euro was down about $0.01 (one cent). The VIX was up mildly, but not enough given the move and uncertainty ahead of us.
TODAY
This is broken down into two pieces: Last Night and Future Outlook
Last Night
After European markets opened the markets sold off about 8.50 E-mini points, then with the continued fall in overseas markets and a failing Iran deal became apparent, the E-minis fell 20 points. This is about 200 Dow points lower.
What I can find going on with the Iran talks is that any possible deal fell apart at the official deadline, but as I write this (11:30 eastern) may not be the end of it. Various news agencies are reporting that talks are going on past the deadline, but Iran has been assured that this 18 months of talks BS will not continue into April 1st. And you can’t blame the 6 nation team talking with Iran since every promise Iran makes is an April Fool’s joke.
Commentary
I am sure I am the same as many expressing utter frustration that Iran actually feels it has a leg to stand on after 18 months. Like Greece, no one has a weaker negotiating position than Iran, and yet they act like it is their card game.
- Option One: quit their nuke program, get money, be allowed to hide their nukes they are secretly building, and piss off Israel all in one shot. In addition they can keep funding world terrorism against the US and Israel’s allies and deny it. They can then sell the US oil at inflated prices, and fake their way through the motions of a peaceful nation with no terrorist intent.
- Option Two: get nothing, have tighter sanctions imposed, and possibly have Israel lite them up like the 4th of July. I hope NOTHING gets done or agreed to as it will confirm to me just how stupid and intolerable that nation’s leaders are.
And if I lose readers over these comments I am fine with it. I hope this thing falls apart, and I know many in the US Senate can NOT stand President Obama for being so weak on these pinheads. The only ting worse than no deal is ā¦..well….pretty much any deal. We will honor our terms but they will not. Unfortunately the markets knee-jerk reaction is wrong. No deal is a good thing. It leaves us with all options on the table when we get a new president who is actually engaged in foreign policy.
Future
I am getting much closer to flipping the pancake over from bullish to bearish. It is just weird because most bull markets don’t end because one day traders window dress too soon, and then the next day Iran can’t agree with a deal in their favor. They could not agree with winning the lottery because they might have to pay taxes.
We have had a fair amount of pullbacks over the last two years, but most came and went relatively quickly. We have not had a 10% pullback for years, even though we have had a couple 9% pullbacks. This time traders buying down 9% instead of waiting until a full 10% were brave hero’s and rewarded for it. But that might not work for the 10th time in a row.
I am waiting to see how we open in the morning and making a decision if I am going to flip the game plan for the last 4 years (long deltas + a hedge) and convert it into short deltas and a hedge. I may be panicking a little early and watch the Dow go to 19,000 before falling, but it does fell like the path of least resistance is to the downside. Plus I would rather not make or lose money from 18000 to 19000 than miss out on a having on a great crash position.
Right now the market doesn’t feel that strong, even on the run up Monday. POT people saw an example of buying a $10 call spread on Thursday and then selling it out on Monday at the close for $6.20. That same spread will be dust on the open. The E-mini equivalent I was looking at last night was trading for $3.60 and I almost bought it when we were down $20 in the minis.
POT is held each Wednesday night at 7:00pm eastern.
Contract the office at 1- 855 ā RWT ā 0008 for more details.
Too True To Be Funny
I have been saying the same thing for months. Thanks for agreeing with me Warren. I now feel vindicated. At least now I can take the hate mail about this thought, and send this clipping.
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Attorney Stuff
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