Yesterday and Today
Yesterday
Open >>>> Down 100 >>>> Unchanged >>>>> Close up 100.
It was a very quiet day with the lows being 1939. The number 1937 was an important number and it didn’t get close, and appeared people were buying well before that number to avoid missing the bottom.
The one surprise was that the bonds and TLT were higher by a decent amount and the EUR/USD is hovering around $1.13 Ā½. This is essentially telling everyone that the market doesn’t think the Fed will hike this week.
My opinion is that they are stupid not to hike. One quarter or Ā½ point is NOTHING, but the uncertainty is spooking the markets. The market did NOT fall because of China or falling oil. It fell immediately after the last Fed meeting where it came across (whether true or not) that the Fed is clueless as to how they will get out of this low rate environment.
TODAY = Higher
Europe does not want the Fed to raise rates and they have said so repeatedly. The Euro has been hammered 20 ā 30% this year already, and a raise of US rates while they are lowering will kill their currency.
Others don’t want the Fed to raise rates because of the weakness in China and the recent correction we had in the US markets (which is now over). If the Fed is waiting to raise rates until a time when the markets do not have trouble from the likes of a Greece, Puerto Rico, Cyprus, commodity drop, market retraction, etc. they will never raise rates. Something scary is always going on in the world. There is no security, only opportunity.
The fact that we closed above 1960, we bounced off of 1937, and the fact that we closed on the highs of the day with a last second buying frenzy tells me the bears are getting squeezed. Volatility is still high which is also a bullish sign.
OPTION TRADERS
Last week I said I expected volatility to get down to 18%. I was wrong as we closed at 23%. Yet we were as high as 29 Ā½% on Monday. I was wrong but anticipate getting down to 18% after the Fed is done on Wednesday ā so Thursday at the latest.
New Random Walker started today. I should have started it Friday but I was busy writing a FREE 21 page update/lesson for everyone that was sent on Saturday night. We have these free lessons in POT from time-to-time and now was a good time to do one for the year-end book. I hope it helps people understand that actively managing a position because the market is moving can be a benefit, where some look at it as a frustration or indication they were wrong.
The only problem I have with this write up is that we forgot to use others business model and charge $600 for it. Our bad. If you feel bad you can pack an envelope full of cash and mail it to me c/o Random Walk at out offices. LOL Have a great week.
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
My pick for best political cartoon this week goes to Michael Ramirez. He summed up how we gave Iran $180 bln to be our friends and they are already threatening us with war. They suck, but hopefully the next president has balls before Iran makes a nuke. Nice to see Kerry and Pelosi represented in the cartoon and in the front. Also I see they are talking to empty chair. That must be what Clint Eastwood was talking about at the RNC 3 years ago. Who’s that in the Where’s Waldo shirt? Reid is by the window.
Attorney Stuff
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