Random Walk Trading.com

Friday

December 12, 2014

1-855-RWT-0008

Prepared by the good people at Random Walk, LLC.

VEGAS

Almost Sold Out

Great Morning !

Closing Prices From Yesterday

Today’s Number(s)

Yesterday and Today

Yesterday

A very strange day indeed. The Dow opened up about 70-90 points and just screamed higher. After that things really took off to the upside with the Dow climbing to a net positive of about 220, and the SPX up $30 points.

Late in the day oil began to fall and it took the market down with it. The graph I created below overlaps crude oil with the SPX cash. You can see that as oil sank it dragged the major indexes down with it. Oil fell below $60 for the first time, and yet the Dow managed to hold its head up for about 30 minutes. After oil continued to fall (showing no support) the Dow closed at its lows for the day.

I keep pointing this out….

One – Oil falling is NOT bad for the economy, but only for a few stocks such as Exxon.

Two – The rationalization the market is making for falling with oil is “deflation”. There has been a lot of concern about all the poorly allocated stimulus money not being sufficient to raise inflation. Inflation of 3% a year is a “Goldilocks” amount, yet we have been struggling to even hit 2%.

BUT one can not have things both ways. When oil was too high the government statistics analysts dismissed oil as being a non-factor in inflation. Now they want to attribute oil to inflation.

Three – The markets usually attach itself to something, almost anything popular. Regardless if it is a real event or not the stock market will take its cues from it. Sometimes it is currencies. Other times it is foreign markets, bonds, politics, etc. Oil will stop falling eventually and then bounce – taking the markets with it. After a couple of days of this the market will detach from oil and move onto the next stupid thing. This is just how it goes, regardless of what more learned people pontificate and Nobel prizes are given for.

TODAY

OIL BS STILL

What the oil market does, so will we. The good news is that the markets held up well and showed a positive day despite oil falling below $60. In overnight trading at midnight oil is still falling and has fallen to $58.80. Eminis were going along for the ride and were down $5.

BUT don’t read into it that much. Things change between midnight and the morning’s open. In addition we had a great Retail Sales number yesterday and some good numbers may come out at 8:30 and 9:55.

Not sure what will happen today, but if OIL shows even a modest gain we should run >100 points higher. If we do run higher keep an eye on 17,750 (Dow) and 2055 (SPX) as targets.

POT LAST NIGHT

Below is the schedule for the month.

We got short the Yen (against the USD), long ATM McDonalds call spreads, bought SPX call spreads, etc. A separate update will be coming out. We also have two GTC orders in SPX and RUT working. We rolled out Dec2 WFM short collar calls but did NOT get filled on NFLX that needs to be rolled still.

Contract the office at 1- 855 – RWT – 0008 for more details.

Too True To Be Funny

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Attorney Stuff

DISCLAIMER (Seriously!) All data above is provided for informational purposes only. Random Walk makes no guarantee as to the accuracy of the data.

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