Yesterday and Today
Yesterday
Another day of surprise selling with the Dow closing down 272 points. What caused it?
I am guessing (in order of importance) fear of the Fed being incompetent, fear of being long over the weekend, fear of what will happen when China’s markets reopen this week, oil prices falling again.
TODAY
Whatever the fear of China’s markets falling after being closed for an extended break, it is unlikely the the 1.6% the markets are down at 11:30pm eastern will be as devastating to the US markets. We should see a bit of a relief rally that things were not worse.
What is a little disturbing is oil is down 1.80, and that has been weighing on the markets as well. Oil, gold, grains, and other commodities have been falling for months on fears of a global slowdown, especially in the big oil and gold consuming China.
Despite this the Dow ill probably open triple digits higher. Should China and oil bounce a little before the open we could see an complete eradication of Friday’s losses, but I am not overly optimistic about this.
I will say this again. We might fall a little more as people seem to be getting optimistic, but this is NOT 2008.
OPTION TRADERS
Last Thursday and Friday I wrote:
āSay good bye to high volatility levels and expect 15% – 18% in a week (if not sooner). Of course this is a guesstimate. ā
This is the week we should see the collapse as the VIX reverts closer to its mean.
Gear up as we start a Random Walker Spread example ā the first in a long time. We already did part of it Thursday and will add more legs as the market gyrates.
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
Attorney Stuff
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