Lovin’, Touchin’, Squeezin’
You really can’t hate the institutional trader,
they are out to make a buck like the rest of us. The only difference is that they can move the market and you and I can’t. That said, the stage is set for and upward to sideways bias for the remainder of the week so the big boys can cash out of the el cheapo technology calls they bought for pennies yesterday for dollars tomorrow or Thursday, as well as pocket all the coin they made by selling puts to the scared-senseless retail trader yesterday. Anyway you look at it, is ‘mo money, ‘mo money, ‘mo money!
I need a little help as well. I need someone to explain to me what significance economic numbers really have. It seems like whatever the economic number du jour is, you can count on it to be spun however necessary by the powers that be to better serve their trading bias. For example, the retail sales figure for the month of February was released this morning that showed a market slowdown in consumer retail spending. In fact, it was the first decline seen in the past three months.Â
Rather than interpreting this data in the most obvious manner which is simply “the consumer has slowed their rate of spending because of massive layoffs, a nearly 60% decline in the Nasdaq market as well as the fact that figures showed today that the wealth effect for the US public dropped for the first time in 54 years,” we heard something different. Rather, our friends in the Chicago bond pit and on CNBC told us that “traders are responding positively to this negative retail sales number because they are counting on the number being revised upward when next months number is issued.” Hmmmm…… OK. Better yet, we heard our friends on CNBC tell us that institutional traders and retail analysts they have spoken to are very positive on the retail sector in light of the weak February figures because “they are optimistic that retail sales will experience a big spike due to Easter bonnet and Easter clothing sales.” Hmmmm…. I must admit, this is a pretty difficult title to award, but I think that was the stupidest and most ludicrous thing I had ever heard in my life. Don’t get me wrong, I love a good Easter bonnet, but how often do you really need to upgrade those buggers?
After hearing that statement, I honestly expected to hear the words: “Now how much would you pay for this? $50? $100? Don’t answer! Because if you call now, the first 100 callers will get a free analyst report from CSFB on why you should be buying Corinthian Colleges
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PowerRating)!! (Forget about the fact they are the same people who have been selling millions of insider shares while recommending the stock all the while.) Yes, you’d have to pay dearly elsewhere for this insightful commentary, but in this special TV offer, you will get all of this for the special introductory, low low low TV price of…..”
Do any of you ever feel like we’re just watching a big fricking “info-mercial” about the stock market all day long? I certainly do.
On to the charts.
Let’s see what the Dow did today.
The 50% level of the big red bar from yesterday should halt any potential advances we may be suckered into generating in the future. But seriously, folks… take the Dow… PLEASE!
Ultimately, my next downside target on the Dow Jones Industrial Average is 9100-9200. I don’t know when, but I know it’s coming.
Now, on to the sector that was voted “Most likely to break out due to enormous Easter
Bonnet sales,” the S&P 500 Retailing Index.
Not too healthy here, either. Remember, old habits are hard to break and investors/traders will always initially buy at levels that provided prior support on declines. We see this here as today’s selloff was halted near an area of two prior declines. Regardless, this index is broken and many retailing and apparel stocks will be shorts once again on their rally attempts. You know the names I’ve been recommending and you should have made a killing off of shorting them to now.
Thanks to Carolyn Boroden’s S&P and Nasdaq price action service, I was able to identify the support levels that held intraday today and cover nearly 80% of my short positions before the big rally started late in the session. At that time, I was short nearly 150,000 shares of various stock and was able to lock in major profits without giving back much.Â
Another interesting name for you all to look into is USA Education, Inc.
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PowerRating). Insiders reported that they sold another 1 million shares of stock recently. Insiders in this stock have been selling feverishly as the stock has been moving up.Â
With options expiration this week, anything is possible. Keep it close to the vest as I believe the bulk of this leg’s decline has been realized and the chances of a further decline before next week are very slim. However, once the options-related shennanigans are done, the NYSE might have to break out their “Dow 10K” hats again. I’ll be there for the next downleg and I’ll be short for it.
Have a good night.