Stock Futures up on Debt Ceiling Deal Hopes

The $QQQ trade looking good. The futures up on debt ceiling deal hopes.

The market entered the weekend on the perfect storm. The SP500 is near the trading range lows. The market was back near the 200dma. The VIX was up above the bollinger bands. We are at the seasonally strong end of month and beginning of a new month. Plus, there is profound pessimism about the markets and debt ceiling.

Well... Not that the debt ceiling deal solves anything but it will be seen as a positive for now. When the old credit card is maxed out, the new credit card provides the opportunity to keep spending!

We shall see if it holds up over night. And will folks sell the news or is this enough to push the market back up to the top of the trading range?

Debt Ceiling and Twins at A's

No concern about the debt ceiling at the Twins @ A's game!

Twins up in top of first.

Debt Ceiling Deal Reached?

Looks like a debt ceiling deal is reached.

Read the link for the details, but I'll add that this whole drama seems to have come to its inevitable conclusion. We all knew a deal would be made at the last minute by our heroes in Washington DC, right?

And a committee to recommend spending cuts sometime in the future? Priceless! That will never happen, but it gets us to the next crisis, right?

Speaking of spending cuts, on a personal note I have decided not to buy a $1 million dollar home, and instead buy a $500K home. That leaves me with $500K in spending cuts, that I can use about $150K of to buy a new car and a boat, and put the remaining $350K in the $QQQ for monday's market open.

Right?

Party on!

#104: Stocks Down 3 Months in a Row, Inflation, Stimulus, the Deficit

#103: Debt Ceiling, $QQQ, GOP, GDP and Romney

Trading the Great Unknown!

Holding the $QQQ position over the weekend. The market soared after the initial swoon down, and I was tempted to book the gains and call it a day. But I am going to remain with the shares over the weekend.

Watching CNBC today and the debt ceiling talk is reaching a fever pitch. Is this the end of Batman? Er, the US economy?

I don't think so. Not yet. I think it is likely that a deal is reached soon. I recall many Friday afternoons where folks didn't want to be long over the weekend, only to see some sort of news come out that sends the futures ramping come Sunday.

I don't know if this is one of those times, but I'm positioned for it.

Went Long $QQQ

With the lower open I went long the $QQQ. The thought being that maybe we will see a debt deal soon. The President is on in a few minutes.

As I mentioned in yesterdays audio boo, if we were near the bottom of the range I think the likely reaction to a debt ceiling deal is up. I could be wrong. And exploding debt is definitely a longer term issue.

#102: Debt Ceiling and Market Thoughts

Waiting for a Reaction

Watching the $SPY for a trade. Today has definitely been tradable but I'm not doing anything. To be honest, it is getting to be that time of year where I start looking to go long and get more aggressive. But only if things line up - like last year on August 30th.

The market is very vulnerable to the debt ceiling news. We could get a sell the news reaction or a relief rally. I'm not convinced of either yet. But I think that depends on where we are in the trading range. If everyone is bearish and we are near the lows or 200dma then I'd expect a rally. If we are at the top of the range and folks are bullish, perhaps the opposite.

Watching... The market has fell a bit since today's highs. So if that persists into the close and heading into end of month, maybe I'd take a swing at a long position. Tough to watch at work today so we shall see...

The Whoosh Down

It's amazing how fast the market has come back down to close in on the bottom of the trading range. Just a couple of days ago, the NDX was above the trading range!

Folks are blaming the debt ceiling stuff. But there always seems to be a reason to be bearish at the bottom of the trading range, and bullish at the top of the trading range. Quite a few trading opportunities along the way.

I remain in the same position, with cash and low beta stuff. Oh, and oil.

I'm wondering what will really happen with a debt ceiling deal. I was thinking "sell the news" when the market was near the top of the range. Now I'm wondering if we'll rally! It seems as folks believe that the debt ceiling issue is causing the market to pause or fall, and once it is resolved it will be off to the races. I don't know. That seems easy.

***
Too busy this week to do much trading or reading around.

Also have a new puppy... LOL. So, that's a lot of work at night!!!

$NFLX, Obama, Debt Ceiling, end of Month

All the focus on the debt ceiling as we approach the end of month period. As you know, the market tends to have a bid under it the last few days of he month and first few days of the next month. Month-end statements, 401(k) dollar cost averaging from paychecks, etc. Doesn't always work, but usually - right, Norm Fosback?

And the debt ceiling stuff last night on TV was ridiculous. Obama started off blaming Bush and threw in some of the usual "clean energy" and taxing the corporations stuff. Does this guy know the unemployment rate is over 9%?

I joked on Twitter last night that Obama was going to talk about the Netflix stock crash last night. I wish he would have, instead of the nonsense about raising taxes. If that GDP number comes in weak, tax hikes are way off the table, right?

Oh, and $NFLX messes with their subscription model just as subscriptions are slowing? Hey, isn't that like a tax hike on folks? And folks are opting out or reducing their plans!

More later. Dog days of summer and all. Same positions as last time.

Is Market Yawning at Political Theatrics?

Watching the $SPY gyrate today and getting the feeling the market has already priced in a debt ceiling resolution.

The fear over the weekend was that the market would tank Monday (today!) if there wasn't a deal in place. Indeed, futures were down and the market fell early today. But since then things have kind of stabilized.

I believe a deal will get done. I think the market believes that. Since we are near the top of the trading range could that be the catalyst to surge above resistance? Or will there be a sell the news reaction?

Staying in low beta stuff, some cash and oil. No trading today!

Saturday Morning Resistance Chit Chat

In discussing the "top of the trading range," I wanted to add that the $NDX is actually above resistance now. That isn't unusual, as the NDX has a higher beta and more volatility than the broad market. So I would think that the likelihood of the NDX crossing resistance (or support) by a few points isn't that unusual. We sometimes see this in the $SPY or Dow, too.

But I want to add that even though I believe the summer trading range isn't over, the market looks good. From a technical standpoint, it certainly looks like the path of least resistance is higher.

The market is forward looking, right? While we saw the market gyrate on Greece, Europe, bad jobs reports, US Debt Ceiling headlines, and state, city and county budget issues, what really matters going forward is the US economy. And earnings have been good. The lines at restaurants are long.

I don't want to make it sound like I'm playing both sides here. You know, no matter what happens I could point back to this post and say that I CALLED IT! So, I'm going to remain in the lower beta stuff, some cash, and the oil for now.

If the economy is rebounding, then oil prices are heading up...

A Bias to Buy

Right now there is a bias to buy. The $SPY is near the top of the trading range. While it seems obvious, too obvious maybe, that the market should go back to the bottom of the range, there is the possibility that we break resistance and have a new leg up.

Nobody promised that the summer correction would end in September or October. It ends when it ends! And that may have been the revisit to the $129s earlier this week (for $SPY).

TGIF!

Yikes - Missing a Move

Geez, I really missed this move in the $SPY. Yet, had I caught it I'd likely have ready flipped it. I still don't trust the summer. We are revisiting previous rally highs. Lets see what's next!

Let's Go Vertical

The daily $SPY volatility has been replaced with a vertical move up. Optimism abounds. Projections of SP500 1450 and 1500 are making the rounds today. And why not?

Rumors of an imminent deal that would provide more cash to Greece is in the news. A US compromise to raise taxes and promise to cut spending in the future someday is in the news. And a deal in the NFL, too? Sweet.

Pay no attention to the rising jobless claims. The market is a forward lookin' mechanism, don't ya know! Besides, with the Roku 2 coming out, who wants to be stuck in the office when you could be playing Angry Birds on your TV? Raise the debt ceiling, sell more Treasuries to China, get those unemployment bennies rolling in, and kill those darn pigs! It's not right they took those birds' eggs in the first place!

Anyway, no change in my point of view, asset allocation or short term trades. Just hanging out...

Stocks Pause..,

One day it's $GOOG or $CSCO, or an after hours pop by $AAPL, then it's "Hmm, what about the debt?"

It is hard to dismiss the good news from tech companies. This is supposed to be the bad earnings quarter for tech, right? So far tech has been good enough to outshine the worries of the world. If only for a day.

Then the reason du jour hits that the US debt ceiling issue hasn't been resolved and European countries are wallowing in their own debt crisis. Reality hits. Is it all sustainable?

Maybe it would be if the Dow ripped 200 points a day! Of course, that in and of it self never lasts, either.

No moves for me today. Watching with cash, low beta stuff and some oil.

Biggest Rally in Dow Since Columbus Discovered America! (and Randomosity)

Thoughts on today’s significant stock market rally $$:

• Why didn’t I buy $SPY yesterday in the $129’s?  When I said “tempting,” I was *that* close to buying.  That was my entry point at the last major trade.  Eh, I still believe that we retest the bottom of the trading range sometime this summer.  You know, sometimes the biggest market moves are against the trend.  That’s “sometimes.”  
• $AAPL profits through the roof.  All the chatter about iPhone sales slowdowns, Android competition, Steve Jobs health… pffft.  Not today’s business.  Not even a “sell the news” reaction on the numbers, which I thought was likely.  I wonder how many folks sold Apple ahead of the earnings call?
• Debt ceiling deal seems close at hand.  It was all just posturing and wearing us out, now BOOM, a miracle.  Seems to happen every time.  I suspect things will be resolved soon.
• Dark chocolate peanut M&Ms?  Tasty!
• If you turned on CNBC this morning to watch market news, you were out of luck.  All Rupert Murdoch, all the time.  I realize that all the media outlets, outside the only media outlet people are watching (Fox), are busy backslapping each other.  But please, can the financial channel show financial news?  I’d even take a few “booyahs” over Murdoch getting grilled.
• Japanese stocks?  Rallying.  Tech stocks, of course.  Nothing else ever rallies these days, right?
• Nasdaq lead the rally today.  That’s good.

$SPY Thoughts II (and $CSCO)

That's two times in two days that sitting on my hands has cost me! $SPY rallied up into the close.

$CSCO news today about the Big Layoffs is the worst secret ever. We all knew it a week or so ago, didn't we? Large companies that dominate an industry tend to grow large and unwieldy over time. I know we hate to see folks lose their jobs, though. Looks like some percentage of the layoffs are from voluntary retirements, and all the folks should be let go by 2012.

Side bar: 2012 is also the end of the Mayan calendar, so the folks who get let go may not need to worry about their future employment, anyway...

$SPY Thoughts

The $SPY basically near where I bought it a few trades ago. Tempting. But, sitting on my hands.

Monday Swoon

Banks and debt are the reason du jour for stocks tanking. $$

The markets will struggle to rally without the financials. Again, this may create the kind of intraday volatility that can set up some nice trades. But I think ultimately the market retests the bottom of the trading range.

It is summer, after all. How many times does this scenario play out? Most of the time...

Sunday Night Shockers Randomosity

• Lots of drama about the US debt ceiling, but a compromise is near.  Shocker.
• $AAPL iOS 4.3.4 patches jailbreak, and is immediately jailbroken.  Shocker.  I’m not sure why folks still jailbreak.
• Dodgers lose again to D-backs.  Shocker.  Dodgers are pretty lame this year.  Hitting is very suspect, right?
• People still outraged over Netflix’s rate hikes.  Shocker.  Heck, who cares about the debt ceiling if the Big Movie Streaming is raking in profits at consumers’ expense?
• Back from Reno, break even.  Shocker.  Thanks to hitting a little on a Megabucks slot machine near the end of the weekend.  Phew.

Reno, Nevada

In Reno, and Lady Luck is nowhere to be found. Took in a Reno Aces game last night.

Watched a little of the Debt Ceiling charades in the news today. Also the prediction from Goldman Sachs that unemployment would still be high heading into the 2012 election. Maybe we would even be able to look in the rear view mirror and realize that the economy was in a recession in summer, 2011.

Lots of chatter. Lots of headline risk. Although we are all probably getting numb to it at the point, eh?

Back to the craps tables.

I like Barry Zito and the San Francisco Giants tonight at San Diego.

Da Bulls

The Bulls are winning the final hour so far today.  No sell off.  But hard to imagine a huge bull move without the financials.  Still, if there is a debt ceiling agreement, that could change.

Friday Morning Usual

Stock market playing it's game today, up early and then the fade. We will see if this continues into the clothes. I think we are all getting a little exhausted with the news flow of debt ceiling, credit rating, Euro zone issues, etc.

If we fade into the clothes I will be tempted to take a long position. Tech earnings coming, and Google was strong. Plus, I think we see a deal on the debt ceiling soon.

Maybe I'm underestimating the resolve of each side, though...

***

Picture is of Reshma Shetty from Royal Pains!

#101: Stock Market Volatility

News Headlines Volatility in the Markets!

The volatility is amazing. Between the Euro zone, debt ceiling, deficits, earnings, Bernanke, Obama, the Middle East, and the US women's soccer team, there are many moving pieces. The market seems to be watching the news headlines.

My thought is that if we drift lower into Friday, I may think about buying back the $SPY again. I think there would be the possibility of positive headlines over the weekend regarding the debt ceiling. And US women's soccer...

Eh, maybe. I'm due to muck one of these trades up!

Quick $SPY Thoughts

Market volatility continues. I would have thought the Moody's move would scare investors. Maybe more ahead of the weekend. Of course, there is also a chance on a debt ceiling deal at any time.

Will Thursday be a Horror Show?

Everyone’s first reaction to the Moody’s warning was “Look out below!” and the futures plunged.  But you know what?  They actually recovered a bit. 

Tomorrow is going to be interesting.

My first thought earlier that with the market volatility lately, any plunge may be kind of interesting.  Tempting.  You know?  I still think the market heads to the bottom of the trading range, though.  But there is some distance between here and there, and the markets tend to fluctuate and all.

***

I’m sitting on lots of cash, some low beta stuff, and some oil.  We shall see…

You’re on Notice! Randomosity

• Netflix raises prices and splits DVD rentals and movie streaming.  Basically, if you want both, your prices are going up.  Will folks cancel?  I think some will re-examine their subscriptions.  I think I’m going to drop the DVD service and keep the streaming.  Or put everything on hold (suspend account) while I search other options.
• Moody’s warns Uncle Sam about debt.  Shocker.  Well, any gap down may be buyable.  Don’t you think the government is going to act fast to raise the debt ceiling to a quadrillion?  (Or whatever it takes these days…)
• Say, the National League has won 2 all-star games in a row, and 2 of the last 3 World Series.  To early to call a trend, but …. hmm.
• Eating leftover pizza for dinner.  Never as good.
• Doug Kass covers his shorts in the after hours on Moody’s announcement.  Hmm, that one worked out.
• Temperatures 15 degrees below normal in Sacramento.  Thanks, “global warming.”  Seriously, temperatures in the 70’s?  Feels nice, but this is pool swimmin’ season.  Between a cold May and June, the swimming season is a very narrow window this year!
• Did you see the talking parrots on America’s Got Talent?  Cute, but is that really talent?
• Ben Bernanke thinking about – er, “weighing,” more quantitative easing.  “The possibility remains that the recent weakness may prove more persistent than expected and that deflationary risks might reemerge, implying additional policy support,” Bernanke said.  The Fed always seems to take a lot of words to convey messages.   I can imagine the high-brow dinner conversations…

$SPY Thoughts and Big Ben

I sold my $SPY just after the open because I was worried what Bernanke might say. I figured the market would move a buck in either direction. Why risk the gains?

So I booked 'em, the market fell back close to flat but then Big Ben came on the scene and the buck move was up! Drat! Should have hit the snooze button one more time and I'd have another buck!

But there's no second guessing. A profit is a profit, and now I'm back to lots of cash waiting for the next game of chance - er, investment.

As I type, the market has slid and we are back near where I sold this morning.

Volatility, baby. Trade it, trade it, trade it.

Closed $$SPY Long

Sold the $SPY long for a small gain. Playing volatility and don't trust market yet.

Another Helping of Stimulus?

What a volatile day in the market! $$

The market hovered around break even until a story leaked about the Fed considering another round of stimulus. That provided a major rush, which then sold off and we find the market down a little heading into the final 30.
***

If I was paying attention when the $SPY was near the highs of the day, I might have closed yesterday's trade. Still long and basically near break even.

Was stuck in a meeting!

Long $SPY Again

Long $SPY again. Playing volatility. Crossing fingers. More later.

Stocks Selling Off

Stocks are selling off ($$) on news that Melissa Lee and Carl Quintanilla are the new CNBC Squawk on the Street hosts.

It's either that or back to the Euro-zone reason du jour. Italy. Spain. Greece.

You know.

Anyway, very tempting to leap back into a $SPY long here. I think earnings season is going to be volatile, so big moves like this are going to see moves in the other direction.

Just thinking out loud while I sit on a bunch of cash.

Sunday Night Thoughts

After a pool party and some bike rides, I'm settling in and reviewing some of the market comments from various sources. $$

It appears as if most are still fairly bullish after the recent v-move up. And that's even with the bad jobs number on Friday. Their (collective) thought seems to be that the friday number lags what is really happening in the economy. Hmm, maybe.

Some of the more conservative commentators spent most of their columns or radio shows bashing President Obama's policies and railing on the employment data, and then say "but the market is going up!" I'm not sure how they reconcile their political opinions from their market opinions.

Of course, I think the economy is bigger than the President. Plus, I don't see too much difference between the parties as far as spending goes. The debt ceiling will be raised in a last-minute action of heroics. We just have to wait out the "suspense."

Overall, I think the market is heading up. But that we still have some work to do for the Summer's trading range. It wouldn't be surprising to see more approaches to the top of the range, or heading back down near the bottom of the range. The correction in the SP500 was what, 7% or so? No big deal.

So the 50dma is now beneath the current price, so that's one thing to watch. Heck, that was turning down until the recent v-move up. Not anymore!

I remain with cash, some low-beta stuff, and oil. Waiting to put the cash to work...

TGIF Randomosity

• So after the $SPY trade, now what? Have a bunch of cash on the sidelines, so now it gets difficult...


• The stock market crapped out on a very bad jobs number. The market actually rebounded a bit at the end, but who knows if that's excitement and anticipation for earnings season or just folks shutting down ahead of the weekend.


• QE3 by the Fall? Well, with the jobs numbers today, you'd think interest rate hikes may be on hold. But additional grease for the skids?


• Norm Fosback is bullish! And predicting double-digit gains.


• Sports and Politics: Stuck in Gridlock. Kind of funny in that perspective, no? Here we have the NFL and the NBA having labor disputes, while the Republicans and Democrats are having debt and taxes disputes.


• Stargate SG-1 marathon on SyFy. I already did that via Netflix last year!


• So, uh, new iPhone 5 this Fall, eh? Who needs QE3 from the Fed! Apple may create some demand for that new iPhone! I'm sure there are tons of rumors on what the iPhone 5 will look like, and what the tech upgrades will be. We will have to wait and see. At this point, Apple isn't wowing us with their stuff, as Android phones seem to have much more capability. We'll see how Apple counters...

In the Fullness of Time

The money ball question is what the heck is this move of the past couple of weeks? Rally or dead-cat bounce?

You know from my previous entries that I think this summer is seeing the same kind of correction that we saw last summer. Only difference for me is that this time, I tried to play the bounce in the middle. I think I caught it. Didn't get in at the lows, and didn't sell at the highs, but I think I caught enough of the trading range to put a big watermelon smile on.

Unless the correction is over and I wake up to another gap up tomorrow... and the next day... and the next day... etc. Nobody gets this stuff right all the time. And the important thing is to recognize when one has really messed up, then readjust and move forward.

The big issue that we face is high unemployment and excess capacity. I do think the economy continues to grow, but just at a slower pace than we'd like. I also believe that the market benefits from gridlock in Washington DC, as we don't really have to worry about higher taxes, cap and trade taxes, or that sort of thing. The market likes the government to just step aside and let consumers drive supply and demand.

My ultimate hope is that the market continues to just grind higher.

Closing the Long $SPY Trade

Sold all of the $SPY trade. Closed.

Just wanted to share.

The thought is that we are near the top of what I think is the summer trading range. I expect the market to meander back down in the weeks ahead.

But, I could be wrong...

Portugal, Eh?

The market was able to keep its head above water today. Barely. Now the worry turns to Portugal. I suspect we already knew that this was coming, right?

Anyway, the big domestic story of the week comes on Friday with jobs, jobs, jobs.

Then next week, earnings season.

I'm still long low beta stuff, oil, the $SPY trade, and some cash. I don't think the rally is over, but at the same time I suspect the market will revisit the vicinity of the lows too.

$XOM Must Come up with Pipeline Safety Plan

The government orders $XOM to come up with a pipeline safety plan, following the leak into the Yellowstone River.

For some reason, on this 105 degree day in Sacramento, that reminded me of my childhood, where my dad tried to fix the leaks in our backyard 3' doughboy pool. How did he do it? Duct tape.

For the longest time, I thought it was Duck tape.

How successful was the duct tape? Well, I certainly hope Exxon has better luck with whatever means they come up with.
***
Disclosure: Long $XOM, No position in Duck tape

And then, the SP500 Win Streak Ended

After 5-days of stock market optimism, “ongoing concerns” lead to a flat market.  That’s right.  It’s Greece again.  And China.  And US debt problems.

Man, we were just clickin’ along last week just fine, huh?  I was starting to think the market was going to go up 1% everyday! 

Instead, gold was up $30 an ounce.  Oil prices closed at highest prices in 3 weeks.  Then, there is the US debt ceiling side-show.  Yes, of course they’re going to raise the debt ceiling.  We just have to get all this political posturing out of the way.

Anyway, flat market today…

July 4th Randomosity

• Ah, the 4th of July! But after the fireworks, watch for the stock market fireworks this week as we get some big economic data. I think the stock market win streak could be in jeopardy, but I'm still long low-beta stuff and the $SPY trade. For now.


• 10% of China's GDP is bad debt. And that makes them worse than anyone else?


• Are we in a secular bear market or two bull/bear cycles? This is some chart analysis opinion of where we are. Always worth a read to see what folks are thinking. As for me, I look at it but do my own thing. As you know.


• Las Vegas home sales at 5-year high. That's pretty good news, right? I was just down there and at least the crowds were up. Good to see some confirmation in the local economy.


• Mark Lynas says you shouldn't believe the lies of the Green Zealots: 'Through research, I found that much of what I believed about environmental issues had little, if any, basis in science'
  


• Do you think Google+ kills Twitter? Or at least leaves the MLM stuff on Twitter while everyone else migrates to Google+?

And that's a wrap on 4th of July, 2011. I was pretty lazy today, watching a ton of marathon TV events. (I'm looking at you, Twilight Zone and Firefly). Didn't barbecue or watch fireworks. That's a bit strange for me, as I normally love a good summer barbecue.

Time to Sell the Rally?

Those who are playing the countertrend rally, are probably wondering if it's time to sell and take profits.

The link is to a strategy on how to play either continuing strength or weakness. I think it's worth a lazy Saturday read. Remember to send a note to thank the writer for providing a point of view!

As for me, I fully anticipate that the summer correction still has more to go. Yes, we've had a double bottom and have hit the 200dma. But much of what is happening is from a big weekly losing streak, ahead of a bullish quarter-end pattern.

I'm still in my $SPY trade for now.
***

Hot day in Sacramento! Been working outside and watching movies inside!

#100: Market Rally, Zynga IPO, Greece, Budgets

Biggest Weekly Jump Since 2008

Closing the week on another great day.  Tempting to close the $SPY trade, but staying long at the moment.

Getting the credit today?  The ISM number.

So, the economy is growing.  We know Greece is, and will continue to be, a problem.  Employment data next week will be interesting.  And July will be interesting.

Zynga coming out with $1B IPO…