Thursday, January 21, 2010

19/01: Markets rally off support levels, led by healthcare

Tuesday's market action was buoyant, on the one hand articulating the customary knee-jerk reaction that a touch of significant support typically catalyzes, and on the other hand pricing-in ever-increasing odds of a Republican victory in the ostensibly parochial Massachusetts race for a U.S. Senate seat (but, in reality, a highly significant, national litmus test on the durability of the agenda of the Democratic party's liberal wing). A national lurch rightward would, of course, change expectations about the expected degree of heathcare reform, and more of the status quo shall (obviously) benefit the incumbent firms.

The Republican, Scott Brown, won emphatically. (This is a little voice from the future.)

In summary, the S&P500 advanced 1.3 percent to close at 1150, a post-Lehman closing high, while the DJIA recorded a triple-digit gain of 1.1 percent and the technology-weighted NASDAQ notched a relative out-performance, appreciating 1.4 percent.

Among notable price action -- and forgive me, reader, for the lack of colour, one caused by the increased irrelevance of such details due to the elapsed time since long-gone 19/01 --, Google (GOOG) saw gains as the markets continued to digest last week's bombshell news of the firm's possibly pulling out of the Chinese market; the financial sector SPDR (XLF) regained momentum in anticipation of the mid-week earnings report from sector bellwether Goldman Sachs (GS); and Apple (AAPL) exploded to a fresh 52-week closing high on fresh (and feverish) speculation about the forthcoming iSlate. Humana (HUM), the leading S&P500 heathcare-sector stock in Tuesday's trade, leapt 7.1 percent.

Saturday, January 16, 2010

15/01: Markets sell-off to key support levels

If I were to offer you, dear reader, a quarter for every 'reset' in relations between myself and this blog (and a half dollar for each unapologetic mixing of cliches), then you might have the green for a free lunch! Yet, as the saying goes, there is no such thing. And, esteemed reader, you already are privy to uptake of the latest mind bullets within this trader's mind, so what's another quarter or half dollar?

With that positively garish introduction, I must now add a pinch of the customary humility: yes, I regret this latest of my absences from the blog; yes, I shall not leave my dear lambs any more; no, I do not intend to disappear again in a fortnight or two. I live to serve my readers. Right.


In brief, my non-trading life -- which would, naturally, be comprised in large part by my alter ego of rather excessive travelling -- enjoyed some highly notable moments during my absence from regular posting, i.e. the two-month period since about mid-November. I enjoyed hops to the exotic locales of Traverse City (MI) and Madison, obligatory multiple visits to West Coast mileage run destinations of San Francisco and Seattle, and most significantly, a roaring and powder-dumping skiing jaunt to the northern Lake Tahoe area. Below, looking beautiful, is a specimen of the oft-maligned CRJ species, on an idyllic late-November afternoon on the Chicago O'Hare tarmac:


Finally, markets! Yes, this blog's true raison d'etre. Friday's trade proved more tumultuous than any in this still-young year, with indices declining to significant support levels that, if broken in follow-up trade of early next week, would provide fertile grounds for an intensified sell-off (a.k.a. the correction forecast by every talking-head analyst and his grandmother). To add some objectivity to the just-spewed blabber, the S&P500 ended Friday's market action with a 1.1% decline (-12 points) to 1136, while the DJIA declined 0.9% and the NASDAQ erased 1.2%. The S&P500's intra-day registered a trading range between 1148 and 1131. Here's a 10-day chart of the broad-based benchmark, courtesy of

My own trade of Friday was not altogether laudable, as the sharpness of the morning pull-back took me by surprise. I entered the session long in X (that's US Steel) calls, which defied a bullish chart by savagely selling-off in the opening minutes, though recovering considerably later. Materials stocks, such as US Steel, alongside financials have been the market leaders since the Christmas holiday while the previous baton-carrier, technology, has been a relative underperformer. It shall be interesting to see whether Friday's unnerving pull-back shall henceforth disrupt this market dynamic of risk-trade leadership. I wrap-up with a quick artistic musing on the essence of '10dX':