Spiker’s were slightly negative this week, although we had several nice Spike trades to perform very well. Peter wins GOLD, Dave M gets the Silver and John takes the Bronze! We had several Spike Members earning $20 dollar credits this week.Nihat posted a 24+% gain, Wessel a 9+% winners, Pat L, Tristan M, John M, Stephen A, and Stephen M. Congrats to this week’s winners and we look forward to receiving another exciting list of Spike Picks!This market has seen a wild swing from Yikes another crash to all has been saved and rallied 150 points this month alone. March Madness is upon us.Last two days have seen the markets pulling back and this not a bad thing, we simply need to see this market show an ability to form a higher low and some leadership step up to the plate.Next week should be interesting to see if this market can hold and find some support.
We saw some profit taking in the names that have led the recent bounce and gains in markets for the inflation trade so all the commodity sectors closed on the upside. Financials were the weakest group.
The Dow Jones Industrial Average rose 92 points, its sixth gain in seven sessions. The big news for the day came out of the Fed meeting. The Fed announced that they would be buying up to $300 billion of Treasury’s over the next six months. They would buy up to an additional $750 billion of agency mortgage backed securities and an additional $100 billion of their debt. As expected the FMOC announced that they were leaving the fed funds targets unchanged. Additional rumors circulated during the day that the Obama administration is considering expanding the TALF through a joint effort by the Fed and Treasury to take the bad assets off the banks books.
In respect for the Irish and St. Patrick’s day, the markets finished in the "green" for the day. The market shook off yesterday’s reversal and rallied strong outing in a 90% up volume day. That is 90% of the volume was in stocks that were advancing. In intermediate term rallies you want to see volume in advancing stocks. Yesterday’s volume was 40% in advancing stocks, not too bad considering the reversal day we had and closing at its lows. The MA of this indicator is now approaching 55%, this has led to the rallies staling in the past. (Chart below)
Stocks fell on Monday after American Express Co said the number of people struggling to make credit card payments grew, erasing earlier optimism that banks could return to profit in the downturn.The SP500 rallied low to high, 100+ points, since the March 6th low of 666.79. The index hit a high of 774.53 right near the 780 resistance levels before backing off and closing near the lows of the day. The NH_NL continues to stall below the 0 level and the market became short term overbought. It is no big surprise we were ready for some profit taking. The market needs to back and fill while it works off the short term overbought condition. In the intermediate term we have more room to rally but the most positive thing this market could do is rest and digests these recent gains without giving the last weeks move up. A pullback into the 720-730 levels need to hold and form a higher low.
Dear Spiker’s and Spike Members,Alex and Pat are getting ready to fly back to NYC this weekend. I have been re-cooperating from a recent double computer crash. Yes, two computers went on the blink in one week. During my re-install, I decided to clean house (hard drives) and re-organize. I am close to fully restored and back to some normalcy.The markets saw a long awaited bounce in this bear market. The market was again hugely oversold and saw levels not seen since the November lows. The financial sector saw gains of 30+%, a typical bear market move. The beaten down sectors rally the most. We will eventually need to see leadership for this rally to be more than just a bounce. Leadership will eventually been seen in NH_NL crossing the 0 and +100 levels and maintaining that level. We will also see a sector or two leading the way. It does not have to be the financials to lead us out of this mess, but they will have to stabilize and stop being decimated. Last week I listed several points we see in boom and bust cycles got thru. A couple of the items were…
I am gradually working my way back to full strength. I have had two computers to go down within one week. The last one fully corrupting my Trade Station files. Rather than doing a quick restore, I zapped my hard drive and reformatted. Ran every hardware check on the system I knew and then some. I now have what feels like a new computer right out of the box. You don’t realize how much stuff you have until you take everything off and begin to restore from scratch.This past week saw a long awaited upside bounce in this bear market. As a matter of fact, the last time I had a system shutdown, the markets had a huge move. It appears each time I have a massive computer crash the market rallies in a big way.The group ended the week positive for the 4th consecutive week. The Spiker’s are up over 6% for the year.Susie wins Gold, Dave F takes the Silver and Nick grabs the Bronze. Once again Spiker’s demonstrated great money management as no one trade loss more than 3%. The group has been profitable 8 weeks out of 11 so far this quarter. We had a mix of long and short trades, and as Alex has mentioned before this is a market of stocks. Many times there are opportunities long and short. In a week that saw the SP-500 move 10%, the Gold and Silver medalist won with short position trades. There was some phenomenal performance in the Spike Members trades. Several had gains of 15% plus. Members David L , Hsin Y, Pat L, Sergey S, Stephen A, Tristan M all earned $20 dollar credits.Congrats to this weeks winners!!
Most of the morning, the Index Put Call ratio, has remained above 1 until the last hour. We can see the rally is beginning to consolidate and rest. We’ll see if this rally can hold its daily gains, something that has not been doable in the last 2 months. Due to the unusual volume in financial stocks, this may be leading to an irregular reading on call buying. Many traders are scooping up calls as a lottery ticket on the financials, especially with a meeting in the Government to address mark to market. This alone is causing us to see reading below 1 more often than normal, especially with a market selloff like we have seen in the past several weeks.
The Index Put Call ratio capped another up move. After this mornings move up, the ratio dove below 1 fairly quickly and remained below 1 trading near .80 all day. Unless we see a last 30 minute rally the market trended down the remainder of the day since that ratio dropped.
Interesting… this morning the Index Put Call is sitting at 1.23; this rally is not fully trusted and appears traders are out to buy puts. We’ll see what occurs from here. If we continue to move upward and can form some higher lows intraday, we need to see this ratio stay above 1 for a while. A drop down below 1 and this up move will likely fail.