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Wednesday, May 10, 2017


“Hey, look at me this morning!”

Wake up this morning and everything is gone … no Windows, no files, no trading platform, just the “Blue Screen of Death” [hard drive failure]. So, forgive me the indulgence of getting “stuff” back onto another laptop I went out and bought early in the A.M.; regular scheduled programming will continue tomorrow.

What we saw yesterday afternoon was exactly the kind of break after 2 P.M. I described earlier in my blog posts; and that leads me right into today, where the worst possible case for a rally day starts with a higher open, off the overnight low, and then an early rally that goes up 40-50 points. That’s the rally we want to see after another new low, not out of the gate, and what it does is ruin the buying power later in the day for the market to rally higher. You simply can’t buy these kinds of rallies cuz they will disappoint mightily.

I got everything up and running about 30 minutes into the New York day, so I didn’t miss anything, but the action today is very disappointing from my “trader’s viewpoint”; everything about today is set up wrong from timing to execution. It’s the inverse of the way it should have been. Now, here at 1:30 P.M., the buying has evaporated and the market is in drift mode, with price about half way between the high and the open … big whoop, and if it starts inching lower, a lot of traders are going to hit the sell button cuz they know that early rally blew it for higher prices.

And while I’m not asking for perfect setups each day in order to trade, it would be nice to get some trade flow going where things happened during the New York business day instead of the “wee hours” where liquidity and volumes are thin to non-existent [which is why often times they happen then because that is the desired effect]; and if you go back and look, we haven’t had a decent small to medium break from the New York open that has seen the Dow30 go down more than about 30 points MAX any time before 2 P.M. in over a month except one time. That’s how bad it’s been, and other than that you can buy the rally which more often than not see the market drift or go slightly lower. 

Today again, we see the Dow30 much weaker than the SP500 or the NDX100; and when those weaken just a tad, the Dow30 slumps 10 points. Again today, it’s now after 2 P.M., the market is starting to lose momentum and go lower; it’s still slightly above the opening aqua line, but not by much. Get it below that line, and we could start to see the beginnings of what happened yesterday afternoon. Again, in both bull & bear markets, breaks in the market in the last 2 hours of the trading day have to be treated with extreme caution; there simply isn’t the time nor the technical strength to power higher in most cases, and most professional traders instinctively know this.

And sure enough, look what happens when the market breaks the New York open after 2 P.M., and after the early small rally attempts; I give you “carnage”! Meanwhile, the SP500 & NDX100 hardly move [the Dow30 move is 100% a Boeing engine issue where they are suspending 737 flights due to engine problems]. So goes the beast from day to day. Just remember, everything about the stock indices is about timing and setup; if market action doesn’t play out with the shorts panicking first, then there will be a rally later. If they do panic first, and the market is either in a bear market or a badly needed correction mode, there won’t be any buying late in the day and selling will continue.

What’s amazing to me, here with an hour to the close, is we’ve had in the last 24 hours 2 stories with negative implications and the market is basically right where it was when it started; right around the 20920 – 20930 area; President Trump fires Comey from the FBI and Boeing has issues with engines. Seriously, what’s it gonna take to move this stuff?

From a PAMM perspective, there weren’t any breaks to buy today, and even if you “took a shot” and got long, there weren’t any signals to buy from either the marco or micro side of the equation cuz pretty much everything set up the wrong way. After the biggest drop in price in weeks, the last thing you want to see right after the open is a rally, cuz when it’s over there isn’t gonna be any more buying for a while; that train left the station already. What’s left in the wake is utter confusion, and that’s what you see in the market this afternoon.

I need to download Microsoft Excel into my spanking new laptop this evening, and since I didn’t do any trades today, the PAMM spreadsheet is the same as yesterday. Everything should return to normal tomorrow, and I’ll get back to making some general comments about the markets and trading in the blog posts. Today was just a little hectic.

Dog doesn’t care, he wants to “hit” the beach … we’re outta here … until tomorrow mi amigos.

Have a great day everybody!


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