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Wacky Trading today

SPX opened lower on worries over the Europe (like we haven’t heard about it previously), then technicals got in, mainly Oracle’s bad results and pushed the market (SPX) all the way down to 1230. That looked scary! At least for me since two days ago I reversed my bearish outlook into bullish and I started seeing nice profit in my SPY long calls. And today morning this gains were vanishing again!

Isn’t that frustrating?!

Then news about Yahoo! and Bank of America deal pushed the market back up and SPX closed with moderate gain. Technically it is a good sign, keeping the market in positive territory for upcoming Santa Claus rally, which now looks more realistic to happen. From historical perspective it should start on Monday next week and last the whole week. In average such rally should bring a nice 1% profit.

I am expecting the market to push towards 200 day MA and maybe even above it. If that happens I should see nice profit on my SPY calls.

I am looking on undertaking couple more bullish trades, but currently my broker is holding my money (I deposited some cash and when trading non-marginable securities he holds the money for three business days), so I have to wait. Tomorrow I should be able to open new trades.

Hopefully the market will sustain its short term bullish momentum and I will be able to ride it up. As soon as we hit 200 day MA, I start using tight trailing stop loss, because overall market outlook is still bearish. I have seen some traders expecting SPY to go as low as 118 level in January. The reason would be worsening data from the US and possible break up of Euro zone, which is IMHO inevitable. So trading this market can be quite dangerous and hard… and very frustrating!

Let’s see what Mr. Market brings us tomorrow.

Happy Trading!

1 response to “Wacky Trading today”

  1. Dan says:

    Agree, today’s trading was really like in a roller coaster. Looks like Santa Claus rally is happening anyway.

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