Hello all and apologies for the long hiatus. As mentioned a couple of posts below, I've been on vacation in Germany for the past 10 days or so, and won't be back home until this coming weekend. On top of that, several days worth of drinking German beer resulted in me forgetting my blog password....but now that I'm back to Scotch, my memory has suddenly recovered.
That said, I want to provide just a couple of quick updates.
1. Stopped out yesterday on the small short position entered a few weeks ago when the SPX was trading at the top of the symmetrical triangle. If you joined me, I hope you kept your position small, as I warned that if the bulls got some momentum going, it could get ugly for the shorts. I was positioned in November deep in the money puts, so still had decent residual value left when I stopped out. I didn't trade at all last week and have been pretty out of touch, so I need to get myself caught up on things and figure out my next move. Will let you know soon.
2. POMO is definitely the name of the game. My last post before getting on the plane said that this could be a game changer, and so far, it definitely has. Yesterday saw the Fed purchase another $5 Billion in Treasuries and we have POMOs on Weds and Fri of this week still to come. I'll be posting more on this topic later in the week or early next week as time permits, but unless we get some really bad news from other areas, these POMOs should continue to propel the market higher....look for next resistance between 1150 and 1155 on the SPX.
3. Today is FOMC day - 2:15 EST. What the Fed says, and how it says it, could have significant impact on the markets this afternoon. There was a lot of speculation last week that a massive QE2 would be announced this week...first an announcement by Morgan Stanley (MS) that QE2 was imminent, followed by a series of reactions in the markets....most notably the Bank of Japan's intervention on the USD/JPY pair, and of course Gold's new all-time high, then a follow-up announcement from MS that they were mistaken in their original prognostication...no QE2 to be announced this week. So what's the verdict?? We'll find out this afternoon, but my guess is that there will not be a QE2 announcement....not while the S&P is trading at current levels.
4. And last but not least....let's all belly up to the bar and have a celebratory toast to yesterday's news that the recession officially ended in June/July 2009. I mean, aside from the fact that this news sound-byte was responsible for the rally of irrational exuberance we saw yesterday that triggered my stops, isn't it great to hear that all is now well in America? Sorry, but what a crock of shit. I don't know how things are looking where you all live, but I can assure you that things are not at all rosy in my neck of the woods....especially for small businesses, and I know a lot of their owners. In fact, my Mercedes mechanic for the past 7 years will be closing his shop at the end of this month because business has fallen off a cliff. Fortunately he is in the position where he can take early retirement, but had the economy remained intact, he would've preferred working another 5 years. And let's not forget the ongoing record foreclosures and near record unemployment levels....but the Government says everything is better now.......so move along everyone....nothing to see here.....
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