Friday, December 5, 2008

Stocks Surge Despite Abysmal Jobs Data

16:30 ET
Stocks Surge Despite Abysmal Jobs Data
Dow +259.18 at 8635.42, Nasdaq +63.75 at 1509.31, S&P +30.85 at 876.07
[BRIEFING.COM] Despite some of the worst jobs data in decades, stocks managed to finish the session with impressive gains after reversing early losses.

From its session low to its session high, the stock market moved from a loss of 3.2% to a gain of 4.1%. It closed with a gain of 3.7%. Stocks finished every session this week with a gain or loss of at least 2.5%. It has been six months since the stock market finished a week without closing at least 1.0% higher or lower in any of the week's sessions.

Stocks fell into an early funk as participants chewed on a 533,000 drop in November nonfarm payrolls, which is far worse than the 335,000 drop that was expected. November manufacturing payrolls declined 85,000, which was actually less than the 100,000 decline that was widely expected. The unemployment rate, now at 6.7%, is the highest in roughly 15 years. The elevated unemployment rate comes as companies lay off workers as part of an attempt to shave expenses amid stiffening economic headwinds.

Recognition of such stiff economic challenges prompted selling in commodities. The CRB Commodity Index dropped roughly 4.3%, while oil dropped around 6.0% to close just above $41 per barrel. Oil's drop took it to its lowest closing level in four years.

Oil's slide weighed on the energy sector for much of the session. The sector traded with a loss of as much as 5.8%. However, broad-based buying pulled the sector into the green, helping it finish with a 1.3% gain.

The broad-based buying effort followed gains in the financial sector, which consistently outperformed the other sectors throughout the session. Financials closed 8.6% higher, led by multiline insurers (+17.5%), like Hartford Financial (HIG 14.59, +7.38). Hartford's share price more than doubled after the company issued upside guidance for fiscal 2008. Despite the massive gain, HIG is still down 85% from its 52-week high.

Elsewhere in the financial sector, the Justice Department said the Treasury is legally bound to inject capital into government-sponsored enterprises, according to Dow Jones. On a related note, Reuters reports the Federal Reserve bought $5 billion in debt from Fannie Mae (FNM 0.87, +0.00), Freddie Mac (FRE 0.86, -0.02), and FHBL.

Executives of the Big Three automakers have been making their own case for government funding. General Motors (GM 4.08, -0.03), Ford (F 2.72, +0.06), and Chrysler are asking Congress for billions to stave off bankruptcy. According to The Wall Street Journal, Chrysler has already hired legal firm Jones Day to provide a comprehensive analysis of the options available to the automaker.

Congressional officials continue to discuss the necessary checks and balances of providing the automakers with taxpayers' funds, making the likelihood of a speedy, clear plan uncertain.

Despite ongoing uncertainty surrounding automakers and the broader economy, stock investors successfully put together a solid rebound Friday, helping soften the week's downturn. The stock market finished the week with a 2.3% decline. That prompted bond investors to take some profits, sending the 10-year Treasury Note down around 48 ticks and pushing its yield to 2.71%. In the prior session the Note's yield fell to around 2.54%, which is its lowest level in decades.

..Nasdaq 100 +4.4%. ..S&P Midcap 400 +4.8%. ..Russell 2000 +4.9%.

Thursday, December 4, 2008

Thursday Day Trading: ES Trade $1,050.00 per 2 contracts

Click on chart for comments on the ES Market trade.

Today was an interesting day of basically sitting on your hands and waiting for the market to do anything at all. There was a lot of talking go on between the 3 Big Automakers, and Fed Chairman Bernanke speaking.

My basic plan of attack was not to look at the market for a trading opportunity until the earliest Bernanke would be speaking. I have noticed that in a lot of cases this is a wise decision in the present market conditions that we are in.

In addition, the big 3 autos were on the main stage today telling us all of their problems and why they need money to support their lifestyles and big golden parachute bonus packages ... :-)

Seriously, I am still waiting on my bailout package. Here is what I think we should do for all AMERICAN CITIZENS. We should have a get out of FREE jail card like in the monopoly game, and we should be able to be forgiven all our debts except for our house mortgage.

You want to jump start the economy, then give the buyers the ability to do it again, and when we get in this predictament again. Then the government simply forgives all our debt again. This way we can run just like the government.

In addition, we should all have access to our own personal money tree, and printing press that we can request funds from the FED anytime we want to make a purchase, and then leave them with the bill, and let good old Uncle Sam take care of this for us.

I figure since they are giving away money in the tune of billions, then we as Americans should be entitled to our very own guarateed debt free bailout. So who's with me?


Good Trades,

David AKA Tiger

Thursday Day Trading: ZB Long Trade

Click on chart for comments on the ZB Market trade.

David AKA Tiger

We will miss you President Bush!

Wednesday, December 3, 2008

Wednesday Day Trading: ES $1,250.00 on 2 Contracts today

Click on chart for comments on the ES Market trade.

Here is a perfect example of momentum carrying a trade to profit targets. On my profit protective stop placement was as follows. First target was at 848, this was a tough one to take out as yesterday there was some resistance at this level.

I also wanted to see if we could push through the high of yesterday, and then determine how it would react at this point in time. It really never looked back so on the second contract I first moved to 848, then to 852, which is 10 points from my entry at 842.

Volume was above average volume and touching the moving average. This is a riskier trade to take in my humble opinion, but one that I will on occasion take a shot at because of momentum of the trade itself.

In any case, I was rewarded by my 2nd profit target of 861, which was below the Upper ADR by a couple of points on the morning trade.

I did not participate in the afternoon trading on the ES, as I really did not see any valid opportunities to enter into a trade with my trading method. All in all, a very nice trending day today.

ZB Trades netted $750.00 (I was 2 for 3 in the ZB today)
ES Trade netted $1,250.00

Trade Total $2,000.00 for every 2 contracts today. Another one of those $10,000 days trading 10 contracts per entry today to put it into perspective on a medium sized account.

Good Trades,

David AKA Tiger

Wednesday Day Trading: ZB $1,000 on 2 Entries

Click on chart for comments on the ZB Market trade.

This was one of those days where we go down and then back up in the bonds. I was reaching for the ADR (Average Daily Range) on both of the trades, but on a pullback was taken out at my original target of 16 tics each time today.

The afternoon was a little more trickier of a trade, but we went into consolidation for a few bars, and so I got out at my price. This was one of those ones that it could have went down to my entry so I decided to get while the getting is good.

I personally like to see momentum drive a trade quickly to a target as shown in the next chart and trade in the ES today.

Good Trades,

David AKA Tiger

Tuesday, December 2, 2008

December 2008 Book Recommendation

This was a very good book to read. One of my other passions outside trading is reading. I have always enjoyed history and self development books. This book has them both in the same book.

Good Trades,

David AKA Tiger

Tuesday Day Trading: ES Contract $1,362.50 Today

Click on chart for comments on the ES Market trade.

Good Trades,

David AKA Tiger

Monday, December 1, 2008

Video of the Week: Fly Away by Lenny Kravitz

Monday Day Trading: ZB Long Trade $937.50 per 2 Contracts

Click on chart for comments on the ZB Market trade.

Today the wise choice was to stay out of the market and wait for the talking heads to stop talking. By this I mean, that is waiting for Bernanke to release his report and the market to react to it.

Looks like today the charts showed that the market wanted to go up. This is a perfect example of using a report (red) and watching for volume to be GREEN, then getting into the trade and seeing where it will take you.

My exit was a little above the high of that bar, and when the market decided to retrace it took me out. I didn't not want to give up gains so I did not follow the greenline on this trade today, but my first protective stop point was at my 1/2 exit profit area.

Then I moved it up accordingly to capture some more profit.

Good Trades,

David AKA Tiger