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Its getting hammered.
Broke the 200ma if we close below 126.56 are we looking at a bearish week?
Many are saying we are in a trading range between 125-130
I think it is more like 122-130.
SPY @126.51
Lets close at a low of the day.
Where are we going to close today? Are we going to bounce or inch our way back down to support?
Futures are down...Maybe we see a sell off tomorrow
Very good questions. This whole thing is interesting and I will be looking into it more this weekend as well. Have a great weekend
Found this to be a very interesting article in the Wallstreet.
EU's Greece Deal Has Dose of Irony
By FRANCESCO GUERRERA
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Fatta la legge, trovato l'inganno. "Make the law and a way will be found around it." The Italian proverb is a sadly apt footnote to the latest round of European shenanigans.
WSJ's Francesco Guerrera discusses the European bailout plan reached this week and harkens back to an Italian proverb: Fatta la legge, trovato l'inganno. "Make the law and a way will be found around it." Photo: REUTERS/Yves Herman
As the stock market and the euro celebrated a deal on Greek debt that maybe, just maybe, could put an end to two years of bumbling procrastination, a bitter irony emerged from the 15-page statement penned by bleary-eyed bureaucrats Thursday.
After spending the aftermath of the financial crisis hogging the moral high ground and criticizing "Anglo-Saxon capitalism" for its penchant for financial engineering and excessive leverage, European Union leaders employed some of the same devices for Greece.
The plan was passed, but not without getting around some of the principles outlined after the 2008 debacle.
Take the idea—central to a solution of Greece's woes—that the country will undergo a "controlled default" in which banks and other debt holders would "voluntarily" agree to shoulder a 50% reduction in the value of their securities.
That is financial engineering at its most Machiavellian. The deal is designed to avoid triggering the payment of credit-default swaps on Greek debt, the much-maligned securities meant to insure against precisely this kind of scenario.
The structure is not much different from the accounting contortions used by banks during the 2008 crisis to avoid bearing the brunt of mortgage-related losses.
The reasons for such a move are unclear. Some EU officials talked about the need to avoid a domino effect similar to the chaos that ensued when Lehman Brothers Holdings Inc. went bankrupt in 2008. But the real motive is that these leaders didn't want to preside over the first EU default.
Still, by undermining the value of Greek CDSs, European leaders have created a precedent that will weigh heavily on the market in future crises. While CDSs attract speculators, a lot of banks and fund managers buy them as protection against catastrophe.
Paradoxically, the second key element of the Greek plan is a CDS-like instrument for Italian and Spanish debt.
Because the European Financial Stability Facility—the rescue fund for the euro zone—didn't have enough money to reassure the markets it could do its job, the EU leaders tried to leverage the funds through financial wizardry.
The EFSF will now be able to use €440 billion ($612 billion) to guarantee about €1 trillion of bonds.
How so? By promising investors they will be covered only for about 20% of their losses in the event of a default.
The problem, as Lehman, Citigroup, AIG and the other overleveraged firms found in 2008, is that when the going gets tough, investors may not be satisfied with a partial solution backed by only a fraction of the money needed.
The latest plan might still work if it boosts confidence in the euro zone. Thursday's market rally is a good first sign.
But the seriousness of the situation deserved more than creative accounting and confidence tricks. As a speaker told an American audience last year: "By ensuring that capitalism and the market economy do not become caricatures of themselves, we will save the market economy and capitalism."
The speaker? Nicolas Sarkozy.
This is nuts...I agree with you recent post. The reason many corporate companies are having good earnings are because they are letting go of all their employees and hiring young college grads for half the price and making them work twice the hours.
I have a question though.
What happens when unemployment rises and more people default on their homes? When I think of people getting laid off, I think of older people who have families, car payments, mortgage payments. Not young Adults who rent an apartment and have no debt. These young adults do not drive our economy, the middle aged adults do. How will the markets reflect this?
This is all just an observation, I could be over thinking it?
Where do you guys see the new channel?
120-130?
ANY SIGNS OF THIS TRAIN STOPPING?
Next week should be interesting. Cannot wait to see what happens and how the new resistance holds
I believe now that we have peaked. Are we fundamentally better now then we were back in June when we hit a low of 125?
125-126 is our new resistance. Our old support of 125 will play as our new resistance. At this point it is best to let the chart establish itself in its new pattern. But a downturn can be expected in the next few trading days.
There is really no movement this morning.
agree with you 100%. My short position in my Oct11 Put Spread is 130. I think I am safe to say the least. I Will not be opening any new nov11 spreads until the new support and resistance is established. However, I do believe we head down before we go up. This is all my speculation of course. GLTA
WE are trading sideways right now. Something will give eventually. It has too. However, I think once Europe figures out difficult it will be to execute their plan, is when we can expect the market to over react and dump their share of SPY. I think we are getting a little top heavy and we are going to need great news to bring us out of the channel that we are currently in. I am in puts, I will hold as I am never optimistic about the markets.
Nice. Wish I could day trade these options as well. however, the Prop firm wont allow me to trade anything other than what they have taught me. Something has got to give. The 120's or the 123's. I am getting impatient...lol
Thanks! The I plan to start trading or real capital starting the first of the year. Spreads are fairly easy and not so risky imo. However, I wanna learn all i can so i can prepare myself for these volatile markets.
lol, i trade spreads and my short is in terrible threat. I am in puts though so the market needs to take a nose dive. I still need more technical trading strategies. Any resources to look at that you recommend? I would greatly appreciate it.
We have a very strong resistance point. We will see if it breaks it. Been stuck here for a little while. I do not think there is enough volume pouring in. Wish I had an L2 to watch the MM and trades go through
U.S. Stocks Edge Higher
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By JONATHAN CHENG
U.S. blue-chip stocks edged higher as investors weighed a surprise earnings shortfall from Apple, mixed U.S. economic data and developments on the European debt crisis.
The Dow Jones Industrial Average added 33 points, or 0.3%, to 11610. The Standard & Poor's 500-stock index gained two points, or 0.2%, to 1227. But the Nasdaq Composite shed 13 points, or 0.5%, to 2645.
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Weighing on the markets were technology stocks, after Apple's fiscal fourth-quarter earnings and revenue fell short of expectations. Sales of iPhones also disappointed. Apple's outlook for the fiscal first quarter, however, was above Wall Street forecasts. The stock slumped 5% after finishing at an all-time high Tuesday.
Other tech names were weak too. Hewlett-Packard fell 2.1% and Cisco Systems slipped 1.4%.
Pulling on the upside were the four so-called defensive sectors that are less sensitive to the broader economy—health care, telecommunications, utilities and consumer staples. Financials were also strong, after Morgan Stanley and Travelers reported quarterly earnings.
On Tuesday, the Dow erased earlier losses to close up 180 points, reaching a six-week high in intraday trading. The Dow is now at the top of a "trading range" that has seen the blue-chip index bounce between about 10700 and 11700.
In economic news, consumer prices rose 0.3% in September, while underlying inflation, which excludes energy and food costs, rose by a tame 0.1%. The numbers were largely in line with expectations.
Separately, U.S. home building jumped 15% in September to its highest level in 17 months as apartment and condominium construction surged. But building permits, a gauge of future construction, fell 5.0% from a month earlier to the lowest level in five months.
"Core inflation is the main story, and it was soothing in that it doesn't raise any alarms—even the inflation superhawks don't have to worry," said Anthony Chan, chief economist for J.P. Morgan Private Wealth Management. He argued, however, that while the housing numbers looked positive at the headline level, the sector remained weak. "When you see building permits, which is really the pipeline measure for what happens to housing, it was pretty disappointing," he said.
Investors also continued to watch developments in Europe closely. In overseas markets, Europe was broadly higher. The Stoxx Europe 600 advanced 0.6% as continued optimism that an agreement will be reached to expand the euro zone's bailout fund overshadowed a two-notch downgrade of Spain's credit rating by Moody's Investors Service.
Asian markets also finished mostly higher. Hong Kong's Hang Seng Index rose 1.3% and Japan's Nikkei Stock Average added 0.4%.
"We're trying not to react to the daily rumor mill on Europe, but this big surge in the past two weeks has been wild," said Mark Masterson, partner and managing director for HighTower in Naples, Fla. Mr. Masterton said that expectations had now run up so quickly that the market could set itself up for disappointment.
"There could be a credibility problem here, particularly if Germany doesn't step up," he said. "The market is now going to be expecting a €2 trillion plan, because that's what's been bantered. Anything less may be greeted with a thud."
Gold futures edged higher to about $1,660 an ounce. Crude-oil futures were flat at just below $89 a barrel. The U.S. dollar lost ground against the euro and was flat against the yen. Demand for Treasurys fell, nudging the yield on the benchmark 10-year note higher to 2.1869%.
WSJ Money & Investing editor Francesco Guerrera sits down with Mean Street host Evan Newmark to discuss U.S. money market funds, usually a safe haven, posing a threat to investors. AP Photo.
The dollar is losing its safe-haven mantle as investors such as China worry about a lack of fiscal tightening and the risk of more monetary easing.
In other corporate headlines, Intel rallied 4.3% after the blue-chip semiconductor maker reported third-quarter results that exceeded estimates, and provided an upbeat fourth-quarter revenue outlook.
United Technologies edged up 0.3% after third-quarter results topped estimates, while Travelers gained 5.2% after beating revenue expectations.
Elsewhere, Yahoo climbed 5.3% after the Internet company's third-quarter earnings exceeded forecasts.
Morgan Stanley added 3.8% after swinging to a third-quarter profit.
Abbott Laboratories rallied 4% after the medical products company announced plans to separate into two publicly traded companies and reported better-than-expected third-quarter earnings.
Checkpoint Systems tumbled 26%. The retail systems-management company indicated its fiscal third-quarter and full-year results will fall short of expectations, and announced a restructuring plan that will affect more than 1,000 employees.
OCTOBER 18, 2011, 4:31 PM ET
Apple Misses on Earnings, Revenue, iPhone Sales, Stock Tanks
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By Mark Gongloff
Bloomberg
Apple reported third-quarter earnings of $7.05 a share, on revenue of $28.3 billion.
Analysts, on average, expected Apple to earn $7.22 a share on revenue of $29.5 billion.
Apple has not missed earnings forecasts since the second quarter of 2002, according to FactSet data.
The stock is down 8% after hours, after gaining 0.5% during regular trading.
iPhone sales came in at 17.07 million, compared with forecasts of 20 million — maybe the most disappointing number.
More to come…
OCTOBER 18, 2011, 3:12 PM ET
Stocks Through the Roof on Report of 2 Trillion Euro EFSF
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By Mark Gongloff
Here we go again. The Guardian is reporting that France and Germany have agreed to boost the EFSF to 2 trillion euros, and the stock market is off to the races.
Where are they going to get these 2 trillion euros? From the euro tree?
Here’s the top of the Guardian story:
France and Germany have reached agreement to boost the eurozone’s rescue fund to €2tn as part of a “comprehensive plan” to resolve the sovereign debt crisis that the eurozone summit should endorse this weekend, EU diplomats said.
And yet — there are thin details in the story about how this is going to be structured, financed, etc.
Here’s the key graf — the EFSF will have additional leverage and act as an insurance fund, which we all knew about, I thought:
First, the main bailout fund, the European financial stability facility, will be given additional levers enabling it to offer first-loss guarantees for bondholders, be they private or public. Senior diplomats say this will deliver a fivefold increase in the fund’s firepower – giving it more than €2tn compared with the current €440bn lending capability. The EFSF will effectively become an insurer, thereby overcoming European Central Bank resistance to the idea of turning into a bank.
Never mind, just buy stocks.
This past week has been very confusing. I still do not understand how we are breaking resistance when domestically we have not solved any issues and Europe still has no developed a concrete plan to fix their issues.
This is volatility and uncertainty at its best.
Look at my post history. You do not need to believe me. It doesn't matter to me. I am just telling you I met the guy and I liked him as a person and I am going to do more DD about the company and become more engaged in the board. That is all. I am not pumping or telling you the stock is going to a no bid. Just sharing with you the type of CEO his is and how he is not full of sh!t. But after I do more homework about the company I will see if I can get quicker responses from him that the board more need if we have disputes about issues.
I m going to play closer attention now and begin following the board.Once I do more DD I will be able to better engage in the message board. GLTA
Long story short, I was at a sports bar watching the Chargers vs Broncos game and he happened to sit right next to me. I started to talking to him about what he does for a living and then he told me he was the CEO of a company that trades on the pinks. This is when I began to engage more in the conversation due to the fact that I used to trade the pinks. I am a prop trader now and have focused my attention in the options market. However, I used to play the pinks and have been out of it for a few months now, but I a want to get back into it. He told me he reads all the IR emails. I spent about 4 hours with him and got a chance to really know him as a person. He obviously would not give me any details about the company other than what is public information, but from the way he carried himself, I believe he wants to drive his company forward and does care about his shareholders who have faith in his company. He said quote, "I will not dump my shares in the market to crush the stock due to the fact that I have many shareholders who are long in this company and I wanna increase the share price for those people who have stuck with me through the manipulation." this is paraphrased a bit but pretty much what he said. But if you guys have any quesitons, He and I hit it off pretty good so he told me that If i ever had a question to put my name in the subject of an email and he would get right back to me.
Had a chance to meet face to face with the CEO over the past weekend. He seems like a straight forward guy and does wanna drive his company forward and not screw his shareholders like most pink sheet CEO's. I am going to follow the board now and the company much closer due to having a great conversation with him. MRNJ could see some good runs in the next few months. Who is long here?
One day we will see PDPR where it needs to be. One day...
lets go PDPR!!!!!!
A lot of activity on the board the past few days
It is reasonable to say that with good news and volume we could push past .04. We move 50-100% on almost no volume. WE get a 10 million share volume day and we will move high and fast.
WEEKLY CHART LOOKS LIKE WE R IN AN UPTREND AND READY FOR A BREAKOUT OF SOME SORT
It would be cool to be at a penny and the company surprising us with something great. PDPR would fly a few 100% imo