Bears defended their turf fiercely for the most of the day. A few attacks by bulls fizzled out quickly. Volume was moderate compared to last a few days.
That was before 3 pm.
At 3 pm, news leaked out that Tim Geithner will be appointed Sec of Treasury. The Street liked the choice. It triggered a huge rally in the last hour of trading. Volume picked up significantly.
Ticker Price Gain/ Loss %
SPX 800 47.59 6.33
INDU 8046 494.00 6.54
COMP 1384 68.00 5.17
VIX 72.67 (8.19) (10.13)
UUP 26.95 (0.13) (0.48)
TXN 31.67 0.23 0.73
TEDSP:IND 2.15 0.02 0.70
The leak appeared purposely made by the Obama transition team to prevent another day of last hour plunge. It worked.
Possible explanation for the last hour surge: technical rebound from a very oversold condition + short squeeze/covering before weekend. Geithner leak was certainly the catalyst.
Friday closed above key psychological levels for DOW and SP.
Some pro traders on the Street were disappointed Friday because wash out selling off did not happened. Translation: they did not believe that the historical lows made Thursday 11/20 were not the market bottom. The market penetrated historical lows of 2000 - 2003 bear market without hesitation.
Monday will reveal the true intention of the market. Possible scenarios:
* If opens strong in the 1st hour of trading, rally may continue. Catalyst: good news or at least no news from Citi and Autos. SP target: 850 before Thanksgiving.
* If opens weak in the 1st hour of trading, it may roll over again and continue downward slide. Catalyst: Citi not improving, bad news from GM, or other bad news.
Fear remains the dominant force. It is still a day trader’s market.
Predict based on what you believe.
Trade based on what you observe.
Mr. Market does what he does.
He doesn’t care who you are.
He doesn’t care what you think, wish, or hope for.
Get your ego, your emotions out of the way.
Supply and demand is the only law Mr. Market follows.
Let opportunity come to you.
When it comes, don’t be afraid.
When Mr. Market shows you signs that he may change his course,
Don’t be greedy.
Get out of the way.
Entries and exits are all that matters in this game.
Risk management, reward and risk potentials are the names.
Cut loss short.
Let profit run.
Mr. Market is emotional.
Market can stay "irrational" longer than you can stay solvent.
恐惧，失望，绝望三部曲
Hope, joy, euphoria,
Contrarian gauges show sentiment.
History repeats itself.
FA, TA, SA
Long, mid, short term
Rational, inrational market
Different indicators, different tools for each situation.
Support, resistance, trend, consolidation.
Identify these ahead of any actions.
Be greedy when others are afraid.
Be afraid when others are greedy.
Don't ever think that you can move the market.
Think in terms of MMs and institutional investors.
Only they can make the market.
Imagine who is at the other side of your trade.
Don't be on the wrong side of the trade.
Buy weakness, bull market;
Sell into strength, bear market.
Different approach for different market.
Protecting capital is job # 1.
Always.
