Sept 25th 2014 – Hell, Fire and Brimstone!
Market News:
Today is why it is important to take small losses on new positions or get out of trades that are in a profitable position when the market turns south. Getting out of the market yesterday, as the above picture on one of the instruments we trade shows, was a blessing after today’s carnage.
I actually had some buy orders back in place after yesterday’s rally, but fortunately the market had only one direction in mind today and none were filled.
However, being a spectator in cash today is certainly not about being smug, as nothing will humble you like the stock market! So I will take my good fortune and thank my systems wonderful programming for keeping me out of the bloodbath that happened today.
The only explanation I can have for yesterday’s rally was that the many people that were short for so long as the market climbed back to new highs recently finally saw their chance to buy back their shorts and go lick their wounds, which as on Friday would have been considerable.
Just where the bottom is here is too hard to say as we have a lower low on the indexes, suggesting a possible change in trend. I hope for more selling to the point that the market is extremely oversold as that is where the best opportunities are.
Market News:
U.S. stocks declined on Thursday, with the benchmark indexes recording their worst session since July 31, as Apple tumbled on glitches tied to its new smartphone and as investors considered a proposal in Russia that would let its courts seize foreign assets.
Reuters reported the draft law, submitted to Russia’s parliament on Wednesday by a pro-Kremlin deputy, would also allow state compensation for those whose assets were taken in foreign jurisdictions. The proposed measure comes after Italy froze luxury properties owned by a long-time friend of President Vladimir Putin, Bloomberg reported.
The CBOE Volatility Index, a measure of investor uncertainty, jumped 21 percent to 16.05; the price of gold turned higher and Treasuries rallied.
Apple dropped 3.7 percent as the iPhone maker contended with glitches in the latest version of its operating system. Twitter and Pandora Media led declines among Internet firms. The Russell 2000 Index of smaller companies dropped 1.3 percent.
Economic reports had orders for long-lasting goods falling 18.2 percent in August, while applications for unemployment benefits rose by 12,000 to a seasonally adjusted 293,000 last week, less than the 300,000 estimate.
A third number came from financial-data firm Markit, which said its initial services Purchasing Managers Index for September came in at 58.5 versus an expected 59.0.
Friday:
8:30 a.m. GDP revision
9:55 a.m. Consumer sentiment
News Sources: CNN Money & CNBC