Archive for September, 2009

ECONOMIC REPORTS

MONDAY 9/14

None

TUESDAY 9/15

PPI, Retail Sales, Retail Sales ex-auto, Empire Manufacturing, Business Inventories

WEDNESDAY 9/16

Core CPI, CPI, NET Long – term TIC Flows, Capacity Utilization, Industrial Production, Crude Inventories

THURSDAY 9/17

Building Permits, Housing Starts, Initial Claims, Continuing Claims, Philadelphia Fed

FRIDAY 9/18

None

 

 

EARNINGS OF NOTE

MONDAY 9/14

None

TUESDAY 9/15

ADBE, BBY, CBRL, KR

WEDNESDAY 9/16

 DBRN, ORCL

THURSDAY 9/17

DFS, FDX, PALM

FRIDAY 9/18

None

 

“It’s not how fast you go, but how little you slow down”  The words of an Olympic ski coach to his athlete who refused to give up after suffering a critical injury that left her a paraplegic.  This young lady made the most of her situation, continued to compete as a physically impaired athlete and was inducted into the Olympic Hall of Fame.  Certainly, the challenges of trading cannot be compared with the challenges that this extraordinary young lady faced.

 However, there are lessons to be learned.  She possessed mental toughness and it takes mental strength to be a good trader.  More importantly, the lesson is that it is not “all or nothing”.  Our young athlete could have given up because she could not compete in the same way that she used to but she chose to select a different venue to in which to compete.  I have seen traders that have metaphorically pointed their skis straight down hill without regard to the hazards that exist.  Their speed had in fact negated their ability to turn and adjust for unexpected contingencies and as a result, many times they would “crash and burn”.

 Had these traders merely dialed down their velocity to the point where they could negotiate turns in their trading, they would have survived to trade again.  Consistently moving down the hill and staying in the race is what matters.  “It’s not how fast you go, but how little you slow down” Best, Robin

The DOW broke down out of the Bull Flag but did so on low volume and bounced up Thursday and Friday.  After Labor Day we should see increased volume in the markets and a short term re-test of recent highs.  September is historically a very bearish month so it will be interesting to see if we follow that historical pattern this year.  I have my doubts.  If the market decides it wants to go down, there should be plenty of time to see it coming and we can just join the move. 

The SPX is also setting up for a short term retest of the top of the recent Flag.  The index needs to push above that high on some volume.  Should the index fail to break out, we could be in for some range bound trading in the short term.  My sense for the direction is that we will challenge 1039.  At that point we need to evaluate the strength of the move and assess its chances for further appreciation.

The COMPQ has been the leader in the move up from the March lows and will, in my opinion, continue that role.  We have historical patterns that bode for a bearish move down in September, yet there are unique circumstances in that there are some fund managers that have not believed the credibility of the Bull Run and have not participated in the gains.  Those institutional investors don’t want to be left in the train station and should drive the market higher into the end of the year with increased volume.  In any event, we will just follow the big boys and profit.

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-This is the component risk graph of the synthetic short stock position.

-This is the composite risk graph of the synthetic short stock position which is comprised of a short call and a long put at the same strike and expiration month.

ECONOMIC REPORTS

MONDAY 9/7

None

TUESDAY 9/8

Consumer Credit

WEDNESDAY 9/9

Crude Inventories, Fed Beige Book

THURSDAY 9/10

Initial Claims, Trade Balance, Continuing Claims

FRIDAY 9/11

Export Prices ex-ag., Import Prices ex-oil, Michigan Sentiment-Prel, Wholesale Inventories, Treasury Budget

 

 

EARNINGS OF NOTE

MONDAY 9/7

None

TUESDAY 9/8

CASY, PBY

WEDNESDAY 9/9

 MW, ZLC

THURSDAY 9/10

LULU, NSM

FRIDAY 9/11

CPB