Oil beginning to threaten SIFs

1251.xx SPX held, but it is doubtful whether it should be treated as anything other than round number support [it is the "French rogue trader" night session low when SIFs were locked limit down].

Tough.

nitro
 
Other than NQ getting relative flows, this is really bad.

I still don't like full throttle short, but I am having a hard time keeping a decent hedge since my computers are far faster than I am, and they are selling with terminal force.

32 handles from top to bottom!!

nitro
 
Support 1225 - 1230 SPX area. VIX at 26.78 as I write this. Last time we were at these levels, VIX was at 38. The vol-of-vol is very tame given the SPX level.

I will buy intra day 1225-1230 SPX support. Extremely unlikely we get there today.

I would be careful spreading ES/NQ for the next few days. Oil may be in a corrective phase, which may take ES down, but NQ loves cheaper QM. That may result in NQ over performing ES for several days. The reverse spread [play to widen] however might be a good trade.

nitro
 
FNM and FRE on pace to do volume far above their MA, with a huge percentage of it sell volume.

A VIX above 30 would at this point imo would signal capitulation. If you are an investor, nibble like a squirrel.

nitro
 
Quote from nitro:

...
I would be careful spreading ES/NQ for the next few days. Oil may be in a corrective phase, which may take ES down, but NQ loves cheaper QM. That may result in NQ over performing ES for several days. The reverse spread [play to widen] however might be a good trade.

nitro
More...

The reverse spread is working great. Normally, I would point out how out of whack ES/NQ are here. In this case, I think it may be justified. You want to unwind that trade if you see financials catch a bid. Then run like hell.

nitro
 
Quote from nitro:

The reverse spread is working great. Normally, I would point out how out of whack ES/NQ are here. In this case, I think it may be justified. You want to unwind that trade if you see financials catch a bid. Then run like hell.

nitro
More...
The reverse spread continues to work well. As long as oil sells off and financials go nowhere, it is a layup trade. At some point though, it may become inelastic.

Large dislocations in stocks with SIFs going nowhere. It is as if funds decided they where going to buy/sell certain stocks no matter what SIFs do. A lack of patience, or all out rotation.

nitro
 
Quote from nitro:

There appears to be a pocket of support at 1259.xx SPX. Hard to say if it is real or not...

nitro
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Uh,

I think no was a safe answer. 1242.xx minor support. I won't be buying it though. I buy 1225-1230.xx, probably closer to 1225. All intra-day for traders only.

I continue to nibble at preferreds for long term investments.

nitro
 
QM + $1, NQ out performing ES. The dislocations are no longer making sense, and I suggest that the ES/NQ spread be put aside for now. My guess is the financial "fear" is greater than the oil "fear", but that is a guess.

I don't see what can stop a test of the 1225-1230 SPX area today. I will have a buy stop in that range, but I need to see price action to know exactly where.

nitro
 
Paulson is now playing the role that Charlie Gasparino played every time he would come on an talk about AMBAC, to a smaller scale.

Imo, he will say almost nothing new, and markets will resume downside action. The market will land where it lands now over the longer time frames, and rallies imo should be seen as opportunities to be sold on all time frames. Obviously you play defence on trend breaks, but you are always sniping for an opportunity to sell.

nitro
 
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