Trading for the Masses

As we discussed in our video from two hours ago, the buying opportunity of the day came as the buyers off the monster gap open puked the futures all the way down to 1286 this am. Perfect buy setup with low risk at that level as new longs and new shorts both get shaking out at that level. Classic behavior as we held the pivot point @ 1284 and put in a nice double bottom and have been off to the races over the past 1.5 hours. Buy the dips, sell the rips.

As we sit here mid day and listent to CNBC tell us how great this market is, I just shake my head. Until we close over 1310, nothing has changed. Since the 6:30 open the trend has been to sell the entire day. We have seen nothing but lower highs and lower lows since that open. We have no retraced 50% of the move from 1272 to 1309.5 which gets you about 1390, we did go a tad lower down to 1286 which finishes the 61.8% retrace area. This is the area to dip your toes in as we discussed this am, buy down to 1385 so here is your entry efforts here. There is never a reason to chase a premarket news event by the FED I have found, you can generally get a dip for lower prices at some point. So until things change, give yourself a chance 1285 to 1290 looks like a tradeable bottom with your risk defined below 1280 at this point. Its all in the close, so let’s see where they go.

I am suprised there hasn’t been more Eco Rock over the past few years with Oil cranking and Gore winning the best picture and all the greenies out there? Guess their still isn’t money in green rock!!
Let’s go back to 1987, damn I can’t believe this song is 20 years old.

Fed intervention got the squeeze going premarket but since the open all assets are trading down. Oil, spoos, gold, equities are all off their opening prices. So if you came in flat and bought the open that strategy has not worked across the board. If you bought the dips and sold the rip this am, you did well. Time will tell into the close. I would be more bullish if they can close the spoos over 1310 today. That leaves a lot of work for the bulls as sellers again have controlled this market since the open of the market @ 6:30 pacific nothing but sellers in sight. So we have had 2 hours of selling, volume is decent but price is dripping all am. See where they take em for the close.

Business as usual as we suggested shorts cover their financials and hommies into this fed week. The suprise move by the Fed is not a suprise, Goldman told us yesterday they would do this. Open your ears the information is always out there. Let’s see if they can rally over the next few days to 1340 which would be another 30 pts over the next few days into the fed meeting next week! Party on indeed. Trade em up girls.

ECONX Fed Press Release on TSLF Announcement

“Since the coordinated actions taken in December 2007, the G-10 central banks have continued to work together closely and to consult regularly on liquidity pressures in funding markets. Pressures in some of these markets have recently increased again. We all continue to work together and will take appropriate steps to address those liquidity pressures. To that end, today the Bank of Canada, the Bank of England, the European Central Bank, the Federal Reserve, and the Swiss National Bank are announcing specific measures… Federal Reserve Actions: The Federal Reserve announced today an expansion of its securities lending program. Under this new Term Securities Lending Facility (TSLF), the Federal Reserve will lend up to $200 billion of Treasury securities to primary dealers secured for a term of 28 days (rather than overnight, as in the existing program) by a pledge of other securities, including federal agency debt, federal agency residential-mortgage-backed securities (MBS), and non-agency AAA/Aaa-rated private-label residential MBS. The TSLF is intended to promote liquidity in the financing markets for Treasury and other collateral and thus to foster the functioning of financial markets more generally. As is the case with the current securities lending program, securities will be made available through an auction process. Auctions will be held on a weekly basis, beginning on March 27, 2008. The Federal Reserve will consult with primary dealers on technical design features of the TSLF. In addition, the Federal Open Market Committee has authorized increases in its existing temporary reciprocal currency arrangements (swap lines) with the European Central Bank (ECB) and the Swiss National Bank (SNB). These arrangements will now provide dollars in amounts of up to $30 billion and $6 billion to the ECB and the SNB, respectively, representing increases of $10 billion and $2 billion. The FOMC extended the term of these swap lines through September 30, 2008. The actions announced today supplement the measures announced by the Federal Reserve on Friday to boost the size of the Term Auction Facility to $100 billion and to undertake a series of term repurchase transactions that will cumulate to $100 billion.”