Looking for certainty in an uncertain world...

There is a very good reason why many institutions are staying away from this market.   From what we read and what we hear from friends in the hedge fund industry, the consensus is that many people are simply going to sit idle (wait) until this market returns to its normal fashion of behaviour.   Some of them would go as far as not doing anything until 2009,  regardless what happens the next couple of months.    In a way, we totally understand them since most of them are old school of buy good stocks and hold them for a while kind of managers.     Therefore, what's left in this market these days are trigger happy funds that either rely heavily on computer black box or a gambling intuition to trade this market.     This is what frustrates most of us freelance retail traders.    Basically, without the buy side institutions' support,  you'd never have stocks or sectors that can run up for weeks or months straight.    Instead, what once was a few months worth of a stock move can be accomplished in mere days.    Yes, it can be agonizing just to think about it.

Market again showed some shakiness during the day as the "good news" of China's stimulus package was further dismissed as anything to do with the US market.   If you noticed,  many Chinese ADR here took a big beating today as people realize most of those companies are just not going to have anything to do with that stimulus package.    On the home front,  financial companies once again led the way down with lots of pressure focused on GS, C, MS etc.  overshadowing the government foreclosure plan which gave the market a blip move to the upside late in the day.   We feel the entire market will remain pressure until people stop selling those financials.

Our EPS plays had a relatively calm day.   You just really can't expect them to do much on a day like today.    However, we are monitoring their health closely as any severe penetration of 9 ema would trigger our exit.    We have been adding little back today, but only with small sizes.    Remember, on a day like today,  price is always on your side so you can literally bid at a steep discount and it may get hit.    We are sticking to our trading plan with these EPS plays, still.     We also have some ETF hedges just in case market gets too nasty all of a sudden.     Right now, it seems market is stuck in the big range of between 860 SPX and 1000 SPX.    Of course,  we are currently near the lower end of that range so we have to keep an open mind that we'd retest previous 10/10 low.   

Well folks, this is how the market is these days, we try to do everything we can to rationalize things and implement our trading strategy as efficiently as we can.

Cheers,