comedy series..
Friday, June 24, 2011 at 07:53AM Due to a slew of headlines bringing on volatility, we probably just witnessed a day of short covering like not seen in ages. Long only investors continued to watch from sidelines, while fast traders/ shorts acted as if they missed their schizophrenia meds for the day.
Firstly, shorts were covering to take profits on the way down to 200ma off IEA news …secondly, shorts were covering in a wild scramble to stop losses on the way up off ‘Greek austerity’ news. In all, a whole lot of intraday ranting and raving that was highly undeserved as longs stay clear and/or nibble on dips. Reasons are the only action was really in the ES/SPY- ETF’s, individual stocks were really not involved as they held tight ranges throughout the volatility , even single commodity linked stocks off our list held in well off initial IEA shock.
Also, intraday volatility likely just made a market comeback as the main headlines ie. IEA effects may end up being insufficient to spur growth, but is still a ‘relief’ to the consumer while ‘Austerity’ news should’ve been considered a non-event because we’ve seen this song and dance before. In reality what should have occurred is for market to rally off crude intervention with rotation into consumer stocks and probably shrug off austerity consent news in the afternoon. In this view, flash PMI’s and robust May end earnings (FDX BBBY RHT ), emerging markets action were completely overshadowed today/week, we’ll discuss the mostly positives (even seemingly weak China’s # is an ‘inflation’ positive) this weekend as this is what really should matter today and for the short term to investors.
All in, all that matters is market held 1280 at the close, hence, market can still use Q end/holiday week ahead to its advantage as discussed over last 2 Journals in respect to these items.