What did you expect?

Wishing for a "relatively" non volatile trading day is like asking for a snowfall in the month of June.    At this point, nobody knows how long the volatile action will last.    All we’re wishing for is that for the next 30 days or so,  traders who travel to South Africa or take time off to watch one of the greatest sports events in the world 'DO NOT' bring their portable trading machines with them.   We’ve never blamed the machines here before, but today's action just got under our skin.

Stocks move up and down off pure thoughts these days.    Yup, it's not even about the headline trading.    Too many speculative accounts have access to fast program trading where a large % of moves can be achieved in mere minutes.     As small guys who don't have hundreds of millions and who don't rely on computerized basket trading,  we can only hope that the market returns to a more normalized environment sooner or later.    We are referring to a market environment where most trades are based on longer term strategy but not off hourly instinct.    What's happening is that the current kind of volatility has been driving away potential buyers/investors.    People just cannot stomach the concept of 5%+ volatility of big cap stocks on a daily basis.    This eventually will change, guess we all just have to be patient for it.

Yesterday, in the afternoon we alerted that a potential move would be ‘sharp and exaggerated’.  The first leg came yesterday and than today concluded the sharp and exaggerated all the way to high 1070’s.   The rational was after a testing 1042 twice, any move was prone to momentum carrying it higher and higher due to short covering and yes…those machines going at short term gains.   This would cause the ‘exaggerated’,  which means the last leg would be ‘unfounded’ into “R” territory.   Machines or no machines,  an exaggerated move had no sustainability as investors really had no incentive to make ‘bets’ before the ECB on Thursday.    So, if the slide catalyst was Euro selling off, GOMexico stocks falling apart or just not wanting to be in ahead of the ECB,  it’s irrelevant.   Unfortunately, the positive catalysts today are as well….China export # leak, Bernanke upbeat, positive corporate news or the Beige book release!.   The market is a ‘basket’ case,  it’s impossible to gauge what’s a relative (headline, catalyst) factor or not.