Back to 8,000

by Larry Levin


You couldn't call today's market a sleeper by any measure; there was good volatility and high volume. From the start the market was weak. In fact, the Dow fell below 8,000 for the first time since last November. This nice round number, which can often be psychological support, led to a 290-point rally off the bottom.

The psychological support of 8,000 was only one reason given for the afternoon blast-off. Another reason was said to be tomorrow's option expiration. Whether your short option position got back to break-even near Dow 8,000 or you just had a small winner, with only one session left, would you hang out to see your money evaporate in a Madoff-like black hole? Even traders who are wildly in-the-money were hedging the options by buying the underlying stock or index. This could continue through tomorrow.

Intel reported trouble in chip-land today. Its fourth-quarter net profit fell an astonishing 90% as the chip giant navigated what CEO Paul Otellini said was a "dramatic" decline in sales.

"Our fourth quarter results reflect the difficult economic climate," Otellini said in a call with analysts. "Putting our results into perspective, this is only the second time in 20 years that our fourth quarter revenues were below the third quarter. The last being the year 2000, where revenues declined less than 1%. The pace of the revenue decline in the quarter was dramatic. And resulted from reduced demand and inventory contraction across the supply chain."

JPM also reported earnings today: 75% drop form last year.

Shitigroup (not downgraded to Shitibank yet) will report its Shiti earnings tomorrow.

Expect a big loss.

Previous Day's Trading Room Results:

Trade Date: 1/15/09

E-Mini S&P Trades*
(before fees and commissions):

1) OTF sell @ 10:00am at 821.50 = -2.00 (1 lot)

2) Engf buy @ 10:10am at 821.00 = +.50 (1 lot)

3) Algorithm positions (9)...combined SofT and Algo total...+12.75

ZB (30 Year Bond) Trades*
(before fees and commissions):


1) No trades today.



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