Stress Tests

by Larry Levin

Today was a trendless two-sided market. At first it fell, then surprisingly rallied more than some expected, which was followed by another strong drop. In the end, late buyers came in to save the market despite more bad news.

Today's bearish news was more bad data from the housing sector and the employment sector. Both were much worse than expected and both were ignored...again.

The Treasury will not be releasing the outcome of the various stress tests in the banking sector; however, it will explain its methods tomorrow. The actual results come out May 4th.

Tax-Cheatin-Timmy is determined to release just enough information about the stress tests to inspire confidence. But he doesn't want to give analysts so much detail that they can run their own tests on the banks before the official release of results. So much for transparency.

In addition to revealing some of the ways the tests were performed, the banks will be informed privately how they fared. Instead of disclosing the results immediately, the results are going to be debated rigged for a week while Tax-Cheatin-Timmy has a week to figure out exactly what they can get away with.

Will this start a rumor mill? You betcha! We can prepare for a "week of leaks" starting Friday, where lies are spoon fed to the public in a hopeless attempt by the biggest liars on the planet to gain credibility.



Previous Day's Trading Room Results:

Trade Date: 4/23/09

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

1) OTF sell @ 11:10am at 835.50 = -1.50 (1 lot)

2) VA sell @ 12:50pm at 842.75 = +1.75 (1 lot)

3) VA buy @ 1:50pm at 842.75 = -1.75 (1 lot)

4) Algorithm positions (2)...combined Secret's and Algo total...+0.25


Electronic (YM) Mini-Dow:

1) None today



Sign up as an AvidTrader Member to receive "The Technician" Value Area's each day. The market then has an 80% chance of filling the Value Area. Many traders familiar with the Value Area and the techniques that go along with it use it to help them decide what trades to do each day. Join and see how this technique can help you trade more successfully!