Down Day?

by Larry Levin

What happened? The market fell; there was a down day? Heaven forefend! Traders sold stocks lower, worrying that the market and financials in particular had risen too quickly since the rally began two months ago. At the end of the day the Dow fell 156 points.

Although the net change from Friday's close was a fairly large drop in the Dow and S&P500, the intra-day activity was dead. The entire range was just 10.1-points and within that 10-point range, 70% of the volume traded in an amazingly narrow 6-point range.

To say it was a slow, choppy, low volume trendless day hardly does it justice. As I wrote a week or so ago, however, when it is this slow the market often rewards our patience the following day with exceptionally good action.

Be prepared at the open. The market could break out into one direction but the recent trend is still up. Therefore, I wouldn't be surprised if the market opened lower following today's weakness, then sharply reversed higher. As I said "be prepared at the open," but one should also be prepared for anything.



Previous Day's Trading Room Results:

Trade Date: 5/11/09

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

1) IDVA sell @ 9:30am at 911.75 = -1.25 (1 lot)

2) VA sell @ 9:40am at 914.25 = b/e (1 lot)

3) VA buy @ 10:20am at 914.25 = -1.50 (1 lot)

4) FT buy @ 1:00pm at 912.50 = -1.75 (1 lot)

5) Engf buy @ 1:50pm at 923.75 = -1.75 (1 lot)

6) Algorithm positions (0)...combined Secret's and Algo total...-6.25


Electronic (YM) Mini-Dow:

1) None today



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