Goodbye August

by Larry Levin

As surely you have heard on many financial stations, August's volume has been abysmal. Day after day the lack of volume kept the needed volatility at bay resulting in the choppiest (non-trending) month we have ever recorded. Eighty six percent of all trading days in August were classified as #4 days...not good. And when there was a slight amount of volatility on a given day, it would end as fast as it started and begin the next excruciatingly long sideways (and narrow) move. Goodbye August!

The market continues to desperately support the S&P 1040.00 level as well as Dow 10,000 despite the poor economic news. Today was no different.

Three reports that were said to be very bullish this morning were the Case-Shiller HPI, the Chicago PMI, and the Consumer Confidence reports. Of course, this is more propaganda.

The S&P/Case-Shiller index of property values increased 4.2% from June of last year. However, what I did not see reported anywhere was the fact that this report is two months in arrears, which means that today's report was still influenced by the free government-giveaway-housing-cheese. It simply does not reflect the current state of affairs.

The Chicago PMI was also bad - it was lower than expected and the worst reading of 2010. With that, the market rallied.

Consumer Confidence was also horrible, but slightly better than expected. At a reading of 53.5 it is still massive below the 5-year average of 76.5, which is where it should be IF the economy was truly recovering...but is not.

No matter - support was held again and the robots bought insane amounts of futures at the close to keep everyone happy at month's end.


Previous Day's Trading Room Results:

Trade Date: 8/31/10

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


1) No "Secrets" trades filled today.

2) Algorithm positions (13)

3) “Reading the Tape” positions (5)…combined Secret’s, Algo, & “Reading the Tape” total… -7.25



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