Slam

by Larry Levin

The market was hammered today and it didn't even have a drink. It was slammed and never even entered the cage to fight Fedor Emelianenko. It was crushed, yet never found itself under Rosie O'Donnell. The sell-off was brutal with the following closes; Dow -268.22, SPX -33.33, Nasdaq almost -4%. The S&P500 reached levels not seen since last October 30th and marked a 14% decline from this year's high. Next stop: 1,000.00?

The market was very weak on Globex (pre-market) due to two major developments - China's economy is feared to be slowing, and European debt needs to be rolled this week. The latter is feared to result in a few failed auctions. The former fear came from a slash in growth prospects from the Conference Board, which led to huge losses for Caterpillar, Alcoa, and Boeing.

“China set the tone in the morning and then it accelerated, with investors probably exiting the market ahead of the U.S. unemployment data on Friday,” said Peter Jankovskis, who helps manage about $2.2 billion as co-chief investment officer at Oakbrook Investments in Lisle, Illinois. “The market volatility is growing, which reflects the overhang from the situation in Europe and the slowdown in China.”

According to ftalphaville.ft.com..."The ECB failed to auction the €55bn in fixed term deposits it had planned to, and what it did auction (€31.86bn) was at a much-higher rate (0.54 per cent) than what it offered at the start of its Securities Markets Programme (SMP). The market seems to be holding tight to liquidity." I think we can call this a "failed auction." The Ponzi scheme in Europe may be unraveling. Then again, surely Benron Bernanke is aware of this event and is dispatching JPM & GS to "fix it" promptly.

Spain will attempt to sell copious amounts of its junk debt, excuse me - AAA+ debt, this week. If the ECB had a "failed auction," I think the market expects the Spanish auctions to be rather putrid as well.

The Conference Board also slammed the market with its consumer confidence data: it was terrible. Expectations were for a reading of 62.5 but came in 15% lower at 52.9. From the report we read - The Conference Board Consumer Confidence Index® which had been on the rise for three consecutive months, declined sharply in June. The Index now stands at 52.9 (1985=100), down from 62.7 in May. The Present Situation Index decreased to 25.5 from 29.8. The Expectations Index declined to 71.2 from 84.6 last month.

Those saying conditions are “good” decreased to 8.0 percent from 9.7 percent, while those saying business conditions are “bad” increased to 42.4 percent from 39.5 percent. Consumers’ assessment of the labor market was also less favorable. Those claiming jobs are “hard to get” increased to 44.8 percent from 43.9 percent, while those saying jobs are “plentiful” decreased to 4.3 percent from 4.6 percent.

Consumers’ short-term outlook, which had improved significantly last month, turned more pessimistic in June. Those anticipating an improvement in business conditions over the next six months decreased to 17.2 percent from 22.8 percent, while those expecting conditions will worsen rose to 14.9 percent from 11.9 percent.

What was the title of today's blog? Oh yeah...SLAM!




Previous Day's Trading Room Results:

Trade Date: 6/29/10

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


1) OTF sell @ 9:59am at 1044.25 = +1.25 (1 lot)

2) Engf buy @ 1:23pm at 1043.00 = +0.50 (1 lot)

3) Algorithm positions (10)

4) “Reading the Tape” positions (11) …combined Secret’s, Algo, & “Reading the Tape” total… +17.00




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