See-Saw

by Larry Levin


The see-saw market tipped again. First the market went down radically, then up monstrously, then hammered yesterday, and reversed again today. What a ride!

There was more news today, almost all of it very bad; however, better than the terrible expectations. Well, I guess if you're dying of cancer and your doctor gave you an extra week to live you'd sit up and have a drink. The market did just that today, swilling a fifth of Jack Daniels in no time.

* Existing home inventory increased to a 4.7% overhang year over year. This is the third consecutive month of a year-over-year increases in inventory, and this is the largest YoY increase since early 2008. As housing sales are currently collapsing, this overhang of inventory will put further pressure on home prices and lead to a weaker housing sector. Yeah! More bailouts to come. Oh wait, president Obama said that would never happen again - period. Yeah, right.
* Existing home sales declined in June. From the NAR report..."Existing-home sales, which are completed transactions that include single-family, townhomes, condominiums and co-ops, fell 5.1 percent to a seasonally adjusted annual rate of 5.37 million units in June from 5.66 million in May..."
* Weekly unemployment claims get worse...again. From the DOL report..."In the week ending July 17, the advance figure for seasonally adjusted initial claims was 464,000, an increase of 37,000 from the previous week's revised figure of 427,000. The 4-week moving average was 456,000, an increase of 1,250 from the previous week's revised average of 454,750. "

Doesn't this all sound simply wonderful? Well, it sure did to the market. The Dow was up over +200 points today. The see-saw is working well. What will Friday bring?





Previous Day's Trading Room Results:

Trade Date: 7/22/10

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


1) IDVA sell @ 2:14pm at 1092.00 = -1.25 & -1.25 (2 lots)

2) Algorithm positions (17)

3) “Reading the Tape” positions (22)combined Secret’s, Algo, & “Reading the Tape” total…+20.25



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!