Chicago PMI and the Market

The Chicago PMI came in at a better than expected 48.2 this morning. Overall the report was fairly decent given the expectations. I dumped a couple of the Energy puts early on, but kept all the rest of the puts, especially the Gold puts. I watched to see how bold the traders would be with the Chicago PMI, but so far all we've gotten is a bear flag on the 60m charts on the Dow. So I re-entered the Energy puts that I dumped and I'm riding the Gold puts hard. I will look to lock some down in the last hour since a lot of the window dressing will happen in the last 15-30m of the day. So far, a great day to be in Gold puts.

Evening Post:

Well.....it turns out I was off by one point on my Chicago PMI prediction. I thought 46-47 was going to be the sit-and-spin zone and it turns out 46-48 was the magical area. After watching the muted reaction and reading reports that traders liked the number, but would have liked it better if it was closer to 50.....you get the picture. You really can't say much about the Dow, Naz, or SPX as far as the short term swing. We are at one near-term support and not doing much. I think that whether or not we hold support has a good chance of coming down to the bigger, badder, bolder ISM Index number tomorrow. A good reading, which probably means 49-50 or higher, is likely to give us a bounce at this support area in the near-term channel that we are in. A bad reading, which probably means 46-47 or lower, is likely to cause the markets to break this short-term support area.

We just didn't do all that much in the markets today, although the window dressing hit right on cue in the last 30 minutes, and right in the areas you would expect, like Energy. I actually nibbled back in to some Energy puts right before the close since we didn't make a higher high. I took out most of my Gold puts for a great profit before the last hour when I knew the window dressing might hit (that I warned you of in the early-day post). I lost a little on some Energy put stops right out of the gate this morning, but I'm well ahead on the week because of the JCP, MHP, GG, AEM, and ABX puts. I think this is all going to come down to the ISM tomorrow morning. The market wants more of an all clear signal before it bounces short-term. I wanted to pick up NKE, GILD, PRU, and EQR calls today (all gave confirmed bounces), but with the ISM sitting there, I just decided to wait until I see how the market handles things tomorrow. I'm not sure if we get the bounce tomorrow or not until I see the ISM and I see the market react positively. I'm ready to dump what's left of my puts tomorrow morning and go to calls if that's the way it plays out.

We'll see what tomorrow brings.....

Here is a test of our new recorder.