Oozing, Cruising, and More Bruising into the Close

A Monday hangover, higher than expected inflation, lower than expected Retail Sales, and all the other macro economic issues like Oil, Financials, and the Real Estate market are contributing to a negative open this morning.

There's no point in re-hashing the news, just suffice it to say that traders are NOT focused on earnings, other than expecting catastrophic forward guidance. It will be interesting to see if they actually take a peek at earnings season anytime soon since that's what we're in.....

The longer we go with this ooze, the more I speculate that it CAN'T end without traders going into a climactic "it's the end of the world, the universe is collapsing in on itself, the stock market will never ever go up again, every company in the solar system is going bankrupt, we're all going to die, dogs and cats are living together, mass hysteria" super nova selling. A 400 point down day on the Dow probably won't do it, we will probably have to see something between a 450 - 600 point down day on the Dow, and that might actually be the end of the slide. Earnings Season could change that, and a climactic sell-off may not happen, but the longer we go with the ooze, the more I'm looking for that climactic, emotional day from traders.

I may start a put hedge on the SPY, DIA, and perhaps IWM today. I'm going to keep everything to day swings, so it will be a day to day strategy. I'll watch to see if the opportunity shows itself this morning.

7:45 am MT: I started some puts on SPY, DIA, and IWM. I will be selling them on the next leg down, and then looking to do it again.

7:55 am MT: Here is the next leg down, I'm going to sell half the puts in a minute or two.

8:00 am MT: I sold the DIA put for an 8% gain, the SPY put for a 6% gain, and the IWM put for a 6% gain. I basically just paid off any losses that I might incur on the Iron Condors (although those trades are not over yet). Now I'm going to focus on the AAPL calls left over from the mechanical error in Papermoney on the next downswing.

8:05 am MT: I picked up the same three puts again on a half-sized position just in case this becomes a dog-pile climactic sell-off this morning. I will add to the positions on an intra-day bounce. It's possible that I'll be doing this all day long today, we shall see.....Remember that the first Dow target is 10,750 but watch the SPX here at 1,200.

8:15 am MT: I picked up puts on ACI, CNX, PXD, ECA, NE, and RDC. You can pretty much throw a dart at the Coal and Energy sectors right now, but those were the ones that I chose. I don't know if the trades will continue to sell off

8:20 am MT: I added to the DIA, SPY, and IWM puts on this little upwing.

8:30 am MT: I sold the DIA puts for a minimal gain, the SPY puts at breakeven, and the IWM puts for a 5% gain because I think I can get them cheaper on a bounce.

9:00 am MT: I just picked up the DIA, SPY, and IWM puts again at a cheaper price. I'll probably add to the position if it wiggles up a little more.

9:05 am MT: Remember that the 1,200 area on the SPX and the 10,750 area on the Dow are pretty important. I speculate that if the market does take one more leg down and cracks through this morning's lows, that it probably won't stay there long because that will put the Dow right in close to the 10,750. We didn't have a climactic move this morning, but the market may still be trying to pound out a short term bottom. Right now the Energy and Commodity stocks are continuing to sell, which is helping give the overall market a boost. I probably won't add to the half-sized positions on the DIA, SPY, and IWM puts at this point, and I may liquidate them on a pullback. The Coal and Energy puts are doing very well so far.

9:55 am MT: I sold the CNX puts for a $2.30 profit, or 22% gain in a few hours. I might get this one again before the close, but it's too red hot intra-day right now and probably due for a big bounce.

10:50 am MT: I picked the CNX puts back up much cheaper on this intra-day bounce.

11:45 am MT: I sold the ACI puts for a .60 cent gain, or 9% gain intra-day. I might pick them back up in a little while. I also added to the CNX puts. I know it looks weird, but I like the look of CNX better right now, so I was culling ACI.

12:05 pm MT: I sold the NE puts for a small .10 cent gain. I'm basically culling again like I did with ACI. I want to start paring this down as I get closer to the end of the day.

12:15 pm MT: I sold the PXD puts for a .50 cent profit or 13% gain intra-day. I also sold the ECA puts for an .80 cent profit or 17% gain intra-day. I might go back into these positions before the close, I'm still trying to decide if I want to hold anything overnight yet.....

1:30 pm MT: I picked up half-sized put positions on APA, DVN, and ECA. I'm not excited about holding anything overnight this week, but I'm going to hold the four Energy puts: APA, DVN, ECA, and RDC. I'm also planning on holding the DIA, SPY, and IWM puts because they are a hedge on the AAPL calls (and the Iron Condors). I'm still expecting volatility day to day but the signals on the Energy stocks look very good. They're all Bear Flags with what will be confirmed rollovers if they close in these areas in the next 20 minutes. I also have a very valid reason to hold the index ETF puts because of the excellent hedge they create for me overnight. The only other put I'm holding is CNX, which I may dump just before the close.

1:45 pm MT: I sold the CNX puts for a small .10 cent gain. I had a nice day with CNX (on the earlier trade), so I'm content, and I don't want to hold too much overnight. The Coal stocks could drop some more this week (along with other Commodity based stocks) but I can always play those again tomorrow.

2:00 pm MT: Market Wrap: We had another wild ride on Wall Street with huge swings intra-day. The market was hit with a dump truck load of news, so it's not even worth recapping everything that was reported. The net result was oozing, bouncing, and bruising as stocks went for a ride.....only they didn't get to ride up front in comfort and air conditioning, instead they were tied up in a sack with a pack of rabid wolverines and tossed in the trunk while traders drove them across a gravel quarry at 110 miles per hour. It wasn't pretty to watch, but the intra-day trading today was pretty decent. The SPX bounced on 1,200 and the Dow held just above 10,800 (key support is about 10,750). The market may be getting to a short-term bouncing area, but we STILL DON'T HAVE A CONFIRMED BOUNCE, so there's no point in getting to giddy about calls just yet. I will report later tonight on the INTC and CSX earnings. The INTC earnings will probably drive the whole market tomorrow morning, and the CSX earnings will drive Railroads and could create a quick earnings momentum trade tomorrow.

3:00 pm MT: Earnings Reports: INTC beat earnings and guided in-line, the initial reaction after hours is a small move up. ALTR beat earnings and guided up, the initial reaction after hours is a big move up. These reports will probably give Chips (and Tech) a bit of a boost in the morning. We still have a lot more info coming from the INTC conference call, so the final consensus is probably at least another hour or more away, but the initial response is slightly bullish for Tech.

Here are some Bullish movers on the day:

Biotechs/Healthcare:
Confirmed Bounces: DNA, BAX, ABT, GILD, BIIB
Almost Bounces: MDT, WYE
Extremish but some potential: AMGN, GENZ, SYK, CELG, STJ, MYGN, JNJ

Also note: APOL, DRYS, CCJ, GIS

Here are some Bearish movers on the day:

Energy:
Confirmed Bounces: UPL, EOG, NOV, NFX, APA, CHK, APC, ESV, HAL, NBL, WMB, MUR, NE, NBR, CNQ, OXY, WFT, DVN, SLB, BHI, SWN, OIH, XTO, ECA, CAM
I bolded a few that look excellent, but they're all confirmed bounces. Remember the Oil Inventory report tomorrow one hour after the open will probably drive Energy stocks one way or another.

Coal: MEE, CNX, ACI (I'm not as excited about Coal because of the gyrations in the sector today).

Steel: TS (but not much else in the sector)

Copper: FCX

Manufacturing/Machinery: CMI, EMR, (JOYG was an almost bearish bounce)

Note: Financials are still getting absolutely obliterated. I'm not sure how much longer they can sell before they get way, way overcooked.

A Final Note: INTC is up 1% in after-hours trading. It looks like Chips will give Tech a little boost tomorrow morning. However, the INTC report doesn't appear to be earth-shattering, so I think there will need to be some other catalyst to really give the market a strong bounce - if we get one. CSX is down a little after-hours, so if there is a play on Railroads tomorrow it may be to the downside since many Railroad stocks confirmed a rollover today (CSX, BNI, and UNP).