The Market Has Indigestion

Earnings are starting to trickle in with AA yesterday. The company beat expectations, which should be expected with most Commodity and Energy stocks this earnings season. NUE received an upgrade. So the AA and NUE news, although not extremely significant, will probably give Metals a boost this morning. The rest of the market will probably carry through with the bounce that started yesterday, although the catalyst is more of an oversold market than it is a positive expectation for earnings across all sectors.

7:33 am MT: I stopped out of HIG, ALL, and X. I lost .49 cents on ALL and 1.28 on HIG. I lost 2.83 on X but it was a very small position so the total loss was $566. I started some AAPL and MOS calls. The MOS position is very small.

7:40 am MT: I added a little to the AAPL calls. I think the market could kick back and forth for a little while this morning before it decides what it wants to do next. I am staying with the CNX and ACI puts because I'm cherry picking and the positions are so small that I am planning on adding to the puts in 1-3 days. I'm anticipating a lower high on those two stocks. I'm also anticipating lower highs on Steel stocks, but I am more interested in STLD and NUE (despite the upgrade) and I am going to wait out the current bounce. With earnings coming up soon on many stocks, I don't want to get any new puts until I see a little more of what's happening in the market.

8:00 am MT: I started some GILD calls. I took a larger position because I like the setup.

8:15 am MT: MOS is pretty extreme on the intra-day charts, and the stock made it to it's 10dma in a blink, so I sold the calls for a profit. I will buy them back on a pullback intra-day. I made $513 on the trade. Also, GILD is pretty extreme on the intra-day charts, so I may sell part of the position and then buy it back on an intra-day pullback.

8:26: am MT: I sold half the GILD calls for a .40 cent profit or 11.5% gain. I will buy them back on an intra-day pullback to 54.50 - 54.75 if it happens. I also picked up a little more AAPL.

8:30 am MT: The major indexes are all fighting with their 10dma's, that's why we have the morning pause. If the Naz, Dow, and SPX can break through the 10dma, then I speculate that the market will most likely rally pretty sharply for several hours on short-covering. We shall see.....

11:25 am MT: Here is what I have done the past couple of hours: I culled ELN for a .15 cent profit. I like WYE and GILD better right now, so I'm playing them. I nibbled small call positions on TRA and CLF. I also picked up a call position on AEM.

1:30 pm MT: The wild ride continues with the market selling off mid-day. Traders continue to slosh around, some bargain buying, some panicking, some day trading, and a whole lot of uncertainty. The past two weeks traders have treated open positions like hot potatoes, bulls don't want to be long, bears don't want to be short, and the market continues to grind and churn through the turmoil. Overall, the major indexes are holding the recent lows, so for now I will just sit tight and watch.

1:55 pm MT: I took advantage of the downdraft to stop out of the ACI and CNX puts rather than play around with them any further. They were a $388 and $389 loss respectively. I'm holding everything else.

Market Wrap: There have been four headfakes on the SPX the past six days, so it's back to that fun stuff. We have seen about five of these types of weeks this year, which makes for some tough trading. I may try something a little different tomorrow to handle a possible fifth headfake in seven days. I may take a large put position on the DIA, SPY, and QQQQ to hedge my calls and then just see which way things go. The market continues to be oversold, and it continues to headfake, so I may try hedging rather than trying to get too inside the chop and slop.

I don't have a lot to say in the market wrap because traders didn't do anything different than they have been for awhile, which is to chop, lump, grind, and gyrate. There's been a lot of that this year. Fortunately, we have seen a little trending here and there in order to make some money in the long run. Once again, there is no reason to get loaded up on trades. That's been the toughest thing about this year, there have been very few periods of time that I could really dive in deep and grab a lot of trades and just ride them. That was last year, this is this year.....

As it is, if the market indexes start breaking to new lows tomorrow then I will hedge my calls with put positions on the DIA, SPY, and QQQQ. We'll see what tomorrow brings, more chop and slop or some kind of resolution to the current indigestion.