Wang’s Happy Trading

from MyHappyTrading.com by HappyTrading! ™

The market went through some huge, swinging actions today.  The market opened up in the morning.  Nasdaq was quickly up +40 points and the Dow was up +180 points.  Then, things turned.  Nasdaq was down almost 30 points at its low and the Dow was down 150 points.  Gold, then, rushed up above $900/ounce.  VIX jumped above 42!!

Just when stocks were going lower and lower, news came out that the government is working on a plan to create an agency that would soak up the bad loans and mortgages.  The talks of a possible “RTC (Resolution Trust Corp.)-style” solution quickly spread on the Street.  The reaction was immediately positive.

The stock market quickly shot up.  Many stocks went through some “extreme” trading actions!  STT was a stock of $65/share yesterday.  It opened at $66.08 and went as low as $29, down 55%!  Then, it popped up to close at $59; that’s up +100% from today’s low!!  LM went down in the morning to $26.56, or down 25% from yesterday’s close of $35.49; it came back to close at $37, up +4.25% for the day!

Financials ended mostly higher, with XLF adding +7.87% to close just above $20.  STI jumped +15.58%; PRU added +13.56%; BAC gained +12.43%; MA advanced +6.39%.  Some big “point-movers” were CME up $38.32; GOOG up $24.59; BIDU up $50.79!

There were some very interesting comments made in our Trade Room today about market’s rally:

bluetick September 18, 2008 1:31 PM
News driven absolutely ; but as i pointed out this morning it did happen too last year for the
opex Friday; if a plan like this has been in discussion for some time why wait till today
if not for the greatest impact..and Europe has still to react to it tom., this could create a
feedback

vinaydh September 18, 2008 1:56 PM
my analysis just tells me that if the market would rally this week or not. Or to say if it would just die. I knew that the market had to rally latest by Thursady so when we were red most of the day, I thought my analysis was wrong.
But I have no way of knowing how low the market would go before we rally. Otherwise I would have waited at the bottom to jump in to the calls. If I had such a fool proof system, I would have traded just the week of expiration and be on cruise rest of the month. LOL!

My experience tells me that news always has a way of coming in at the right time to let the market do what it wants to do.

To me, these are perhaps comments that only traders can relate.  It is very amazing how “timely” events and news can happen.  This morning, I cashed out on one of my personal trades and made a comment in the Trade Room:
HappyTrading September 18, 2008 7:02 AM (PST)
FSLR
OCT 230 calls (unpublished) in at $8.5, out at $15, just now; will look for new entries, if the market holds up…

Here’s today’s intraday chart on FSLR:

As you can see, immediately after I took the profits (+87.5%), FSLR started to go down, and, went down to almost $206 from $222!  That’s $16 on the stock!  Why did I decide to take the profits?…

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