Wang’s Happy Trading

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Another crazy day on the market.  The market opened higher and just did not have any buyers to sustain the move.  Then, with about 2 hours left in trading, the market fell off the cliff!  We’ve been monitoring VIX very closely.  Last night, I said, “VIX ended up and has not shown an intraday top.  Looks like it wants to go above 60!“  During the day today, I mentioned in our Trading Room:
HappyTrading October 9, 2008 11:09 AM
market
getting weaker again; that 30MA on VIX hourly chart is too strong!

Subsequently, the market picked up its downward speed.  VIX went above 60, closing at 63.92!  The Dow fell from about 9200 to 8579 in 2 hours, to finish down 678.91 points for the day!!  SPX lost 75.02 points; and, Nasdaq tumbled 95.21 points! 

Our members were frantically adding puts in the last 2 hours:
Bagger Vance October 9, 2008 11:34 AM
buying spy oct puts here…96 and 95

vinaydh October 9, 2008 11:35 AM
bought NOV 70 MON puts. Missed the right spot to short it. That’s why going to NOV.

Bagger Vance October 9, 2008 11:45 AM
i’m on a slew of dia puts
and added oct ge 21 puts here

OptionDragon October 9, 2008 11:48 AM
COF and AXP…..weak
spy and DIA puts yes…..

Frosty Muggs October 9, 2008 12:10 PM
GOOG - Looking at puts. Oct 300

billbigD October 9, 2008 12:14 PM
Dartboard working again!

And, there was so much more…  Can’t list them all here!  The “puts” dartboard seems to be still working, as billbigD said!  Mr. “Bagger Vance”, especailly, has being “bagging” profits on the “put” plays these past couple of months!  One of “Bagger’s” friends expressed today:
Sent: Thursday, October 09, 2008 5:49 PM

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Most sectors were down, of course.  GLD (gold) did make it back up to close in the green!  SPX and Nasdaq charts look horrible and are going vertically down.  So, instead of looking at the sectors and index charts, we’ll look at an intraday chart of VIX.  I think it’s more useful in this emotional environment!

VIX (10-day hourly chart)

As we can see here, even after today’s precipitous drop, VIX is still holding a bullish formation on its hourly chart.  And, it seems to have more room to go.  The RSI is only at 70!  Normally, 80 would be an intraday top!  So, we might see VIX climbing even higher tomorrow, which means the market could fall lower!

Good night and HappyTrading! ™