Wang’s Happy Trading

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The market started lower at the open, then, attempted to bounce, only to end with a big drop at the close!  Yesterday, at the end of the market, I wrote in the Trading Room,
HappyTrading November 19, 2008 1:12 PM
OIHs
on the edge of a new cliff.

This morning, the whole oil services sector gapped down, and, we played puts on RIG and SLB.  I went a little safer with December puts on RIG.  OptionDragon went with the aggressive November puts on SLB and got a quick double:
BAKER November 20, 2008 12:45 PM
OD,
thanks for the SLB trade…
got a bagger on that…

There were all sorts of profittable put plays in our Trading Room today:
Bagger Vance November 20, 2008 6:08 AM
greetings all…major puke session coming, load up on puts if the spx pulls up to around 800. bonds at highs, 10 yr all time high.

billbigd November 20, 2008 6:50 AM
COF- hit first price target of 25.5 half out. Roughly 300%

OptionDragon November 20, 2008 7:05 AM
bought POT puts….JPM scalped RIG scalped….boooyah!

Yesterday, I said to pay attention to how VIX handles 80.  Our members waited for our cues to call the market bounce:
lsxxxx November 20, 2008 7:27 AM
OD thanks, Happy usually comes on and says its getting toppy, taking my cues from him on that. So more room you think?

At almost noon, VIX charts started to come down, and, the market bounced:
HappyTrading November 20, 2008 8:49 AM
VIX
starting to look toppy.

But, the market didn’t go far.  SPX got back above 800 and started sliding again:
HappyTrading November 20, 2008 11:30 AM
VIX
rising again…

market
going lower…

and, we started picking up put plays again:
HappyTrading November 20, 2008 11:56 AM
GOOG
might be visiting $250 soon.

HES
Dec 45 puts look good.

APA
going below $65 support.

Frosty Muggs November 20, 2008 12:58 PM
POT Nov 60 puts out at 5.60 from 3.10 +80%

It was another big down day on the market and another nice collective effort in Trading Room with all the good plays on the short side.  The ultradshorts that we started talking about last week and continued to mention since the weekend all made huge gains today:  SKF +17.778%; SRS +14.99%; DUG +21.35%; EEV +13.34%; FXP +7.85%.  The Dow was down 444.99 points; SPX lost 54.14 points; Nasdaq fell 70.30 points:

Commodity-related sectors got pounded today: OIH (oil services) -15.81%; XME (metals and mining) -12.67%; XLE (energy) -12.37%; USO (oil) -8.58%; PBW (clean energy) -11.63%; MOO (agriculture) -9.22%.  XLF (financials) dropped -10.74%.  FXI (Chinese ADRs) slid -5.03%.

SPX

SPX lost 54.14 points to close at 752.44, just above 750.  The daily MAs and MACD continued lower.

Nasdaq

Nasdaq fell 70.3 points to close at 1316.12.  Its daily MAs and MACD also went down.

Last night, I said,
“SPX has a support around 750, but, it’s a soft one.  Nasdaq could find support around 1300.  Let’s first see how the market deals with SPX 800 tomorrow.”

The market went down at the open and attempted to come back to 800.  When SPX 800 couldn’t hold, it was time to drop lower, and, we traded accordingly.  SPX ended just above that soft support at 750; Nasdaq is closing in on 1300.  After the market, DELL reported earnings that beat the estimates.  Its shares traded +5% higher in AH trading.  The market has come down far in just 2 days.  It is perhaps time to rally a bit.  We might see the market strong in the morning.  But, I don’t think it’s time to get too optimistic yet.  Tomorrow is Friday, and the last day for November options.  “Pinning actions” may start early in the day, and, the market could fall right back down, if the market does indeed see some strength in the morning.

Good night and HappyTrading! ™