Interdum stultus opportuna loquitur...

Tuesday, July 15, 2008

USRant: Blood on the Floor, Cash in the Pocket...

Note - from June 24th 2009, this blog has migrated from Blogger to a self-hosted version. Click here to go straight there.

Well now - do I crunch the numbers without the aid of the Rantbot and then write a USRant proper, or do I just have a bit of a Toot-toot?

OK - toot-toot it is, then.

Those of you who subscribe to the USSpy list will have got the order of battle sometime shortly after 4:28 p.m. French time (i.e., 12:28 a.m. Sydney time, 10:28 a.m. NY time, 9:28 a.m. Chicago time). It went a little sump'tin like this...

Hey y'all.
I mentioned in the OzRant Update that the US might see early weakness (although frankly it was more likely that it would jump up straight out of the gate).
No matter - this is the Official 'nail the colours to the mast' post, even though anyone who went long at 2:48 French time (10:48 Oz time) will do just fine.
Buy S&P (or Nasdaq) futures in the next five to ten minutes and all will be well.
Targets: 5 points for the first half position (or close out entirely if trading only 1), and then move stops to breakeven for the remainder. Close all unstopped open long positions at the close of the CME day session (3:15 Chicago time).
[Stuff not relevant - redacted]. Idiot.


Now those of youse who limit your Rantophilia to these free bits, won't have seen that - but you will have seen the post below this one in which I exhorted folks to have a dip on the long side in either the SPI or the S&P/Nasdaq (with a little embedded warning about possible early weakness).

Now, let's examine whether a dip on the long side paid off. It depends on what sort of position management you do, but shortly after entry, those on the USSpy list got this about an hour after the first e-mail...

Et voilĂ ... all one-lotters have 5 in the bag and are mad at me for not setting a 10-point target.
Folks who have still got a position riding - take another half of the position off (it ought to be showing a gain of over 10). That means that if you're trading two, you're closing all positions.
For those who will have a residual position (i.e., those who were originally trading four or more). move the stop on the final quarter to equity break-even, and trail it.
So if you started with 4, you will then have a single contract remaining with a stop 25 points below your initial entry (giving it MUCH more room than it needs), And you will close it at the close of play today.


So there it was - $250 gain per $500 margin (the standard discount margin on the mini - although it's easy to find intraday margins as low as $300) on the first contract... and $500 per $500 on the second. At 3:10 p.m. NY time the remaining lots (if any) were up whopping 28 points ($1400 per contract)... but then the selloff regained traction and everyone closed out with no more than two or three points on any remaining units.

But still - not a bad day's work; the one-lot return more than paid for a monthly subscription.

So let's have a gander at these US markets (they think they're so big...).

Headline Indices

I will admit that I was pretty sure that there would be a green close - but who gives a rat's bum? If USSpy-ers can pocket a couple of hundred bucks from a long position on a down day, then we're not in bad shape.

After early weakness, then a 300-ish point rally, then a sag into the close... the Dow Jones Industrial Average lost 92.65 points (0.84%) to 10962.54 points. The index high for the day was 11123.67 (11125-ish... just after 3:10 p.m. NY time), while the low of 10827.71 (10825-ish) was set just at the end of the first half-hour. These firs half-hour swoons - regardless of which direction (up or down) are ALWAYS to be faded. ALWAYS. They are the quintessential "Dumb Money At Work" sign.

The S&P500 Index lost 13.39 points (1.09%) to 1214.91 points. The index high for the day was 1234.35, while the low was 1200.43 - let's just round  that off to 1200.

The Nasdaq Composite advanced +2.84 points (0.13%) to 2215.71 points. The index high for the day was 2249.12, while the low was 2167.29.  The Nasdaq100 advanced +0.32 points (0.02%) to 1798.35 points. The index high for the day was 1826.11, while the low was 1761.08. I believe I mentioned both in the freebie post and in the subscriber e-mail, that the Nasdaq would be a better speculating vehicle today. 

The CBOE Volatility Index advanced +0.06 points (0.21%) to 28.54 points, while the CBOE Nasdaq100 Volatility Index lost 0.19 points (0.57%) to 33.01 points.

NYSE Total Volume totalled 7.38 billion units according to my data feed (and also according to Yahoo). Anyone who believes that number is an idiot. I have no idea what the NYSE thinks they're playing at, promulgating stupid numbers like that... at a guess I would say that agg volume would have been slightly higher than average.

Nasdaq Total Volume totalled 2.8 billion units - that feels about right; slightly more than the average busy session.

Major Market Statistics
Index Close Gain(Loss) %
Dow Jones Industrial Average 10962.54 -92.65 -0.84%
S&P500 Index 1214.91 -13.39 -1.09%
Nasdaq Composite 2215.71 +2.84 0.13%
Nasdaq100 1798.35 +0.32 0.02%
CBOE Volatiity Index 28.54 +0.06 0.21%
CBOE Nasdaq100 Volatilty Index 33.01 -0.19 -0.57%
NYSE Total Volume 7.38bn - -
Nasdaq Total Volume 2.8bn - -

Major Advancers in the Dow were

  • General Motors (GM) +0.46 (4.9%) to 9.84 on volume of 35.4 million units
  • Microsoft (MSFT) +1 (3.98%) to 26.15 on volume of 92.4 million units
  • Johnson & Johnson (JNJ) +1.29 (1.94%) to 67.7 on volume of 24.1 million units
  • Coca Cola (KO) +0.83 (1.63%) to 51.79 on volume of 19.1 million units
  • IBM (IBM) +1.66 (1.37%) to 123.2 on volume of 10.6 million units

Major Decliners in the Dow reflected jitters over the state of Financial stocks (and XOM got caned as a result of the nuffie-skinning in the Crude Oil market)...

  • AIG (AIG) -1.91 (8.47%) to 20.64 on volume of 71.3 million units
  • Bank Of America (BAC) -1.63 (8.09%) to 18.52 on volume of 185.7 million units
  • Citigroup (C) -0.66 (4.34%) to 14.56 on volume of 188.5 million units
  • Exxon Mobil (XOM) -3.23 (3.78%) to 82.19 on volume of 34.2 million units
  • Caterpillar (CAT) -2.63 (3.77%) to 67.04 on volume of 10.9 million units

Most Traded Dow stocks were

  • Citigroup Inc (C) -0.66 (4.34%) to 14.56 on volume of 188.5 million units
  • Bank Of America (BAC) -1.63 (8.09%) to 18.52 on volume of 185.7 million units
  • Intel (INTC) +0.24 (1.17%) to 20.71 on volume of 94.6 million units
  • General Electric (GE) -0.53 (1.95%) to 26.65 on volume of 94 million units
  • Microsoft (MSFT) +1 (3.98%) to 26.15 on volume of 92.4 million units
Precious Metals

Precious metals futures continued the rebound from a recent take-down; the retracement was enough to give newbie gold bugs a bit of a taste of sick in their mouths, and will make them wary of participating too earnestly in the next leg up... until the next short term swing top, at which point Platinum will roll over again, giving the signal to move off the Precious Patch and let the dumb bunnies get cut to shreds by da Boyz.

Precious Metal Futures
Index Close Gain(Loss) %
Gold 977.4 +3.7 0.38
Silver 18.965 -0.285 -1.48
Platinum 1985.0 -51.0 -2.5
Palladium 444.55 -11.80 -2.59

Energy Markets

Energy futures got a fairly typical slaughtering of latecomer spec longs. The Commitment of Traders data has shown a marked increase in small spec longs recently, and it is these folks  - late to the party thinking things only go one way - that provide the squeezable squishy centre to the cake for da Boyz.

Energy Futures
Index Close Gain(Loss) %
Crude Oil 138.72 -6.46 -4.45
Heating Oil 3.9215 -0.1434 -3.53
Gasoline RBOB 3.3820 -0.1757 -4.94
Natural Gas 11.435 -0.524 -4.38
Ethanol 2.599 -0.103 -3.81


The nine-stock group that makes up the Rant bellwethers declined on average by 6.6%. The fallout occurred as follows:

  • General Electric (GE) down $0.53 (1.95%) to $26.65 on volume of 94.05 million units.
  • Citigroup (C) down $0.66 (4.34%) to $14.56 on volume of 188.48 million units.
  • Wal-Mart (WMT) down $0.07 (0.12%) to $56.24 on volume of 26.52 million units.
  • IBM (IBM) up $+1.66 (1.37%) to $123.20 on volume of 10.65 million units.
  • Intel (INTC) up $+0.24 (1.17%) to $20.71 on volume of 94.61 million units.
  • Cisco Systems (CSCO) down $0.26 (1.22%) to $21.04 on volume of 63.5 million units.
  • Google (GOOG) down $5.53 (1.06%) to $516.09 on volume of 6.02 million units.
  • Fannie Mae (FNM) down $2.66 (27.34%) to $7.07 on volume of 199.83 million units.
  • Freddie Mac (FRE) down $1.85 (26.02%) to $5.26 on volume of 222.22 million units.
Other Indices of Interest...

The Banks Index lost 1.54 (3.18%) to 48.47 points. Index volume totalled 1.4 billion shares. Of the 24 index components, 4 advanced, with volume in advancers totalling 213.4 million units. Of the remaining 20 stocks in the index, every other stock fell, with total volume traded of 1.2 billion shares.

Major movers in the same direction as the index:

  • Bank Of America (BAC), down 1.63 (8.09%) to $18.52 on volume of 185.7 million shares
  • Wachovia (WB), down 0.76 (7.72%) to $9.08 on volume of 229.9 million shares
  • Fifth Third Bancorp (FITB), down 0.72 (6.45%) to $10.44 on volume of 39.8 million shares
  • Capital One Financial (COF), down 1.95 (5.46%) to $33.75 on volume of 30.8 million shares

I'm out of energy now... this hand-crafting malarkey is not sustainable. Despite Red Bull now being legal in France, I don't know where it can be bought - if I had some, I could probably have churned out a reasonable facsimile of a USRant with Ecodata and Fed crap and so forth. Oh for the days when you could fool a GP into believing that Ephedrine helped one's asthma...