Straight Lines

Today was all about moving in straight lines.  I won’t opine on what that means for the market, just pointing out facts.  Crude oil $CL_F moved straight up between 8AM and 2PM.  When I mean straight I mean straight.  Traders are chasing crude now, the guys in the pits are having a ball, and stubborn fundamental investors are scratching their heads like normal trying to understand why crude is flying.  If you trade commodities, you would be smart to keep this little saying from Jesse Livermore somewhere near your desk at all times, “Prudent speculators never argue with the tape.”  Stop trying to figure out why crude is making this move and just read the tape, it says higher.

The move in crude corresponded to similar moves in the $USDCAD and copper $HG_F.  There was no one to take the other side of those trades the better portion of the day.  The $USDCAD has been especially volatile as it retests an important breakdown level.

Equities where a completely different story.  Financials, housing, and even certain retail names are beginning to roll over.  Commodities are obviously holding this market up as even tech can’t move forward with conviction, one step forward, one step back there.  Once crude had closed there wasn’t much to hold up the market.  Traders took their foot off the sell the $USDX pedal and planned on sitting tight for the remainder of the afternoon.

Then Mr. Dick Bove decided to come out and downgrade $WFC.  Along side that, Obama announced new pay restrictions on government owned banks and car companies.  The market obviously didn’t like one or both of these announcements, and puked.

The market broke support on the $ES_F at 1091.25 and dumped over 2% in an hour.  Whoever wanted out wanted out bad and didn’t care at what price.  Stocks were sold across the board with the finnies taking the brunt of it.

I sold out of $AMZN today, took a long position in $APWR, and a short position in $JACK.  In the spirit of @howardlindzon I plan to walk into a Jack In the Box restaurant tomorrow, puke, and claim the burger has H1N1.

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