- Markets opened strong. By 9:44am the Dow was up about 130. By 9:45 it started it’s descent, down over 100 Dow points. But at 3:30 the market got a bid and much of the decline was wiped out. Ten minutes to the close it went green. On the close the Dow was up 32 or 1/2%. A pretty good close with someone wanting to go long over the weekend. Encouraging.
- The market internals (you remember: advanced/declines/up vol/down vol) were terrible from the get-go. Two new highs and almost 900 new lows.
- American Express became the sixth Dow component to trade under $10. Now the lottery begins as to which company will replace Citibank in the Dow. It already has a special dispensation from the NYSE so it won’t be delisted.
- All financials were crushed. FAZ, the 3X financial bear ETF was up another 15% at one point and is now up 75% for the year. Especially troublesome was Goldman Sachs, down 7% today.
- I bought a bunch of the inverse ETFs (TWM, SRS) in an attempt to protect my longs. It helped a little.
- GE has become a trader’s paradise. Huge liquidity with over 300 million shares traded daily. And the spread between the bid/asked is only a penny. Day traders will buy 5,000 ($35,000) shares, for example, and flip it for ten or twenty cents. And, since they day trade there really is no use of capital. They probably pay less than $15 commission for the round-trip. They try to make $500 or $1000 on the trade but am sure they are happy with a couple of hundred per trade. And they may reload and do it again. And again.
- All in all a pretty good day.
- Lets all meet back here early Monday and try it again.
Have a glorious weekend!
