As long as we continue to have 2-4% intraday trading ranges as routine the
environment will only be safe for day-traders. Today featured another whiplash
as stocks fell sharply early, camped lower, reversed course and then reversed
again. It’s enough to send investors to the chiropractor.
The open lower
this morning followed more bad news and sentiment regarding earnings. But volume
was relatively light and we remained camped lower. Then with news pending
regarding mortgage restructuring from FNM Da Boyz decided to press things early
and caused a healthy ramp just before that news. Further there was some floor
talk that Blackrock’s holdings of Bear Stearns toxic mortgages wouldn’t be as
bad as feared. Want some?
But reality settled in and Da Boyz reversed
course just as folks were getting excited and invested no doubt. It’s a market
for the hedgies and trading desks to play with.
While volume increased
today most of it came during the whiplash beginning around 1:45 and lasting
until the close. Breadth continues to be poor.
And, this data just in, courtesy of blog reader and
subscriber David Hurwitz.
That wraps things up for this whip lashed trading day. Da
Boyz had fun pushing each other around after lunch. When volume shrinks as much
as it did today, those sitting on trading desks with large sums to trade can
really get things going to suit their short-term needs.
But, this is
only a market for them since normal position traders can’t hold on using
reasonable stops with this much volatility.
We’ve posted our portfolio
returns for October and our year-to-date returns from conservative to more
aggressive portfolios are 3.89%, 5.49% and 9.09%. Naturally, some individual
ETFs have performed better or worse. These results may seem a pittance but
dare I say it’s “relatively” better than conventional performance
from most managers?
Anyway, now we’re just lying in the weeds and
waiting whatever next opportunities may be present. But, one thing is certain:
volatility and lethal intraday action must calm.
Let’s see what happens.
Have a pleasant evening and let’s honor those who have served.
Disclaimer: The ETF Digest has no position in any of the
highlighted securities.
