My goal in life is to help make memories. After a great week on vacation, and a few lessons to subscribers as I became "frustrated" at "panic," I spent a week ranting to you all as I traveled, and again much part of my goal to "make memories." It is most important to me in life to offer who I am and what I do well to others, and to share. Money is not "real" to me, but simply another instrument we use to play.
As I teach stock and option trading I am really teaching life experiences from a transpersonal psychology base.
What occurred yesterday in the market is an excellent example of FEAR and GREED.
Both of our signals were profitable yesterday. Traders could have bought the July580P, on the opening upside, for as low as 8.40, and sold to highs of 17.20.
Most sold profitably for 25% profit goals.
In turn, traders were able to only tightly profit on the July600C until early afternoon, when astute traders bought at lows again , strong support lines, and took the option back up. The market moved from a 150 point drop to a flat even start within 30 minutes after the 3 p.m. hour, prompting good profits for day traders with iron stomaches.
Here is how the market was "interpreted":
WASHINGTON (MarketWatch) -- The price of petroleum will continue to rise because of ethanol, the weak dollar and political tensions, the oil cartel's president was quoted as saying Sunday.
"The price of oil will rise again in the coming weeks," Chakib Khelil -- the Algerian energy minister and currently president of the Organization of Petroleum Exporting Countries -- said in an interview with an Algerian newspaper. "We have to follow the evolution of the dollar, because a 1% fall in the dollar means $4 more on the price of oil."
Khelil said the weak dollar and geopolitical worries are responsible for 60% of the rise in crude prices, but also said that "the intrusion of bioethanol on the market" was alone responsible for the other 40%.
He didn't explain why more ethanol would drive crude prices higher, but said the dollar's decline was because the Federal Reserve had kept interest rates low.
Khelil repeated his view that a lack of supply is not the problem.
NEW YORK (MarketWatch) -- U.S. stocks turned steeply lower Monday afternoon, sending the S&P 500 into bear market territory, as worries banks would be slammed with more mortgage-related losses overtook earlier optimism sparked by a big drop in the price of crude.
"The advent of earnings season this week has investors on the defensive, especially as the beleaguered financial sector leads off," analysts at Action Economics said in a note. "Big declines in commodities today have also weighed on commodity based shares."
Record Shorting of U.S. Stocks May Fuel Rebound, JPMorgan Says
By Elizabeth Stanton
July 7 (Bloomberg) -- Record bets against U.S. stocks may mean the market is on the verge of a rebound fueled by purchases of shares that were sold short, according to JPMorgan Chase & Co.
So-called short interest on the New York Stock Exchange has risen 55 percent this year to a record 3.6 percent of listed shares, JPMorgan Chief Equity Strategist Thomas J. Lee wrote in a report today. In a short sale, an investor sells borrowed shares in anticipation of being able to buy them back later, or ``cover,'' at a lower price.
Given the ``extreme levels'' of short interest, positive catalysts for the market ``could trigger a substantial short- covering rally,'' New York-based Lee wrote.
The Standard & Poor's 500 Index of large U.S. companies declined 14 percent this year, led by financial and telephone shares. Short-sellers have benefited from crude oil's 49 percent advance to more than $140 a barrel, falling home prices and resulting bank losses on mortgages, and ``wariness'' about second-quarter earnings following three straight quarters of profit declines, Lee wrote.
A record 36 percent of the companies in the S&P 500 have at least 5 percent of their shares sold short, the report said. Eighteen percent have more than 10 percent of their shares shorted.
``The record short interest suggests to us that being a bear is consensus,'' Lee wrote. ``It has not paid to be a contrarian lately, but we wonder how often is consensus right.''
The 55 percent jump in short interest since October exceeds all other gains since 2000, the report said. The six previous increases averaged 28 percent and lasted 11 months, Lee wrote. During those periods, the S&P 500 declined an average of 6 percent.
The benchmark U.S. stock index gained an average of 8 percent in the six periods since 2000 when short interest declined, according to the report. The typical rally to cover bets reduced short interest by 12 percent. A drop in current short interest by that amount would lower the figure by 2.4 billion shares, worth about $70 billion, Lee said.
Oil dropped substantially, but the market did NOT react to the long term positive. As oil dropped, more worried about subslime mortgages rose to the occasion
(Sec. of Treasury Paulsen, a Bushy and Wall Street boy, "Subprime appears to be limited in the longer term reaction, and the majority of write offs have occurred" (Two weeks before the Bear Stearn bailout, earlier this year).
As you analyze "cut gasoline taxes" to help lower the cost of gas, think smartly. As we do little "long term" perhaps it might be time to consider proactive vs. reactive thinking?
We are in a market that is so FEARFUL that GREED cannot yet come into play. We were in a market with SUCH GREED that fear could not come in to play.
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