Day Traders Were in Heaven

Many traders have written recently to comment on our Dow projections, and how close we are identifying support and resistance lines. And, many have asked for Floyd's thoughts on the long term trend of our market, and the economic stimulus package.

I've stayed off the soapbox on our stimulus package, as it's far from over, and sadly needed. The idea of a "bad bank" is smart, as we must as a nation filter out all the false financials that have been provided to us, and the banks are now beginning to open their books to show us just how much fraud has been created. The concept of the FDIC insuring the banks is ludicrous, as there is not enough money in FDIC to do so, just as there is not enough money in Social Security. The entire house of cards is falling, and we're soon to add a trillion dollars more in debt.

I believe there will be a Fibonacci retracement of 38.1% from the lowest lows, which as this point will put the market at 10,600 area. This could occur later this year, or in early 2010. Fibonnaci studies the natural evolution of patterns, and his magnificent "magic numbers" never seem to fail.

Unemployment was at 500,000 in November ( a false number, I believe) and is now at 2 million and rising. We'll easily see real adjusted unemployment of 20% or more if the government is able to truly take the false stats out of the unemployment figures. What this means is simple: without jobs, less spending, and spending is the critical part of our economic recovery.

Whipsaw is very likely. It's quite possible for the market to hit resistance lines and drop back to the 7750 area. And from this, rebound will again occur.

We saw much of this in yesterday's trading, with the market moving to 8200 on the theoretical Dow before 11.30 a.m. Traders who have been playing the February 400C were able to sell to highs of $12.80 before lunch hour. And, right at our resistance area the market began bottom testing again, allowing traders profits to the put.

Day traders were in heaven:

-"Floyd, bought and sold the 400C twice for 2.00 to 3.00 a contract, and still hold. Sold the puts for tight profits, and bought new puts at 8150, your top. Sold them for 40%. Three trades in one day profitable, and I've made day trading bucks two times each day this week. Your Dow projections are the key, and I study support and resistance around them"
CB

Shoot, every time I think I'll lose on something the support lines hold and I make money. I've learned from you to simply follow the rules. I study Bloomberg, and your alert I take notes on each day.

I've had 4 profitable trades so far this week, and I'm now 14 for 15 of the last trades with you. Best service I've ever used. You teach. Thanks.
MWB