Let's See Which Reality Sets In

My commentary, you may have noted, has been more muted the last few days, as the market struggled to hit 10,000. While 73% of companies reporting last quarter had good earnings, most are generating profits by slashing costs and workers, an approach that has unemployment near 10%, at 1983 levels. I worry that a lot of these profits are not because these firms are expanding revenues but because they're controlling cost by laying off workers.

In other words, as the market surges these companies are not acting as if we're going to have a recovery, but remain in defense mode. It is our fault that there are not new jobs, not Obama's, although infrastructure rebuidling as stimulus creates huge jobs and may be supportive.
Anyway, I guess I have been the quiet skeptic, quite surprised to see the rebound show such resilience, but frightened silly at the profits Goldman Sachs is going to make, and that the top traded stock for profits for the past six months was AIG, a phantom company.

A bit of me is more than saddened by the devisive nature of a few that can affect a majority. We are so easily led.

Okay, to the market. Hesitation all day but by mid afternoon all call traders had profited. Here's a great email from a new trader from France, nicknamed "Yellowman", :

Ok, I bought the call today at 9,50 ... and had my sell order at R1 (10071) ... I did a recalculation of the subset R/S and I had a new R1 of 10042... with the dow trading at 10033 (near the new R1) so I sold it at 11,00... I hope that was ok to do?

That's superb profit and what a trader should look for.

Although the market showed no strength it allowed call buyers easy entry and good fast day trade profits, which leaves us with our hedge put, which we'll stop loss today. With the market falling at 3.30 we saw even more of the nervousness of this market yesterday and do not want to hold positions over the weekend. No new trades.

Let's see "which reality sets in."