Extreme Market Commentary For Wednesday Evening

GENERAL STOCK MARKET COMMENT
The U.S. stock indexes closed sharply lower today as traders experienced a post election hangover after pushing index prices sharply higher on Tuesday. News today from ADP that projected a very weak U.S. jobs report on Friday also reminded traders how sick is the U.S. economy, with recovery nowhere close at hand. There are still early technical clues to suggest market bottoms are in place. However, as the weakening economic news continues to trickle into the marketplace, it will be hard for the stock market bulls to get excited about sustaining any solid uptrend in prices. Do remember that during serious economic weakness or recession that generally the stock market puts in a low well before all the bad economic news is reported.

INTEREST RATES

December U.S. T-Bonds closed up 1 26/32 at 117 6/32 today. Prices closed near the session high on more short covering and flight to quality buying amid a big sell off in the stock market today. A bullish double bottom reversal pattern has formed on the daily bar chart. Bulls have fresh upside near-term technical momentum.

ENERGY MARKETS
December crude oil closed down $5.35 at $65.18 a barrel today. Prices closed near the session low today. A sharply lower U.S. stock market pressured the crude today. Crude oil bears still have the near-term technical advantage. Prices remain in a 3 1/2 month-old downtrend on the daily bar chart.

December heating oil closed down 1,086 points at $2.0530 today. Prices closed near the session low. Bears still have the near-term technical advantage. A 3 1/2 month old downtrend is in place on the daily bar chart.

December (RBOB) unleaded gasoline closed down 1,077 points at $1.4250 today. Prices closed near the session low today. There was not follow-through buying interest today and a bullish "key reversal" up was not confirmed on the daily bar chart. The bears are still in technical control. Prices are still in a 3 1/2 month old downtrend on the daily bar chart.

December natural gas closed up 4.1 cents at $7.26 today. Prices closed nearer the session high and closed at a fresh four week high close on more short covering in a bear market. The bulls have some fresh upside near term technical momentum but need to do more upside work to begin to suggest that a near term low is in place.

CURRENCIES
The December Euro currency closed down 15 points at 1.2916 today. Prices closed near mid-range. Bears still have the overall near term technical advantage amid still no strong technical clues that a market low is close at hand. Prices are still in a 3 1/2 month old downtrend on the daily bar chart.

The December Japanese yen closed up 116 points at 1.0152 today. Prices closed near the session high today. No serious chart damage has been inflicted recently. Bulls still have the near-term technical advantage.

The December Swiss franc closed up 18 points at .8605 today. Prices closed nearer the session high today. Short covering in a bear market was featured again today. Bears still have the near-term technical advantage.

The December Canadian dollar closed down 96 points at .8576 today. Prices closed nearer the session low after hitting a fresh three week high early on. Bulls still have some upside near term technical momentum to begin to suggest that a market low is in place.

The December British pound closed down 6 points at 1.5886 today. Prices closed nearer the session low. Bears still have the near term technical advantage. Prices are still in a six week old downtrend on the daily bar chart.

The December U.S. dollar index closed up 13 points at 85.50 today. Prices closed near mid range today. No serious chart damage has occurred recently and the bulls still have the overall near term technical advantage. There are no strong early technical clues of a market top being close at hand.

PRECIOUS METALS
December gold futures closed down $16.20 at $741.10 today. Prices closed near the session low today. Mostly bearish "outside markets" sharply lower crude oil prices and sharp losses in the stock market pressured gold today. Bears still have the overall near term technical advantage.

December silver futures closed up 27.0 cents at $10.40 an ounce today. Prices closed nearer the session high today and closed at a fresh three week high close. Bears still have the overall near term technical advantage. Prices are still trading below a 3 1/2 month old downtrend line on the daily bar chart.

December N.Y. copper closed down 1,460 points at 181.20 cents today. Prices closed near the session low today. Mostly bearish "outside markets" sharply lower crude oil prices and sharp losses in the stock market pressured copper today. Copper bears still have the near-term technical advantage. Prices are still in a four month old downtrend on the daily bar chart.

SOFTS
March sugar closed down 4 points at 12.67 cents today. Prices closed nearer the session high today. Mostly bearish "outside markets" sharply lower crude oil prices and sharp losses in the stock market pressured sugar today. Prices are still trading below a 2 1/2 month old downtrend line drawn from the August and September highs.

December coffee closed down 50 points at 116.20 cents today. Prices closed nearer the session low today but did poke to a fresh four week high early on. Mostly bearish "outside markets" sharply lower crude oil prices and sharp losses in the stock market pressured coffee today. Coffee bears still have the overall near-term technical advantage.

December cocoa closed down $27 at $1,972 today. Prices closed near the session low today. Mostly bearish "outside markets" sharply lower crude oil prices and sharp losses in the stock market pressured corn today. Cocoa bears still have the overall near term technical advantage.

December cotton closed down 203 points at 44.29 cents today. Prices closed near the session low today. Mostly bearish "outside markets" sharply lower crude oil prices and sharp losses in the stock market pressured cotton today. The cotton bears still have the solid near term technical advantage. Prices are still in a 7 1/2 month old downtrend on the daily bar chart.

January orange juice closed up 315 points at $.8600. Prices closed near the session high today. More short covering was featured. Bears still have the overall near term technical advantage. However, prices have been trading sideways for four weeks and that does favor the bullish camp as it suggests a bottoming process.

January lumber futures closed up $4.00 at $209.50 today. Prices closed near the session high and were supported by more short covering in a bear market. Lumber bears still have the overall near-term technical advantage.

GRAINS
December corn futures closed down 21 1/2 cents at $3.91 1/2 today. Prices closed near the session low. Mostly bearish "outside markets" sharply lower crude oil prices and sharp losses in the stock market pressured corn today. Bears gained some fresh downside technical momentum today. Corn prices are still trading below a four month old downtrend line on the daily bar chart.

January soybeans closed down 54 1/2 cents at $9.04 1/2 today. Prices closed near the session low today. Mostly bearish "outside markets" sharply lower crude oil prices and sharp losses in the stock market pressured beans today. Soybean bears remain in overall near term technical command and gained fresh downside momentum today.

December soybean meal closed down $12.80 at $265.00 today. Prices closed near the session low today. Bears still have the overall near-term technical advantage.

December bean oil closed down 195 points at 34.02 cents today. Prices closed near the session low today. Bean oil prices are still in a four month old downtrend on the daily bar chart. Bears still have the near term technical advantage.

December Chicago SRW wheat closed down 35 1/4 cents at $5.37 1/4 today. Prices closed nearer the session low today. Mostly bearish "outside markets" sharply lower crude oil prices and sharp losses in the stock market pressured wheat today. The bulls had gained some fresh upside technical momentum, but lost it today. The wheat bears have the overall near term technical advantage and regained downside momentum today.

LIVESTOCK
December live cattle closed up $0.42 at $94.27 today. Prices closed near the session high today and did close at a fresh three-week high close on more short covering and bargain hunting buying interest. While the bears do still have the overall near-term technical advantage, the bulls have gained upside momentum recently to begin to suggest a near-term low is in place.

November feeder cattle closed up $0.15 at $100.65 today. Prices closed near the session high today and poked to a fresh four-week high on bargain-hunting buying and short covering. The bulls have gained technical momentum recently to begin to suggest a near term low is in place.

December lean hogs closed up $0.05 at $54.47 today. Prices closed near mid-range today. Prices set a fresh contract low early on today. Hog bears still have the near term technical advantage, amid bearish cash market fundamentals. Prices are still in a three month old downtrend on the daily bar chart. There are no clues of a market low being close at hand.

February pork bellies closed down $0.85 at $83.80 today. Prices closed near mid-range and did poke to a fresh contract low. Bears still have the near-term technical advantage. Prices are in a six week old downtrend on the daily bar chart.

Forget The Fundamentals, Trade The Trend

I think I feel about the same as every other trader right now, hung over. It has been a tough week or two for everyone. But as I have said in previous post we can control our anxiety and stress by formulating a plan and sticking to it. Even if it means sitting on the sidelines for now. But I don't think you have to. There is money to be made.

We are at a point where we need to forget the fundamental technical analysis and trade the trends using catalyst for our buy and sell points. I am tempted to say don't buy any stocks right now, but that wouldn't be right. There is best of breed companies that are getting knocked down to levels that I personally have to add to my positions on. I am adding to FCX and NOV just to name a couple. But I am still sticking to my plan to sell them on every rally. Until we get some consolidation in this market I will sell every rally then turn around and short the market using the QID for the NASDAQ and the DXD for the DOW. Most likely this week it will be the DOW with the levels that the NASDAQ has reached.

Now that the "bail out" vote [yes I'll call it that] is done what is our next catalyst? I think it will be the Federal Reserve lowing the interest rates. The Street seems to be betting that if financial markets remain unsettled, the first rate cut could occur before the Federal Reserve's next meeting on Oct. 28-29. Some are saying as early as this week!

The trend is down no matter how the talking heads want to polish this thing. Stick to your plan, take your profits and don't trust this market.

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How Many Times Do I Have To Say It, You Have To Have A Plan

So how many times do I have to say it. You have to have a plan. Trading is a business and just like any other business you have to have a business plan. I know there is a lot of traders out there that think there is "a plan" that all traders use. But like any other business we are all going to find ourselves fitting into a niche that fits our trading styles and personalities. Even if you are a beginner, you must develop your style and your plan.

I ended the last 15 minutes of today's trading with 5 trades. There is no way that I could execute these trades in that time if I did not have a specific, detailed plan. And I even have to write out the numbers and tickers on sticky notes and put them on my computer monitor. I am jealous of you guys that don't need to do that, but for me it works.

By the way, those 5 trades were selling off UPL, FLR and NOV all up about 10%. I then bought the QID Ultra Short ETF at $54.95, then placed a stop/loss at $49.00. I am sticking to my plan of selling into strength every chance we get and that the trend right now is down.

Good luck to everyone tomorrow! Now let's take some time to relax.

Ray's Stock Buys For The Day - Tuesday 9-23-08

I was very confident that the market was continuing downward today. And while I do believe we should be looking to increase our cash positions with a market that makes no rhyme or reason, I am still going to add to some positions when the price is right.

Today I added to my FLR which ended the day down 6.08%, ADM which ended the day up 2.62% and NOV which plummeted 9.38%.

It will take some intestinal fortitude to hold positions here but I truly believe in adding to my "best of breed" positions at these discounted prices while still finding a way to get into cash!

Good Luck On Wednesday!

Sold 50% National Oil Well Varco - NOV

Well that didn't take long. As I posted last week I took a major stake in NOV [National Oil Well Varco] and Friday September 19th I sold off 50% of the position when it was up almost 14%. I expect this to go higher along with the rest of the oil services sector but not only am I going to take profits when they are there, the market has gone up so far, so fast, that we will get a pull back this week. We'll buy more at that time.

Because of the run up we will be looking at the ticker QID on Monday. The QQQ ultra shorts. We will be looking at resistance at the 200 day moving average. If it holds in the $38.00 range we will BUY!

Ray Pulls The Trigger On NOV - National Oil Well Varco

OK, I pulled the trigger on NOV[National Oil Well Varco] today after in dropped 13%. I know common sense says I should have given it another day to see if it tested the 200 day moving average. But at 13+ percentage drop I felt Wall Street would come around fast on NOV. Even before they do the drillers. Remember this isn't just an oil play. It is a Natural Gas play as much as it is an oil play. And I feel nat gas has bottomed for the fall with crude having a little ways to go.