This guy has an interesting point of view:
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[madtrader]
Wed Oct 31, 11:34am PST TYX
To give more perspective about the massive move in bonds today. As it has dropped more than 35 basis points thus far. In it's 20 plus year trading history, there has only been two prior instances that similar move has been made. Just so happens, all of the two prior moves were also made in October. And on top of that significant juncture in stock market history as well. The first time was back in October of 1982, a time most historians credits as the start of the longest bull market in history. The second time was in October of 1987, during the big crash. We all know what happened to stocks afterwards........ none.
[madtrader]
Wed Oct 31, 11:23am PST Asset Allocation
As Bill Gross of Pimco (world's largest bond manager, $250B plus) pointed out in Barrons over the weekend, institutions are withdrawing money from his fund to switch into stocks. Mainly due to the in-balance caused by the sharp rally of bonds and then sharp drop in stocks. The rally in bonds today is much bigger in percentage gains than stocks. Which suggests stocks are lagging, or I believe having a delayed reaction. The fear out there is just as great as immediately following the September 11th attack. Even though stocks have held up well. The market is having a classic period of climbing a wall of worries (I wrote about it a few days ago). Let me spell it out plainly, I have never been this leverage to the long side in my trading life. none.
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[RumorDude]
Wed Oct 31, 11:11am PST $DRG.X
While the drugs have come down (and very well may continue) they are certainly slowing up a bit. Sell to close Nov 400 DRG.X puts
[RumorDude]
Wed Oct 31, 10:55am PST $NDX.X
Just adding a bit more short term spunk here. Obviously, this is for a short term trade. Buy to open Nov 1375-1450 NDX call spread
[RumorDude]
Wed Oct 31, 10:38am PST QQQ
As madtrader has pointed out many times, the liquidity injected by the fed -- and the obvious "get into equity" motions (i.e. 30 year cut + low interest rates) has got to push (or at least help base) overall markets. On a weekly chart of the Q's, the most interesting telling point here would be the MACD. While still in negative territory, this indicators slope is heading upwards from flat. Additionally, the DMI is starting to contract. Obviously, neither of these are signals, but speculating when these are starting to turn is probably not too bad an idea. Selling from a long QQQ position to finance: Buy to open Nov 36 QQQ calls, Buy to open Jan 02 35-40 QQQ call spread, Buy to open Jun 02 40 QQQ calls. |
