Hedge 5

Sometimes to you have to say you were wrong. I am too close to getting called away to have to delivery the 40,000 SPY shares, so I covered this for a loss today. of $10.64 a share or $425,600. It happens.

The same rules apply. No trading for me for three days since I have had a losing day. Probably better since we have labor day head.

No trading until next Wednesday with the holiday

Sunday Homework

I covered most of my thoughts on Friday with RPM from daytradingradio.com Nothing has really changed since last week. The bears need this under 3317 to really make a dent to the downsize. It’s up to the bulls to hold or make news. It would be very logical to hold and consolidate up here into the election. We could, barring news, wobble between 3250 and 3425 between now and the election and neither side could declare victory.

Bond Link

This is a link to a wikipedia page with a nice table of bond ratings and historical default rates.

I was looking at some bonds rates BBB- and could not remember that default rate statistics. Based on this table, a corporate debt instrument with a rating of BBB- would mean there is a slightly less than 5% chance of default. Good to know so you can price your risk accordingly.

An example would be if you could get pick up a bond paying 5% at par at a discount of 10% to par. So instead a 5% yield it would 5.5% or so. Or a 10% bump in yield. With a 95% chance of being paid and getting your original money back.

Something to be aware of with debt instrument investing

https://en.wikipedia.org/wiki/Bond_credit_rating#Credit_rating_codes_and_classes

Sunday Homework

The bears won on Friday put in an ugly reversal candle on the daily. It is up to bulls to either put up or go home.

There is a weak high around 3350. I expect that to revisit again soon and would start shorting 10 handles or so above that.

Really nice stuck shorts at 3294-5ish that should be good for a long as they cover.

An air pocket if this can get under 3311 down to 3302ish.

They sold the close on Friday so would no be surprised at a gap down Sunday night. See what it looks like after that open.

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Strong Market

Last night the news about the Iranian missile launches was out and the market was down 50 handles or so. We are now green today by 7 handles while I write this post.

This market wants to go higher If the bears couldn’t hold it lower with missile launches then what makes it go lower?
Earnings start next week. If they are NOT as pessimistic as people think, then we will hit 3300 more quickly than 3100

Inverse H&S trying to form in the four hour inside of a pennant.

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