News out of Dubai is cratering the futures on Thanksgiving. That's not very nice and happy to a lot of investors (including me as I'm long into tomorrow = oouch...to start).
Futures down 23+ on the ES (S & P) and 42 on the Nasdaq futures. That's a steep freakin decline premarket, particularly when tomorrow should have been an up day based on the holiday and the 1/2 day status.
I haven't had the time to digest the news or really read the whole thing so I'll refrain from making an overall call, though my initial impression is that there are going to be some very nice fades to play. With all due respect to the UAE they aren't the center of the universe.
The sectors that may very well get whacked the hardest are the financials and anything real estate related. Remember, we've said for a while, as have others, that the commercial real estate sector would be the next "shoe" to drop. I do own 10k SRS and 80 FAZ calls as my hedge so hopefully for me that will counter my AMZN and AAPL calls and the other small stuff I own.
In the meantime, I did my marketcast class Wednesday after the close and said that I felt that the market would head higher Friday, unless some news came that derailed us. Well, seems we got some news that rerailed us, at least initially. Hard to imagine calling for the gap to fill if its truly 20+ points, or more (watch 1075 on the ES as a potential short term line in the sand here).
So, it'll be interesting to see what we do particularly if Black Friday #s look better then expected. If that happens I would think that becomes the focus and not what happened in the UAE.
The fear here is that the house of cards we have been trading on becomes the house of wax and someone lit a blow torch to melt it. Or, some bad metaphor like that.
So, either the fear that this will lead to worldwide emerging and other market meltdowns either spreads, or this is just another buying opportunity on the dip. My guess initially is its the latter. If it all melts down, though, it'll get very ugly very quickly.
As we always teach, "NEWS RULES!" There's nothing that is more powerful then news. You can have the best trend, and the best chart and the best fundementals, but if the news is bad, the stock is gonna get hit.
As far as fades go, watch retail off news from Black Friday and more then likely stay shy with banks and financials, just not worth it unless we start to look like we are going to get a massive reversal. Very tough on a 1/2 day, the timing is really bad for this type of news because unless it gets cleared up right away investors face the cunundrum of locking in profits and leaving the "risk" trade, or using this as a buying opportunity if they missed this move, or a lot of it.
Also, watching the Dollar, it should be UP on this news. Europe gets hit far worse then we do on this and yet the dollar, while up a tad, is certainly not up much here.
A flight to "quality" would usually mean that the dollar gets a very nice squeeze, and perhaps it does but so far it hasn't, and Gold has not sold off all that much.
So, let's see what clarity we can get overnight, maybe we'll open GREEN! OK, not very likely, but we are about 10 points off 1075 and below that I'd look at 1050. If we bust below that early next week it'll either act as support or we may finally get that selloff many have been looking for.
ES now down nearly 25 points and Naz futures down to 1750, down 44 points.
That's a very large gap down. Interesting indeed. Very very interesting. One way or another we should get a very BIG move next week and once I digest the news I'm hopeful I can get a broader sense.
Also, remember - TUESDAY is the FREE class on trading the current market and will be a very special class indeed. So far we have a TON of people emailing me all day today (apparently I'm like a TURKEY, or better).
Email Ilene for info @; firstname.lastname@example.org and/or me @: email@example.com
and we'll send you the link to sign up.
Also, just a heads up, Monday's TREND SUCCESS radio show should be AWESOME, it's all about being and living GREEN successfully. Obviously a popular topic and I have some great guests coming on the show.
Next week we're probably going to do a show on the spiritual side of MONEY, but we'll see as I'm waiting to hear back from some very special and cool guests.
If you want to check out the show, go to; www.chataboutit.com/about/trend-success
I'm loving doing it, which just goes to show that money ain't everything. I don't make a dime on the show and yet its one of the funnest things I do in my life these days. Who knows, maybe soon I will be persuing a new career. I was actually offered a very cool opportunity business wise the other day and am thinking about it. Cool thing about the dollar basically being worthless you can pick your choice of careers, we'll all be broke! Ka-chango!
In the meantime, as I close this out, the ES is now down 26 points. Tell ya, anyone who went short Wednesday near the close is sitting pretty just about now babies.
It ain't me, but then again, playing for disaster is usually not a good trade to make. Though, clearly not always.
Oh, btw, I'm in Cincy and the news right now is showing the Black Friday lines for Coach, and other retail outlets here already. Have a feeling that IF the Black Friday #s are better then expected we will at least try to eat into this crazy big gap down.
One more note, still keep in an eye on 1.50 on the Euro, right now we are actually down about 2 cents on it, which is a decent size move, but if the dollar does reverse and get recrushed again the market should get that bounce.
Tough to call here, let's see how it plays out and go with the flow!
Michael "Waxie" Parness
*FREE CLASS TUESDAY, email - firstname.lastname@example.org or email@example.com for a link to sign up for the class.