Lunchtime commentary

Positions
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FAS @ avg. 6.25, cost @ 4.73, increase stop to 4.95
UCO @ avg. 7.75, cost @ 6.505, increase stop to 6.95

FAS has considerable gapping risk that may blow past my stop.
I've calculated a few stats since the ETFs inception in November 2008:

Mean daily delta (high-low) = $3.08
Sample standard deviation of that delta is $2.114

Likely, these numbers are corrupted by sampling from multiple populations, but the message is clear. Overnight stops on 3x leveraged ETFs can turn sizable gains into quick losses - a trader's cardinal sin.


Lunchtime Commentary
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Ugly, putrid economic data. Worse than expected across the board

January Durable goods orders ex-transportation (-2.5% vs. -2.1%)

Initial Jobless claims (Initial: 667k vs. 625k, Continuing: 5.112mm vs. 5.025mm)
** First time ever continuing claims > 5mm
** Highest initial claims since 1982 recession, although the labor force was much smaller in 1982

MoM New Home Sales (309k vs. 324k)
** Lowest ever, and -10.2% month-over-month (MoM)

Being a nocturnal creature by nature, I was up watching my man Tiger until 11:30pm and then was up to follow Asians markets through their close. U.S. markets are looking eerily similar. Big opening hour gains slowly wiped out. Hoping this doesn't happen, but in reality, nothing positive has happened today. Unless you are a fan of 9000 earmarks. $140MM for volcano monitoring - "It's the stimulus package stupid!"

Technicals are once again a factor.
1st level daily resistance was not broken: S&P @ 779, Dow @ 7398
We'll likely test these levels again as supports are more than 2% below current levels

Crude oil has risen sharply but faces tough resistance at 43.50 - 44 (Trendline/Fibonacci).

Pad-gra-prow? Sounds like a plan - spice it up.


Live from Queens
Think happy thoughts
TM

12:07pm
Because the true timestamp makes me sharper than Nostradamus