Mark M. - Head Technical Trader

can we test two important levels in two days?

After that close that is the question on my mind and on the desk. What a start to the day as we rallied off of M&A news and some not horrible economic numbers all the way to 1098.50, up a massive 22 handles from the previous close, but then 1:30 pm came and something strange happened; the S&P ‘s sold off a full 10 handles into the close.

This market is brutal, we test levels every couple of days and we tested one today around 1100 after testing a low of 1066 yesterday. Can we test lows again tomorrow? I certainly would not bet against it (I have no positions on in my pad, so I am not betting either way).

All I know is that I am exhausted and this market is horribly tough, although I restarted my streak today (please refer to my blog from this morning) and in a nice positive way.

Who knows where we close tomorrow, or where we open or what the overnight session does, I can’t try to predict anymore, just trade what I see. So I will be patient and make the right trade at the right time and hopefully run the winning streak up to two.

Have a great night.


The good trading streak ends abruptly

I have been on a very good streak of trading, making money in 9 of the last 10 days. Consistency is one thing that separates the winner from the loser in the long run of trading and is what I teach my students right from the beginning, better to make $50 a day, then one day be up, the next down and so on.

When you achieve a level of consistency in your returns the benefits are exponential from a confidence persepective as well as from your actual dollars in your account. Consistency allows you to enhance your share size which in turn allows you to make more money. This is the path that every trader needs to go down if they are going to make it in this great business.

The trader that lacks consistency will never be comfortable stepping up their share size as their confidence will never build the base that is unshakable in the face of a losing session.

So yesterday I lost money and as of 10:45 I was with 7% of my daily stop limit. I took my time and managed to make back some money before the end of the day but it was still a losing session and now I need to begin a new streak. When you are consistent there is actually a liberation in a losing day as this takes some pressure off yet your confidence is unshakable so you just start the next day knowing that a new streak is quickly about to get started.

In hiring traders I will take a trader that makes money 15 out of 20 days even if that trader only makes 50% of another trader that swings bigger and has wider P&L moves. Every desk needs both types of traders but for my money the trader that shows consistent returns over the long term will always be better off than the trader that just feels comfortable taking big risk, looking for the “lottery ticket” kind of trade.

So my streak is over but now I have a new goal and that is to get 10 out of 10 for the rest of this month. Keep following me on my blogs and see how I do.

Happy Trading!

Charlie Rangel makes me sick

Another example of our wonderful political system and the morons who support them. Charlie Rangel, a lifetime politician is under investigation for 13 counts of ethics violations including misappropriation of funds and in true to politics fashion decides to throw himself an 80th birthday at (drum roll please) the Plaza in New York City. Not only was it a chance to celebrate his birthday but it also seemed like a good time to raise money for his next election campaign and to help finance his upcoming legal battle on said ethics violations.

But thank goodness that people are too smart to pay to help this idiot skirt run for re-election or finance his legal battles, oh wait cancel that the party’s 800 tickets were sold out. I find it hard for me to find a more sickening story to think about this morning. Have we lost our collective minds as a country? Do we really needs more years of Rangel? Can’t he just fade off into the sunset?

Clearly the Ted Kennedy route is in the cards for this perfect role model of defending the every man. This man stands for everything that I hate about current politics and is the poster child for why I say that we are in huge trouble as a country as long as we have leadership like this. Jeremy Frommer has taught me that you lead by example and this is the last example that I would want my kids to follow.

Say no to this madness, call your congress people and tell them that you will not stand for this anymore and that you are committed to voting out the bums that are hell bent on destroying this great land of ours. Rangel is supposed to get a fair trial and I am in full favor of that, but must he flaunt this type of behavior during a time of scandel and a time when this countries fiscal security hangs in the balance?

This just does not pass the sniff test to me. If you think I am wrong or right, please comment, I would like to hear what others think on this topic.


As the kids like to say, my generation is more like holy shit! I sit here at 5:20 pm with the S&P emini futures down a full 9.25 handles and the NAZ futures down a full 23 handles and we just re-opened. Already a tough market today CSCO did nothing to help after the close and the market is absolutely puking right now.

Needless to say this is not a good thing for those that are long. Please refer to my long list of blogs saying to get short, including todays that ended with “Get short or Get Killed”. This market has a bad feel right now and after a high volume day, and a day that got absolutely no lift in this market, to get these futures down again is a bad sign.

Happy Trading!

The S&P will NOT rally today

The last 3 session the S&P has managed to rally off the lows each time, closing at respectable levels. Unfortunately that is not going to happen today. There is too much pressure on this market and having watched the 5 hours (instead of sleeping) the market has barely made a whimper of a move higher.

I will be agressively shorting rallies today and perhaps holding these short if the selling maintains all day. I try to be flexible about my trades so anything is possible but I believe that this could be the start of the next move that test the super important 940 level on the S&P. Before that 1060, 1044, 1032 and 1008 are critical levels and should be stopping points on the way down.

Even though I am a technician, I do not see the fundamental backdrop for a good market. Earnings were solid but each economic indicator that comes out seems to disappoint traders, England is lowering growth forecasts as well as China. The overriding poor economic news is going to drag this market lower and there is not a thing that Bob Doll and all the other permabulls can do about it.

Get short or get killed!

Bond market hates the Fed

Strange title for an equity guy but with interest rates at historical lows and the bond traders with a long history of getting the economic scene right I thought it was a good day to discuss what low interest rates are saying about the economy. The bond traders are saying two things: first, the economy is not recovering any time soon and second, there is no faith in the FOMC to see us out of this economic mess.

Yields cannot get much lower as the two year is at .49%, for TWO YEARS you get essentially no interest on your money. This is why people just go to the mattress, taking no bank failure risk and getting the close to the same interest rate.

Frankly I agree with the bond market and it is only a matter of time before the stock market wakes up and smells the deflation. I wrote on Friday that the S&P is going to go lower and perhaps much lower.

Today we get word from the Fed at 2:15 pm est of what their monetary policy stance is going to be, which we know is going to keep rates at 0-.25% but we will also read what the FOMC is going to do about more quantitative easing and the expansion of their already inflated balance sheet.

Bottom line is the Fed is irrelavant and what they say today does not really matter. What matters is the economy stinks, we are losing jobs there is nothing more the Fed can do at this point. Good night Irene!

Happy Trading!

Sometimes it sucks to be right

Clearly I am becoming the sage of Wall Street as I am understanding exactly how this market is trading and am way ahead of the supposed “smart” money when it comes to the economy. I know this is not typical Mark Moskowitz but self promotion seems to be the way of the finance world so I figured I would jump on the bandwagon.

But in the real world, if I am right but we lose money as a fund none of this matters. I am very negative on the economy as my readers know. Every month I get more and more proof of this as the economic numbers show that if we are in a recovery, it is the slowest recovery on record. Bill Gross of PIMCO stated that 7% unemployment is our new bottom number as opposed to 4%

The economy WILL DOUBLE DIP and the next dip could be so brutal that it will last for years. Let’s not keep fooling ourselves that we can spin these poor numbers in a positive way, fact is fact. Right now the S&P is overvalued, I don’t think the $95 earnings estimates by the analysts are even remotely possible.

This last 100 point rally is going to be another great chance to sell stocks and get short. I don’t know if we will do this as a firm, but I know the direction of my pad.

Oh, by the way Obama’s economic team is leaving in droves, hmmmm!

What do I need to see to leverage up?

I believe this was the question posed to myself and Dean Machado last night by Jeremy Frommer. We are under capitalized at this point and unfortunately I have yet to get the intraday setup that will allow me to take more size in my trades. Certainly the S&P has been grinding up and I think there are times to be over leveraged and there are times to be under capitalized.

Why has it been tough for me to get long this market? Because nearly everyday we are maknig R3 sell signals and slowly grinding higher. This setup makes it nearly impossible for me to take long trades.

What is the setup that would be most advantageous? Last Friday we had a great setup, a move into S4, good candle pattern and then confirmation. Yesterday again was a difficult setup for me. I really hate to go against the pivots as I believe in them, so as a discipline trader I will wait for my best pitch, my great setup and then look to hit it hard when that time comes.

Dow Jones Index drops 1,000 points

Why am I making this prediction? How long until this comes true?

In listening to Fast Money on CNBC and that John Paulson is selling half of his equity assets due to uncertain economic times gets me to thinking that the market has had a huge move off the bottom and that a small correction may be in the works. Then I go to the CNBC website as well as Bloomberg site and I see that many big time managers are about split on where they believe the market is going to go.

So all of this divergence in opinion tells me that the range that we have traded in since late April is still in tact as the market is in a virtual deadlock between opinionated managers with lots of capital. Bob Doll who is the CIO of Blackrock and permabull is calling for 8% average returns over the next decade and at the same time his firm is applying to the SEC to create ETF’s that can short stocks, hmmmmm.

The last part of my thesis is that today I was heavily short this market and although I lost a little bit of money, I was never hurt that bad and as we have seen over the last few weeks, the market often will trade counter to the last move of the previous day. The market is at resistance, we have rallied 120 handles on the S&P and we have payrolls data on Friday. Earnings are mostly behind us and the economy stinks, regardless of what people want to say.

Do we drop 1,000 Dow points tomorrow? Let’s wait and see.

Quiet Stock Market Continues, how to survive

We are in the dog days of summer with very low volume and very tight ranges, but there is still some opportunity to make money. As an intraday trader we have the luxury of finding many stocks and even on the most quiet days there are stocks that are moving.

I traded a number of stocks yesterday and was positive for the day with low volume.

First tip for survival is to keep expectations low. If you are used to making $1,000 a day, that number may need to be cut down.

Second tip is to make “A” trades primarily. You do not want to get stuck in a trade that does not have the best chance for success. Be very choosy and if you feel the need take larger size to offset your lack of trades.

Third tip is to notice when the markets are trading and when they are stalling. 9:30 am to 10:30 still seems to have some volume in it, but the remainder of the day has been quiet. Don’t be afraid to get up and leave once you have achieved a good day, refer to tip #1.

Fourth tip is to stay close to home. Trade the names that you know, this will give you a comfortable feeling when in a trade and allow you to guage the action in the market.

Final tip is to have some fun and learn from the market that we are in.

Happy Trading and keep your comments and questions coming in to member chat.