Fed to slash the rate… now what?

Wednesday the Fed wraps up their meeting…

My guess is a cut of half a point.  That puts the rate back to Dwight Eisenhower days!  Now is a great time to refinance your house, or even credit card loans.  I suggest just calling your credit card company and ask them to give you a lower rate.  Use some fancy economic words.  You’ll be surprised at how low you can negotiate your loan at.  I’m not sure how that will work if you have an auto loan from a credit union, but with these historic lows on rates, its worth a try to just ask.

The big question for me is, when will the Fed start raising rates again?  I mean, I think getting under 1% will probably not be efficient on the lender side.

As for the market, I am expecting a retracement in the early hours that will probably be filled back up.  I also think the Vix will be relatively quiet, showing that it won’t be an easy day to day-trade.  Maybe in the final hour, the best setup would be to short weak stocks if we see sector-wide profit taking.  

As for possible fades:  

MercadoLibre, Inc. [[meli]]

GeoEye Inc. [[geoy]] … government no longer has satellite spending on budget

Titanium Metals Corporation [[tie]]

United States Steel Corporation [[x]] … which rallied right off its 52-low yesterday!  It will get under that in a few days.  Keep it on the short list.

DryShips Inc. [[drys]] , TBS International Limited [[tbsi]] … short on any spike.

As for possible breakouts:

Integral Systems, Inc. [[isys]]  … me and Mac approve

Intuitive Surgical, Inc. [[isrg]] … see Ragin’s vid

National-Oilwell Varco, Inc. [[nov]] … oil could see more strength heading into November.  This one is Fly’s pick.  I like

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And here’s the solution to the early IBD/PPT chess puzzle, no one solved it, but MPTrader was close (http://ibankcoin.com/gioblog/?p=2170):

 

Knight to F4 blocks the Bking’s path to H5; Bking to H7

Bishop to G5, bishop must not give up that diagnol!; BKing forced to move to H8

Knight to G6 check; BKing forced to move to H7

Knight to F8 check!; Bking forced to move to H8

Bishop to F6 checkmate!

 

… the trick was limiting the black King’s moves to just one.  You will notice the Black king moved from H7-H8-H7-H8 … it had no other choice because white blocked all the other squares.  This is called a “zugzwang”in chess, where the other opponent forces your moves.

Lesson:  Don’t let the market get you caught in a zugzwang!  Set your stops based on volume then price.

 

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For those of you following me, I issued a warning last Friday that the Vix had completed its double spike pattern up to 80s.  The first confirmed “spike” was on Wednesday at the open, the second spike occured on Friday’s -500 premarket panic.  I originally thought Thursday was a “spike”, but it was more of a trend up. 

Anyway, last night I posted a video (http://ibankcoin.com/gioblog/?p=2168) for possible trading ideas based on my Vix-Double-Spike theory.  My key plays were to short the inverse ETFs.  Take a look at them…

[[skf]]

[[fxp]] ..wow!

Or you could have go long any stock in the universe.

Right now I am holding a massive day-trade long in Petrohawk Energy Corporation [[HK]] as outlined in my video.  Notice the key triangle wedge formation I noted there.

I am also short SKF, and will continue to hold this as a swing trade.

Right now the Dow is heading to the 8% territory.  So now do you trust the Vix Theory?  Its at least great for using to find key reversals, even on the short term charts.

Finally, I am starting a new study with The PPT merged with the IBD100 list.  I will let you know when I get a correlation in trends there.  Should be great stuff!

Aloha!
-gio-

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But first, another chess puzzle..

White to win in 5 moves, white’s play…

 

 

Rank	Company	Symbol	Price	PPT Hybrid	Rec.
—-	—-	—-	—-
1	EMERGENT BIOSOLUTIONS	EBS	15.65	3.02	Buy
2	ALMOST FAMILY INC	AFAM	37.33	3.16	Buy
3	INTEGRAL SYSTEMS INC	ISYS	20.81	2.66	Sell
4	LIFE PARTNERS HOLDINGS	LPHI	37.67	3.76	Buy
5	PETMED EXPRESS INC	PETS	16.37	3.7	Buy
6	SYNIVERSE HOLDINGS INC	SVR	15.18	2.48	Sell
7	AMEDISYS INC	AMED	47.38	2.85	Sell
8	SYNAPTICS INC	SYNA	28.33	2.35	Sell
9	AXSYS TECHNOLOGIES INC	AXYS	54.82	2.74	Sell
10	CELGENE CORP	CELG	57.47	1.97	Strong Sell
11	CLEAN HARBORS INC	CLHB	60.24	3.48	Buy
12	ENSIGN GROUP INC	ENSG	15.65	2.8	Sell
13	UNITED THERAPEUTICS CORP	UTHR	88.88	2.5	Sell
14	CHATTEM INC	CHTT	67.73	2.72	Sell
15	AEROVIRONMENT INC	AVAV	27.98	3.22	Buy
16	HOME BANCSHARES INC	HOMB	24.89
17	LACLEDE GROUP INC	LG	47.71	3.21	Buy
18	STRAYER EDUCATION INC	STRA	176.25	2.72	Sell
19	TECHNE CORP	TECH	64.6	2.5	Sell
20	BALCHEM CORP	BCPC	23.36	2.67	Sell
21	NEOGEN CORP	NEOG	26.67
22	SOUTHSIDE BANCSHARES INC	SBSI	21.04
23	SPARTAN STORES INC	SPTN	23.14	2.75	Sell
24	GILEAD SCIENCES INC	GILD	43.32	2.3	Sell
25	CELLCOM ISRAEL LTD	CEL	28.19	1.79	Strong Sell
26	FLOWERS FOODS INC	FLO	25.68	2.5	Sell
27	GENOPTIX INC	GXDX	31.87
28	EL PASO ELECTRIC CO	EE	17.72	2.74	Sell
29	MCDONALDS CORP	MCD	53.06	3.12	Buy
30	PROASSURANCE CORP	PRA	48.76	3.03	Buy
31	CHURCH & DWIGHT INC	CHD	55.35	2.84	Sell
32	DOLLAR TREE INC	DLTR	34.7	3.59	Buy
33	STERIS CORP	STE	30.99	3.4	Buy
34	HAWAIIAN ELECTRIC INDS	HE	25.13	2.46	Sell
35	ONEOK PARTNERS LP	OKS	49.71	2.95	Sell
36	STERICYCLE INC	SRCL	50.4	2.45	Sell
37	GENZYME CORP	GENZ	67.45	2.89	Sell
38	PINNACLE FINANCIAL PRTNR	PNFP	24.52	2.96	Sell
39	BAXTER INTERNATIONAL INC	BAX	58.2	2.81	Sell
40	TRACTOR SUPPLY CO	TSCO	36.17	3.7	Buy
41	ABBOTT LABORATORIES	ABT	54.3	3.22	Buy
42	AMGEN INC	AMGN	57.17	3.93	Buy
43	THORATEC CORP	THOR	25.04	3.09	Buy
44	ENTERPRISE PRODUCTS PTNR	EPD	23.9	2.72	Sell
45	COVANTA HOLDING CORP	CVA	21.68	3.1	Buy
46	BURLINGTON NTH SANTA FE	BNI	80	2.97	Sell
47	C H ROBINSON WORLDWIDE	CHRW	44.16	3.22	Buy
48	BARD C R INC	BCR	81.18	3	Neut
49	WAL-MART STORES	WMT	51.4	3.48	Buy
50	EDWARDS LIFESCIENCES CP	EW	50.94	2.58	Sell

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Hi traders… I was fooling around with Flash and decided to make a video since I couldn’t sleep.  Anyway, its very loose, uncut, unedited, with no fancy stuff yet.  I just decided to record part of my desktop while setting up my trading platform for tomorrow.  So, you basically just see me looking through a few charts.  Anyway, here’s what I was trying to say throughout the vid…

1)  Vix double spike “woke me up” to start searching for a possible relief rally.  The Fed day was a good place to start as bears could run scared.

2)  AAPL chart… screwed that up.  I was zoomed in too much.  Lol.  

3)  Then I proceeded to show you the stocks I intend on trading if we get a relief rally AND/OR which stocks to short if the rally fades.  Stocks included:  GG, GMXR, HK and JASO for the long side.  Notice HK’s nice mini-bull flag that moved the stock over 40% real fast.  Then I was amazed at how low JASO was.  

4)  Finally, I looked at some inverse ETFs that I plan on shorting on a rally.  I’m already short SKF since my Vix signal to start searching for a rally.

Anyway, here’s my video.  Hopefully it gets better along my learning curve.  Beware!  Its poorly put together.

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Going over my charts on the Vix once again.  The first spike was confirmed on Wednesday morning to the 80s, then a morning spike to the 90s on Friday as stocks opened with -500 completed the second spike.  Monday’s selloff was expected, as trading was light.  The Vix did not spike last Thursday, but rather moved up at a low parabolic rate.  These numbers are telling me the Vix is trading at “extreme levels” so its a good time to start digging for a relief rally.  The Fed news, however, throws a wrench into the system so beware.  Wait up… I just checked the futures, up about 300 points on Dow!  Will the VixTheory work here?  I’m not really a fan of premarket action, so I can’t say much about what that’s printing.

Tomorrow, we get the Fed news volatility.  I’m expecting good surf in the early hours, and in the final hour of trading.  Watch for volume if you’re planning on going on the long side.

Two ways to play the tape… fade the first reversal on the morning gap.  Or (2) play the accelerating momentum at the close… that could go either way, but I’m expecting up, else no trade.

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