Wednesday, December 17, 2008

Encouraging That Options-Week-Wednesday Was Not A Big Down Day - But Lots Of Churn

Usually options-week-Wednesday is a bad day. But not this time. Although things got choppy mid-afternoon and a bout of selling in the final few minutes pushed the indices back towards the morning lows, all in all it was a pretty good day for the market. Investors stepped up to buy the initial weakness, the averages were able to climb into positive territory early in the afternoon, traders hunted aggressively in some pockets of momentum (including steels, bulk shippers and solars), and both the Dow and the S&P 500 held above their respective 50 day moving averages.

Why in the world should solars trade like they did today with oil down so much, and what in the world is going on with treasuries? – equities are seeing some decent pricing action. I suspect that it has a lot to do with the time of year, and that may be why volume is drying up, but it’s been a while since we’ve seen groups of stocks act well as a whole and do so for several days in a row.

Regardless of the reasons, that’s what the market is doing right now, and even if we don’t put a whole lot of trust in it – okay, we aren’t putting any trust in it – that doesn’t mean we can’t play along while it lasts.

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