The end of the day might have been discouraging to a lot of bulls but the intraday one minute chart is what kept me in the market holding my short positions. You can see in the intraday chart below that that market attempted to hold the 1930 support level. But 1930 is light support and it has done well to hold this long.
Investor sentiment is so negative that you can see that in the momentum indicator set for intraday at the one minute cycle, it was primarily negative during the day. Even some of the rally attempts saw quick bursts of selling. It was in general a very negative day on the markets.
Into the close volume picked up rapidly and stocks dropped quickly. My AT&T stock trade would have earned additional income had I waited into the close. The selling into the close was pronounced and while some on the media outlets thought the selling smacked of capitulation I think this is far too premature to call an end here. The S&P is nearing 1900 and with the Dow now negative on the year and the IWM ETF Russell 2000 at a new low for the year, there is still more selling ahead.
Intraday one day for Oct 10 2014
Rolling Down Covered Calls For Longer Term Positions
During the day today I rolled down a number of covered calls which I had sold in the money at the start of the selling in mid to late September. Today a lot of those positions are out of the money or at the money and I rolled some lower again to keep bringing in premium while the market decides whether to keep falling next week. Since no one ever has the perfect crystal ball I like staggering my rolling down of covered calls on my longer-term stock holdings. I will write this up this weekend.
VIX Index New High For The Year
The VIX Index hit a new high for the year at $22.06. Sadly all my calls were gone days ago and I did not add to them. I may consider adding a few call contracts if there is a rally next week but right now stocks look set to move lower next week which will push up volatility. I will have to decide whether to chance buying the VIX Index calls even though I am reluctant to do so without some kind of a rally back up to get their inflated premiums lower and more attractive to buy. You cannot be in every trade and I learned a long time ago not to chase any trade so I will have to wait to see what next week brings before deciding whether to enter the VIX Index Call strategy.
Summary of Today’s Market Direction Action
Action today was all negative and while the Dow and SPX did turn positive for a short period, the momentum indicator showed a lack of follow through and was dominated by negative readings. Today was about the bears. This weekend I have a lot to post and will send out notices as I post. Enjoy your weekend as next week looks volatile still.
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