A Day Trader's Tape

By David Fry | November 18, 2008 | 6:25 PM | 0 Comments

It's been a day traders market and today was no exception. Another messy opening, a ramp higher, a dump lower and lastly a nice stick save higher into the close. Since headline writers don't understand markets they write dumb things like Yahoo/Finance at the close: "Stocks End Higher, Buoyed by Late Surge". Yeah, right.

There really is no apparent reason why stocks rallied [maybe an auto bailout?] into the close other than traders could push it. The key to events like today's end-of-day ramp is low volume within an oversold downtrend. Trading desks this and watch the volume closely. Armed with free TARP money, they try to push it in the other direction to spot resistance. As long as they find little resistance they'll continue to bid it higher. And so it goes.

Volume picked up dramatically in that last 45 minute ramp higher. But breadth continues negatively and a look at it doesn't reflect a healthy rally today.

A day traders market? Yes, that's the strategy that's been most effective unless you're a short seller with a willingness to accept large moves against you without getting stopped-out.

The end-of-day ramp was built from trading desks testing and pushing indexes higher. Also, perhaps our activist and manipulative government knew a serious break of the indexes at today's lows could have meant another large waterfall leg lower and stepped-in directly. I can't prove it and wish that during this congressional testimony someone would ask that question directly.

We'll have more on inflation from a low CPI number coming up and did you know this is options expiration week? I'd say the market was in perfect condition for some shenanigans from the floor traders at the options exchange.

Have a pleasant evening.

Disclaimer: The ETF Digest has no positions in any of the highlighted securities.