Monday, October 6, 2008

The RO Report, "Orderly Panic" Edition

I have to say that for all the pictures you'll see tomorrow of aggrieved traders, and even with the $VIX spiking to its highest level since its inception, it didn't feel too panicky out there.

Also, the fact that the market rallied 400 points on even the hint of a rumor about a special G8 meeting, is laughable. In fact, the market was so orderly today on the downside, that I'm starting to get the awful feeling that we'll need to get below 8500 on the Dow before this is all over. That's just my feeling... no lines or anything to give me that number... it's just where I think shit would be really, really scary.

The best case scenario, from a trading standpoint, didn't happen today. Had we pinned ourselves to the lows at the close, down over 1000 points or something, and set ourselves up for a little more of a wash tomorrow morning, I feel we could have made a bottom. It would have been perfect. Europe and all the overseas markets would get crushed again, we would have gapped down tomorrow, sold the first hour and then bounced. Just after we started to bounce, the FED could come in and cut 50bp and we would have had a 600 point rally.

The end of day rally today muddied that scenario a bit and I'm not sure what to think now going forward. I think we have, yet again, forestalled the inevitable.

It wasn't a classic day for the RO. There was good money made, but also some heavy losses. At no time today was it "easy" to make money and every trader... even Trader D, visited the dark side today at some point. In fact, Trader D was down close to $30,000 at one point.

Out of 26 traders today, 19 were gross positive, or 73%. That's good, but given all the movement today, I'm surprised it wasn't better. Still, the "bosses" reclaim the top position... the RO was nicely positive today overall. 12 traders finished up over $1,000 gross. I was #10 of 26.

Here are today's Bosses:

1. Trader D, $107,836 on 738k shares traded.
2. Trader C, $30,088 on 579k shares traded.
3. Trader Z, $14,564 on 377k shares traded.
4. Trader E, $8,974 on 147k shares traded.
5. Trader L, $5,587 on 114k shares traded.

And the Manservants:

1. Trader F, -$27,081 on 185k shares traded.
2. Trader K, -$23,121 on 362k shares traded.
3. Trader A, -$11,797 on 556k shares traded.
4. Trader N, -$4,656 on 46,000 shares traded.
5. Trader V, -$1,617 on 59,500 shares traded.

Get good sleep tonight. But before you close your eyes on the day, give us your thoughts on what will happen tomorrow over in the comment section.

NOTE: Volume on the NYSE was under 2 billion shares today. That seems light given the action. I don't think we've seen the bottom.


Paracelsus said...

I think tomorrow will look ugly. The market is waiting (hoping) for a 50bp rate cut. If that doesn't happen we might be down for a slide of 500 points or more.

Scott said...

If you prepare yourself to trade whatever direction the trend is, it doesn't matter which way the market goes.
I find it mystifying why people want to decide what the market is going to do. Just go with the flow. That makes it much easier to change direction when the trends do, take your profits, or stop your losses and go the other way.

illmighty said...

First time commenter, long time reader. Dig the blog man!

Well, it would have been easier to guess what tommorow's gonna do if we would have closed at 2pm...repeat of last Monday/Tuesday scenario. Tomorrow, I'm gonna bet a mildly up morning that sells off in the afternoon...down 266 for the day. However, if the rate cut gets announced we go up 400.

T said...


NYSE' volume for today was 8 billion shares. Don't know where you got the 2B number.

Dinosaur Trader said...


Most traders in my office prepare some type of strategy for the day. If it pans out, it gives them more confidence, if not, they just scrap it and move on. I think it's a decent exercise. And if you're almost always right in your analysis, (as Trader B seems to be for example) it can really help you size up.


Thanks for the comment. I like that theory actually... thanks for coming out of the woodwork.


I get my figure from $tvol on esiggy. It doesn't include arca data. It's purely the trades executed on the NYSE. For comparison purposes, last August, it was close to 3 billion when the craziness began.


ilscfn said...

Yo paracelsus well done! You hit the proverbial nail on the proverbial head. Do you have a prediction for tomorrow?
-trader E