Tuesday, August 17, 2010

Strong up day in the markets today. You'll recall yesterday the $200 million man was kind of half in on both the up side and down side. The numbers for the last three market days leading up to today in the S&P 500:

Last Thursday ($200 million man totally out):
83.81
213.10

Last Friday ($200 million man goes half in on the positive side):
210.82
210.72

Yesterday, Monday ($200 million man sells some of his up fund stake and puts it in the down fund, leaving kind of a half in position both up and down)
177.68
247.81

So I see today's large up day, and I know he must have done exactly what he did do, although I was a bit shocked at the extent he did it, until I saw a little news blurb. What did he do? Of course, he got out of his up position totally, and went all in on the down side. This action here is what my blog is all about. Hopefully you will stay tuned and watch as this repeats itself over and over and over. Remember, it's not just the $200 million man. I believe he is just the perfect representative sample of what is happening short term.

And those numbers for today were:
70.91
347.23

This did surprise me. He's always good for a laugh. But I did wonder about the strong negative move. Then I saw a news blurb that I think explains it, and that is there is apparently a strong resistance number in the S&P 500 at 1100. I would bet you anything that that is what the $200 million man was looking at. And what happened today was we had the large up day, but it failed to pierce that 1100 number. So the blurb I was reading had kind of a negative tone, even though it was a big up day, because we had failed to pierce that number.

It's always fun to try and figure out what the $200 million man will do next. Many times just one large up day is all it takes to scare him out of the position. These are double funds. So with the S&P 500 up whatever it was today, a large number, he lost twice that by being in this down fund. But having read the blurb about failing to pierce the 1100 number, I would definitely be willing to bet some money that he will keep that money on the down side tomorrow, leading to a possible giant up day. And if we do get a giant up day, then we've had two large up days in a row, which would make him not want to jump in on the up side because it's moved up so much in just two days, and so the rally continues. This is pure speculation. He can and will change from day to day. We'll see what happens.

The Nasdaq 100 money remained relatively unchanged, which is fairly negative, relatively speaking.

Rob