Thursday, September 18, 2008

A day to remember

Palpitating fear in the market after initial balance. Great deal of volume. The Market structure (normal variation) we had yesterday extended with the range extension to the down side in the morning. It is an important detail to note that we had a buying tail in the G & H period. An important level for the future.

Markets rebounded first with the British Financial Services Authority put a temporary ban on betting on the short side. Wide speculations of a cross -border effort with many centralbanks. Then we had news of Paulson talking to lawmakers on a proposal to deal with the bad debt losses:

The U.S. Treasury Department and Federal Reserve declined to comment on Thursday on any discussions Treasury Secretary Henry Paulson may have had with lawmakers about a Resolution Trust Corporation-style fix for a financial market crisis.

"We're not going to comment on rumors," Treasury spokeswoman Jennifer Zuccarelli said.

A congressional aide told Reuters that Paulson has been discussing with lawmakers a proposal to create an entity to deal with bad debt that would be similar to the institution established in 1989 to clean up massive losses in the savings and loan industry. (Reporting by Mark Felsenthal; Editing by Dan Grebler)

A great trading day. Cutting losses quick (or breakeven) and letting runners run
works like a holy grail on days like these. One could rake in a huge profit with less than 50% win rate.

We ended up with a net negative delta of -50K in the genenral chart which indicates that short covering led the rally and some of the long term longs that were liquidated today were not put back on. The big contracts ended up with a positive delta and is in line with the last 3 days action by the big money.

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