Friday, November 7, 2008

The Kirk Report

The Kirk Report

Trade & Fade The Extremes

Posted: 07 Nov 2008 05:23 PM CST

While we started off November on the right foot, the post-election meltdown allowed the bears to win this week's battle.

S&P 500

For the week, the S&P 500 lost -3.92%, Dow -4.09%, Nasdaq -4.27%, and the Russell 2000 -5.90%. There were some giant swings this week and to make money you had to trade and fade the extremes.

As we've seen in prior weeks, the "ultra" shorts were the top leaders. All of the following gained more than +10% on the week - ProShares UltraShort Smallcap 600 ETF (SDD), ProShares UltraShort Semiconductors ETF (SSG), ProShares UltraShort Russell 2000 Value ETF (SJH), ProShares UltraShort Russell Midcap Value (SJL), ProShares UltraShort Russell 1000 Value (SJF), ProShares UltraShort Financials ETF (SKF), ProShares UltraShort Russell 2000 ETF (TWM), ProShares UltraShort Russell Midcap Growth (SDK), & ProShares UltraShort Consumer Services ETF (SCC).

Next week I'll focus on sharing some charts with you among a few other things. We'll see you then!

Breaking Point

Posted: 07 Nov 2008 01:09 PM CST

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October Payrolls Fall 240,000

Posted: 07 Nov 2008 08:30 AM CST

Good morning. October payrolls fell 240,000 and the unemployment rate rose from 6.1% to 6.5%. (September's payroll number was also significantly revised to -284K from -159K).

In turn, premarket trading has been volatile, but currently suggest a positive start in spite of the jobs report and more disappointing earnings announcements. There's hope that the bad news is already baked in, but we'll see if that sentiment holds past the first hour of trading.

Premarket gainers: NVDA, OSIP, AIG, SWKS, ABK, FSYS, LFG, EGLE, VTIV, FNF, TRLG, PCLN, ARMH, PEG, GOLD, CSIQ, PRGN, MIDD, FLR, SAPE, EBS, TBSI, SOLR, QLTY, WPRT, TKC, & CHU.

Premarket losers: YHOO, WFC, GNW, INTG, SOMH, SAH, EFUT, UEIC, PODD, LVS, MTZ, ARAY, STV, HOV, ETFC, SFI, DIS, & WB.

At 10:AM we have the pending home sales index and wholesale trade. Then at 12PM Fed Dennis Lockhart is scheduled to speak about the economy and at 3:PM we have the consumer credit report.

The key for today is simply to shake off the bad jobs report and put in a higher low after the past two days. Premarket futures suggest that is a clear possibility, although I'd temper any excitement over early strength. I suspect there's a fair amount of overhead supply (i.e. sell interest) that we'll see come in but we won't know for sure until trading gets fully underway. At a minimum, 900 level in the S&P must be held in today's session.

Have a great Friday!

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