Day Traders Satisfied with Market Volatility

Today was the type of day that Day Traders far and near have been waiting for. Follow through with volume. The markets sold off hard leaving this as the worst down session in 12 weeks. Threats of a tighter monetary policy in China, Obama speaking of tighter regulation in the banking industry and many selling the news after positive earning from EBAY, Goldman Sachs (GS), and Starbucks (SBUX).

Energy stocks dropped 2.0% as oil prices were pushed to a near one-month low of $75.66 per barrel before they finished pit trade with a 2.1% loss at $76.08 per barrel. Financials were down 3% as Obama anounced plans are being put together to ensure that no bank will own, invest in or sponsor a hedge fund or a private equity fund, or proprietary trading operations unrelated to serving customers for its own profit.

Some of our newer traders’ had never witnessed this type of volatility and some even made comments that “trading is easy , when the order flow is clear and the volume is present”. We could not agree more. Trading can be easy, when you are disciplined to follow your plan and trade when the conditions are right and trade lightly or not at all when conditions are poor.

At the close of the day, we had held the 50 EMA on the SPY. We will be watching the $100.74 level in the SPY for the next move in the market. The markets have held the 50 EMA at almost every attempt to break down. If we trade below, with volume, the markets may very well get the correction that many have been long anticipating.

The $VIX climbed from a low of 18.30 to a high of 22.02.

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