Well Everybody Knows

There will always be people with better and more accurate information, and have the ability to process it quicker and act upon it faster than I can. There will also be people who get this information from the inside and sometimes from the bearded mouth himself. We know from documentation that the FED would talk their book to Goldman Sachs which allowed GS to in turn position themselves accordingly. We also know the back pockets of politicians hold a lot of greasy dollars and their not immune to passing off policy information before votes are cast.

We know that there are typically two times when a stock gets downgraded, after it has dropped from $100 to $8 is usually a good time, and the other time is when a stock is clipping new highs; not that the stock is too expensive mind you, it's just that someone else wants it cheaper. This is how the game is played so there's no use crying about it. However, that doesn't mean there isn't something we can do about it and yesterday was a good example of what to pay attention to.

Going into yesterday the major indexes had strong moves of over 1% with many closing near their highs. It looked at the time like constructive action as price action was firming and the higher low was being confirmed. Then the gap down hit the open and the markets began to hemorrhage clipping that higher low and at one point being down as much as 1.5%. Clearly this looked ominous and suggested to me at the time the June 04 pivot low would be in play over the near term. But a funny thing happened.

Buy Buy Buy

Going into the close the buy button was hit and the indexes back tracked and the Russell actually closed higher for the day and near the previous day's close. Now I can't know for sure if someone in the EU was talking their book or not, but if I was Merkel I might want to put on a little hedge position and make sure some were positioned to take advantage of the situation in a manner that was beneficial for Germany (especially after that poor performance!). Knowing this or not is not important to me, but what is important and a valuable lesson from yesterday is improving my awareness of these little nuances when the indexes flip intraday from blood on the streets to just a flesh wound.  It might take me a day later to get the picture, especially when I was too busy watching the German back field get shredded like Parm, but I'm a bit slow at times at times anyways.