Bond Insurer Downgrade, System Failure? Down Again --> $600 profits
5 min Emini Nasdaq 100
Hi,
Market gapped down slightly, covered the gap and immediately met resistance at the moving averages, bouncing down with a sharp turn of stochastics... I shorted 1 contract at 1880 and another 2 more contracts at 1874... Price was choppy but went down as expected... I only exited when stochastics cut up the oversold region. I exited at 1866 with $600 profits.
Fundamentas:
Credit concerns also dogged Wall Street after rating agency Moody's Investors Service placed bond insurer Ambac Assurance Corp. on review for a possible downgrade. That possibility alarmed Wall Street because it would place all bonds insured by Ambac on review as well. Ratings agencies are concerned that bond insurers would be unable to absorb a spike in claims.
Investors fears of a slowing economy again dominated trading.
"The Philadelphia Fed just announced dreadful numbers," said John O'Donoghue, co-head of equities at Cowen & Co. He said if you look back at Philadelphia Fed data for similar numbers, it takes you back to the 2001 to 2002 recession.
"It's not rocket science - the economy is slowing dramatically, and it's being reflected in economic reports."