This market is desperate.  Desperate for a glimmer of hope, a light at the end of the tunnel, politicians with brains.  Whoops!  Did I just say that last part out loud?

So, New Home Sales went up today all of 0.01 – told in millions, that’s 10,000 homes.  The teeniest of moves up.  Barely a drop in a very tired, sad, empty bucket.  But the way the markets reacted, you would have thought we had a return to, IDK, 2001!  LOL!  Okay, I love volatile news announcements, so I’ll take it, but it’s just plain weird.

New Home Sales; 7-26-2010

5 points on the initial move, 1.25 on the correction, 3 points on the similar move.  Okey-dokey, we’ll take it!!

We expected to see some extra volatility coming into today’s trade after yesterday’s shenanigans.  But news that was mixed left the S&P having a whipsaw reaction.  Patient traders who made it through the first couple of minutes on the trade were rewarded.

Dawn-Renée's Non-Farm Payroll Trade 05-07-10

Leading up the the announcement, you can see the S&P move up (yellow arrow moving up on the left side of the graphic) in anticipation of the move.  I don’t normally put orders in prior to the announcement, but the movement up made me expect that we would be likely to see immediate movement downward on the announcement.  So I sold short at 1131.25, expecting the market to move downward.  Instead, it started wicking (the skinny green section of the candle) up.  I drug my stop loss farther up once, expecting that it would go back down because even though the market added 90,000 more jobs than expected, most of those were temporary government census jobs and unemployment actually went up .2%!  I tried to drag my stop loss up a second time, but didn’t make it and it filled me at 1134, causing me to lose 3 points.  However, true to my Market Mover Trading education, I didn’t panic and instead focused on the news.  Sure enough, there was a correction downward as the market realized that the Non Farm Payroll news wasn’t actually good news!  I made 4 trades on the downward movement (see yellow arrow down in the middle of the graphic) using MMT’s proprietary Prediction Points for 6.50 points of profit. (S@1132, B@1129.75; S@1129.75, B@1128.75; S@1129.5, B@1127.75; S@1128.25, B@1126.75).  Then, using a MMT strategy, I suspected we would see similar movement (as the initial news), so I bought long and made an additional point.

So, for the day, even with the initial 3 point loss, I was up 4.5 points, which is 45% and $225 on one $500 contract.  I was 7/8 trades for the week and up 70%! Woo-hoo!  If I can learn and succeed at this without much brain damage, anyone can.  I spend WAAYYY more time blogging about this than I ever do actually setting up to trade and trading.

So, on top of a morning that brought us Initial Unemployment Claims that were 31,000 higher than expected (496,000 vs. 465,000), we then received more great (lol) news on MMT’s proprietary News Server.  This News Server is incredible; we get new news instantly.  Sandra Pianalto, the chief executive of the Cleveland Reserve Bank, stated that the “mortgage modification process has been more difficult than anticipated.”  After we recovered from peals of laughter, since any mortgage professional worth his or her salt could have told anyone who was listening two years ago that modifications were not going to get done at the level for which the Fed was pushing, we saw the futures market immediately take a 5 point plunge on that news.  We sold short.  Again, news doesn’t need to be happy for it to benefit Market Mover Traders!  The MMT News Server is a fabulous tool and my favorite in our MMT arsenal.