Tuesday, May 18, 2010

5/19/10 Eleanor Rigby



Father McKenzie writing the words of a sermon that no one will hear
No one comes near.
Look at him working, darning his socks in the night when there's nobody there
What does he care?


To this day I still believe there's value in periods of isolation, where one puts heart and soul into creating something no one will (ever) hear.

In the late seventies I would take the bus up to North Campus in the evenings (best if it was a Friday or Saturday night), walk to the Music School, and play in a deserted concert hall, or inside one of the dozens of practice rooms, all empty save for one or two diehard musicians. There's a creative spark that occurs when one is alone while others are partying. Of course, whether those partiers are experiencing more or less isolation/desolation than you is an open question.

Once I played for an hour at an upright piano at the front of a lecture hall in the Modern Language Building on Central Campus on a Saturday night. When I finished, I was startled by a guy who had snuck in at some point, taken a seat near the back (of the darkened room), and applauded, 'Bravo!'

I love the images the lyrics of Eleanor Rigby conjure.

So how do I deal with the anguish of having only made a small fraction of the gains I 'foresaw' coming my way? During the relentless rally over the past year, making a grand in one day would have seemed no small feat. Making a grand today, by comparison, felt hollow- it should have been twenty grand. What the hell.

110 comments:

  1. Seoul working on another -2%.

    ReplyDelete
  2. Nikkei working on another -2%. Sydney (well, it doesn't really count) down -1.8%.

    Yeah, the trend appears to be...down.

    ReplyDelete
  3. 2nd - I think that the China markets are close to seller fatigue so I wouldn't really look at those markets that close anymore, unless they really crash. The Shanghai is down 20% in one month, so how much more can it really go down before bouncing? In the past few days it has basically gone sideways while the S&P is down about 5 or 6% (high to low)

    ReplyDelete
  4. This situation just keeps getting uglier by the day, guess I'll have to take some corrective actions.

    ReplyDelete
  5. Naturally, as fear reverberates through the streets everything but the dollar gets hit hard.

    I've seen this show before...

    ReplyDelete
  6. What I mean by 'resolved to show gains' is this-

    I will enter an ultrashort- say TZA, or VXX (not a short per se, but you get the point).

    It used to be that I would have to take a loss, and I would then be 'rewarded' with having skirted a much larger loss.

    Yesterday and today, I noticed that if I held steady as ultrashorts moved against my entry points, they would ultimately resolve to show a profit. And if I had held those positions longer, they would have ultimately shown much larger profits.

    Big difference in price action, in other words. Which is to say, big difference in trader behavior.

    ReplyDelete
  7. Re: Are We Over-Reacting?/ The Mirror Image of Summer '09 newSubmitted by 2nd_ave (4417 comments) on Tue, 05/18/2010 - 22:23 #63187 (in reply to #63175)
    tof- I'd be careful.

    (a) We all thought bulls were 'overreacting' last summer. It took almost a year to prove them 'wrong?'

    (b) "The CEO of HPQ just said that one of the things he saw in Europe was STRENGTH...and strength across all regions." I don't doubt that. However, reaction by traders to those kinds of quotes may now well be negative, in the same way traders reacted positively to bad employment/housing numbers last year. It's the reaction to the news, and not the news, right? The 'news' does not reflect commitment, whereas 'reaction' implies action (and thus commitment) by traders.

    (c) Indexes fall much faster than they rise. May 6 felt like a 'buyable' sell-off-- that would be the kind of negativity you're looking for. The ones we've had this week do not (IMO, of course).

    (d) If I use J6P as a market gauge, then I can tell you I sense very little anxiety right now among those I work with. Whereas May 6 there was a distinct solemnity in their eyes while watching the -1000 point drop in the DJIA.

    (e) I think we need to at least test the 200 SMA before playing a 'bounce.' And it would likely be a 'dead cat' bounce until real fear (in the form of accelerated selling) arrives.

    (f) As for playing the short side, I've had limited success the past several trading days. However, I have noticed that most of my shorts have 'resolved' to show gains. Quite a difference from last year, when my shorts almost always 'resolved' to minor losses. Just a minor anecdote at this point, but one that leaves more than a fleeting impression on me.

    ReplyDelete
  8. 2nd - i hear you my friend...if we break the 200 DMA i will have to reassess things...

    ReplyDelete
  9. Bear markets have nothing to do with short sellers. It's simply when traders don't want to buy and take on risk. It's fair to say that these are risky times right now...but isn't that what we have been waiting for?

    ReplyDelete
  10. Goldman Sachs Advice Hands Clients Losses in 7 of 9 Top Trades
    By Ye Xie

    "May 19 (Bloomberg) -- Goldman Sachs Group Inc. racked up trading profits for itself every day last quarter. Clients who followed the firm’s investment advice fared far worse.

    Seven of the investment bank’s nine “recommended top trades for 2010” have been money losers for investors who followed the New York-based firm’s advice, according to data compiled by Bloomberg from a Goldman Sachs research note sent yesterday. Clients who followed the tips lost 14 percent buying the Polish zloty versus the Japanese yen, 9.4 percent buying Chinese stocks in Hong Kong and 9.8 percent trading the British pound against the New Zealand dollar."

    ReplyDelete
  11. T3D- I'd be interested to hear your take.

    ReplyDelete
  12. Wouldn't it be fun to sit there and listen to their presentation, and after its over offer to put down a few $mm on the other side of the trade they present, just to be able to tell them straight to their faces we all know they are out to screw us out of our money?

    ReplyDelete
  13. but honestly, anyone messing with forex or in markets they don't know, is just ASKING to lose their money...

    ReplyDelete
  14. The thing I don't get is if we were really concerned with the European economy as we're told, then it's easy enough to check on their progress and assess their mood by looking at their markets.

    Perhaps our concern is their recent oscillation around the 200DMA?

    ReplyDelete
  15. Anyone else watch(ing) the Big Wave Challenge on ESPN 2? Crazy stuff huh? Watching the undulation of the markets is a lot like watching the big wave riders. Going up is kind of like paddling into the big waves, a nice steady ascent looking out over the edge, only to free fall to the bottom. You just hope when you get to the bottom you have enough air to get back up again.

    ReplyDelete
  16. Golfing this morning no positions...watch PAL break support for me:)

    ReplyDelete
  17. should have been more patient...

    ReplyDelete
  18. lol, should have been a LOT more patient!

    ReplyDelete
  19. Landry-

    Random Thoughts:

    The fact that the indices sold off hard after a strong start suggests that the Gatekeeper remains in place.

    Gold and Silver remain in uptends but that's about where the good news ends.

    Most sectors look like the market itself--forming First Thrusts, Gatekeeper, and/or Bowtie type patterns.

    Considering the above, now's the time to brush up on your trend transition patterns (shameless plug, see my 10 Best book).

    ReplyDelete
  20. When I checked futes around 330 am, DJIA was -101. Now it's -30. Quite a change.

    ReplyDelete
  21. Bidding PAL @ 3.51 (200sma).

    ReplyDelete
  22. Sure looks like V found a price traders wanted.

    ReplyDelete
  23. At CC some are quoting Richard Russell and getting guff from the permabulls.
    Here's This AM's Ritholtz:
    "Yesterday’s close took us below the May 6th Flash Crash closing prices. The DJI, S&P 500 and NASDAQ that session’s intraday lows (at 10,241, 1094 and 2228, respectively). Closing below May 6th’s end of day prices is technically significant.

    After the flash crash, we were discussing were this could go, and I could not help but think the intra-day lows of May would now act as a magnet.

    This places us in a precarious position: The downside target is that intra-day flash crash low. If the volume lightens up as we approach it, that would suggest a “successful” retest of the lows, and set up the next up leg.

    Volume continues to expand on the downside, suggesting that it is supply (not demand) driving the most recent action.

    Market internals might provide some insight as we head towards those lows as to the probability of penetrating that level. If that occurs, the next level is significantly lower."

    ReplyDelete
  24. The ES is ahead of cash right now by about 6pts.

    ReplyDelete
  25. FF- I read an interesting article that made a case the flash crash was "real" and that bottom will hold for the year. I'll see if I can find it.

    ReplyDelete
  26. Out of my longs...sitting on the sidelines with my impending vacation.

    Added a tiny short to MTW with a potential target of the 200 DMA

    ReplyDelete
  27. short on MTW was $11.85.

    Thinking is if we're heading down to the 200 DMA on the S&P then something like this, with a crapload of debt and minimal earnings, should go down further and faster

    ReplyDelete
  28. FYI - if GCI goes below $15.05 on the close it should spell trouble for the stock. I'm out of it at a small loss for full disclosure. If the market does tank then this should go back down to $10. At $10 it would be trading at about 2.5 to 3 times free cash flow, which I would consider a very good entry point.

    ReplyDelete
  29. Cleared another $815 trading with the (down)trend, on VXX/FAZ this time.

    Basically, just waited for the 'green' light, which I felt would happen at some point, held fast while both positions moved against me, and sold into the down draft...

    ReplyDelete
  30. Dropping FTWR bid to 4.26 :)

    ReplyDelete
  31. I like Ritholtz's take- the 'Flash Crash low.' Destined to become another catch phrase...

    ReplyDelete
  32. I'm thinking about putting in some stink bids on quality names for the vacation...doing my best to mimic the great David. Thinking about putting in the following:

    GOOG at $450
    AAPL at $210
    PG at $58
    JNJ at $60

    ReplyDelete
  33. Wild, wild action in VXX. If you like fast gaming tables, this is it...

    ReplyDelete
  34. Still holding my SPY and Emerging Markets index funds in my long only account but will probably sell at the close. It sure looks like there is a big defense of the 200 DMA going on...

    ReplyDelete
  35. Unfxxxing real. The market is truly an amazing beast.

    ReplyDelete
  36. Good inventory report for crude. UCO moving up smartly. Looks like 68 might hold.

    ReplyDelete
  37. TOF- I like it. Take a look at the crash lows for those names.

    ReplyDelete
  38. Damn...both my FTWR/PAL bids would have hit right at the LOD before I lowered then. Let's see if that's a blessing or not :)

    ReplyDelete
  39. WOW...WATG down to $7.67.

    ReplyDelete
  40. Geez...I might get the 200 DMA on MTW today.

    FD: Short MTW.

    ReplyDelete
  41. Gold is obviously in rally mode due to deflation... What an absolute load of crap.

    ReplyDelete
  42. I may be leaving my SPY and Emerging markets Index funds on if the S&P successfully tests the 200 DMA. In fact, I may add more at the end of the day if that's the case.

    ReplyDelete
  43. hey guys i see i didnt miss nothing...thinking of buying pal...the distance from the trend break is in the neighborhood of buyable...maybe.

    but dont quote me

    ReplyDelete
  44. Hey mister, can ya' spare a dime?

    ReplyDelete
  45. Note that SSG is actually in the red right now...

    ReplyDelete
  46. I think the rest of the day is crucial in determining the direction of the markets over the next few weeks. If the markets can rally on the GE upbeat news, then I think its safe to buy here. If the market shrugs it off then I think its smart to stay in cash.

    ReplyDelete
  47. DJIA down -90, and SSG is flat.

    ReplyDelete
  48. out of MTW short at $11.66.

    I will probably add to my SPY index fund and Emerging markets index fund in my long only account at the close.

    ReplyDelete
  49. Wonder if GS has completed their accumulation phase?

    ReplyDelete
  50. Bought some CSCO and GE at $24.3 and $17.24.

    ReplyDelete
  51. alright...if this is a real bounce then the upside target is 1,150. shit it might hit it today with this ridiculous amount of volatility.

    ReplyDelete
  52. Love it chicken!


    Green close?

    ReplyDelete
  53. Market's finding a way to screw both bulls and bears today...

    ReplyDelete
  54. Shark, your timing has been impeccable!

    ReplyDelete
  55. Hey guys.

    I am a little sorry that PAL isn't above where I bought it. Sorry because, after all this time, that fact suggests that the odds of this trade working out are disfavorable. However, I'm in it now, so I will hold and hope. And then there were the times I sold at a time like this and it went on dramatically in my former favor. So I will hold overnight at least.

    ReplyDelete
  56. Better than your hairdo!

    Cmon Chicken...We don't need anoher hero:)...

    ReplyDelete
  57. Sugar....ah honey, honey...:)

    Seriously though, this will be a long term trade for me. We'll see.

    ReplyDelete
  58. Archies fan, huh?

    Green close?

    ReplyDelete
  59. Mark - how do u buy sugar via equities?

    ReplyDelete
  60. XLF leading the pack. That's what we want to see if your long....And here comes oil...

    ReplyDelete
  61. added a few May $24 Calls on CSCO at $.42 for shits and giggles.

    ReplyDelete
  62. TOF- SGG, opened today @ 41.06. It's thin has hell, but I checked it to the actual price, and it tracks very well. Entries/exits can be dicey.

    ReplyDelete
  63. err...at $0.51 I meant.

    ReplyDelete
  64. Green close? Who the hell knows, but we are seeing the same volatility we saw at the last top. Might be a ST bottom here.

    UNG coming back to me...I'm surprised, but pleased.

    ReplyDelete
  65. Has HEK found a bottom???? Interesting price action today.

    ReplyDelete
  66. Mark - I noticed UNG as well. I'm thinking it might just be safer to go with the CHKs of the world because that ETF looks messed up. I mean, look at USO. That doesn't even come close to playing the price of oil. It is like 1/4 of its old highs while oil is at about 1/2 of its old highs.

    ReplyDelete
  67. Green close? Maybe if this isn't just a technical bounce?

    ReplyDelete
  68. Assuming we close above this level I will move the remainder of my cash into the SPY and emerging markets index funds in my long only account. Risk is well defined at this price with the 200 DMA just below us.

    ReplyDelete
  69. TOF- Yep, CHK, DVN are doing "well" today in light of everything. UNG works OK for a short term trade though.

    Oil back above 70 right now.

    I think the lady interviewing Cramer right now is drunk :) Steady....

    ReplyDelete
  70. Wow..OIL is spiking here. Spec. money coming home to moma? :)

    ReplyDelete
  71. IPSU - Another sugar play I was looking at months back, not sure how it correlates to actual sugar prices though...

    ReplyDelete
  72. CP- I checked that one out also. It tracks about as well as miners for PM's. So, it's so-so.

    ReplyDelete
  73. Man it's dicey trading today.

    ReplyDelete
  74. Looks like the slide in oil might be over for now, but PXP keeps falling. So I just sold 3 June $22 puts on it for $1.06, so as to either pocket $318 in a month or buy PXP at $20.94, which definitely seems like a "value" entry after looking at its 2-year chart.

    ReplyDelete
  75. "WOW...WATG down to $7.67."

    TOF, so now you don't feel so bad selling it at $8+, right? :)

    ReplyDelete
  76. David - that's what I was thinking...and wondering if I have the guts to buy now.

    ReplyDelete
  77. Flash Crash Thursday
    Submitted by 2nd_ave (4418 comments) on Wed, 05/19/2010 - 14:58 #63236
    Flash Crash Thursday May 6- Fat finger strikes.
    Bash Friday- Market rallies back.
    Smash Saturday- Open bar for those who bought on Thursday.
    Cash Monday- All long positions well in the green.
    Clash Tuesday- Bulls win at the scrimmage line.
    Smash Wednesday- Take out remaining bears on a spike in the DJIA to 10,952.
    Slash Thursday- Cooler heads prevail.
    Trash Friday- Rally's over.

    ReplyDelete
  78. Petty good volume in WATG today. Hmmm.

    ReplyDelete
  79. Bought a little PAL at $3.39. If it drops below $3, then will sell a lot of $2.50 puts on it.

    ReplyDelete
  80. That's funny...3 of us are looking at WATG at the same time :).

    ReplyDelete
  81. Today's drop in UNG might be just the act of shaking out weak hands after it started looking technically strong and too many people have boarded the train. Just bought 500 shares of HNUZF at $5.30 and placed a sell limit order on these shares at $6.

    ReplyDelete
  82. So S&P closed right around its closing price on May 6. So how about a bounce into the end of the week to make it look like the bottom has held, followed by a scary collapse next week?

    ReplyDelete
  83. I just keep missing all the opportunities, and when I do see them, I can't get myself to trade, or want to take the wrong side.

    I bought a little FXC today, and a small amount of DGP.

    I think I want to be completely out of US dollars soon, as I can't see it going up much more, and once it starts going south, I think it gets hammered real hard. The lies can't win forever, IMO.

    ReplyDelete
  84. Sheesh, BP beat the S&P! Tell me that isn't wrong...

    ReplyDelete
  85. If you were told 3 weeks ago that VIX would be at 40, what price level would you think the S&P 500 would be at? I'd suspect it would be lower than 1,115, no? I mean, the VIX was much lower back in February.

    That tells me we may have hit a near term low...FD: moved all in at the close in my long only account with a average of about 1,123.

    ReplyDelete
  86. CP, it's about time BP made a huge rebound rally to shake out those who shorted it with confidence.

    ReplyDelete
  87. I am still holding onto my BP June $50 puts (thanks, TOF, for suggesting to short BP when it was above $50!), which have almost tripled in value but not yet -- I have a sell limit order for them at 3X the purchase price. BP needs to go down another $1 in order for that sell limit order to be hit.

    ReplyDelete
  88. David = I was thinking of you today when I saw BP down in the mid 40's today. I sold for a measly 20% gain!

    ReplyDelete
  89. bp was in the mid 40's ?

    feels like stories from armagedon and I am not a believer of that kind of stuff.

    when i get a min i will post depressing pics of road work (everywhere)- mostly on east side around oakland.

    who says this isn't a depression?????????

    I don't think everyone is in a depression maybe some regions are.

    gluck and kiss the dog tonight

    ReplyDelete
  90. 50 bucks to anyone who will stand in for me at school night tonight. FD- There will be singing.

    ReplyDelete
  91. All right, that was stupid. A 100 bucks.

    ReplyDelete
  92. "ron ore prices may rise 30% to 50% from July
    (Agencies)
    Updated: 2010-05-19 10:57

    Vale SA, BHP Billiton Ltd, and Rio Tinto Group may demand a 30 percent to 50 percent increase in the prices of iron ore in the July quarter, taking advantage of rising demand from steelmakers, according to Taiwan's China Steel Corp.

    The forecast is "an opinion," Taiwan's largest steelmaker said in an e-mail reply to queries, but didn't give other details.

    Vale and Melbourne-based BHP, the largest- and third- biggest exporters of iron ore, this year abandoned a 40-year tradition of setting prices annually in favor of quarterly contracts, with the Brazilian mill winning a 90 percent increase. Steelmakers have to raise prices to pass on the higher costs, the World Steel Association said this month.

    Vale is offering Chinese steelmakers iron ore priced at $160 a ton, including freight charges, for the July quarter, Interfax reported today, citing an unidentified executive at Wuhan Iron & Steel Group Corp. That represents a 23 percent increase from the previous quarter, the report said."

    http://www.chinadaily.com.cn/bizchina/2010-05/19/content_9867781.htm

    ReplyDelete
  93. mark - i would need a five spot hey, sorry, I can't imagine doing that now!

    ReplyDelete
  94. vale is one of my favorite companies and i just noticed it is a great price right now. 25.00?

    I sold my dzz today at the close for a nice profit. I will take the winnings invest in all metals as prices go down from here per b. cara. I have to admit bill is 90% right on everytime when it comes to gold and metals.

    ReplyDelete
  95. VB- I hear ya', thanks :( Problem is, I can't even think about doing it. Hmmm...Perhaps a beverage...

    ReplyDelete
  96. mark, take alot of pics to remind them you did this. lol

    yep back in florida. I had such a great trip but gald to be back on the job. website went live tonight. start ups are fun

    ReplyDelete