Tuesday, August 31, 2010

9/1/10 Rocket Man



Take a look at the one day chart of the DJIA. You can visualize the repeated attempts to shake out weak hands- at the open, over and over again during the day, then a last-ditch attempt in the final hour.

So I've finally found (in a Karate Kid kind of way) 'vindication' for those daily workouts in the inverse leveraged funds- immunity to being shaken down by run-of-the-mill non-superhuman adversaries -)

Get ready for Wednesday morning. Zero hour, 9 am. And the SPX's going to be high as a kite by then.

106 comments:

  1. Mark- We're (finally) scheduling an appraisal for Friday. Hope yours went well.

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  2. Mr Top Step (tweet)

    $1.8 BN to BUY - # $ES_F S&P 500 MOC Imbalances now that is big imbal $$

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  3. Sorry, Mark- you'll need to translate that one.

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  4. Short and sweat 2nd. Hard to believe how much time/energy/money I put into getting ready for it.

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  5. There was a $1.8B Market On Close imbalance on the buy side for the ES. That's huge. I've seen $500M before.

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  6. http://www.marketwatch.com/story/death-of-equities-part-2-2010-08-28?link=kiosk

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  7. It guess it had to happen eventually. My port under preformed SPY by .50% today.

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  8. Look at the intra-day for FTWR. I'll be watching closely tomorrow.

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  9. CPE might be bottoming here.

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  10. I'm not sure if China's PMI just hit the tape, but the futes just popped.

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  11. Not enough. We need something in the neighborhood of +150-200 points on the DJIA to trap bears and fuel a short-squeeze that takes us to 10,500. After that, it will be continuing disbelief by bears that takes it to 11k. The time to buy is now.

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  12. 2nd - Looks like we're getting the start of what we envisioned. Good luck to us all.

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  13. I dunno. I'm happy to be $1500 richer than yesterday.

    Its a less stressful existence that way, not hoping the market finally bounces good tomorrow.

    Maybe I find a trade tomorrow, maybe not. Any day I make over $500 I did well. If I had ALL my cash in 3% CD's or accounts I'd only make $40,000 a year from it all, so anything better is a good thing as I see it.

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  14. CB - that's better than the $3k I'd make!

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  15. Just imagine the plight of retirees who depend on the interest to live off of...

    LOL, the FEW that have anything left after the last 10 yrs of market disasters.

    I was looking tonight, though, and while there are a lot near 52 wk lows, they aren't cheap compared to their 5 yr charts. I was surprised to see that INTC had been in the $12's area for months recently, for example. It all must be a function of how much credit th Fed allows out there to bid things up, barring other fundamental or technical reasons, I think.

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  16. i don't know cheapy...if i look at the INTC chart since 2004, the only times it went under $20 outside of the late 08/early 09 depression panic it bounced right back up above it quickly. and back then it was only paying a 2% dividend (versus 4-5% 10-year treasury yields) with a worse balance sheet than it now has.

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  17. Could be, tof.

    I only zoomed out enough to see 2 or 3 yrs, and to be honest, I have avoided tech since 1987, because its where I got creamed. Once I made back the losses, I gave up on all stock trading completely for almost 15 yrs.

    I'm only back since 2002 because I had/have no job or business left, and its the only casino around that I have any clue at all how to play. I have 10 years to go before I can get any SS, and have no pension at all, so this IS my job, LOL.

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  18. I think the 6-month daily chart for ESLR is now showing a nice breakout. I have just placed a buy stop limit order for 5000 shares at $0.68/0.70.

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  19. hope you guys are right, since I'm still 60% long equities.

    even though it is stressful I am starting to really enjoy trading, and knowing that I am in control of my $$$, not some schmo who only cares about commissions. May move another 10% into the trading account

    Thx David - the 3month and 6month charts do look good, I might move into that one as well

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  20. jb- If you're 60% long, you should have a killer day.

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  21. David- I don't get the attraction with penny stocks. I know we have (less than) fond memories of ESLR, but I wouldn't allocate more than pocket change to a position right now.

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  22. I need to have a good day 2nd since my long portfolio was down over 5% for August (It's heavy in financial services etf's)

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  23. On the other hand, one day or one month doesn't mean much over the longer term. I don't think 30-40% over the next 1-2 years from this level is unreasonable. Compared to 2-3% a year being offered for bonds? Now that's a portfolio killer over the long term. When bonds start paying 7-10% a year, I'll start allocating.

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  24. I'm with you there...less than 10% bonds and most of that is thru some old 401k's which I should just be rolling out of anyway.

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  25. I like this concept

    "american wagering"

    BETM.OB

    http://finance.yahoo.com/news/Sports-gamblers-getting-apf-227143740.html?x=0&sec=topStories&pos=6&asset=&ccode=

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  26. I learn more about BC every day.

    'With 21 minutes remaining in yesterday’s session I sold a 30% portfolio weighting in EDZ, which is a 3x emerging markets bearing position, so my exposure was 90% of the index. I sold at 38.83 a position that had cost 38.54 a few hours earlier. For a while as you know I was underwater, putting the trade on four minutes before positive economic data had been released. But I didn’t get overly concerned because the Euro had been plummeting against the Yen, which I believed would pull down equity prices to test S&P 1040 one more time at least, or until the Bank of Japan relieved the pressure of a historical near record setting high market price for the Yen.'

    I admire high-stakes gambling as much as anyone. But you have to be up front about it. Betting 30% of the portfolio on a 3x leveraged inverse ETF- that's the high-stakes room.

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  27. I go 30% into the triples sometimes, too, but if you are wrong, the losses rack up quickly.

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  28. Think about a 30% weighting and the Internet connection goes down...:-(

    MVIS looking interesting

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  29. Well, you guys were right. No frigging way I'd buy this market, though.

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  30. so sad. I'm just going to turn off the screen and add another 100 oz of shiny to punish myself.

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  31. scratch that order, shiny is too high to buy as well.

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  32. spx - rejected at 1065 though...

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  33. Wow Bob. You ARE rich:)

    Usually people talk about their net worth and they forget to include the mortgage they are underwater on and the 11 kids they are sending to Harvard. I salute you for your high earning/low spending ways:)

    I could actually retire on what have now btw....I think I may be more of a cheapskate than even you:)

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  34. That was Zero Hour, 9 am Central Time newSubmitted by 2nd_ave (4519 comments) on Wed, 09/01/2010 - 10:06 #68293

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  35. All things are relative, shark.

    Today I'm a fool for being fooled yesterday. This whole stock market is a complete scam, eclipsed only by the ponzi scam of a currency its measured in and the ponzi scam of debt backing it.

    How can DEBT back anything, anyway?

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  36. Here comes my WTF! (Wed,Thur,Fri) rally?

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  37. And no, I haven't sold PAL b/c I'm a dipchit.

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  38. Re: That was Zero Hour, 9 am Central Time newSubmitted by 2nd_ave (4521 comments) on Wed, 09/01/2010 - 10:36 #68300 (in reply to #68298)
    How long it lasts in the ST doesn't really matter much to me, as I made the decision to enter a LT trade last Thursday. My only ST trades right now are limited to two separate positions in SPY October 106 calls, which are up an average of +54.6% from yesterday's entries.

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  39. Expensive Boarding Passes newSubmitted by 2nd_ave (4522 comments) on Wed, 09/01/2010 - 10:46 #68301
    jack- This is exactly the kind of beginning you want to see for a bull move- one that disallows easy boarding for sidelined passengers. So I would call it an 'auspicious' open.

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  40. bull trap - spx will be rejected at the 50DMA(1080ish)

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  41. Kyle- That's what everyone thinks. I think we blast right through it to 1100.

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  42. wow 2nd, this is pretty much how we envisioned it. i came down with a little cold yesterday and slept in, only to find us up about 2.5%. how's that for a short squeeze. i suspect the same happens tomorrow and we get to 1,100. my SPY and STT calls are killing it. they too are the only short term trades i have on. everything else is 100% long.

    CB - the casino may be rigged, but we have to play it if we want to make money. bonds ain't gonna do it over the long term

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  43. True, there, TOF. I just hate being clueless is all. I could be REALLY rich if I could just get a clue.

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  44. Single day FOM (1st of month) rally? I'm staying long here even though my better judgment tells me not to. Either we've seen the bottom or soon new lows, finally presenting me the opportunity to add.

    tic-tac-toe

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  45. Nice. All positions in the green now except INTC.

    Yep, 1080 is the number everyone will be watching.

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  46. bgz - potential dbottom @ 15?

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  47. GRMN - Still going strong, hasn't pulled back at all.

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  48. 2nd, you nailed it

    now, do we be selling into strength or adding on dips?

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  49. BGZ - How about buying just under the double bottom? I have been considering a short position just in case this rally doesn't stick.

    I'm expecting S&P to clear 1080 in order to suck in as many bulls as possible before it turns back down, assuming it actually does.

    Maybe today's close is 1080+ and we retrace this morning's gap by Friday close?

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  50. BGZ - cp...agree w/ your thinking. It's often difficult to tell whether it's going to be a dbl-bottom or an inverted C&H and it's going much lower...

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  51. Palladium moon shot, looks like catalytic converter technology might be around for at least a few more months...

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  52. I'm gonna be tempted to short silver if/when I see $20.

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  53. Hold PAL Chicken it's getting good.

    Daily up gap plus it's proximity to the 20 day ma
    combined with the break of the recent downtrend make a judicious amount of PAL a better than even bet. I have a mere thousand shares as a core position now which I bought this morning for exactly what the stock is now trading for:)

    I will trade around it when the action in PAL becomes more juicy.

    What I regret is, not re-loading yesterday afternoon at 3.12

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  54. Taking profits on the SPY calls.

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  55. JNK - Have a small position - It's back to flat

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  56. Back in the trading range.

    http://www.ritholtz.com/blog/2010/09/pop-back-into-the-trading-range/

    FF

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  57. NIB (thin!) - Cocoa - starting 'slide' down the L-BB

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  58. Wow, 2nd_ave -- you are the MAN! Professing such a major rally with such a high conviction -- you MUST have had a real crystal ball in front of you!

    All the buy stop orders I placed yesterday were triggered today: TBT for 300 shares at $31.09, INTC for 300 shares at $18.06, ESLR for 5000 shares at $0.68. In order to make sure that my current profit does not turn into a loss, I am placing tight stop limit orders under these new positions: TBT at $30.90/30.88, INTC at $17.99/17.98, ESLR at $0.63/0.63.

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  59. Ouch. Stronger Cdn $ and flat/weak silver/gold putting me in the red today.

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  60. not selling anything...just shifting things around a little. Sold my PIR stock and moved it into RBCN. RBCN is a major supplier of sapphire used in the LED markets, which is booming because of the iPad and other tablet type devices that use LEDs.

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  61. 2nd: Good call. What a way to start the month!

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  62. RBCN - mentioned earlier on cnbc LED segment along w/ CREE & AYI. On a (3 Year / Weekly) looks like a H&S to me w/ 29.50 LHS top & 23 neckline???

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  63. bought TZA@34.71, just off the new chart play.

    on this freakin' crazy sap+dell call....if i could i would short the crap out of both co's...UNREAL

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  64. wow, in the 10 seconds it took me to do my post I got stopped out of TZA@34.55! dang it!

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  65. UNG tried joining the party twice today, but then decided to leave. I am disappointed. On the other hand, I did brag a few days ago that I was just warming up for the real fight with it, and apparently it heard me and decided to come back and throw a few punches at me. Well, I have another bunch of HNUZF ready to be loaded when UNG hits $6. Let's see if that happens.

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  66. I took a closer look at the intraday prices of TBT over the past 5 days and saw that the lowest point on Monday was $30.76 and the lowest point today was also $30.76. So in order to reduce the chance of being shaken out from my current position, I lowered my sell stop limit for TBT to $30.71/$30.70, which if triggered would give me a loss of $120 on my today's entry at $31.09 -- something that I can still easily live with.

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  67. XLK - Put Spread (suggested on FMoney last night) I went with a modified version of this...
    Bought Dec 21 Put & Sold Dec 17 Put against it.

    Thesis: Tech refresh cycle isn't going to happen

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  68. Kyle - not sure about the H&S thing on RBCN (do H&S patterns ever work anyway?) but the 200 DMA looks like solid support. And fundamentally, there is too much demand for their product for this to stay down for long. I'd recommend listening to the conference call in August...it's quite bullish.

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  69. Interesting play Kyle - my take is, and has been for the past 6months or so, that as co's move from on-premise to cloud that the current "refresh" is going to be a disappointment in the short run....long run I think it will be big

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  70. I put on more bearish positions yesterday by shorting SSO, so I am getting clobbered today. My black box even went bullish on SPX short term today and will stay there over 1075. The intermediate and long terms will not flip to bull until around 1090 so I will wait and see. It is saying this is a short term rally in an intermediate bear market, till then.

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  71. tof - Most conference calls re. tech companies usually are...

    50-Week MA - 22.11 about the neckline of the H&S & the Dec 09 peak lvl

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  72. I think the 6-month chart for RBCN looks really good, as it just had a decent pullback and a clear support level has been established at $24.50 on the intraday chart over the past 5 days and on the daily chart. I have just purchased 200 shares at $25.43 and placed a sell stop limit order at $24.43/$24.40.

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  73. now this is interesting: instead of choppers flying over head I ended up getting an email back from mr prez....i'm still going to hide under the couch for a few hours just in case the choppers reappear.

    my wife just keeps telling me to STOP emailing the white house......................naw!

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  74. I am VERY long now, but all my recently added positions have tight stops, so I hope that 2nd_ave crystal balls keeps working tomorrow and we have another gap up open, instead of a gap down to shake out cautious bulls like me.

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  75. jb - Seems to me that 'cloud' assumes the 'Internet' grid will work so local application access is not necessary. I don't believe our 'Internet' grid works any better than the rest of out 'Grids'...But this is an 'Until Dec' trade...

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  76. Of all the days, ECU.TO is having a major pullback today. Maybe the traders are taking profits after the amazing rally it had over the past week and are moving funds into other stocks that are having a great day today?

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  77. how on device ultimately gets deployed to the users vs on premise is certainly a huge issue...and figuring out exactly which players will win in the areas of bandwidth, storage, etc, etc is going to be key.

    totally agree with the "until dec" trade as the whole cloud revolution is going to play out over the next 3+ years

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  78. "The U.S. manufacturing activity expanded in August for the 13th straight month, with the ISM manufacturing PMI defying expectations to rise to 56.3, from 55.5 in July. The encouraging numbers were fueled by strong employment and production data." (WSJ, 9/1/2010)

    Hmm, and everyone claims the economy's headed down the tubes! Okay, I'll admit we've seen better times but considering what we've been through the past couple years it doesn't seem quite as bad as some folks make it out to be.

    We'll see.

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  79. Not sure why I'm a little nervous here. A nice break of 1080 and hold for a few days might help ;)

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  80. Sapphire - I remember that stuff, heavy as all get-out! This is the material, if it can be manufactured cheaply enough, some folks believe promises to allow Moore's law to persist.

    Have they discovered a cheap way of manufacturing it?

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  81. Mark - smart money is going to let dumb money keep adding until they sweep it off the table...

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  82. Stubborn fox! - I caught that same fox again yesterday with one of my duck hens in his mouth. He saw me coming and started looking for an escape but by the time he realized he was trapped in the pen and I was nearly upon him he only had enough time to drop the hen and run for the exit.

    The hen limped for a few hours but she was fine afterward.

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  83. Kyle- So you think 1080 holds? What would change your opinion?

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  84. Smart money sure has made a habit of taking gains quickly.

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  85. Mark - No not sure 1080 holds - Look at end-May/early-June upthrusts to 1105 & the early-July 'walk' up to 1100. BUT look at the mid-July 'resistance' that the 50-DMA provided. Going into Sept/Oct I'm more inclined to believe the 50-DMA provides significant upside resistance. And that's what makes a Market...

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  86. SGG is broke out to new highs today, in sympathy for the broad market. :) I am still holding the 100 shares I picked up at $50, hoping to sell them at $60 for a $1K profit.

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  87. In order to reduce the chance of being shaken out from my INTC position, I lowered my sell stop limit order just below today's low, at $17.89/$17.88.

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  88. Even though I joined the party a little late today and so I cannot say that I had the largest one day gain today in 2010 (as 2nd_ave and TOF probably did), there is still one thought that is warming my heart: I exited my large TWM position at $22, and had I kept it today, I would have a loss today instead of a gain! TWM was crushed today, as the collection of risky stocks in Russell 2000 were up 4%!

    Well, there is always tomorrow, for having the largest one-day loss with all the longs I have picked up today. :)

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  89. wow. what a day. i believe we have found a pretty significant low in the markets over the past few days. i wouldn't be shocked to see 1,100 this week and i think we will eventually take out the 1,200 levels. i'm comfortable holding all of my longs at this point for a while as i feel the valuations of all of them are quite reasonable.

    here's to a gap down tomorrow!

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  90. Mark - Something else...I often look at RSI more than I look at levels...(1 Year/Daily) RSI(14) standard stuff
    mid-June RSI14 @ 55
    early Aug RSI14 @ 62
    now 50.76 ... I'll wait for 55 or so

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  91. Kyle- I have SPY going through the 10, 20 and 50 day SMA today. 109.50 is the 200ema and 111.80 is the 200 sma.

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  92. "I don't think 30-40% over the next 1-2 years from this level is unreasonable."

    2nd_ave, I think this can be the case only if the tax cuts are extended. Otherwise, all bets are off, and I will close all my long positions after the Santa Claus rally. Over the next 6 months, however, I think it will be very reasonable for S&P to break out to new highs since March 2009.

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  93. This is interesting. SWN had an imbalance on the buy side today. I've never seen that.

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  94. Mark - This chart is $SPX...

    http://www.screencast.com/t/YTU2MDk4M2

    50-SMA @ 1081.31

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  95. From TK today....

    "Today was my worst trading day ever, measured in dollar terms.



    I came into the day not just fully short, but margined to about 135%. Virtually every one of my positions was in the red, and I trimmed the quantity of my positions substantially. I picked up three large long positions - GDX, FXE and IWM - although obviously it would have been nice to have bought them at yesterday's prices instead of today's.

    All in all, a day like this is disheartening beyond words and makes me wonder what all the hard work is for.

    It seems that 1040 as a buy-everything-you-can point has been a good rule lately. If we pass the area marked in yellow (1098.50), it will weaken the bear case. It we cross the green tint (1129.50), it's time to hang it up."

    I admire his honesty.

    Got to run. Time to see if I can pick some pockets..

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  96. no joy in slopeville today.

    great call 2nd, tof, kyle et al!

    funny/worrisome how spx ended right on top of it's 50MA.

    trading acct took a hit on my tza mis-step but the long portfolio more than made up for it.

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  97. jb - It's a wild axx dance man. Like you, I took profits in BGU, EDC, FAS, EWG, & UCO today. And the dance rolls on....

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  98. yeah it is.....gotta love profits! great job.

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  99. jb - the 50ma is significant b/c traders will be watching to see if it holds and if not, well, you know the story...

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  100. so i've been thinking about how awesome it would be to be in a position to have $1,000,000 in my account because all i would do is just buy NLY when it dips and hold on for the dividends (16%). Then my annual income would be $160k and with 20% tax rates that is the equivalent of over $200k in salary. But then i looked at the chart of NLY and i see a clear sequence of gradual lower highs. Not only is this a bad omen for this stock, but in a way I think it is bullish for stocks. I view NLY as a bearish/conservative play on the markets...it's a play on the Fed continuing to back the housing market because the economy sucks. Maybe it's a stretch, but a series of lower highs on NLY might just be a tell that the housing market is indeed beginning to pick up?

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  101. TOF - Take a closer look at the NLY chart(s), I've noticed there's something fishy going on with the data on finviz b/c I could swear it's been past $18 more than just twice... I think their data are adjusted once the div is distributed, making some of the charts not reflect actual market prices.

    Anyway, NLY divy loses steam when T's yield curve flattens out and there's been some uncertainty over the fate of GSE guaranteed MBS' going forward. The limited immediate upside and uncertainty have kept me out.

    And yes, I agree that NLY has been a sort of shelter, where money is parked while collecting dividends but shouldn't the yield curve steepen as rates rise, opening a fresh can of fly attractant?

    I've also noticed when a NLY selloff occurs lately, it's usually an immediate event.

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  102. Everyone needs to read this...Post of the day at CC

    Studying charts in milliseconds
    Submitted by JimG (45 comments) on Wed, 09/01/2010 - 12:34 #68321

    http://www.nanex.net/FlashCrash/CCircleDay.html

    http://tinyurl.com/35b8ehs

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  103. Nanex - The way I interpret their analysis leads me to conclude HFT as a kind of computer-generated attack on the exchanges intended to overload and interrupt trading flow.

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