Friday, October 1, 2010
10/2/10 REDF Redux/ Both Sides, Now
I know some of you own it, and one of you is short. In some ways the stock market is easier to game than the casino. It's straight odds in the casino, and there's nothing one can do to change the odds. Whereas it's absolutely possible to gain an edge in the market by correctly discerning crowd psychology.
Right now, my take is REDF sells off.
(a) Today's sell off was 'unexpected,' probably to the same degree the spike up was unexpected. This indicates demand disappearance (ie, buying exhaustion) at current price levels.
(b) If you're long and intend to hold, expect to be tested. I would prepare for it by coming up with real reasons for holding (tell yourself you're not ----ing around when you ask yourself those questions)- if you don't have any, then sell it. Waiting (hoping) for recovery to basis probably isn't a good strategy. (I can't predict, of course, where prices are going, only an educated guess.)
(c) Sentiment on this stock is not only way too high to be initiating longs, it's actually dropped to the point where it triggered a Sell Alert on Thursday:
Ticker Last RSI7d RSI7w RSI7m Zone (estimate)
REDF * 5.43 63.88 85.69 76.31 Sell alert (trig. 1 days ago [on 2010-09-30 at $5.43, +0.00% chg], after a 6 day DZ)
No, it's not too late to sell, should you decide the risk is too high. There should be decent exit points on Monday. No need to fixate on REDF- there's no lack of stocks to place bets on.
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Re: Opening Comments/ Both Sides, Now>The Roaring Twenties newSubmitted by 2nd_ave (4674 comments) on Fri, 10/01/2010 - 19:54 #70589 (in reply to #70586)
ReplyDeletehttp://tinyurl.com/6b8jsn
Grym- There are (at least) two sides to every story. People are naturally optimistic, and will find ways to survive and prosper. People who have lost jobs find new ones. Trades and professions that fade into obsolescence beget new ones.
What's new in the Bay Area? Quite a bit. INTC is looking for new sources of revenue. Facebook and Google are trying to redefine social networking- one of my wife's nephews spent the summer working for one of them, and was offered a full-time position upon graduation next spring. Larry Ellison is working to have San Francisco host the 34th America's Cup, which is expected to inject $1.9b into the US economy. High-speed rail is pretty much a done deal looking ahead 10 years. I could go on.
Partly in response to all of the above, housing prices have stabilized and have actually begun moving back up. We recently refinanced, and were pleasantly surprised to see the appraisal come in above our expectations.
Everything is relative. Try looking at things from another perspective, and it may seem as if we're entering a new age- the Roaring Twenties might be closer than you think?
This week was kinda important to my port. For those of you who don't know, I really only started investing "real" money in Jan. 08'. Did the basics. Spread my money around about 10 sectors and a handful of mutual funds. Averaged down, bought more, averaged down more, bought more etc.
ReplyDeleteWell, you all know what happened. I think I took things over in the summer of 08'. At the start of 09' I had finally managed to close out all of my positions and MF's.
Then I stated trading. I just checked all the way back to day one, and for the first time my port is green. I'm sure some of you might laugh at this, but I dug myself a REALLY large hole and saw OVER half of my entire life's savings go down the rat hole. For example, I think PXP was one of the very first stocks I bought in Jan. 08....For $78 I think.
Well, now I have ALL of my money back and I've done it on my own with the help of you all here, NOT there, and advice from my clients.
Now it's time to build. The digging and filling is over.
Have you ever been to Belgium? It's flatter than a pancake and has been invaded/conquered as many times as anyplace on the plant as a result.
ReplyDeleteFace it, we're in new territory in this day and age, things tend to move considerably faster than 70 years ago.
Take China and India for example, and add Turkey and Taiwan to the list for good measure. I'm sure you could add a few more.
None of us can claim to have a good handle on the future of our economy if we're not considering the larger picture, I feel like we're being manipulated on a daily basis and the weapon is micro-data.
If you're going to play the game, at least keep an open mind and try to learn the rules.
To be fair, I have added cash to my port over that time frame, so my returns are smaller % wise than what might be inferred.
ReplyDeleteCongratulations, Mark! It's nice to be green! More importantly, now you have the skills (such as the confidence to set stops and then knowing that after your stop is hit, you can jump back in once the price chart starts looking bullish once again) not to let yourself get back into the rat hole anymore!
ReplyDeleteGreat job with the comeback Mark, glad to hear about it.
ReplyDeleteAlthough I'm not back to my April high, I'm back to a 16% gain from where I started a couple years ago in spite of starting out on CC. Glad as hell I finally got out of there and away from the attitude...
Thanks David. And you right. I scrolled through all of my trades (investments) and the ones that stood out were ALL huge loses. 25K, 17K, 22K, etc. Damn.
ReplyDeleteThanks CP. Glad to here your UP! Ask 100 people if they are green over the last 3 years and the answer would have to be less than 10.
ReplyDeleteFWIW...It was NOT easy hitting the sell button on those babies. That's really a reality check day.
ReplyDeleteNo fair asking Cheapy! :)
ReplyDeleteRemember, those loses were not based on LT unrealized gains. $'s started flying out of my wallet from day one!
ReplyDeleteNo JB...They were NOT moths :)
Or TOF!
ReplyDeleteHell....No fair asking ANYONE here :)
ReplyDeleteI'll help celebrate by pouring you a glass of cognac. ;) I especially like it along with a warm cup of coffee.
ReplyDeleteSo let's see here, looks like the 50dma is about to cross up through the 200dma, anybody gonna put on a test-short right about there?
ReplyDeleteSo Mark, where would you be if you hadn't sold at some point? Still in the red?
ReplyDeleteI'm really deep in the red on the 10 shares of Yahoo I bought around $24 or so.
ReplyDeleteJust saw this one the local news...Name the 3 cities that have the smartest people and the dumbest people.
ReplyDeleteCP- The mutual funds are all off 40% still. On the individual plays, the ones I can think of are still well off the prices I opened them. I can look back again, but I'd guess 40% down would be about right.
ReplyDeleteIt's nice to see AMD beat the crap out of INTC last month.
ReplyDeleteI lost $125k in 08. I'm not as wise as I wish I was. If I were, I'd have made money in 08.
ReplyDeleteOther than that, yes, I'm up a lot since. This year hasn't been "great", though, because I didn't have the guts to ride long term on my miners.
But my trading has improved, and turned around to where its generally a good living, well above what I need to live the way I like. Pre 2010 my trading never made much money, if any, so it was a low bar. I still make too many mistakes, but as time goes by I'm getting better.
AMD is a little more volatile, but they've actually been beating the crap out of INTC for the last couple of years.
ReplyDeleteWhy the hell didn't I buy a boatload of AMD when it was trading with a $2 handle?
ReplyDeleteI was scared shitless and not thinking straight, that's why.... So now I'm loaded up on a couple of others that I think are bound to outperform on the remainder of the upside and may even move against the tide if it were to move down from here.
CADC "October 1, 2010
ReplyDelete08:54 EDT CADC
theflyonthewall.com: China Advanced Construction should be bought at current level, says Roth Capital"
http://www.theflyonthewall.com/permalinks/entry.php/CADCid1305815/CADC-China-Advanced-Construction-should-be-bought-at-current-level-says-Roth-Capital
Keep in mind, Roth had arranged the reverse merger that allowed CADC to list in the first place.
ReplyDeleteAlright mark, tell us the Tale of the Three Cities and if it's good enough I'll tell The Tale of the Hero's Quest.
ReplyDelete3 Cities? I know the one with 2.
ReplyDeleteThank you, TOF, for providing the link to the article by Kostohryz. Here are a couple more of his good articles:
ReplyDeletehttp://www.minyanville.com/businessmarkets/articles/james-kostohryz-quantitative-easing-qe2-fiscal/8/31/2010/id/29869
http://www.minyanville.com/businessmarkets/articles/kostohryz-fed-statement-interest-rate-stimulus/9/23/2010/id/30224
They suggest that Fed *will* buy a lot of new Treasuries (regardless of the level of the stock market) and it most likely *will not* buy any private mortgage-backed securities (unless the stock market really collapses). Since a purchase of Treasuries will have very little impact on the overall economy OR on the bond market (which has already priced such a purchase to a large extent), the current stock market rally will most likely fail, and then if the credit spreads start rising rapidly and all kinds of privately held asset-backed securities start getting marked down, the Fed *may* buy them from the private holders so as to help the financial markets, which *should* give a very nice rebound rally.
Good job bro! wish I could say the same. i'm still caught in the middle, part of the port invested in mutuals/I-funds etc, and part in my trading account. as I get more confidence I slowly move $$$ into the trading acct. however, that's mainly due to the fact that we save about 25% of my income.
ReplyDeleteCP - spent many days in Belgium, it is mainly flat but in some areas that have what we cyclists call "stingers", very narrow, sharply steep hills.
enjoy the weekend guys!
The tale of the Hero's Quest goes something like this (Insert choice of hero's name here):
ReplyDeleteThe hero starts in the ordinary world, and receives a call to enter an unusual world of strange powers and events (a call to adventure). If the hero accepts the call to enter this strange world, the hero must face tasks and trials (a road of trials), and may have to face these trials alone, or may have assistance. At its most intense, the hero must survive a severe challenge, often with help earned along the journey. If the hero survives, the hero may achieve a great gift (the goal or "boon"), which often results in the discovery of important self-knowledge. The hero must then decide whether to return with this boon (the return to the ordinary world), often facing challenges on the return journey. If the hero is successful in returning, the boon or gift may be used to improve the world (the application of the boon).
Chicken,
ReplyDeleteYou watched the thing about Star Wars on the History Channel last night.......
For anyone interest in photography...
ReplyDeleteI have been using a new camera for about a year now and am really impressed. I've enjoyed taking pictures for years, used to have my own darkroom, etc.
Although all cameras come fully automatic now, I mostly use the manual side. Mainly for depth of field control, shadows, etc. Basic stuff really, but it makes a difference. I new use filters even though it can create interesting images.
This is what I use, and highly recommend taking a look at it if you are really interested....
Nikon D80 body
Nikkor AF-S 70-300MM F/4-5.8G (4.3X) lens
Nikkor AF-S 600MM F/4G (8.2X) ED-VR lens.
Nikkor AF-S 20-80MM F/2.8-22G ED-VR lens.
Should read..I never use filters....
ReplyDeleteSharkie- I think he was playing some sort of video game :)
ReplyDeleteI've never been to Belgium or Spain....
ReplyDeleteI've been to Oklahoma though.
http://www.youtube.com/watch?v=dm6qw_yeo6o
FF
Received the following email, albeit belatedly, from my subscription "investment strategy engine" (thats what they call themselves):
ReplyDeleteThis weekend, we are hosting a free 'open house' for our members and their
invited guests to demonstrate the new features and capabilities that our Full Access members currently enjoy.
It is easy to enable the pass, and we encourage you to invite your
friends.
Just follow this link for complete details:
http://stopsandtargets.com/openhouse/
I subscribe at the lowest level (3 major indices for $30/mo) but sometimes I wish I had the full package . It's a bit expensive considering the small size of my portfolio.
If you enter the open house be sure to go to The Big Picture Blog:
stopsandtargets.com/members/futures/blog/
The guy "Swinger" is uncanny in his graphs and comments. Mostly geared toward the S&P E-Mini futures contract. Short term and Very ST. I suspect he is a retired "pro trader". He used to blog on another website that I frequented but now is behind the wall of the S&T site. The latter went public a bit over a year ago.
Playing/learning/practicing with Thinkorswim's "on demand" feature this weekend. It allows you to choose a day/time in the past couple months and replay it, bid/ask and trade by trade, either at normal speed or 3x normal. You can use your charts and some commonly traded issues are available.
ReplyDeleteBoy, do I screw up bad at it. I tend to get creamed because things drop a lot more that I would think they might.
Anyway, its good practice and should help me find my weak points, and hopefully improve without risking real money.
Anyone else do things like that?
cb - nice, so you get to sim trade w/real historical data and at real time speed (or 3x speed). i've never done that but i'm switching off fido and going with either trade station or TOS. i'll check to see if TS has sim trading.
ReplyDeletehow does it capture your trading results, some type of p&l?
Yes, the TOS on demand system has a reset button that takes it back to 100k balance. TOS also has a papertrading system, but I don't use it because it messed up the charts in my live system, so it needs to be loaded separately to avoid that.
ReplyDeleteThe thing I like better about tradestation is that it can show you your buys, sells, and p/l on the chart as you trade. That is real handy to look at afterwards, because you can see your smart and dumb moves right there, along with the charts and indicators you used to make the decisions. It has a papertrading system, too, but I don't think it has a selective replay that I'm aware of.
I like the TOS charts and indicators a lot better. The language is far from perfect, and I don't like the limited flexibility on screen layout of window sizing on the charts, because I end up having to dedicate an entire screen for 1 chart, but I have been able to program my own simple indicators along with buy and sell arrows, which is a huge advantage for someone like me that is creative/willing/able to code to try to find an edge, technically.
Also, Tradestation comes with very few indicators already there for you to use. Of course the basic ones are there, but it only has maybe 15 or 20% of what TOS has available, not that you'll know what to try without just trying, but at least they are there and you don't need to buy them separately, like with TS.
ReplyDeletethx cb! I just opened a TOS acct.
ReplyDeleteWe talked about that here a week or two ago and came to the consensus that the "best" way to do that is via opening a TD Ameritrade account that can access TOS, I think, because you would get to choose the best features from either that way. TOS accounts at least at present, can't use TDA features, but TDA accounts can use TOS features. I'm not saying I actually would normally USE those TDA features often, but to be able to when needed might be real nice, and at zero cost, its the way to go, IMO. It still might be easy to change horses at this point. I'm not aware of any disadvantage of doing it that way, but you might ask them if there are.
ReplyDeletePS: sorry for not repeating that here as part of the discussion a few hours ago. I was just playing/testing/learning with on demand at the time, and my comment was oriented to that, and that feature vs TS capability, not how to setup the account.
ReplyDeleteJB- TOS is now owned by TD, but I've heard a lot of people complain about trade execution with TOS.
ReplyDeletethx guys.
ReplyDeleteyeah bro, I heard that too but I think it had to do w/a bad s/w upgrade and now that is resolved.
I love TS, but some months I don't trade 5k shares, so I would be on the hook for $250.
time to regroup
ReplyDeleteI like the blog today. cp, good advice on global perspective and mark, good reminder on to review your past trades.
yesterday shopping in SF - stores packed with new merchandise at 70% off. No buyers ... 2nd hand stores were Packed.
We are still in a depression with deflation and without stimulas, civil unrest would break out. If you have a good paying job remember, you are one of the few - that is reality my friends.
Yes, actually, if you had a TDA account and were trading it using TOS, I bet you were able to trade it via TDA the day TOS put in their messed up software upgrade. That was one of the big advantages I saw to having the TDA account and using TOS to trade it normally.
ReplyDeleteI bet in another year they will combine it all, but in the meantime its an advantage in case of trouble with TOS's system.
anon, I agree with your view of the economy. There are certain "must have" things people are willing to pay for, but other than that, many people are trying to get off cheap, reduce debt, or save for retirement, and those are things we haven't seen for a long, long, time.
IMO, the economy needs to be rebalanced to where consumption is down to 50% of the economy, either by reducing consumption or increasing sellable production. Given the overcapacity for almost all manufactured goods and services already existing in the world, and the global nature of things, I just don't see how production can be increased unless prices are reduced to where the goods and services have willing/able buyers.
But hey, I'm no Keynesian, LOL, so I don't see things the way they do. To me, the stimulus didn't work, because all it did was bury us in more debt, even those of us who were prudent enough to avoid that fate while the bubbles were being blown up by these paper printing fools.
Here is an article that says that the Fed's goal is to raise the prices of all assets with QE2 and that they have a good chance of succeeding:
ReplyDeletehttp://www.financialsense.com/contributors/james-j-puplava/prospecting-for-bubbles
The one caveat I see is that buying Treasuries might not be enough at this point to raise the value of all assets -- MBS purchases are needed for that, and so far the Fed doesn't seem eager to embark on them.
Nevertheless, it probably does make sense to wait for a break of 1130 on S&P before attempting to short this rally. If S&P stays above 1130, then the market should not be shorted.
David,
ReplyDeleteIf you want to fine tune it, my TA algo says change is upon us breaking below 1128 for both short and intermediate time frames. Long term break at about 1094. Your 1130 is very close to their break point.
The market looks like a sell to me right here...
ReplyDeleteJapan sure seems giddy tonight, and China has committed to backstopping the Euro zone and buying Greek bonds next year.
And what's up with all the backyard chats, too many foreclosure signs posted out front?
ReplyDelete