Wednesday, November 3, 2010

11/3/10 Out In The Country



Whenever I need to leave it all behind
Or feel the need to get away
I find a quiet place, far from the human race
Out in the country

Before the breathing air is gone
Before the sun is just a bright spot in the nighttime
Out where the rivers like to run
I stand alone and take back something worth remembering


The perfect song with which to speed down a two-lane road on a warm and sunny Wednesday afternoon. In my case, the stretch of Skyline Boulevard between Black Mountain Road and the Woodside redwoods.

With mid-term elections and QE2 in the rearview mirror, the rest of the week seems to be a good time to break away from the markets.

It's easy to forget why we spend so much time trading- freedom from the daily grind.

99 comments:

  1. It's almost easier to walk away for a few days and let other traders work out the implications of today's results/announcements.

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  2. Re: WOW what a day! newSubmitted by 2nd_ave (4900 comments) on Wed, 11/03/2010 - 21:31 #73454 (in reply to #73448)
    jack- I learned the hard way to avoid leveraged ETFs on days like this. It gets volatile enough as it is- if you're amped up 3x, it's like drinking 3 doppios in a row...

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  3. FF- I was waiting for a response to your question today. MGM studios is privately held. So my comment about Icahn was wrong.

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  4. Since I was messing around with my P/L today, the final tally was +$697.

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  5. I guess I was dreaming for a gap fill on SGEN. Let's watch it here.

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  6. I knew you'd finally get things balanced in your favor, just gotta work at it sometimes. ;)

    I closed green today as well, despite GMO.

    The two Chinese moly miners I've been watching opened in the red but are now green.

    Somehow I have a feeling I'll be struggling with holding GMO for another week or two at least. Glad I was prepared to scalp the momo players, gave me some breathing room.

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  7. A couple of headlines that caught my attention this evening. Also, in the second article there is a warning from Brazil that the US money printing may lead countries to enact protectionist policies.

    "Fed Stimulus Expansion Worsens Hong Kong `Bubble' Risk, HKMA's Chan Says"
    http://www.bloomberg.com/news/2010-11-04/fed-s-easing-worsens-property-bubble-risk-in-hong-kong-hkma-s-chan-says.html

    "South Korea Warns It's Close to Curbing Capital Inflows"
    http://www.cnbc.com/id/39998421

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  8. bought some HK and sold the Jan 19 strike calls today. I'm just beggin for some natty exposure and Tudor Pickering thinks HK has the best upside potential. This is in my long term account so I plan on holding it ahwile unless it gets called away or some news comes out that makes me change my mind about the future potential of natty or HK.

    Its probably wayyy to late for this trade but I'm placing a good till cancled buy order for 3 TBT Jan12 30 strike CALLs at $6.00. If this trades then I'll start selling short term higher strike calls against it. We'll see if those long term rates come back down.

    I bot some SDS yesterday at $26.86 and I'm using a 1.5 x ATR stop calc on it. I had the stop in place today but I was busy when it traded up to the 27.30 area. Had I been at my desk I would have moved my stop up and changed it to a trailing stop and I probably would have been stopped out already. I need to figure out how to put in the complex trades like CONDITIONAL or ONE CANCELS ALL.

    I'm going to start using David's style where I put in the orders and adjust them from time to time but I'll make a couple of adjustments to help me sleep at night. I'm going to target some more JAN 12 calls so I'll know what my max loss is. And I'll do a few more buy-writes. The biggest problem I have with both of these strategies is what do I use for a stop loss. I'm going to think about that a bit more.
    Good trading tomorrow

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  9. port- I like the play on HK. I was hoping for a little more retracment off of the XCO news. Did you catch the comments out of EOG? MOG says TLM will reduce their rig count by 30%. He says, and I believe, they are the biggest players in Marcellus.

    He is very bullish on natty now after the elections. His contention was, and still is, the EPA will never wrestle away the jurisdiction from the local level. Too many $'s in play. I'm still working over in my head the best play in ECO.

    If I hear anything more I'll keep you posted.

    SDS- Man, from what I hear from X+3B that is not a winner LT. I've commented on this space before, and if you missed it/care, I'll re-post. GL!

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  10. TOGa party newSubmitted by 2nd_ave (4901 comments) on Thu, 11/04/2010 - 09:02 #73479
    Sure looks like one. Here's to those of you wearing the togas- enjoy the ride!

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  11. whoa! look at the futures go! glad i bought UGL and a few GLD calls yesterday. i had a feeling GLD would gap higher. now i think it goes on a run of all runs and possibly a blowoff top.

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  12. TZA/VXX @ 20.06/11.44 newSubmitted by 2nd_ave (4902 comments) on Thu, 11/04/2010 - 09:41 #73481
    Yeah, I may live to regret it...

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  13. Sold BYD March $9 calls at $1.35 that I bought yesterday at $1.05. Sold BYD stock at $9.35 that I bought at $8.12. Still holding out of the money calls on BYD.

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  14. will be looking to reload BYD

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  15. Sold UGL at $67.1 that I bought at $63.3 yesterday. Sold GLD $136 Nov calls at $1.40 that I bought at $0.70 yesterday.

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  16. "South Korea Warns It's Close to Curbing Capital Inflows"
    http://www.cnbc.com/id/39998421

    Hmm, a lower dollar and yen make US and Japanese equities cheaper doesn't it?

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  17. Re: TZA/VXX @ 20.06/11.44> Off 20.66/11.48 newSubmitted by 2nd_ave (4903 comments) on Thu, 11/04/2010 - 10:05 #73488 (in reply to #73484)
    Rough waters on the short side.

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  18. Bought a few SPY $122 November 12 puts at $1.62 to hedge my longs.

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  19. Yesterday I went 100% long DGP on the panic, and balance was already RBY in my IRA.

    Its a record up day so far, but because I bought the DGP yesterday, I can't reload it till monday if I sell today, so I'm gonna hang in there even if I have to shut down the screens, take a pill, and do the "hide on the couch, listening to blues channel" routine. Sometimes its the only way I can keep myself from selling. At this point I think $1500 gold is a given withing a few weeks, and that will drag, kicking and screaming, even the most unloved miners skywards.

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  20. Industrials
    Utilities
    Healthcare
    Financials

    In that order...

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  21. It's raining gold!!!

    anyone brave enough to pick up tgb??

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  22. Re: TZA> That was 20.36, not 20.66 newSubmitted by 2nd_ave (4904 comments) on Thu, 11/04/2010 - 10:30 #73489 (in reply to #73488)
    But you probably figured that out already.

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  23. I was just looking at a 5yr chart of UNG, every time I want to take a position (thought about moving in at S1, right after the inventory report), I look back and it removes all my desire.

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  24. TGB - Is political risk increasing in Canada? The government blocked BHP/POT deal, TGB and TC were front-run?

    Just wondering what's going on up there...

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  25. not sure cp but I see it as a buy op. Just added for long term

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  26. Re: TZA> That was 20.36, not 20.66 newSubmitted by 2nd_ave (4905 comments) on Thu, 11/04/2010 - 11:00 #73495 (in reply to #73492)
    invariate-

    Countertrend moves using the 3x ETFs seem to work out if I wait for the third 'wave' of selling. When you think it can't go down any further, wait. When it sells off further and you're pleased with yourself for having waited, wait some more. The third sell-off usually leads to the thought that you should just stay away from this POS- that's when you jump in

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  27. GOLD newSubmitted by teamonfuego (2278 comments) on Thu, 11/04/2010 - 11:09 #73497

    Screw it...went back in on the long side on GLD with UGL and bought some GLD Nov $136 calls at $1.54. This is the reason why I'm back in on the long side:

    http://online.wsj.com/article/BT-CO-20101104-714748.html

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  28. So what your saying, in short, is trouble comes in threes?

    Wonder when today's gap up will fill?

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  29. Sold my SPY puts (that were hedges)...dumb move. Lost $450 on that one.

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  30. TOF - Bit by the gold bug in his ear. ;)

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  31. Chicken - I guess I've seen the light...we're gonna have a blowoff move up in the metal soon.

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  32. TGB - Now is probably as good a time as any... Certainly better than last month.

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  33. Why not buy a PM miner, not expecting the PM move to stick and move the miners more?

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  34. Chicken - too much risk with miners. that would require me to actually study and learn about the companies and what their risks are. I'd rather just stick with the metal. I'm betting on a big short term move to 1,500 and then I'll probably be out.

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  35. probably would have made sense to pay attention to the potential double top in gold now that i'm thinking of it more...easy to get caught up in the emotions of it today.

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  36. Gold double top - I wouldn't discount the probability of a string of new highs.

    My question is what all the recent dumping was about.

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  37. PM miners - Of course, one could cover them all with GDX or GDXJ, and maybe miss out on leveraged ETF volatility decay.

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  38. Today is no big deal, except for the Oil stocks I am holding that are pushing my accounts to new highs. It is like a spinning top that wobbles, sometimes it straightens out, sometimes it comes crashing down. You need nerves of steel.

    I am in the TOF camp in thinking we are topping here and remain cautious.

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  39. PAL - Reports 11/10, wonder if they ever got their Sleepy Giant gold production costs under control?

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  40. What's this I hear about taking on a sense of urgency?

    Always a day late and a dollar short.

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  41. Chicken - I've been reading the Fleckenstein articles and he's got a great point when he says that it's never a top when people are worried so much about it being a top, which is what people have been saying about gold. He also said that while the recent mining conferences have had record attendance, when asked what percentage of their assets they had in gold, only 5% of attendees stated 90% and most were in the 5% area, which is also indicative of there not being enough bullishness to consider the current price to be a top.

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  42. freaking BYD man...keeps chugging. i'm still holding my out of the money calls which are getting close to being in the money but i wish i held everything.

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  43. U$D - Ouch, I'm down 0.77% on my cash today. Good thing I'm more on long side than in cash...

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  44. Good thing I fueled my car up last night too!

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  45. I woke up today and saw that the party is on. :) Looks like TOF's and my intuition about there being a spike up after the FOMC meeting instead of a sell-off (since the market has already worked off its short-term overbought condition by staying flat for two weeks prior to the meeting) turned out to be correct.

    I do have a large core position in ECU.TO, and my intent was to start trading around it by buying ECUXF on every pullback and then selling it when it reaches new highs. So, being consistent with this plan, I have just placed a sell limit order at $0.8 for the 9199 shares I was able to pick up over the last two days at the average price of $0.73.

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  46. Just remember: "Bernanke has no bullets left".

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  47. I don't know how they figure it, but I just noticed my day trading buying power is $1.8M....

    That's nuts.

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  48. Any of you guys have a take on Davids TBT?

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  49. David- I certainly don't feel too smart right now trying to be too cute with ECUXF.

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  50. TBT - am giving this one some room...currently short some Dec 30 puts...may move up to 32's if things go OK...

    YCS - watching to see what Japan does...

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  51. I've been there before, Mark. That's why my strategy right now with any new long opportunity is to always buy a small amount at the ask right away, so as not to feel left behind, and THEN, if the price declines, gradually start building up a full position. But always dip my toe in the water first.

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  52. My sell limit order for ECUXF was hit at $0.8 for the 10000 shares I picked up over the last two days at the average price of $0.73. I still think ECU.TO is going much higher after all the reports in the pipeline do come out by the end of 2010. But then, I have a large position in it already, and today's sale gives me a peace of mind in knowing that either my large position will keep going higher (and I am OK with this) or if ECUXF drops below $0.75 again, I'll reload my 10000 shares and will feel like a good trader. :)

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  53. I just checked UNG -- what a nice surprise! My joy this morning at seeing ECU.TO take off was darkened by the fact that my UNG/HNUZF is dragging my portfolio down on such a good day. But now they have joined ECU.TO in giving it a boost! If the market were to close right now, I would have a new record up day for my portfolio.

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  54. After selling my 750 shares of CEF at $17.60, I reloaded 250 shares at $17 and set a sell limit order for them at $18. I just noticed that this sell limit was hit today. I am sad, of course, at exiting completely such a great gold/silver fund, but then I still have 200 shares of GLD and a boat load of ECU.TO, so I still have *plenty* of exposure to gold/silver.

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  55. Mark, even while your checking account is empty you can still write checks!

    Borrow that 1.8M for a few seconds, they'll never miss it!

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  56. Bill Fleckenstein: America's 20-Year Binge About to End

    Submitted by Dave M (244 comments) on Thu, 11/04/2010 - 15:08 #73532

    Although Bill Fleckenstein is afraid to quit the Bernanke-fueled stock market, he says quantitative easing marks a long-term inflection point.
    "If you debase the paper enough, no one's going to hold it and the markets are going to have to turn against the easing. The markets are going to have to finally become vigilantes and say we're not going to buy when you ease, now we're selling," he said on King World News.

    "That's the funding crisis, the final leg to this pass we've been on for twenty years. First Greenspan printed too much money and we tried to speculate our way to prosperity, then in the housing boom we tried to borrow our way to prosperity and now we're trying to print our way to prosperity. This will end like those others did in disaster, but we can't take the printing press away from ourselves anymore then if the Greeks had a printing press they would have taken that away from themselves. The difference between the United States and Greece is essentially a printing press."

    The trick is finding a way to short a market that keeps rising. "Even if it is an inflection point, the machinations of the market convince you that you're wrong even if you're right, so yes I'm tempted [to short], and I may do something and we'll have to see."

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  57. Take a look at the last 3 volume bars on XLF.

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  58. If I were to short this market, I would short the weakest sector ETFs: XHB & KRE. Or, better yet, short the inevitable drama that is currently playing out but is still not making head news: the collapse of the state budgets. Check out the Cal Muni Bond ETF called NVX. It had a huge rally since November 2008 but then rolled over in early September 2010 and now is in a clear downtrend. This *WILL* affect the stock market eventually.

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  59. Bank bears had better cover, PMI looking good today too.

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  60. Imbalances..

    BUY- BAC/C/WFC/JPM/SWN

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  61. Hope your port gained more than a few hun today...

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  62. Re: VXX/"insider selling"/ Fuggedaboudit newSubmitted by 2nd_ave (4907 comments) on Thu, 11/04/2010 - 16:11 #73541 (in reply to #73535)
    what is VXX? It is an ETN seeking to replicate, net of expenses, the S&P 500 VIX Short-Term Futures Total Return Index

    I don't think so. VXX was invented by a younger and more sophisticated generation of Mafia associates to replace the outdated drug trade. It's a cleaner, more efficient, and (surprisingly) legal enterprise.

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  63. Yet another record up day for my portfolio: +4.5%. The total absolute profit is at a new all-time high (52% return since I started playing with the market in 2006).

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  64. PIR - Anybody riding the wicker rocket ship?

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  65. When you say return, do you mean realized?

    I'm now up 60% from where my port started, not a new high but fairly close.

    Anybody anticipating a big sell off tomorrow since bears covered their financial shorts?

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  66. CADC - Wouldn't it be realistic to believe this one will exceed $5.50 simply considering their track record (pun intended) of the past several quarters?

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  67. holy moonshot higher in gold. if we get a combination of average employment numbers + renewed fears on ireland/portugal then gold will most likely ramp higher quickly.

    FD:
    long UGL, GLD calls

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  68. I gather the employment numbers aren't going to be pretty, the FED has anticipated this.

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  69. While Rome burns (USA), the traders on Wall Street party, along with their cohorts in DC.

    I am afraid, very afraid.

    CP: yes, best day this month with an exclamation mark.

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  70. CP -- I mean the total account value. My portfolio is about 1/4 in cash now, so if new opportunities appear, I'll be able to take advantage of them as well.

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  71. David, yes, I held onto too much cash today, should've bought gdxj yesterday... up only 2% here today.

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  72. Congrats to all you guys for making a boatload of dough. I'm one of those nonbelievers that TOF talks about all the time so I only made a little dough since I'm only half invested in my long term accounts while I keep dinking around with SDS in my short term account. One good thing about SDS and SSO is that I'm pretty disciplined using stops and it came in handy today.

    Even the crap stocks in my long term accounts went up. GMO only lifted a penny though. Hmmm.

    Of course I had to make an emotional play so I bought back in to XOM and sold the Nov 70 strike calls which puts my net cost around $68.96. My previous XOM shares were called away a couple of weeks ago. If you are going to make an emotional play, at least make it with something you don't mind holding for awhile AND something that pays dividends.

    I also sold 1 Nov 130 put on FSLR. I left work early but all I heard about this morn was $100.00 oil so I think that supports FSLR. IF the stock gets put to me in a couple of weeks I'll turn around and sell a Dec or Jan 130 strike or better call.

    I'm going to try a new strategy in the day trading account. I'm going to STOP dinking around with SSO and SDS and start with 30 shares of SPY. The commision will be a little high but I want to see if I can get the mechanic's of entry, exit, and stop placement down a little better. I'll come up with a trading plan this weekend and start implementing it next week. I'll post the results for review.

    Now, what do we all thinkg about AAPL, BIDU, and POT?

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  73. "I am afraid, very afraid."

    This is what happens when the world's largest economy is held in a sustained trade imbalance for over two decades while the currency is artificially propped up. The consumption binge precedes a major hangover and the currency takes a sudden hit.

    It only works until it doesn't.

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  74. BIDU - I'd look for a retest of the 20SMA?
    AAPL - Looks headed for upper trendline?
    POT - Are heads rolling up north yet? The price seems kinda high if socialism is the new Canada?

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  75. VXX or gold? Well, that should be a no-brainer IMO.

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  76. OK, I'll play Bernanke's game today and will do some consumer spending now to prove that his "wealth effect" theory is working -- keep printing money, Ben! :)

    I'll be buying the Spanish Absinthe called Obsello. Here are the reviews for it on the web, which are very positive:

    http://www.wormwoodsociety.org/index.php?option=com_content&task=view&id=432

    The previous absinthe I bought, Le Tourment Vert, actually has very poor reviews -- I should have read them before I bought it in the first place. However, it was the cheapest absinthe in BevMo, and I started with it just to set a low benchmark for all the future ones I buy.

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  77. CP: If China Corp put in a bid to by XOM, what do you think would happen?

    POT.to; must be a reason they put in a bid. I don't think it will be bankrupt soon. I am in agreement that for now this takeover is on hold. They are not going to create jobs with this buy. And they can't move these good paying jobs overseas. Prefer they create jobs instead of maintaining them. We have had a number of foreign takeovers like this and we have lost employment a result. Look at Vale and their purchase of INCO. One of the longest strikes in history in Sudbury, Ontario.

    CP: We have had a modified socialism in Canada for 50 years. So this is nothing new for our modern history.

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  78. You could insert the word "rent" in there somewhere but every increase in trade helps. ;)

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  79. XOM - I think of this company as a multinational. They all are, essentially, aren't they?

    The minerals belong to the people though, unless the people have sold the rights.

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  80. port - sorry if i'm rubbing salt in any wounds man...sometimes i just write down what comes to mind when i hear people talk / read people write. i'm so sick of hearing from naysayers about things that it gets me all fired up some times. i don't mean any harm from it.

    the markets are pretty damn near what i was thinking they would get to and i'm only about 70% long now. if i had one bet that i could make it would be to go long the nikkei. i believe they will fire a counter shot to the QE2 nonsense and their currency will drop. what this does to our markets i don't know. but it should be good for 1,500 nikkei points in a month or so.

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  81. EWJ - Does look as though it broke out today, will Europe dance the QE boogie as well?

    Put on your Speedos, soon we'll all be swimming in an ocean of fiat!

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  82. SLW was flying too, this must be like shooting fish in a barrel if you know what you're doing.

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  83. Thompson Creek Announces Third-Quarter 2010 Revenues Up 41% and Cash Flow From Operations Up 143%

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  84. Here are some interesting excerpts from the recent article by James Kostohryz, titled "Is Greed Good for Investors?"

    http://www.minyanville.com/businessmarkets/articles/wall-street-movie-money-never-sleeps/11/4/2010/id/30946

    "I think this sums up the mind frame of successful investors: Investing is a game. It’s just a game that they love to play. It really has little or nothing to do with the money.

    In this game, the money might just as well be monopoly money. Within this mind frame, money isn't a means to an end; the purpose of money isn't to buy anything -- fancy homes, clothes, cars, or anything else. Money is just a number; it’s just a figure on a computer screen used to keep score. That’s all it is.

    An investor that cares about the things money can buy -- cars, clothes, prestige, the nice home -- possesses a frame of mind that leads to the investment dark side. Attachment to money (greed) leads to fear, and fear leads to the dark side."

    I think that's very true. TOF, who I believe has the best YTD return on this blog, mentioned several times that he can afford to lose a large part of his portfolio because he doesn't really need it to survive. That's why he can take calculated risks and invest all his money into small companies like REDF.

    Is everyone else playing a game here as well? I am. :)

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  85. Guys, did you check recently the consumer spending graph at http://www.consumerindexes.com/index.html? This was the biggest "fly in the ointment" for the economy -- consumers not spending money. However, this graph is turning up now, which is an expected result of their consumer index leveling off after a sharp drop. If the index itself stays flat, then their percentage YOY change will return to 0. Since most of the numbers in the economy are presented as YOY comparisons, even the mere fact that consumer spending stopped falling will now present a very positive force on the various econ statistics that was hampered by the falling consumer spending over the past year. Now, combine the growing economy with money printing by the Fed and you get the best of both worlds, which can indeed justify S&P at 1400 to 1500 by the end of 2011.

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  86. David - I think it's very important to remain detached from the impact of money on your style of living if you want to be a successful investor. It's tough because it's human nature to think this way.

    S&P 1400 to 1500...certainly possible. Like I've said before, I am seeing / hearing a lot of positive things going on in my business and my friend's companies.

    I actually seriously thought the Fed wasn't going to do QE2 because the recent economic reports have been pretty solid. With yesterday's announcement, it make me pretty sure that we're now at the risk of seeing significant inflation soon to the point where the genie may have already been let out of the bottle. I was shocked to see gold down yesterday and had a damn good feeling it was an abberation. I think the Fed is once again behind the curve on their thinking. 6 months ago I would have never thought this but it's amazing how quickly sentiment can change...even your own sentiment.

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  87. David, your last post sounds like a case for buy and hold.

    Silly me, I was thinking about selling gmo soon in preparation for a pullback but considering the big picture outlook that might not be such a good idea.

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  88. "I actually seriously thought the Fed wasn't going to do QE2 because the recent economic reports have been pretty solid."

    Well, they haven't actually but I think they intend to b/c they keep repeating that growth is too slow.

    Could it be they're running against the clock in terms of tax receipts? All of a sudden there seems to be concern over the plight of the middle class!

    This is where they should've started or at least worked in parallel, everything has been so serialized it's frustrating and expensive.

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