Thursday, January 27, 2011
1/28/11 Dear Old Grand-Dad
Check out this chart yo-
http://www.kitco.com/charts/livesilver.html
I don't about the SPX, but the XAU is headed for some serious shit- feel me? That POV won't win me any friends- but for all our differences, I always liked EEM's perspective on disagreements- 'I'm here to make money, not friends.' A'ight?
Put another way-
The only one who will hang out with me
Is my dear Old Grand-Dad
And we drink alone, yeah
With nobody else
Yeah, you know when I drink alone
I prefer to be by myself
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Silver spot prices just took another tumble after the HK open.
ReplyDeleteImagine if the S&P didn't have a pullback until 1,400...that would be some heavy stuff.
ReplyDeleteI still wonder if gold = SPY isn't the target, but the 150DMA suits me as well. Kinda wish I'd waited a bit longer before jumping in but them's the breaks. ;)
ReplyDeleteWe don't NEED to imagine a 30% pullback in stocks like SLW- it's happenin' bro. What I can't imagine is holding through that kind of action.
ReplyDeleteMargin Debt:
ReplyDeletehttp://online.wsj.com/article/BT-CO-20110126-711957.html
At highest level since Sept 2008 at $276 Billion, but a chart of margin debt shows we have a long way to go before we hit the 2007 levels, which was around $100 Billion higher:
http://www.learningmarkets.com/Stocks/200910281670/understanding-the-nyse-margin-debt-numbers.html
10% haircut for broad market when gold hits 150DMA?
ReplyDeleteWhat would it take to shake SLW holders out of their positions? 25? I don't think so. 18? No doubt. So I think the odds of 18 just got alot better.
ReplyDeleteIf it loses 25, it sure as hell goes to 18.
ReplyDeleteI should revise that. There's good support at 20 also.
ReplyDeleteSLW - Well, the 200DMA is $25, but I'd bet the broad market will notice if silver dropped far enough to take it there. It seems like SLW has over reacted a bit to the move in silver.
ReplyDeleteWho knows, maybe I'll be buying SLW in the teens...
20 would be a 50% drop from highs. I doubt it gets that low but then again I've only held one PM stock and that was NAK 7 years ago. I don't know enough about the industry to get involved other than for a quick trade.
ReplyDeleteI think we're going to witness a dramatic PM rally soon, I'm just wondering if a huge broad market sell off can be the catalyst or if the same sell everything scenario as 2008 repeats.
ReplyDeleteWhat are the potential options, buying government debt, emerging market equities, PM's?
Unless all really is well in Corporate America and the money is rotating out of PM's and into equities. Personally, I don't see how equities can continue rising without PM's.
Here's what Sprott supposedly did:
ReplyDeletehttp://finance.yahoo.com/news/Gold-Guru-Sprott-Makes-New-indie-140873467.html?x=0&.v=1
CP- I agree with your last comment, unless there is a paradigm shift that is afoot that makes no sense given the debit load across the globe.
ReplyDeleteThen again, I'm not smart enough to understand why the Gov. doesn't take the biggest stick it has, Natty, and shove it up OPEC's ass by saying it will only buy natty powered cars and trucks by 2012.
ReplyDeleteGuys - Check out STVI again. They recently raised $8.5 Million to grow the business quicker. They also announced that they grow revenues 50% in q4 over q3 and in December their revenues were $1.25 Million. They have gross margins of 79%. Assuming $15 Million in revenues, gross income is $11.85MM. They had operating expenses of $1.26MM last quarter. Assuming they do $1.4MM for 4 quarters, they would have $5.6MM in expenses and then $6.25MM in Net income. They are currently trading at a market cap of $69MM so they're trading at about 11 times their earnings run rate. Considering how fast they're growing and how much people pay for these social networking application companies, I think this could at least double from here.
ReplyDeleteI just noticed that the dollar has dropped 12 out of the past 13 days. I thought to myself that the dollar is in a death spiral. That's usually precisely the moment that the dollar rally's spectacularly. Looking at DXY, it looks like it could be making a 5 session rounded bottom which could provide a launching pad for a spike. This, of course, would take equities lower.
ReplyDeleteDollar - Well, it's interesting the dollar actually lost ground today. I naturally assumed the opposite, considering Japan's downgrade.
ReplyDeleteIncidentally, unemployment in Japan is reportedly 4.9%
"why the Gov. doesn't take the biggest stick it has, Natty, and shove it up OPEC's ass by saying it will only buy natty powered cars and trucks by 2012."
ReplyDeleteJust a couple thoughts off hand:
b/c OPEC is rich and can buy military equipment? If OPEC lost income from US, the middle east would likely become destabilized?
Speaking of oil, I wonder what MOG thinks of the plan to stop "subsidizing" oil companies? I always kinda thought of it the other way around, that oil companies were subsidizing the US government...
ReplyDeleteMUB - Now there's a real contrarians contrarian play...
ReplyDeleteMan, why are you guys out there living under the California sun such constant welfare cases? And what infrastructure is he speaking of? I would think US citizens are going to oppose sending more money to a rat-hole money loser state when infrastructure in their own state is crumbling! ;) And yet, it is what it is...
ReplyDeleteCal. Treasurer Bill Lockyer on State BK:
"States didn't ask for it. We don't want it. We don't need it," Lockyer said. "Bankruptcy would devastate states' ability to recover from the recession and make the infrastructure investments that create good jobs."
And gold hasn't moved a lick, it's 02:30 here and nothing 1313.60
ReplyDeleteI was out of the house for the whole day today and so I missed yet another down day for my portfolio. :)
ReplyDeleteMy stop on GDXJ at $34 was hit for the 200 shares I purchased at $33.31. My sell short stop for 200 shares of FCX was triggered at $107.95 (why the heck did I close my FCX puts when it went up to $110 yesterday???).
VXX was down to a new low... I just placed a buy stop limit order for 200 shares to $29.75/$30.
I think we'll have a big move down in the market soon, rather than a simple 5% correction. Have you seen the chart of new 52-week highs on NYSE? The chart just made a 4th lower high yesterday as S&P made a 4th higher high since early November. That's some divergence. The leadership in the market is really thinning out, and its strength is running out.
As for SLW, notice that SLV is still 25% higher than its level in late September while GLD has already matched its late September level. Imagine how much more SLW will fall if SLV drops another 25% so as to catch up with gold...
ReplyDeleteUNH - Here's one I owned @ $30 and got bounced out of @ $28. Now it's $42.
ReplyDeleteShuttle Explosion - Hard to believe it was just 25 years ago today.
ReplyDeleteGDP report today.
ReplyDeleteShanghai Futures Warehouse Inventory:
ReplyDeletehttp://www.shfe.com.cn/estatements/secondpage.jsp?subjectpid=905&subjectid=9053&startpage=1####
GDP 3.2%
ReplyDeleteJJG - Has barely missed a beat.
ReplyDeleteBought more LVS at $46.5 in premarket. Stock is down on nothing news.
ReplyDeleteFunny how the equities rally was kick-started with a weaker dollar, wonder how long/if that strategy can keep it going?
ReplyDeleteHope my gold position doesn't end up as chihuahua meat in someone else's taco...
ReplyDeleteWow-
ReplyDeleteSNDK just dropped 2% in the first 2 minutes since its opening print.
Jefferies raises BEXP PT to 48.
ReplyDeleteI can't come up with a coherent trading strategy.
ReplyDeleteOh, say it ain't snow! We're getting more of the white stuff this morning...
ReplyDeleteI still think a lurking sell-off will have absolutely nothing to do w/ earnings. In fact, earnings estimates will probably ramp in the face of a crisis.
ReplyDeleteThis will most likely be the trigger...
http://finance.yahoo.com/news/Bill-Gross-sees-dangers-in-apf-4283779401.html?x=0&sec=topStories&pos=8&asset=&ccode=
Wonder what happens to gold when the debt limit gets increased?
ReplyDeleteJust sold my VXX for a 1% loss. If UNG is the widow maker, what is VXX??
ReplyDeleteNo flash crash, blow off top, no black chicken...Sheer boredom will be what shakes out the longs or shorts.
ReplyDeleteJessie, I wasn't going to read that when I saw it earlier b/c I'm not exactly a fan of Bill Gross's public statements.
ReplyDeleteAfter reading, I'm glad I found out Gross says not raising the limit is reckless. I tend to agree with him.
Clack Chicken!!!! OMG, where?!?!?!? You know, sometimes you've got to think outside the bun...
ReplyDeleteBlack
ReplyDeleteBack in VXX at same level. I don't see VIX going too much lower in the short term. It hit 15.94 today.
ReplyDelete11 for CLNE.
ReplyDelete2 trading days left to push the S+P back inside its monthly bolinger band at 1282. Let's see if history can take it from here.
ReplyDeleteSentimentrader posted last night that smart $ put buying has reached a crescendo not seen since just before prior selloffs. Also, the CSFB "fear index" which tracks the price of puts is just about at its highest level EVER....
France - Anything goes except gay marriage.
ReplyDeleteVXX is the HIV-positive wife that inflicts unbearable mental anguish while playing around, then leaves one with the stigma of an incurable disease.
ReplyDeletePicked up DXD. Looks like nice rounded bottom. Sell stop at the lows for minimal loss.
ReplyDeleteJesse - I keep waiting for this opportunity to add, over six months now... Prices seem to keep moving higher though.
ReplyDelete"VXX is the HIV-positive wife" Oh so graphic! We used to call it cooties back in the day...
ReplyDeleteRAS. Same old same oh...Buyers @ 2.70, sellers @ 2.75.
ReplyDeleteBought some BGZ at $7.97. Not sure why because I have lost money pretty much every time from the short side.
ReplyDeleteGold shorts better cover!!!
ReplyDeleteBack into SPY Puts...$132 Feb 04 Puts at $2.40ish. Probably gonna lose once again but oh well. I think the market finally cracks. This is what I was thinking earlier this week...a pop on GDP then a straight selloff.
ReplyDeleteBEXP challenging recent highs.
ReplyDeleteIs it possible the world wasn't quite so hostile back in the day?
ReplyDeleteAt what point do shorts call a blow-off top triple-black chicken foot?
ReplyDeleteI completely sold my LVS as well when I moved to the dark side. Now have no longs, about 60% cash and long BGZ/SPY Puts. Market is doing its classic hard selloff right when people expect it least.
ReplyDeleteI don't think I've ever made much money on VXX, but I think its time is getting VERY close. I still think it could surge to 50ish. I looked at the list of VXX tweets last night, and EVERYBODY is still talking about the easiest way to make money on wall street- which is to short VXX because it will automatically go to zero over time. This strategy has played out successfully for a L-O-N-G time.
ReplyDeleteEvery dog has its day. And when it does...it can be big.
VIX update just sent to me:
ReplyDeletehttp://www.stocktiming.com/Friday-DailyMarketUpdate.htm
tof- I think what we have here is the market 'telegraphing' a hard sell-off, either later in the day or Monday. I think it may rally back up right now.
ReplyDelete"Congressional Republicans say bond investors will set off a Greek-style financial crisis in the U.S. if the national debt grows. They've promised not to raise the limit without deep spending cuts."
ReplyDeleteI wonder if these bozos can actually man-up and cut what needs cutting: The military budget is 50% of the monetary drain.
Bidding APA @ 108.62. Obvious reasons.
ReplyDeleteOr maybe a better take would be: since I expect a rally from this sell-off, it's the real deal...
ReplyDeleteNotice how metals/miners are countertrend at this point.
ReplyDeleteAh yes, UNG inverse relationship still working?
ReplyDeleteI just emailed MOG about APA. I already know he'll say buy it, but I'll let you know.
ReplyDeleteBidders still in RAS.
ReplyDeleteOK, we close green..or am I sea sick? :)
ReplyDeleteWOW. IWM has basically just tanked.
ReplyDeleteThis is the real deal...we may see a bounce but I suspect we see 3 or so days of heavy selling and a test of the 1,260 level.
agree w/tof, probably 3-5 days a real selling, the pause that refreshes, then back up we go (assuming econ data and earning+guidance are basically net positive).
ReplyDeleteGMO - Approaching $5.20, Market snap-back today?
ReplyDeleteI really want to buy natty here, but all of my bullishness was based on it breaking its 2 year channel. It was rejected hard by the upper channel this week. If history is any indication, UNG trades down to (gulp) sub $4. I still think it goes up substantially in the long term.
ReplyDelete1st 2 charts
http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID660602&cmd=show[s202393439]&disp=O
Okay fellas, I'm gonna hold tight and wait before adding even though I think it's wrong. Thinking outside the bun.
ReplyDeleteWall street typically decides well in advance when a major market top or bottom will take place as they need to get all of their ducks in a row (load up on puts or calls; publish all of their upgrades or downgrades). They usually pick an event day to do so. I wonder if today's GDP announcement was "the day"?
ReplyDeleteThis is all about Egypt...But I like it. Doing quite well actually.
ReplyDeleteStinky on GMO @ 4.88.
ReplyDeleteSold VXX and DXD on the pop. Time to go to Mt. Hood for the day:)
ReplyDeletenice trades, jesse.
ReplyDeletePicked up a little CSCO @ 21.17...
ReplyDeleteUNG - Inverse relationship failing, headed to $4.72 ish lower trend line first?
ReplyDeleteMark Today APA has cyclone issues. You have rig damage risk.
ReplyDeleteCold weather - Electricity demand shot up.
ReplyDeleteMark did you get that price on APA. I didn't see it print that low.
ReplyDeleteGOOG weak.
ReplyDeleteAKAM strong.
FCX relatively strong.
BAC strong
AAPL weak...looking to retest 325.
Re: Opening CSCO @ 21.17/ ADD 21.08 + BAC 13.74 newSubmitted by 2nd_ave (5184 comments) on Fri, 01/28/2011 - 11:36 #78523 (in reply to #78521)
ReplyDeleteStill bullish for the ST.
Wow...glad I got out of my longs man. This could be a down 2% day. I think the 1999 parallel plays out, with a 5% or so drop.
ReplyDelete2nd - I think its smart to hold off on longs. If we get a 2% down move it tends to take a week or so for the markets to stabilize.
ReplyDeletePutting a limit order on my SPY Feb 04 Puts at $4.5 that I bought at $2.48. I have a pretty large position in them so I want to make sure I get it before the bounce. This would be a stop at a 2% down move which is about what I expect.
ReplyDeletePKX - On sale, approaching bottom trend line.
ReplyDeleteWell, Dr. copper is up 0.75%
ReplyDeleteSold 1/8 of my SPY Puts at $4 that I bought this morning at $2.48.
ReplyDeleteI'm a buyer of AAPL at $326 only for a trade.
ReplyDeleteAPA - Only fell to within a gnat's butt of $110 so far.
ReplyDeleteSold another 1/8 at $4.2
ReplyDeleteShit we might hit 1,260 today.
ReplyDeleteDBB - +2% pop
ReplyDeleteNice shakedown> Close higher newSubmitted by 2nd_ave (5185 comments) on Fri, 01/28/2011 - 12:21 #78534
ReplyDeletejack- Not Captain Courageous by any means. Just picking up loose change on the ground.
Re: Nice shakedown> Close higher newSubmitted by jack black (1136 comments) on Fri, 01/28/2011 - 12:38 #78537 (in reply to #78534)
ReplyDeleteOK,
you convinced me. Sold my EEM puts. Will look to reload later.
I also noted that EEM stopped the free fall, so there is some resistance at this level.
Sold all of my SPY puts at $3.86 and went long SSO at $49.79 for a bounce only and sold it at $49.9
ReplyDeleteThere's still a huge divergence between gold and copper, indicating potential trouble for metals near term.
ReplyDeleteOn the other hand, I'm not so concerned with the divergence considering 1) I believe there remain plenty of tail winds in gold's favor if metals have gotten ahead of recovery, and 2) As the economy recovers, demand for alternative cubbyholes in which to store wealth might justify this perceived divergence.
Long GOOG at $605; sell limit at $609.5.
ReplyDelete"Fighting terrorism is a growth industry"
ReplyDeleteJust a bunch of crap covering up the real reasons? "Stocks Slide as Egyptian Concerns Brew in Markets- AP"
ReplyDeleteWhat an interesting morning to wake up to! Stocks are down hard but metals and miners are up! Does this mean that hot money is showing desperate attempts to still find some place to go? Increased volatility and investor nervousness after a large rally is always a sign of a top, and so it is just a matter of time before the hot money decides to flow to $USD for a few days, and equities will collapse hard without any bids during those days.
ReplyDeleteDouble bottom on GOOG at $601...I decided to add more at $603.5 and will stop out at $596
ReplyDeleteMOG on APA...
ReplyDelete"My only thought is that most of Apache's operations have been in the Western Desert, far away from anything or any people. I do not fully understand the uprising in Egypt, have not yet seen the anti-western sentiment but it may be coming.
Egypt has been a major producer for a long while (Gulf of Suez, then Nile Delta and Western Desert) and they fully understand the importance of energy security and export $$, but maybe the situation is boiling enough to escalate.
I spent 6 weeks in Egypt, mostly in Gulf of Suez climbing the mountains and avoiding all of the land mines...one of the more harrowing field experiences in my former life. People are very emotional there, love a good riot and are dirt poor.
Surprised at the selloff, APA knows their way around crises, well managed."
I'll be looking to get long.
RB- No, that was a bid.
HL is strong. Almost took that one yesterday.
ReplyDeleteMy VXX buy stop limit order for 200 shares was triggered this morning at $29.83. Then, as VXX surged up, it hit my sell limit at $31.27 for 100 shares I picked up at $30.27, and when I woke up, I decided to book some more profits and sold at $31.59 100 shares I purchased this morning at $29.83. Money pump is working again! :) As for the last 100 shares I picked up at $29.83, I decided to place a sell stop order at $31.45, just below the recent low in VXX.
ReplyDeleteI just saw that February VIX futures were at $18.75 15 min ago but VIX itself was at $19. Naturally, the smart VIX traders are not projecting this level of panic to remain here for a month. However, if we do not have a market rebound on Monday and VIX stays in place, then VXX will keep moving up, so as to get futures above the spot price as usual.
The sector that led the market to new highs yesterday was SMH, and today SMH is down hard. That's some money rotation.
ReplyDeleteI decided to move up my stop on 1000 shares of TWM I purchased (following TOFs example) a couple of days ago at $12.19 to the break even point, so as not to let a profit turn into a loss.
ReplyDeleteSimilarly, I decided to place a buy to cover stop limit order for the 200 shares of FCX I shorted yesterday at $108 at the break even point, so as once again not to let a profit turn into a loss.
Let's see how far this sell-off takes us...
Max frustration = close at 1,290.
ReplyDeleteACI looks strong today.
ReplyDeleteHere's my thinking (hope) on APA. Lot's can happen over a weekend. Perhaps we will get a better price at the close when those weak hands get nervous.
ReplyDeleteS&P - Boy, that's an ominous looking red candle.
ReplyDeleteHow long would it take for investors to figure out that TLT has bottomed and that it is a much safer investment for the next month than the overbought equity market that is showing signs of topping out?
ReplyDeleteMUB - Flat! Maybe we should consider buying government debt, LOL?
ReplyDeleteimho, egypt and ford are just the "excuse" for the needed pull back....last i saw the gdp of egypt was ranked somewhere between 26-30 globally so really who gives a rats a**.
ReplyDeleteTLT - I can find other means of shorting the market that don't involve the name "Lehman"?
ReplyDeleteActually...max frustration would be a close above 1,300. could you imagine that bs?
ReplyDeletegood to see the us govt is on the job "non-essential travel to egypt" ain't a great idea.....man, that's the job I want: watch 24x7 news and send out "don't go there" sms notes....could handle that
ReplyDeleteI'm not buying the Egyptian riots moving the market, I'm thinking there are much larger forces at work, such as state default.
ReplyDeleteEither GDP was a genuine disappointment (are initial reactions incorrect?) or this is a shakeout attempt?
I'm not taking a directional position yet but I'm not too happy with gold's inability to hold onto gains...
CLNE needs a friend.
ReplyDeleteI need to give up on GOOG. The stock is completely dead. No bounce ever...I even went long some calls today on this at $605 and the stock immediately tanked and is underperforming the market. Very frustrating stock.
ReplyDelete"govt is on the job"
ReplyDeleteDon't forget about your guaranteed pension, healthcare package, and it's virtually impossible to lose your job to layoffs.
I stepped away from the market and no I see that I did get stopped out at $31.45 from the last 100 shares of VXX I purchased this morning at $29.83. Overall, the 300 shares of VXX I sold today gave me a $440 profit relative to the price at which I recently purchased those 300 shares. This is the second time the VXX money pump spits out some money to me (the total profit collected the first time was also around $500). To be honest, however, this 1K profit I got so far is barely enough to counteract the constant time decay in VIX futures. But that was my plan in the first place -- try to stay flat on the VXX purchase through trading while waiting for a big market correction during which VXX should rise 30-50%.
ReplyDeleteUNG - Inverse play gaining momentum?
ReplyDeleteright up my alley CP!
ReplyDelete"imho, egypt and ford are just the "excuse" for the needed pull back....last i saw the gdp of egypt was ranked somewhere between 26-30 globally so really who gives a rats a**."
ReplyDeleteThat was my thinking exactly as soon as I read the Yahoo headlines. There was so much stuff happening in other countries over the past few months and the US stock market ignored all of that, but now it cares about Egypt all of the sudden? Please!
Here are a couple of very plausible scenarios IMO for what the media will be saying if the US stock market plunges 20%:
1. The market keeps going down on concerns about growing national debt that will inevitably lead to higher interest rates and government austerity measures, with the US government seriously considering to follow the CBO advice about raising taxes.
2. The market keeps going down on concerns about deteriorating state finances, which will force state governments to raise taxes and halt the recovery of our fragile economy.
JB- Kinda like what I do here!...except I'm usually wrong.
ReplyDeleteLong NOK at $10.61...I think this stock is set to turn things around on their mention that they will be using the Droid operating system, which seems to have been well received.
ReplyDeleteDoes NOK make smart phones? Seems like pretty tough competition with AAPL/MOT.
ReplyDeleteDamn. Look at RAX/CRM.
ReplyDeleteHow's the private sector going today? Here's some news from my recession-proof neck of the woods:
ReplyDelete"Northrop Grumman's new Fairfax County workers will earn average of $200K
Washington Business Journal - by Michael Neibauer
Date: Monday, January 24, 2011"
http://www.bizjournals.com/washington/blog/2011/01/northrop-fairfax-hires-will-earn-200k.html
Long BTU at $61.66
ReplyDeleteClosed out of my GOOG position. I don't believe I've ever made money in that company.
RAX/CRM - These must be federal gov. contractors?
ReplyDeleteCP - cloud baby, it's all about the cloud... :)
ReplyDeleteseriously, someone is going to make a ton of jack (probably more than crm) hitting a billion users via the cloud.....question is; WHO?????
CREE - What are the chances this company receives any considerable business in the future as a result of energy saving incentives offered/mandated by federal government?
ReplyDeleteJust day-dreaming...
JB - Then earn your keep by giving us a heads-up when you figure it out. ;)
ReplyDeleteCP - after I make my first move you guys will all be in the loop. actually spend hours each day on cloud related initiatives and to be honest, I still don't get it, I really think I'm just too damn old to know what's what in tech land nowadays.
ReplyDeleteAlright...i'm staying on the sidelines. BTU and the coal stocks are the ones I'm keying in on for a bounce on Tuesday or so...
ReplyDeleteTriple bottom coming up for SPY....Or???...
ReplyDeleteEh, you're not too old. I hope you don't buy that line of bs, dude! Even the "best" get caught with their pants down, just look at Intel with no smart phone presence.
ReplyDeleteThere are claims that cloud is already in use but I haven't had anything hit me on the head.
Should I be looking? I'm not sure even if it will catch on(did VHS finally replace beta?) but it probably will if taxpayer monies are involved.
Things are not getting any better in the last hour of trading. In fact, a slow downtrend is visible so far.
ReplyDeleteThe cloud issue is pretty complex: private clouds, public clouds, on premise SAAS, etc, and I am freakin' way too old to try to figure it out - just want to get put out to pasture with a modicum of dignity.
ReplyDeleteas a data point SAP is looking to deploy 1000 RDS in '11 and over 1/2 of those will be deployed in the cloud.
although, listening to Gibbs confirms to me that an ample supply of buzz words is far more important than actually KNOWING anything, makes me ill.
Have a good weekend everyone. I'm off the grid until monday. Hold down the fort.
ReplyDeleteChecking in from the road.
ReplyDeleteDavid- You are spot on for media explanations for the pullback ahead. There will be many "reasons" and much fear during the pullback/crash. For the last 6 weeks or so, the charts have been SCREAMING major pullback (to me at least).
BTW- I was just sent an intraday report from sentimentrader- which never happens.
S+P setting a new 52 week hi one day, then dropping to a 10 day low the next. This has happened 8 times since 1928. 26 days later, the market was up 1 time. 6 of the other 7 were down an additional 4-17% within 1 month.
This is not going to be pretty boys and girls. Volatility will make a comeback which should be great for us traders from both the long and short side. I even see lots of 10-20% short term trades from the long side as the market adjusts lower.
All my humble opinion of course.
I imagine the cloud basically as a return to the dumb terminal system that existed before the desk PC. Throw in a coupl'a buzz words and some mood altering substance and I'd probably still say the same.
ReplyDeleteHow about the buzz-term "shovel ready", does it apply? I bet it does somehow...
APA @ 115.00
ReplyDeleteABX - A buck off it's high, what a POS.
ReplyDeleteI haven't had such a big up day in a while, making money both on my long positions and short positions simultaneously: GLD up, ECU up, VXX up, TWM up, and all my puts are up!
ReplyDeletegreat job David!
ReplyDeleteWhat I am really licking my chops about is for VIX to rise to 30, at which point I'll start buying in LARGE quantities 6-month out $40 strike puts on VIX. I think there is ZERO chance that VIX can stay above 30 for 6 months, and so this will be a GUARANTEED way of making money. Unlike my previous strategy of shorting ultrashorts, I will get no margin calls with this strategy, so it WILL work. All we need is for VIX to rise to 30...
ReplyDeleteDavid - the question is: do we get a rise to VIX 30? I honestly doubt it. I think we get maybe a few day sell off here at most. There are buyers at every turn and the mass public that missed the rise in stocks twice since 2009 are salivating for a chance to get in. Any pullback should be short and shallow in my opinion. I'd target 1,240-50 as a good target point for this pullback.
ReplyDelete"great job David!"
ReplyDeleteThanks, JB. I think I just got lucky today.
On a second thought, it wasn't just luck, and I have to give credit to where it belongs. I have to thank TOF and Jesse for pointing out that when a market goes down medium-hard for two days after a LOOONG rally and then rallies to a new marginal high, the rally is most likely a fake to shake out the new shorts, and so I simply followed TOF two days ago in opening a large ultrashort position after hours (TWM for me, BGZ for TOF). Also, I have to thank 2nd_ave for pointing out yesterday that no catalysts remain to take this rally higher, which gave me the additional confidence to place a tight buy stop limit order on VXX yesterday (which luckily got triggered today at $29.83). It's great to be trading as a part of such a great team!
TOF, I don't think the public missed the recent rally. All my friends were confident in January about the economy finally beginning to expand and all of them bought into the market in December/January. It is hard to imagine someone with cash, who was WILLING to invest that cash and didn't invest it in December/January following all the headlines we were getting. This is all speculation, though. What is a hard cold fact is that the chart of new 52-week highs on NYSE made a 4th lower high yesterday since November 2010, while S&P made a fourth corresponding higher high. You can't make this stuff up -- the market leadership is thinning out, which is a sign of a LONG TERM market top.
ReplyDeleteDavid - I hear you regarding those issues with leadership...I just think there is a good chance we go higher because the bearishness out there is still so prevalent and I think that prevented a lot of people from hopping on the freight train. We all know that markets can remain out of touch with reality for longer than we expect and I suspect this time is no different.
ReplyDeleteSure, new 52-week highs on NYSE could make a 5th lower high since November 2010, but in that case I'll probably go all in on S&P puts. :)
ReplyDeleteDavid - I hope you're right man as I'm rooting for a big pullback and would love to get into some stocks at cheaper prices (and to have my BGZ position really take off). But these big down days with major spikes in the VIX usually end up as a couple day events and then it's over with.
ReplyDelete"But these big down days with major spikes in the VIX usually end up as a couple day events and then it's over with."
ReplyDeleteThis will keep happening until all traders start to expect each pullback to last no more than a couple of days, and when all traders habitually cover their shorts in one of those two-day pullbacks, there will be nobody on the southbound train and it will take off empty for good.
new post
ReplyDeleteWouldn't it be amazing if we discovered that the ECB were contemplating an interest rate hike?
ReplyDelete