CP I don't know If I like KOG. I read that they doubled their output from 600 barrels a day to 1200 barrels a day. About enough to fill up my SUV. Their play is all dependent on high oil price which has risen on fear, speculation and a weak dollar. Fundamentally the US has had a large surplus. If you compared oil supply with prior times it would be considered way overvalued right now. That is why the refiners were on such a spike up because of the glut of oil, yet rising gas prices. That being said I think i will always have at least 10% position in Domestic OIL in the port. I will trade what I have now and then load up on a dip. I'm not sure what horse to ride, but that's Mark's job. BEXP seems to be acting the best. I should of never sold my position that I picked up at $26.
Gap higher to 1,320 would do the trick for maximum frustration. It's not like econ reports have been bad lately so I'm sure the bulls can gather up some momentum if they need to. Shoot jobless claims are now in the 300's...
I think a gap up with a trending market for a day or two, followed by a gap down would just about signal max frustration.
I wonder what Laszlo Birinyi is thinking these days with his 2,100 most likely scenario by 2013.
"David- SD is a mere penny or 2 away from 10 bucks."
That's crazy, Mark. Do you know why SD started rallying like crazy in December? Such moves always happen when we are not watching...
As for HEK, I bought some March $2.50 call options on HEK when it was trading at $4, and I'll hold them till expiration. Maybe HEK will do the kind of rally that SD did? :)
The dip in silver was bought pretty vigorously. So I am counting on ECU being up strongly tomorrow, fueled both by a strong rally in market indices and a rally in silver...
That is one awesome video 2nd. Thanks for sharing it.
By the way, I just read a very interesting note about BAC...if this is true, this stock could rally really hard given how much it has underperformed the other big banks...FD: I own too much BAC at this point, through stock and August options...i'm actually considering just going with LEAPS because I think it will be a $25-$30 stock in 2013 and I don't know what the market will do in the short term:
"UPDATE 1-FBR sees dividend bonanza from big banks
* Fifth Third raised to outperform
* Expects BofA to pay dividend
* Favors big banks over regionals (Adds details)
Feb 25 (Reuters) - FBR Capital Markets said the U.S. Federal Reserve may allow banks that have repaid bailout funds to return as much as 50 percent of their earnings to shareholders, when the regulator announces the stress test results in March.
Big banks that are well capitalized should be able to raise their dividends by as much as 30 percent of their payout ratio, the brokerage said and identified JP Morgan , PNC Financial and Wells Fargo as having the most excess capital among the lot.
FBR expects Bank of America , the largest U.S. bank by assets, to be able to pay a dividend, contrary to Street expectations. Bank of America plans to raise its dividend -- now at 1 cent a share -- in the second half of 2011, if it gets Fed approval.
The brokerage said it also favors big banks over regionals as many of the regionals are still weighed down by the commercial real estate segment and lack the benefit of a diversified revenue base.
Among regional banks, FBR expects Fifth Third Bancorp to return capital to shareholders at a faster pace than most banks over the next two years and upgraded the stock by a notch to "outperform." (Reporting by Rachel Chitra in Bangalore; Editing by Saumyadeb Chakrabarty)
After meandering through 9 cities in Malaysia and Thailand, I now rest in Macau for a day or two before I lose all blog, Facebook, Google doc, Youtube, Seeking Alpha etc. etc. etc. access for a few weeks.
In the meantime, my focus is on natural gas. I was stopped out of my position, but I re-entered a portion of it at yesterday's close. I'm not sure if yesterday's hammer will hold, but I see loads of support in the $3.70-$3.80 ballpark. If it holds, a powerful reverse head and shoulders pattern will emerge w/ a short-term target of $7 or so. http://www.stockcharts.com/def/servlet/Favorites.CServlet?obj=ID660602&cmd=show[s207384618]&disp=O
In the meantime, I just ran across this Seeking Alpha article.
"The chart shows statistics on the ratio between natural gas and crude oil over the last 21 years. As can be seen, the highest ratio seen was 26.35 in late August 2009. The ratio as it currently stands is 26.11. The current reading is in the 99.82nd percentile of readings over the last 21 years, meaning that it is almost the highest reading ever seen. Considering that the median reading was 9.02, the current ratio stands almost 200% higher than the median. The last time the ratio was this high was September 2009, and natural gas proceeded to rally 138% until the end of 2009.
Additionally, Sentimentrader publishes commodity sentiment readings. Natural gas sentiment is literally off the charts on the bearish end of the spectrum which is a big green light for the bulls per Sentimentrader.
HEK is probably one way...only concern I have is they have gotten crushed in each of their past 4 earnings reports and the next one is due out in about 2 1/2 weeks.
I still get a feeling that we stall here then go lower. Nat gas is definitely going to be in play with this mid east turmoil. HEK could skyrocket here.
Mark/David- Next time you're in the mood for a lobster roll, try Woodhouse Seafood on Fillmore near Pine. A colleague recommended it. It's 26+tax for the larger 6oz. It's a pocket of fresh/toasted/buttered sourdough with nothing but lobster/salt/pepper/a little mayo. Stuffed to the point where I had two whole claws falling out of the top. They make each on demand only- for all I know, they start with a live lobster- it takes about 20 minutes. Decent string fries. Cole slaw.
Damn...$26 for a lobster roll!?!? When I was living up in Boston I used to get a mean lobster roll up on our annual canoeing trip to Maine for $12...best damn lobster roll you can get.
I think the smart people are selling into this rally. I think we have a retest of the 1,300 level in our cards before we can bottom out and move higher. I don't think this is a gap and go.
After 2nd's comment, I just realized that I haven't been out to dinner in the U.S. for about 6 months. $26 + tax and tip in Cali. must be about $36 I would imagine. That is literally 2-3 weeks of restaurant dinners for me anywhere in Asia (outside of Singapore). Over the past couple of weeks, I've been itching to make a more permanent move back to the States. No matter how well I do in the market, $36 is a major deal breaker for me:(
I'm using the Taiwan markets trading as a gauge for how we will trade. The past month saw an extremely overbought market all the way up to 9100, then a hard drop down to 8600, then stabilization and a gap up to 8800 which held for 2 days, then a gap down and trading down to 8500. if we follow that pattern we could see 1,275-1,280 in the next week.
Jesse - no kidding man. i went on a two week trip to mainland China 6 years ago and I spent more money on airfare than all of my meals and hotels combined for 2 weeks.
Huh, I remember buying lunch for myself and another about 15 years ago in the Tokyo Hilton restaurant, $125 for two small cokes and two club sandwiches.
If you ride just a few train stops from Tokyo to Hashimoto or other nearby province, you can find a nice yakitori bag-meal at a corner grill for just a few bucks, and grab an Asahi out of the street vending machine.
I usually use GAZ for a proxy for natural gas as for whatever reason, it is a much better barometer for chart formations for me. I decline to trade it due to its light volume and the inability to trade pre/post market.
Anyway, check out all of the tails lately under $7. Could be a major bottom for natty. Like I said earlier, a bottom here could clear the way for a reverse head and shoulder surge to $7. That would equate to UNG $18 or so going forward.
Re: Lunch date with VXX @ 31.83/ TZA @ 40.21 newSubmitted by 2nd_ave (5280 comments) on Fri, 02/25/2011 - 12:10 #80465 (in reply to #80463) Out of courtesy.
"A pattern triggered which has been just as effective at preceding short-term rallies. The S&P 500 set a 52-week high, then saw three straight down days...but each one was a lesser loss than the day before.
When we've seen this in the past, using either S&P 500 futures or the S&P 500 SPDR (SPY), prices rebounded between 75% - 90% of the time from 2 days through 2 weeks later, with a risk/reward that was skewed about 3-to-1 to the reward side.
Using SPY prices, it took a median of 8 trading days for the S&P to close at a new 52-week high, with 8 of the 10 instances taking less than 13 days. The maximum loss before hitting a new high averaged -1.1%, with only two of them dropping more than -2% at any point before recovering. Given the oversold readings from the past few days, the looming beginning-of-month positive seasonality that has worked wonders over the past year, and this price pattern, we should see Thursday's low hold for the time being.
Traders have been piling into the energy-related funds at the Rydex mutual fund family for the past few months, as assets in the two funds have increased more than 350% since September, and more than doubled since December.
They've reached a point now, at $410 million in combined assets, that was last seen in July 2008, just as Crude Oil was forming a major peak. The chart below highlights the only other times combined energy assets climbed this high since 2000, all of which were in 2005 or 2006 (other than today and the instance in 2008).After the other instances, Crude Oil wasn't able to maintain any further upside momentum over the next couple of months when Rydex traders had become so enamored with the energy sector."
"In the meantime, my focus is on natural gas. I was stopped out of my position, but I re-entered a portion of it at yesterday's close. I'm not sure if yesterday's hammer will hold, but I see loads of support in the $3.70-$3.80 ballpark. If it holds, a powerful reverse head and shoulders pattern will emerge w/ a short-term target of $7 or so."
Jesse, my friend, I really wish you all the best in your trading, and so I really hope that you take seriously the idea I had already mentioned to you at one point: the UNG daily chart is MEANINGLESS if the interval of more than one month is considered, since every month UNG rolls over to new futures. UNG is $5 now but was $18 two years ago. But it is an optical illusion -- the NG futures where NOT 3 times higher than they are now.
If you want to predict where UNG prices will be next month, you should look at the chart of April NG futures (which UNG is tracking right now), which you can get by clicking on the chart icon next to April futures at
CP - I really like India longer term. Some caution is warranted right now with their market given it is now under the 200 DMA. Should it recapture the 200 DMA, which I think it will, then it's a buy. I personally would be a buyer of anything India...I really like IFN/IBN/TTM/REDF right now.
A little earlier today, just when I woke up, I decided to sell at $41.17 100 shares of CCJ I picked up yesterday at $40.23. That was a trick against market gods, who like to move prices in exact opposite direction of my orders. This time it happened again, since as soon as I sold these 100 shares, CCJ shot up to $41.50. But I still have 500 more shares left! :)
"In the meantime, my focus is on natural gas. I was stopped out of my position, but I re-entered a portion of it at yesterday's close. I'm not sure if yesterday's hammer will hold, but I see loads of support in the $3.70-$3.80 ballpark. If it holds, a powerful reverse head and shoulders pattern will emerge w/ a short-term target of $7 or so."
Thank you for your concern David. All of the above numbers are based strictly on NG futures and not UNG. $7 for natgas futures would take UNG to a post-split $18 ish.
Re: Lunch date with VXX @ 31.83/ TZA @ 40.21 newSubmitted by 2nd_ave (5281 comments) on Fri, 02/25/2011 - 12:27 #80467 (in reply to #80465) No good deed goes unpunished.
The small short position in VXX (200 shares) I opened yesterday at $33.64 is doing well today. I decided to move down my buy to cover stop from $35.10 to $34.10.
Unless we get another major scare soon, VXX should see new lows next week. I got a good feel for what happens to these future-based ETFs when I was playing UNG, and what I realized is that any decline carries a double wammy for them: the decline always happens on the front month futures, which opens up a large contango, which quickly devours whatever is left of the ETF itself. Given the scare we had, the next month VIX futures will stay high, but the front month will keep going down as the market fear subsides. This will be deadly for VXX.
TOF - Yep, I like most everything about India. Even though I've never been there, I feel some kind of special connection and I have high confidence in the people to overcome their hardships.
That's a major rally we are having in WATG right now, up 7.40%. It would be a pity to see it give up these gains. The best way to ensure that it keeps going up is to trick the market gods by selling some WATG right now. So I just sold 500 shares at $6.82. The cost basis for these shares was $6.25 (I acquired these shares by first selling $7.50 puts and then $7.50 covered calls), so I actually booked some profits here. I also decided to place a sell limit at $7.25 for 500 more shares of WATG (whose cost basis was also $6.25)
Good job David...I often wonder if I would be more successful just trading two or three securites because I would understand their trading patterns much more than following 25-30 of them. You've been trading WATG for a year now and seem to be doing a pretty good job with it.
1,320 on the /ES seems to be a pretty strong resistance point. I still think we top out here for the next day or two of trading and then gap lower on Tuesday maybe. Ultimately, oil will probably go lower so F should be bought up.
WATG is up 10% already. :) The best way to trick the market gods is to sell 1/10 of your position into a big rally, so as to ensure that the rally becomes HUGE. :)
I am actually tempted to sell another 1/10 of my position, so as to ensure a huge rally next week as well. :)
So I just did sell 500 more shares of WATG at $6.98, so as to ensure that WATG doesn't drop below $7 in the near future. After all, the market gods (read: mean hedge fund traders) wouldn't allow me to reload the 1000 shares I sold today at the average price of $6.90 (booking a $650 profit on them) at $6.50 and then $6, right? :) If so, then they should be kicked out of their jobs! :))
Before today, I had a slightly larger fraction of my port invested in the Chinese auto parts sector than I wanted, and at the same time all my free cash was either invested or used as a collateral against short puts. Thus, raising some cash (especially if I can do it while booking some profits) was crucially important for me from the point of personal portfolio management -- hence the sale of some WATG today. My experience shows that management of free cash in the portfolio is even more important than picking the stocks to buy -- one should ALWAYS have enough spare cash to take advantage of amazing opportunities that regularly arise.
Re: Bad date> VXX/TZA off @ 31.70/39.40 newSubmitted by 2nd_ave (5282 comments) on Fri, 02/25/2011 - 15:46 #80483 (in reply to #80470) It's just incredible how much punishment these two ladies deliver, even during brief encounters. I can't imagine the stress in a long-term relationship.
Hedged out some of my SPY Puts with short term near money SPY $132 calls at $1.29 just now...just in case Libya is done with on Monday and we get a gap up. If it isn't done with and we get a gap up I will sell them and the majority of my longs and keep the puts for the dip. I'm still much longer than short.
Re: Bad date> VXX/TZA off @ 31.70/39.40 Submitted by 2nd_ave (5283 comments) on Fri, 02/25/2011 - 15:51 #80485 (in reply to #80483) Even the guys that just took them off my hands are getting slapped- hard.
2nd They are heart breakers. MS. Market is sleeping with my FRAT brother KOG and i am a wee bit jealous. THis is after her 3 week romp with BEXP. Ms. Market is a harlot and a tramp.
HEK had a beautiful day. A clear breakout. Now it's just a matter of what the upside is. LNG and CHK tell me that the upside is much higher...probably in the $8 range for the time being. I'm setting my stop at breakeven and hope to trail it up. I may set it at around $5.26 just in case it needs to backtest the breakout. $5.29 is the low from Tuesday and Wednesday as it was preparing to make its move up.
What if along with lobster, you could have an oil and gold eggroll side dish?
A miner's hedge against high oil prices?:
Friday, September 5, 2008 | 11:26 AM ET CBC News
"Barrick Gold Corp. has received 94 per cent of the outstanding shares of Cadence Energy Inc., effectively snapping up the Alberta oil producer and its 3,600 barrels of daily crude production, the company said Friday."
After seeing the close on XLE, seeing DIG rsi at 98, XLE at 90, weekly XLE rsi at 85, and remembering Sentimentrader's comments regarding the energy sector, I shorted XLE ah at 77.90. Will move into puts on Monday should it hold up over the weekend.
Natural gas finished the week w/ a very nice weekly candle. It tested the head ($3.50 spike low in October) in a year-long possible reverse head and shoulder pattern. My guess is it forms the right shoulder over the next couple/few weeks then heads down the shoulder to $6 to mimic early 2010's trading. If it were to happen, this is precisely the time as nobody would expect natty to move as it warms and as natty sentiment readings are at or near all-time lows and as the oil to natty ratio is at the all-time high.
I suspect we get another spike higher in oil which will be a good time to short it. Until then I think there is not a great reason to get in front of it.
This week turned out very well for me. Especially playing the long side in a Market that lost 3% at one point. I had to take on probably a little too much risk (position size in RAS) to do it though.
CP- I couldn't find the Con Call either anymore.
ReplyDelete2nd - Can't say I blame you one bit, the only way to make money is to get the timing right and only stay long enough to take profits.
ReplyDeleteMy buy and hold strategy hasn't moved in months, the market Gods must be upset with me.
Mark, for some reason all conference calls are only posted for a few weeks then taken down. Not sure why that is...
I'll try to find the hard copy on Seeking Alpha, they keep them for some equities.
Tomorrow, me tired of playing computer now.
CP- I don't think Mark was referring to the conference call. He was talking about the con call.
ReplyDeleteLooks like Asia took the bait, they must think Saudia Arabia's going to fill the vacuum.
ReplyDeleteSheesh, King Abdula is 86 yrs. old and was just here in Baltimore for a heart operation a couple of months ago..
I'm quite certain lower oil prices won't last long, if at all. They may drop for a week or so but this issue isn't going away.
I'd really hate to run a Schwab portfolio check right now :)
ReplyDeleteCon's can't make unlimited calls? When did they enact that rule?
ReplyDeleteCP- MOG says SA can fill the void in about 5 days. Longer term, oil goes up though.
ReplyDeleteI just schwabed my ears with a Q-Tip. ;)
ReplyDeleteTomorrow!
I don't quite get the rally in HK.
ReplyDeleteYeah, rather than dicking around with gold I should'a followed RB on KOG.
ReplyDeleteCP I don't know If I like KOG. I read that they doubled their output from 600 barrels a day to 1200 barrels a day. About enough to fill up my SUV. Their play is all dependent on high oil price which has risen on fear, speculation and a weak dollar. Fundamentally the US has had a large surplus. If you compared oil supply with prior times it would be considered way overvalued right now. That is why the refiners were on such a spike up because of the glut of oil, yet rising gas prices. That being said I think i will always have at least 10% position in Domestic OIL in the port. I will trade what I have now and then load up on a dip. I'm not sure what horse to ride, but that's Mark's job. BEXP seems to be acting the best. I should of never sold my position that I picked up at $26.
ReplyDeleteGap higher to 1,320 would do the trick for maximum frustration. It's not like econ reports have been bad lately so I'm sure the bulls can gather up some momentum if they need to. Shoot jobless claims are now in the 300's...
ReplyDeleteI think a gap up with a trending market for a day or two, followed by a gap down would just about signal max frustration.
I wonder what Laszlo Birinyi is thinking these days with his 2,100 most likely scenario by 2013.
Great vid and song 2nd, thanks
ReplyDeletet3d
http://www.youtube.com/watch?v=1Zl8zgKSUks&feature=related
ReplyDelete"David- SD is a mere penny or 2 away from 10 bucks."
ReplyDeleteThat's crazy, Mark. Do you know why SD started rallying like crazy in December? Such moves always happen when we are not watching...
As for HEK, I bought some March $2.50 call options on HEK when it was trading at $4, and I'll hold them till expiration. Maybe HEK will do the kind of rally that SD did? :)
The dip in silver was bought pretty vigorously. So I am counting on ECU being up strongly tomorrow, fueled both by a strong rally in market indices and a rally in silver...
ReplyDeleteThat is one awesome video 2nd. Thanks for sharing it.
ReplyDeleteBy the way, I just read a very interesting note about BAC...if this is true, this stock could rally really hard given how much it has underperformed the other big banks...FD: I own too much BAC at this point, through stock and August options...i'm actually considering just going with LEAPS because I think it will be a $25-$30 stock in 2013 and I don't know what the market will do in the short term:
"UPDATE 1-FBR sees dividend bonanza from big banks
* Fifth Third raised to outperform
* Expects BofA to pay dividend
* Favors big banks over regionals (Adds details)
Feb 25 (Reuters) - FBR Capital Markets said the U.S. Federal Reserve may allow banks that have repaid bailout funds to return as much as 50 percent of their earnings to shareholders, when the regulator announces the stress test results in March.
Big banks that are well capitalized should be able to raise their dividends by as much as 30 percent of their payout ratio, the brokerage said and identified JP Morgan , PNC Financial and Wells Fargo as having the most excess capital among the lot.
FBR expects Bank of America , the largest U.S. bank by assets, to be able to pay a dividend, contrary to Street expectations. Bank of America plans to raise its dividend -- now at 1 cent a share -- in the second half of 2011, if it gets Fed approval.
The brokerage said it also favors big banks over regionals as many of the regionals are still weighed down by the commercial real estate segment and lack the benefit of a diversified revenue base.
Among regional banks, FBR expects Fifth Third Bancorp to return capital to shareholders at a faster pace than most banks over the next two years and upgraded the stock by a notch to "outperform." (Reporting by Rachel Chitra in Bangalore; Editing by Saumyadeb Chakrabarty)
After meandering through 9 cities in Malaysia and Thailand, I now rest in Macau for a day or two before I lose all blog, Facebook, Google doc, Youtube, Seeking Alpha etc. etc. etc. access for a few weeks.
ReplyDeleteIn the meantime, my focus is on natural gas. I was stopped out of my position, but I re-entered a portion of it at yesterday's close. I'm not sure if yesterday's hammer will hold, but I see loads of support in the $3.70-$3.80 ballpark. If it holds, a powerful reverse head and shoulders pattern will emerge w/ a short-term target of $7 or so. http://www.stockcharts.com/def/servlet/Favorites.CServlet?obj=ID660602&cmd=show[s207384618]&disp=O
In the meantime, I just ran across this Seeking Alpha article.
http://seekingalpha.com/article/254811-crude-oil-to-natural-gas-ratio-at-extreme-levels
"The chart shows statistics on the ratio between natural gas and crude oil over the last 21 years. As can be seen, the highest ratio seen was 26.35 in late August 2009. The ratio as it currently stands is 26.11. The current reading is in the 99.82nd percentile of readings over the last 21 years, meaning that it is almost the highest reading ever seen. Considering that the median reading was 9.02, the current ratio stands almost 200% higher than the median. The last time the ratio was this high was September 2009, and natural gas proceeded to rally 138% until the end of 2009.
Additionally, Sentimentrader publishes commodity sentiment readings. Natural gas sentiment is literally off the charts on the bearish end of the spectrum which is a big green light for the bulls per Sentimentrader.
Jesse - The issue becomes: how do we play it. UNG is a dead horse.
ReplyDeleteHEK is probably one way...only concern I have is they have gotten crushed in each of their past 4 earnings reports and the next one is due out in about 2 1/2 weeks.
ReplyDeleteMy current longs EXC
ReplyDeleteMOTR
WPRT
CSCO
ALU
MSFT
AA
MDW
let's see how they treat me today
Jesse, sounds like a blast, enjoy.
ReplyDeleteLNG is another way...I'd buy it on a successful retest of the $5.5 support area.
ReplyDeleteSBAY - Seems headed off the cliff this week, delisting notice.
ReplyDeleteKOG - 1200BB/day, LOL! One of hundreds, no doubt. ;)
ReplyDeleteLong HEK at $5.49.
ReplyDeleteSold my F calls at $2.03 that I bought at $1.7.
ReplyDeleteSold my REDF at $6.23 that I bought yesterday. Just looking to book some profits.
ReplyDeleteNice looks like I got filled on more HEK at $5.52. Total of 2k shares now.
ReplyDeleteLong F stock now at $15.
ReplyDeleteI still get a feeling that we stall here then go lower. Nat gas is definitely going to be in play with this mid east turmoil. HEK could skyrocket here.
ReplyDeletet3d- They seem to be treating you well this morning.
ReplyDeletePersonally, an opening gap up does nothing for my conviction. It feels more like an assault on shorts.
picked up jtx 1.16. Somewhat similar to redf bottom a couple months back.
ReplyDeletesold AMAt and PBR I agree with team about direction
ReplyDeleteCSCO/INTC are making nice moves. But on very low volume. Of course, we're only an hour into trading.
ReplyDelete2nd, agree smart money probably sells the opening gap, I do not trust this mkt.
ReplyDeleteout of MSFT, WPRT (up 10 of 11) too strong will buy back on pullback. Will lighten up more as day rolls on 2 or 3 positions
TOF HEK nice b/o
Solid rain storm for the past 12 hours on the Peninsula. Sheets of rain + heavy winds. Seems to be the tail end here.
ReplyDeletePicked up a couple of SPY Mar $135 Puts at $4 to hedge my longs in F, CHGI, BAC.
ReplyDeleteMark/David- Next time you're in the mood for a lobster roll, try Woodhouse Seafood on Fillmore near Pine. A colleague recommended it. It's 26+tax for the larger 6oz. It's a pocket of fresh/toasted/buttered sourdough with nothing but lobster/salt/pepper/a little mayo. Stuffed to the point where I had two whole claws falling out of the top. They make each on demand only- for all I know, they start with a live lobster- it takes about 20 minutes. Decent string fries. Cole slaw.
ReplyDeleteDamn...$26 for a lobster roll!?!? When I was living up in Boston I used to get a mean lobster roll up on our annual canoeing trip to Maine for $12...best damn lobster roll you can get.
ReplyDeleteBeen adding 2 $135 March SPY puts every 5 minutes for the past 30 minutes...now have 17 at $3.96 avg
ReplyDeleteHow long ago was that? It's $18 for a regular. I was just in the mood for an all-out binge.
ReplyDelete2nd - I guess it was about 8 years ago now. i'm partial to seafood from the northeast though. I definitely miss the food back there.
ReplyDeleteI think the smart people are selling into this rally. I think we have a retest of the 1,300 level in our cards before we can bottom out and move higher. I don't think this is a gap and go.
ReplyDeleteAfter 2nd's comment, I just realized that I haven't been out to dinner in the U.S. for about 6 months. $26 + tax and tip in Cali. must be about $36 I would imagine. That is literally 2-3 weeks of restaurant dinners for me anywhere in Asia (outside of Singapore). Over the past couple of weeks, I've been itching to make a more permanent move back to the States. No matter how well I do in the market, $36 is a major deal breaker for me:(
ReplyDeleteI'm using the Taiwan markets trading as a gauge for how we will trade. The past month saw an extremely overbought market all the way up to 9100, then a hard drop down to 8600, then stabilization and a gap up to 8800 which held for 2 days, then a gap down and trading down to 8500. if we follow that pattern we could see 1,275-1,280 in the next week.
ReplyDeleteYesterday's dip buyers seem to be selling those positions.
ReplyDeleteJesse - no kidding man. i went on a two week trip to mainland China 6 years ago and I spent more money on airfare than all of my meals and hotels combined for 2 weeks.
ReplyDeleteNow up to 20 SPY puts...Also bought a few F $16 Puts the expire next Friday to hedge my long position.
ReplyDeleteHuh, I remember buying lunch for myself and another about 15 years ago in the Tokyo Hilton restaurant, $125 for two small cokes and two club sandwiches.
ReplyDeleteNo tipping allowed, it's a belittling practice.
GL guys. Been busy this morning...But I'll take a lobsta' roll to go please :)
ReplyDeleteIf you ride just a few train stops from Tokyo to Hashimoto or other nearby province, you can find a nice yakitori bag-meal at a corner grill for just a few bucks, and grab an Asahi out of the street vending machine.
ReplyDeleteMDW - +16%, LOL!
ReplyDeleteI usually use GAZ for a proxy for natural gas as for whatever reason, it is a much better barometer for chart formations for me. I decline to trade it due to its light volume and the inability to trade pre/post market.
ReplyDeleteAnyway, check out all of the tails lately under $7. Could be a major bottom for natty. Like I said earlier, a bottom here could clear the way for a reverse head and shoulder surge to $7. That would equate to UNG $18 or so going forward.
I cleared the deck don't like the action. Really mismanaged KOG. Should of could of would of......
ReplyDeleteTOF - What's your feeling on India these days, more downside? Chart kinda looks like a bottom may have formed, but extremely tentative.
ReplyDeleteTOF - FYI, today's GDP report was lower than anticipated. Just in case you hadn't heard yet. ;)
ReplyDeleteLunch date with VXX @ 31.83 newSubmitted by 2nd_ave (5279 comments) on Fri, 02/25/2011 - 11:58 #80463
ReplyDeleteNo plans beyond lunch.
Re: Lunch date with VXX @ 31.83/ TZA @ 40.21 newSubmitted by 2nd_ave (5280 comments) on Fri, 02/25/2011 - 12:10 #80465 (in reply to #80463)
ReplyDeleteOut of courtesy.
This is why I'm hesitant to re-establish my puts:
ReplyDeletePer yesterday's Sentimentrader:
"A pattern triggered which has been just as effective at preceding short-term rallies. The S&P 500 set a 52-week high, then saw three straight down days...but each one was a lesser loss than the day before.
When we've seen this in the past, using either S&P 500 futures or the S&P 500 SPDR (SPY), prices rebounded between 75% - 90% of the time from 2 days through 2 weeks later, with a risk/reward that was skewed about 3-to-1 to the reward side.
Using SPY prices, it took a median of 8 trading days for the S&P to close at a new 52-week high, with 8 of the 10 instances taking less than 13 days. The maximum loss before hitting a new high averaged -1.1%, with only two of them dropping more than -2% at any point before recovering. Given the oversold readings from the past few days, the looming beginning-of-month positive seasonality that has worked wonders over the past year, and this price pattern, we should see Thursday's low hold for the time being.
Traders have been piling into the energy-related funds at the Rydex mutual fund family for the past few months, as assets in the two funds have increased more than 350% since September, and more than doubled since December.
They've reached a point now, at $410 million in combined assets, that was last seen in July 2008, just as Crude Oil was forming a major peak.
The chart below highlights the only other times combined energy assets climbed this high since 2000, all of which were in 2005 or 2006 (other than today and the instance in 2008).After the other instances, Crude Oil wasn't able to maintain any further upside momentum over the next couple of months when Rydex traders had become so enamored with the energy sector."
"In the meantime, my focus is on natural gas. I was stopped out of my position, but I re-entered a portion of it at yesterday's close. I'm not sure if yesterday's hammer will hold, but I see loads of support in the $3.70-$3.80 ballpark. If it holds, a powerful reverse head and shoulders pattern will emerge w/ a short-term target of $7 or so."
ReplyDeleteJesse, my friend, I really wish you all the best in your trading, and so I really hope that you take seriously the idea I had already mentioned to you at one point: the UNG daily chart is MEANINGLESS if the interval of more than one month is considered, since every month UNG rolls over to new futures. UNG is $5 now but was $18 two years ago. But it is an optical illusion -- the NG futures where NOT 3 times higher than they are now.
If you want to predict where UNG prices will be next month, you should look at the chart of April NG futures (which UNG is tracking right now), which you can get by clicking on the chart icon next to April futures at
http://www.cmegroup.com/trading/energy/natural-gas/natural-gas.html
All technical analysis should be done on THAT chart, as opposed to the chart of UNG, GAZ, etc.
CP - I really like India longer term. Some caution is warranted right now with their market given it is now under the 200 DMA. Should it recapture the 200 DMA, which I think it will, then it's a buy. I personally would be a buyer of anything India...I really like IFN/IBN/TTM/REDF right now.
ReplyDeleteJesse - I hear ya on the sentiment thing. I personally am only looking for a very short term trade...as in a day maybe.
ReplyDeleteA little earlier today, just when I woke up, I decided to sell at $41.17 100 shares of CCJ I picked up yesterday at $40.23. That was a trick against market gods, who like to move prices in exact opposite direction of my orders. This time it happened again, since as soon as I sold these 100 shares, CCJ shot up to $41.50. But I still have 500 more shares left! :)
ReplyDelete"In the meantime, my focus is on natural gas. I was stopped out of my position, but I re-entered a portion of it at yesterday's close. I'm not sure if yesterday's hammer will hold, but I see loads of support in the $3.70-$3.80 ballpark. If it holds, a powerful reverse head and shoulders pattern will emerge w/ a short-term target of $7 or so."
ReplyDeleteThank you for your concern David. All of the above numbers are based strictly on NG futures and not UNG. $7 for natgas futures would take UNG to a post-split $18 ish.
Re: Lunch date with VXX @ 31.83/ TZA @ 40.21 newSubmitted by 2nd_ave (5281 comments) on Fri, 02/25/2011 - 12:27 #80467 (in reply to #80465)
ReplyDeleteNo good deed goes unpunished.
Well maybe a couple of days.
ReplyDeleteSRZ - Take out your false teeth mamma, I wanna suck on your gums! ;)
ReplyDeleteThe small short position in VXX (200 shares) I opened yesterday at $33.64 is doing well today. I decided to move down my buy to cover stop from $35.10 to $34.10.
ReplyDeleteUnless we get another major scare soon, VXX should see new lows next week. I got a good feel for what happens to these future-based ETFs when I was playing UNG, and what I realized is that any decline carries a double wammy for them: the decline always happens on the front month futures, which opens up a large contango, which quickly devours whatever is left of the ETF itself. Given the scare we had, the next month VIX futures will stay high, but the front month will keep going down as the market fear subsides. This will be deadly for VXX.
TOF - Yep, I like most everything about India. Even though I've never been there, I feel some kind of special connection and I have high confidence in the people to overcome their hardships.
ReplyDeleteThat's a major rally we are having in WATG right now, up 7.40%. It would be a pity to see it give up these gains. The best way to ensure that it keeps going up is to trick the market gods by selling some WATG right now. So I just sold 500 shares at $6.82. The cost basis for these shares was $6.25 (I acquired these shares by first selling $7.50 puts and then $7.50 covered calls), so I actually booked some profits here. I also decided to place a sell limit at $7.25 for 500 more shares of WATG (whose cost basis was also $6.25)
ReplyDeleteGood job David...I often wonder if I would be more successful just trading two or three securites because I would understand their trading patterns much more than following 25-30 of them. You've been trading WATG for a year now and seem to be doing a pretty good job with it.
ReplyDelete1,320 on the /ES seems to be a pretty strong resistance point. I still think we top out here for the next day or two of trading and then gap lower on Tuesday maybe. Ultimately, oil will probably go lower so F should be bought up.
ReplyDeleteI believe David has a point regarding the market Gods, they are waiting me out on all of my holdings.
ReplyDeleteThis week I put the hex on CB via RBY. Trust me, you don't want me to buy HEK and RAS, so be nice or I will. ;)
HERO/LNG/SD....Man :(
ReplyDeleteJust heard a commercial: "Come see us before spring, when the world's in bloom and everyone wants a new car"
ReplyDeleteCREE - Looks like there's some upside potential in the chart, isn't there an effort afoot to end production of the incandescent light bulb?
ReplyDeleteWATG is up 10% already. :) The best way to trick the market gods is to sell 1/10 of your position into a big rally, so as to ensure that the rally becomes HUGE. :)
ReplyDeleteI am actually tempted to sell another 1/10 of my position, so as to ensure a huge rally next week as well. :)
David- Go for it man! Help out a brother...me :)
ReplyDeleteSo I just did sell 500 more shares of WATG at $6.98, so as to ensure that WATG doesn't drop below $7 in the near future. After all, the market gods (read: mean hedge fund traders) wouldn't allow me to reload the 1000 shares I sold today at the average price of $6.90 (booking a $650 profit on them) at $6.50 and then $6, right? :) If so, then they should be kicked out of their jobs! :))
ReplyDeleteMark, feel free to e-mail that report on MDW to regulars of the board, the second one. Just the Haywood report please.
ReplyDeleteToo bad I was not able to get this out earlier, but I have been talking about this since Jan.
Before today, I had a slightly larger fraction of my port invested in the Chinese auto parts sector than I wanted, and at the same time all my free cash was either invested or used as a collateral against short puts. Thus, raising some cash (especially if I can do it while booking some profits) was crucially important for me from the point of personal portfolio management -- hence the sale of some WATG today. My experience shows that management of free cash in the portfolio is even more important than picking the stocks to buy -- one should ALWAYS have enough spare cash to take advantage of amazing opportunities that regularly arise.
ReplyDeleteGMO - "General Moly Appoints Steven Xiao to Board of Directors"
ReplyDeletehttp://biz.yahoo.com/bw/110225/20110225005854.html?.v=1
MDW, sold 1/2 @1.69
ReplyDeleteRe: Bad date> VXX/TZA off @ 31.70/39.40 newSubmitted by 2nd_ave (5282 comments) on Fri, 02/25/2011 - 15:46 #80483 (in reply to #80470)
ReplyDeleteIt's just incredible how much punishment these two ladies deliver, even during brief encounters. I can't imagine the stress in a long-term relationship.
Hedged out some of my SPY Puts with short term near money SPY $132 calls at $1.29 just now...just in case Libya is done with on Monday and we get a gap up. If it isn't done with and we get a gap up I will sell them and the majority of my longs and keep the puts for the dip. I'm still much longer than short.
ReplyDeleteRe: Bad date> VXX/TZA off @ 31.70/39.40
ReplyDeleteSubmitted by 2nd_ave (5283 comments) on Fri, 02/25/2011 - 15:51 #80485 (in reply to #80483)
Even the guys that just took them off my hands are getting slapped- hard.
2nd They are heart breakers. MS. Market is sleeping with my FRAT brother KOG and i am a wee bit jealous. THis is after her 3 week romp with BEXP. Ms. Market is a harlot and a tramp.
ReplyDeleteHEK had a beautiful day. A clear breakout. Now it's just a matter of what the upside is. LNG and CHK tell me that the upside is much higher...probably in the $8 range for the time being. I'm setting my stop at breakeven and hope to trail it up. I may set it at around $5.26 just in case it needs to backtest the breakout. $5.29 is the low from Tuesday and Wednesday as it was preparing to make its move up.
ReplyDeleteWhat if along with lobster, you could have an oil and gold eggroll side dish?
ReplyDeleteA miner's hedge against high oil prices?:
Friday, September 5, 2008 | 11:26 AM ET CBC News
"Barrick Gold Corp. has received 94 per cent of the outstanding shares of Cadence Energy Inc., effectively snapping up the Alberta oil producer and its 3,600 barrels of daily crude production, the company said Friday."
http://www.cbc.ca/news/business/story/2008/09/05/barrick.html
OVTI - Rally on next week's anticipated unveiling of new iPAD.
ReplyDeleteYes, old news, what have you come to expect?
After seeing the close on XLE, seeing DIG rsi at 98, XLE at 90, weekly XLE rsi at 85, and remembering Sentimentrader's comments regarding the energy sector, I shorted XLE ah at 77.90. Will move into puts on Monday should it hold up over the weekend.
ReplyDeleteNatural gas finished the week w/ a very nice weekly candle. It tested the head ($3.50 spike low in October) in a year-long possible reverse head and shoulder pattern. My guess is it forms the right shoulder over the next couple/few weeks then heads down the shoulder to $6 to mimic early 2010's trading. If it were to happen, this is precisely the time as nobody would expect natty to move as it warms and as natty sentiment readings are at or near all-time lows and as the oil to natty ratio is at the all-time high.
ReplyDeletehttp://www.stockcharts.com/def/servlet/Favorites.CServlet?obj=ID660602&cmd=show[s207384618]&disp=O
Dang, I sold my SCO a day too early! I've really got to learn to let the market baptize my every trade or I'll never make any money... ;)
ReplyDeleteI suspect we get another spike higher in oil which will be a good time to short it. Until then I think there is not a great reason to get in front of it.
ReplyDeleteAbsolutely agree! The same could be correlated to any stock in the broad index's, inclusive of gold stocks.
ReplyDeleteToday would've been a great day to cut SCO lose though, it hurts knowing I left so much on the table by selling at @ $9.60 ;)
Adorable Cheetah Kittens for adoption, (hopefully Sharkie doesn't see this):
ReplyDeletehttp://www.dominicantoday.com/dr/view-classified/1556
Just for the sake of curiosity, keeping in mind there's several weeks to go and the action is dynamic:
ReplyDeleteMax Pain for 3/19:
BEXP - $28
JNJ - $62.50
RBY - $2.50
CSCO - $19
AMAT - $16
This week turned out very well for me. Especially playing the long side in a Market that lost 3% at one point. I had to take on probably a little too much risk (position size in RAS) to do it though.
ReplyDeleteNew all time highs. +3% on the week.