We all carry baggage, much of it in the form of 'briefs' that summarize our beliefs about the way markets work. For instance, it's easy to go to bed thinking that given x+y+z conditions, historical odds say there's a good chance the indexes pull back from here.
If, however, the indexes continue to run over our indicators on its way higher, how many of us rewrite the briefs that correspond to each set of indicators? Do we need to rewrite them?
We all agree on the concept of maximum frustration, no? I think there is in fact a great deal to be learned from historical patterns. What trips us up is the highly unpredictable manner in which x+y+z ultimately lead to a pullback.
So it's perhaps not the brief we need to check at the door (it will prove correct 90% of the time), but the speed with which we act given a set of market conditions?
Maybe I should just stop trading. The last 3 times I switched back to my trading screen my "Day's change" has gotten bigger! :)
ReplyDeleteGood points 2nd. No doubt here about Max Pain.
ReplyDeleteThat means, of course, RAS will print a 4 spot tomorrow.
ReplyDeleteCADC - I'm considering canceling my buy order until after earnings reaction. Ditto for RAS, I doubt these are going to sell off prior but they may on some bad rumor or insider info dumping.
ReplyDeleteI'm not pressing my bets here. The roller has thrown a lot of trash and us COME line betters have been cleaning up, but crapping out is one throw away and it only takes the Stickman a second to rack in all the chips.
ReplyDeleteCADC, They are red china right. How could they have a bad earnings report? The chairman will not allow it.
ReplyDeleteNice analogy RB. Kinda my feelings right now. I like my pile of cash here, and the cold one in hand.
ReplyDeleteBTW, The stick man was at CPE's table today.
ReplyDeleteRB - Too funny, this company pours government project concrete, and government is buying all it can. How could it be a money loser? Try finding an US gov project contractor that isn't militarily oriented.
ReplyDeleteSo, the finale tallies...
ReplyDeleteBEXP + 21.33%
RAS + 22.99%
APA + 3.34%
PCAR - 1.30%
IRA...
RAS + 44.22%
Just to prove I know nothing, the 100 shares I still have of TCK are up 808%.
ReplyDeleteTCK - A certain someone worked hard to make me feel uncomfortable about that trade, I guess he wanted my shares.
ReplyDeleteCramer said sell PCAR today!! We might get a real opp. here soon.
ReplyDeleteMark - I agree that PCAR looks interesting.
ReplyDeleteExcellent trades on RAS my man. Not a bad return in 2 months huh?
BTW- That was a type-o...I have 10 shares of TCK. I always thought I'd get back into it, but......
ReplyDeleteIWM finally broke above its mid-January high today. If it doesn't pullback tomorrow and instead continues on to yet another high, there would be no reason for me to hold TWM now. So I have just placed sell stop limit orders for all my TWM in all my accounts at $11.50/$11.40 (in addition to a buy stop limit order I placed at $12).
ReplyDeleteTOF- RAS is all you man. I did my homework on it, but the numbers game is yours. I am pleased all of my adds in the trading account paid off.
ReplyDeletePCAR is interesting to me. MOG's email response was a little terse. I'm guessing the analysts take pissed him off. He's normally very expansive for the simplest of questions from me. When I asked him if this would be a good time to open a position in PACAR due to the weakness he replied word for word... "No comment, other than I bought more."
Cramer might have handed us a gift. I have no question he is clueless about the long term prospects of the Co., but he does move price. So let's be smart here. I don't think there is any rush. This is a huge Co. that moves slowly and a huge percentage of the Co. is in family hands.
Yet another reason why RAS should do well:
ReplyDeletehttp://www.dailyfinance.com/story/real-estate/rising-rents-could-spark-inflation/19829676/
Landry-
ReplyDeleteRandom Thoughts:
The Ps accelerated to new multi-year highs. The Quack and Russ broke out of their recent sideways ranges. This action puts them at multi-year highs too. Considering this, obviously, the big blue arrow continues to point up.
The sector action continues to look great. Many, like the market itself, are hitting new multi-year highs. Selected subsectors such as Telcom-Communication Equipment are doing exceptionally well.
Since the methodology requires a pullback, there aren't a lot of new meaningful longs setting up. Therefore, focus mostly on trailing and scaling on existing positions (as offered).
Futures are flat pre-market.
OIH off 1.8% ? Testing the 10.
ReplyDeleteStill trying to GTHO of that POS LEXVF :)
ReplyDeleteCSCO- Wow, that was a classic shakedown.
ReplyDeleteHoping that took out weak hands.
ReplyDeleteRemember this one? CPST. Got 2 nice up grades today.
ReplyDeletePCAR. Hmmmm...
ReplyDeleteCSCO has a recent history of rocketing above it's 200 day MA and then falling through it like a spent booster, even creating a gap each time. That happened 3 times on a one year chart. Is it happening again?
ReplyDeletePinball machine OCLS back in working order.
ReplyDeleteillini- You're either a believer or a non-believer in CSCO. I believe pigs can fly.
ReplyDeleteI don't think it's a pig but will wait till it is at or below 20 before boarding. Same goes for INTC. CSCO is the better value play though.
ReplyDeleteI wonder how many people, come 2013, are going to be regretting not buying BAC at $14.
ReplyDeleteWFC outperforming.
ReplyDeleteAKAM looking good. I own some in the money calls that expire next Friday. Looking to off them before earnings after hours tomorrow.
ReplyDeleteIgor's ALGT holding.
ReplyDeleteSold 1/3 of my AKAM calls at $3.3 that I bought at $3.2 yesterday. I'm a wuss.
ReplyDeletetof- As many as will regret not buying CSCO @ 22.
ReplyDeleteSPF looks like it's at a great level to start buying...having broken out then come back to retest the old resistance levels. I might be putting some money in the stock tomorrow.
ReplyDeleteALGT pulling up from $40 support.Best performing stock for me this morning.
ReplyDeleteTOF- I was looking over SPF's latest presentation last night. I'm interested.
ReplyDeleteLot of buyers lined up for RAS @ 3.01.
ReplyDeleteGL guys!
ReplyDeletewow India down over 10% in 2011 already.
ReplyDeletePCAR - You know things are getting bad when you start trading off Cramer's comments.
ReplyDelete2nd - care to make a friendly wager that the return on BAC stock will be greater than CSCO by 1/1/2013?
ReplyDeleteI find it a wee bit problematic that IYT, IWM, OIH are not performing well.
ReplyDeleteactually, the only one that looks concerning is IYT. IWM and OIH actually made new highs yesterday.
ReplyDeleteWhat is Big Ben going to talk about tomorrow night. Does anyone know.
ReplyDeleteI mean the czar of the world not the Steelers QB.
ReplyDeleteI don't know what Ben's supposedly going to say, but I'll say that I appreciate his work over the past couple of years. Previous to then, I think he made some huge mistakes, but I also think our Congress ultimately bears most of the responsibility.
ReplyDeleteBTW, what's the good-ol-boys club up to today?
tof- Not really, b/c I think the percentage return on BAC will in fact be higher.
ReplyDelete2nd - are you holding CSCO thru earnings?
ReplyDeleteBought 10 x Nov 2011 $14 calls on BAC at $2.11.
ReplyDeleteSLV almost back to old highs.
ReplyDeleteHow does the cloud space fit in with reports of increased IT hiring forecasts? My interpretation is these are opposing in nature, but I'm also under the mistaken belief that Red-China presents investment opportunity as well...
ReplyDeleteBAC/RAS/PMI - I wouldn't mind taking a position in one or all of these if I had any faith our Congress weren't going to waffle through the next decade just as they've done for the previous two.
ReplyDeleteTalk about a lengthy list of poor decisions, one after another consecutively, it's so damn consistent, the record of accomplishments is truly amazing!
Planning to hold CSCO through earnings.
ReplyDeleteCK, What could happen if they did something Right?
ReplyDelete"What could happen if they did something Right? "
ReplyDeleteI don't know, it's truly a stretch of my mental capacity in order to hypothesize such an event but I'm trying hard.
Someone throw me a bone here!
CSCO: Options has A 3% move up or down priced for the stock. Slight bias toward puts. Those are probably normal expectations for csco earnings.
ReplyDeleteKeep in mind, Uncle Ben has stated numerous times that the FED cannot shoulder the entire burden of economic recovery without some cooperation on behalf of Congress.
ReplyDeleteSo if you guys happen to learn of something potentially positive brewing from within the beltway, I promise I'm all ears.
Debating if I should hold the 6 remaining calls in AKAM that I have through earnings tomorrow. It's a tossup. They are $46 calls expiring next Friday. I think the company should do well given the strong holiday season and increased web security threats and sentiment seems to be down on them, which is good.
ReplyDeleteCk, Since i have you on the phone. GMO has just shown up on my screener for possible short canidates. I'm not saying it is a short!, but it is exhibiting the qualities that short people like. 20% or more below 52 week. Breaking below 20 and 50 high beta. blah blah.
ReplyDeleteCP - There is a lot of work to move the current in-house implementations to cloud space. Also budgets have been opening up for new technology projects, that is why you see an uptick in hiring.It is alway easier to climb from a low point we hit over the last couple years.
ReplyDeleteAKAM - Well, if you believe what the analysts seem to be saying, and combine that with the chart (from my perspective) seems to indicate, it looks as if some upside potential exists.
ReplyDeleteTherefore, I'm wrong.
GMO - RB - Yeah, thanks, GMO has been acting very weak lately. I recall numerous times before when it acted this way just prior to a big move up.
ReplyDeleteSo, it's my plan not to add until a much lower price presents itself, while just allowing the gains to ride.
NLS breaking out on the daily chart.
ReplyDeleteIgor - Yep, that kinda makes sense. Similar situation as when the atomic bomb went off above Nagasaki. Thanks.
ReplyDeleteAMZN pretty much back to pre-earnings levels. Wow. what a move. It definitely pays to buy the drops. Maybe we should be buying LVS?
ReplyDeleteGMO - Also note base metals action, trading near the top of range. It's refreshing to observe some strength in PM's and weakness in crude at this point. From my perspective, the alignment of the stars is actually moving in GMO's favor at the moment.
ReplyDeleteWhich means GMO is about to tank.
CP > Monthly chart on GMO looks fantastic. It basically gapped to $5 in October and has held and is creating a shelf / base for another move higher. That's what it looks like to me at least.
ReplyDeleteTeam, Thanks for pointing out time frames. My screener is on daily chart only. The charts you use should correspond to your holding period.
ReplyDeleteTOF - Thx, "is creating a shelf / base for another move higher."
ReplyDeleteActually, that's the scenario I'm anticipating. GMO has traded historically at moly/2.6, which would put the share price @ ~$6.50-$6.70ish.
If it happens to fall appreciably on no news, I expect I'll be adding.
Nice to see SORL shoot up in the last few minutes -- Buffett must have read my post about SORL being a "Buffett-like stock" :)
ReplyDeleteOut of the 3 stop orders I placed last night I was faked out only on one, the most dangerous one: purchased 500 shares of VXX at $29. However, seeing the high compression level of the VIX futures and the fact that VIX itself seems to have found a support at $16, I decided to buy 250 more shares just now at $28.50.
ReplyDeleteCP > You can use below $5 as a stop out i would think...maybe like $4.80? Although the range over the past few months is quite wide.
ReplyDeleteNice to see SLV being up strongly today and ECU.TO, which was lagging SLV in the morning, finally outperforming it percentage-wise right now. ECU.TO is still the main driver of my portfolio, with all other positions creating "noise" around the fundamental trend of ECU.TO (as all the gains/losses I get on those other trades can be reversed by a one-day move in ECU).
ReplyDeleteBTW, my July target for moly is currently ~$20, which would bump GMO's historic value to ~$7.70.
ReplyDeleteMoly's all time high was over $35, not sure when to anticipate seeing that again considering I've heard nickle supplies are more than adequate, but Inconel is the stainless of choice, and it's an alloy containing more moly as opposed to nickle.
I read China has over 120 nuclear power plants on the drawing board, these are usually constructed using miles of stainless tubing.
I'm kinda hoping shorts pile onto GMO in a big way just prior to construction permits being granted...
What could possibly go wrong?
Occasionally I check the RAS Yahoo message board and occasionally they post some good stuff. Check out this report:
ReplyDeletehttp://raitft.com/upload/RAIT%20Expectations%20-%20Prices%20Cap%20Rates%20and%20Capital%20Flows%20Winter%202011.pdf
At first glance it looks very positive. I now have something to read tonight as I wait for my 1/4 shares of RAS I sold on Friday to come free. I'm thinking RAS/BAC could be some of the best buys in the market.
"Buffett must have read my post"
ReplyDeleteAgreed, and it's really kinda irritating when Buffett keeps stealing our ideas.
I just placed a buy limit order for 250 more shares of VXX at $28. Unless VIX drops below $15 soon, I should be able to sell those shares at some gain during any small market hiccup.
ReplyDeleteI hope Buffet reads my post about VXX as well -- wouldn't it be funny if he buys into VXX big time and loses all his money in one year? :))
ReplyDeleteTBT just broke out to a new high. Let's not forget now that REGARDLESS of any long-term positive fundamentals for this market (assuming that we do indeed get a steady improvement in economy and corporate earnings), a local jump in bond yields will lead to a strong correction in stocks. No one is talking about this because no one knows the point at which the stock traders will say ENOUGH and switch temporarily into bonds, sending stocks plumetting down without any bids.
ReplyDeleteWe'd have to refer to you as "David, the giant killer", if you bring down Buffet.
ReplyDeletePicking up RNOW on weakness, takeover play, of course
Market is feeling a little parabolic to me. Perhaps we get a gap up tomorrow to 1,332 and then it's a good spot to fade for a trade. We're now up 50 points since the Egypt selloff 7 trading days ago.
ReplyDeleteJB thanks for the heads up I like stocks like that. Nice chart.
ReplyDeleteTaking OAKBX off at the close newSubmitted by 2nd_ave (5242 comments) on Tue, 02/08/2011 - 15:44 #79347 (in reply to #79336)
ReplyDeleteOpened in the buy-and-hold account at last Friday's close, exiting at today's close.
jack- The indexes are likely to continue higher for a few days, but it's no doubt prudent to start taking things off the table here.
Still holding CSCO in the trading account.
Buy side imbalances on the financials.
ReplyDeleteMy take right now on RAS is to buy right before the close tomorrow.
I decided to move down my stop on TWM just a little to $11.45/$11.40.
ReplyDeleteThe reason I started trying to venture into the short side a few weeks ago is because I saw a real weakness in copper and PMs, in addition to the weakness in small caps. Right now, however, Russell 2000 broke out to a new high, copper broke out to a new high and SLV is almost back to its previous high as well. So I should probably lay off the short side until both copper and Russell 2000 drop below their previous highs or until they make some new obvious shorting setups at higher prices. I am learning not to be too stubborn and to change my thinking if the market tells me to do so.
ReplyDeleteOPEN raced up into the close. Damn, I hope those players are right. Yikes.
ReplyDeleteLooks like Mickey will get lucky tonight.
ReplyDeletePMI - What do you guys make of that move, any indication of a change in the breeze?
ReplyDeletePMI- Nice move/volume. Do you understand the fundies?
ReplyDeleteCSCO - 2nd, don't be afraid to share your thoughts, I'd say at this point you're pretty safe if you got in well under $20, otherwise you might want to consider taking some off the table until the market reveals more cards.
ReplyDeleteSeems the 200DMA is presenting a formidable challenge.
CP- My thoughts are along the lines of CSCO breaking through resistance.
ReplyDeleteI just placed a sell limit order on VXX at $29.50 for the 250 shares I picked up today at $28.50.
ReplyDeleteCSCO will rise to the challenge.
ReplyDeleteDavid- You need to join VXX-Anon.
ReplyDeleteSince FCX is a high-profile stock that is traded heavily by the mean black box algorithms, they will most likely dip FCX a little below its 5-day support at $55 before taking it higher. Thus, I decided to move down my sell short stop limit order on FCX to $54.50/$55, so as not to get faked out by a small dip below $55.
ReplyDelete"David- You need to join VXX-Anon."
ReplyDeleteYes, I know... I hope this market will teach me, the hard way, not to gamble when chances are against me. We can only get convinced that this is indeed the way to behave only after we get punished ourselves many times for behaving otherwise, right?
Objectively speaking, however, this time I have a much better entry into VXX than last time (last time VIX was at $17 and the futures had a much larger contango built into them), and given the fact that last time I was able to walk away with only a minor loss, I might actually walk away with a gain this time. :)
ReplyDeleteFDO - Nice pop there today finally.
ReplyDelete"PMI- Nice move/volume. Do you understand the fundies?"
ReplyDeleteNope, not really! The theme does involve Congressional approval of some sort of reform to the reform of housing in some mechanism unbenounced to me, relegating it completely and unequivocally to the realm of a black box from which no light or matter can escape, not unlike a black hole.
As a secondary angle, how can housing recover without mortgage insurance, what lender in his right mind would fall for that? (my advance apology for asking yet another obvious question)
I just figured I ask in case sitting in front of a boob-tube has any unique advantage. I'm guessing no, from the response so far, or maybe yes, in the sense that there's no news coming out of the speakers which sheds light on the subject.
ReplyDeleteMy line of wishful thinking goes something like government backing out of mortgage business makes room for private investment and therefore mortgage insurance demand.
How can this be, you might ask? HTFDIK! What I do know is if you snooze, you lose.
GMO - I guess shorts covered at end of day.
ReplyDeleteSome AH press release outlining further delay to the permitting process likely to create renewed short interest:
"Based on the pace at which these edits are being completed and additional Cooperating Agency reviews the BLM has determined necessary, it is unlikely that the DEIS will be released for publication until the second quarter of this year. Once the DEIS is released for publication by the Battle Mountain, NV office of the BLM, we estimate the Notice of Availability process to publish the DEIS in the Federal Register will take an additional 1-2 months, although other DEIS publications have taken longer. The Company's current expectation is that the Record of Decision (ROD) will occur 6-9 months following DEIS publication and that production at Mt. Hope will occur approximately 20 months following initiation of project construction."
Mark - I'm leaning toward going back in with a full position in RAS tomorrow. I think it's dumb to be selling right now. Look at all of the positives that's going on:
ReplyDelete1.) Return to paying a dividend
2.) CMBS market is springing back to life.
3.) Occupancy rates for rental props are very high and for office props are rising.
4.) Valuation relative to book is very low.
5.) Stock chart looks great with a breakout above old closing highs and a back test to the $3 area.
Negatives are clearly that there is heightened risk surrounding earnings and the market is probably due for a rest. But I think in 6 months RAS will be in the 4's or 5's so it won't really matter.
TOF: will you be able to hold your RAS for 6 months, given that we will most likely finally experience a strong market correction during this time frame?
ReplyDeleteIYT - Has anyone noted recent weakness in the transports?
ReplyDeleteMight be some opportunity there as well, if we're going to be experiencing further broad advance.
NSC looks interesting to me from a Buffett perspective.
Ten Year Bond
ReplyDeleteSubmitted by Illini (503 comments) on Tue, 02/08/2011 - 18:53 #79363
Rates on longer term treasuries blasted off from yesterday's closing line starting before 1 PM during mid-session. Never looked back. Up 2.2% @ 3.73%. Continues strong uptrend.
T's - Yes, there was a bit of a lift there today. Today there was a 3 year auction that dealers had to become more involved than usual and there's a ten year action scheduled for tomorrow, so perhaps today we were witnessing some pre-auction posturing?
ReplyDeleteBears are watching?
David - It depends where it corrects from. If the stock goes to $5 then corrects to $3.50 it won't be a terrible thing. Plus, if it got to that level then I most likely would begin bailing. The CRE market seems to be picking up steam from what I've been reading and yet RAS is just steadily gaining momentum...it hasn't even gotten close to a parabolic move higher, which usually signals a top.
ReplyDeleteCP > I've been mentioning transports for a little while now. However, look at how XRT was acting a few weeks ago and it has now regained it's strength. Same with XLF. These moves are just pauses in my mind.
Hmm, speaking of the devil:
ReplyDelete"AAR: Rail Traffic increases in January
by CalculatedRisk on 2/08/2011 03:59:00 PM"
http://www.calculatedriskblog.com/2011/02/aar-rail-traffic-increases-in-january.html
ESV - Anyone think the ensco/pride deal might be priced in here?
ReplyDeleteTOF - Somehow I missed your mention of transports, I assume your conclusion/summary was cautiously positive.
CP > Yeah man. It basically looks like a consolidation to me.
ReplyDeleteI was talking to my friend about how it's crazy that the markets are so high as compared to where they were 2 years ago and he said he thinks that the internet and a highly connected world makes things move much faster than they did in the past and that this has an impact on markets rebounding faster than in the past.
Interestingly, Russell 2000 futures didn't rise today above yesterday's high. They didn't even rise today above Friday's high!
ReplyDelete