Michael Gayed of ATACX recently pointed out that trading is the only game where it's possible to be right in your thesis and lose money, or to be wrong and make money. (Of course, he has every incentive to make that statement!) That certainly seems to be 'more true' than usual lately.
(a) On Monday, I went long the US indexes + shorted bonds on the premise the markets would rally.
(b) On Tuesday, the markets flatlined, but bonds sold off hard. I took the bond short off the table for a +0.7% gain.
(c) This morning, the markets gapped up. The long ETFs did fine, of course. The rally also led me to regret closing the bond short...not! Surprisingly, the long bond (TLT) rallied just as hard as the SPX- both closed up about +0.65%. RYJUX closed down -0.7% today.
(d) My takeaway? The current market is not so much about being right or wrong- it's about taking gains when you have them, because overnight action will otherwise cause them to vanish.
What did I do today? Here's the comment I was unable to post at lunchtime:
ReplyDeleteWith 45 minutes left in the regular session:
DJIA +84, SPX +11 to 1945, and IWM (Russell 2000) 113.33 (vs 113.06 @ 1030 est). So I’m not too upset about letting my positions go at the 1030 est window.
VGK (Europe) off earlier highs, and now +0.35%. RYEUX (Rydex 1.25x Europe) should close around +0.4%.
I am not, however, having a perfect day. You’ll recall I reopened a small position in UGAZ yesterday @ 15.88 (after closing an earlier position @ 16.50). Well, NGas prices fell off a cliff overnight! UGAZ was bidding around 15 pre-market. I decided to give it ‘more time.’ That violated Rule #1 (take losses immediately), and I paid the price. I came to my senses a few minutes later, and the position was closed @ 14.81 during the regular session. So I gave back some of my earlier outsized gains in UGAZ. Had I decided to give the position even more time, and waited ‘til lunchtime? Well, UGAZ is now bidding 14.30. There are no exceptions to Rule #1. Exiting for a loss @ 14.81 now allows me to consider reopening @ 14.31 with a clear head (I’ll pass).
The intraday high for the SPX was 1948. That’s pretty damned close to the Khrushchev era. The markets may well retest the July highs, but I doubt it. My take is that US indexes continue their decline from here. The next pitch could come anytime, but I’m heading for the showers right now. I’m holding one small position in JCP (an earnings play), but o/w in cash. The portfolio is up about +11% ytd, which I’m happy with. Sometimes the best trade is to back off from trading.
What happened to Brazilian markets today?
ReplyDeleteDeath of a presidential candidate in a plane crash may turn voters away from the pro-business person to the socialist:
Deletehttp://www.reuters.com/article/2014/08/13/us-brazil-crash-idUSKBN0GD1GY20140813
2nd,
ReplyDeleteI think we are at an inflection point where we change from the markets going up with bonds (rates down) and move to a market where stocks go up as bonds go down (rates up). The driver behind this will be an improving economy, job market and inflation pressures which will push rates up. But the stock market will also go up with the improving economy.
L.Sigurd @LSigurd 36m
ReplyDeleteAnd the well results look excellent.
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L.Sigurd @LSigurd 36m
Im convinced that $BXE problems are capacity and sentiment related. Both of these will pass. Long term will be dictated by well results
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L.Sigurd @LSigurd 37m
Ive averaged down on my $BXE position at $7.50. I rarely average down and only do so after much thought.
The above was from the Reminiscences guy on BXE. Like I said before, he works in the Canadian energy patch and has made smart energy purchases in the past, so not a bad guy to follow.
DeleteThe slide seems to have abated so it's wait and see. I think we probably have some more downside remaining. $6.60 or so, but we're close. Could be the rally begins soon.
DeleteUCO - Ouch!
The tweet got him an exit bump?
DeleteThere's actually a gap up from Feb last year, this has me wondering if it's destined to close.
DeleteBLMN - Mark, why did you unload?
ReplyDeleteWell, looks like we should have bought that last dip as well - market seems to be rebounding nicely.
ReplyDeleteYes it does, if you hold the right stuff you're doing well. Wonder if it's a fake move?
DeleteSeems like every day is a wild ride.
ReplyDeleteCP- I'm still long the 5K calorie onion.
ReplyDeleteLOL, Yeah just kidding. I've been watching it for an entry b/c I think it could be a good one.
DeleteI sold a bunch of LEJU today at $13.43. I have a sneaky suspicion they crank this lower heading into earnings on 8/20
ReplyDeleteHolding about 70% of original position.
DeleteLong DANG for an intraday trade. $14.64
ReplyDelete$15.52 target?
DeleteIf it can take pre market lows ($14.9) back then I'm targeting pre market highs ($15.6 - $15.7). Not sure if it has the strength.
DeleteMUX - I wouldn't bet against McEwen, he probably knows what he's doing. After all, he was responsible for GG's success and how hard can it really be to tell some guy to jump on the excavator and move that pile of dirt there from place A to place B?
ReplyDeleteJust wait till they start excavating in Mongolia and Africa using real machinery as opposed to picks and buckets.
BRK/B and BRK/A - look at recent moves in those stocks and tell me the economy / market is heading down.
ReplyDeleteTrue, it's as if the H&S on spx is done and this was just a technical correction.
DeleteIRE is popping up today.
I literally was just kicking myself for not acting on IRE. I stared at that sucker for about 30 minutes yesterday and didn't pull the trigger.
DeleteTBT - Bang, down.
ReplyDeleteAdded DANG $14.58
ReplyDeleteLong PIR at $15.41
ReplyDeleteMy thinking is retail has been in the dumps for a while yet I'm seeing a lot of retail stocks put in a base and with oil down so much sentiment may change on these guys. Plus, I think PIR is less exposed to Amazon as others.
DeleteCopper and crude, big smackdown.
ReplyDeleteBXE - Exactly what I thought was gonna happen, crap.
ReplyDeleteSold out of DANG at $14.53. Dumb call.
ReplyDeleteGM - Notice the knee-jerk reaction this morning to a more than likely obvious buy signal? "Credit Swiss emerges as GM Bear"
ReplyDeleteThese guys aren't our friends, they aren't going to help us.
I bought a small stake in XIN only because HGSH went nuts on their earnings call and XIN has earnings tomorrow. I think the Chinese stocks may be done in the short term as they consolidate their gains. Only reason I say that is the reaction to positive earnings from VIPS / DANG / TCEHY. On the flip side, though, this might just be a very short term dip in the middle of a parabolic move higher for the whole group. Tough to say right now. I will wait for the next couple of days before adding back LEJU. Earnings are on 8/20 as well so that is a concern in the short term. I have about 2/3 of my existing position still on. I think the crowd is shifting today. I see dry bulk shippers ripping really hard, some retail stuff bouncing back...basically anything tied to the global economy is doing well today. I want to have some exposure to those. I think BALT/NM is good on the next dip.
ReplyDeleteHGSH looks like a bull flag.
DeleteShort QIHU at $98.4
DeleteClosed the QIHU short at breakeven.
DeleteHII - Look what this sucker did. Now which way does it go after sucking in a new gaggle of Muppets? The citizens no longer like or trust the war mongerers, that's why they're being voted out. Good riddance to them b/c instead of placing their efforts into building up our economy they concentrated on the easy ripoff. This is what made the US popularity suffer. Yes we have laws everyone must follow, just not for the thieving and backstabbing top 1%
ReplyDeleteBXE - Now I have a $6 target, same elevator ride as the one I enjoyed with SVM (which will never recover).
ReplyDeleteWho got sucked in at 1952, raise your hand. Here comes 2nd's home run?
ReplyDeleteNLY - Wow, didn't expect that. Wonder if the old fart actually bought like he told me he planned?
ReplyDeleteDB - See that move? Makes me think it's got some strength behind it as the dip didn't last any time at all.
ReplyDeleteHopped back into ENSV, small position, at 2.98. Will look to add all the way down to $2.7. Someone is selling today so I'm able to buy 5k lots at the bid. Presumably they bought in the high $3's.
ReplyDeleteDude - JCP. Wow.
ReplyDeleteJWN tood fellas. Retail is back en vogue. Here's to that squeeze spreading over to the wicker wonder as I ended up taking a fairly large position in it today.
DeleteJWN down hard now from the AH highs, JCP down a good deal from AH highs. Maybe I jumped the gun a little.
DeleteBerkshire Hathaway boosted its stake in GM by 3 Million shares. Stock is up after hours.
ReplyDeleteSCO - Up 5%, plenty of energy to go around.
ReplyDeleteTWTR finally added a search bar to their site. That makes it a lot more attractive fundamentally in my opinion as it allows for ads.
ReplyDelete