The +61-point rally in the DJIA at the open? What about the +1% spike in EEM (emerging markets)? Fueled by FOMO (fear of missing out), in my opinion.
(a) Reopening shorts at the 1030 window. RYTPX (Rydex 2x Inverse SPX) and RYWYX (Rydex 2x Inverse EM). Keeping it small. (b) Picking up a little SLW (Silver Wheaton) on the morning pullback to 14.22. (c) Reopening a position in EXAS (Exact Sciences) @ 8.17.
I know the test is far more accurate than the old FIT test kits, and that patients overwhelmingly prefer Cologuard to a colonoscopy. My wife (and my boss' wife) both opted for Cologuard. It's probably just a matter of time before the product gains acceptance as 'standard practice.' I opened a small long-term position in the big guy's account.
There's a small (but significant) chance the markets pull back to an attractive entry point by today's close. Should that unfold, my strategy (given the limitations imposed by Rydex mutual funds) will be to 'lock in' gains on the short side by opening equal-weight positions in the corresponding leveraged long funds. If sufficiently attractive, I will 'size up' by going 'above and beyond' what is needed. It's unfortunate that retail investors need to come up with these types of workarounds, but as we all know it's not a level playing field.
Happy Canadian Thanksgiving! My friends in Boston used to celebrate that because one of my friend's wives is Canadian. Happened to coincide with the playoffs so we would get together and watch the Red Sox play. Great times.
Too funny, I pulled up the chart of that on Stockcharts and read the name and my mind read the company name as "Horseshit Holding Corp". Some sellers last week have to be saying that to themselves.
"David, Are you selling Puts you own or naked Puts?"
I was buying VXX puts after the late August crash, and now I am preparing to unload them. I was a bad student of market history, and so I started buying VXX puts too early. Had I looked at the daily charts of the 2011 crisis (available through Yahoo), I would have noticed that VXX tops much later after the VIX tops. Same thing happened this time around -- VIX topped on August 24, but VXX topped much later. So only the puts that I purchased late into this crisis, when VXX was at $29, are nicely green for me, but the other ones are still a little in the red. Luckily, I started buying puts very cautiously, in small amounts, increasing the dollar amount of each purchase as VXX kept going up and as it became a better and a better deal. My heaviest purchase was when VXX was at $29 (30 strike, March 2017 expiration) and those puts are nicely green now. I'll sell them last, since they have the longest expiration date, and will sell first puts with the lowest strike price ($21 and then $25).
SPY is still following the 2011 script, pausing at the peak level between the double bottom. It may even pull back from here a little, as 2nd_ave expects. Or, if the 2011 script holds up, SPY will simply launch forward another 5 points or so, till 205, at which point it will stall and THEN will have a nice pullback, below the 200 level (say to 195), so as to scare everyone once again.
Notice that GLD is also flirting with the highs established during the first rebound after the early August lows. If GLD goes up just a little more, above 111.11, then buyers should really start piling in, as the chart will then have a nice sequence of higher lows and higher highs.
ZINC - I forgot to monitor that one. Happy Thanksgiving, BB! :) IBB had an H&S, looks like it's played out now. http://www.finviz.com/quote.ashx?t=ibb&ty=c&ta=1&p=d
Emerging markets look good. Almost switched to a bullish stance near Friday's close, but EEM failed to pull back below Thursday's close, and I prefer a lower-risk entry. Hope to see late boarders tested next week, followed by a sustained push through resistance. Once institutional buyers begin boarding, we'll leave the trade on auto-pilot. Commodities, energy, and miners are all buying opps on pullbacks. My only positions right now are SLW and EXAS. (I'm holding four positions in Rydex funds, but it's a 2 minus 2 equals zero situation.)
I stopped following them closely after last years move. Just seemed too momentum driven to me at the time and now it's basically one total messed up chart that I don't think many people will trust. My cynical side tells me that the whole splitting up thing was a ploy to get the stock higher since the fundamentals suck
Notice that commercial specs are very rarely net long, and they have not been net long to the same extent as now in a VERY long time... On the other hand, the combined position of small specs and large specs is net short now, which is rarely the case and it has not been net short to the same extent as now in a VERY long time. So the current rally may have legs. I am thinking now that 205 level on S&P might not be the place where it pauses. S&P might very well run straight to its previous band of 210 before pausing...
The average stock I follow is actually still down quite a lot and I'm seeing plenty of value in certain spots of the market. The lift up was aided by oil and gas stuff which mirrors the fact that lots of other stuff is still down 20%+. I think there's enough room to new highs of energy stays elevated
Putting this idea into practice: just used all the money I got from selling my two SVXY lots to buy UPRO (3X SPY etf) at $60.49. Placed a sell stop limit order at $50.49/$50. Given the extremely lopsided position of speculators in the SPY futures and the fact that the price is not breaking down, I think the next move is more likely to be up rather than down.
GLD broke out to a new high and GDX is down 1.66%??? WTF? I am glad that GDXJ is not confirming this strange behavior. Maybe it is a great short-term buying opp for GDX?
Using this pullback in GDX to add more options -- just bought a few Jan 2016 calls, strike $12, at $4.05. If GDX rises above its afternoon plateau of $16, then these puts will already be green, so I am paying almost nothing for volatility with them...
I am just betting on the fact that if GLD closes at the current level, it will place it at the highest level since the early August low, which should attract more buyers soon...
If the market goes to new highs, Gold should make new lows. I think we could get our first divergence with miners though. In that scenario I bet miners don't make new lows. I'll be looking to buy GDX / GDXJ in this scenario, with gold at new lows.
"If the market goes to new highs, Gold should make new lows."
Why do you think so, Mike??? SPY and GLD have been rallying together since the recent jobs report. Both of them like the reduced prospects of Fed raising rates, which puts pressure on $USD.
Because I think there is still a lot of fear and the higher the market goes the less fearful people become, which is counterintuitive but its the way it works.
Sure, but gold has not been trading based on fear lately -- it has been trading based on $USD. And $USD has been trading based on the likelihood of Fed raising interest rates soon.
Agree with all of the above. Shorts are wrong. I think we've seen the lows for 2015, and will end the year up to +8% higher. Long EM, Oils, Miners at the close.
The +61-point rally in the DJIA at the open? What about the +1% spike in EEM (emerging markets)? Fueled by FOMO (fear of missing out), in my opinion.
ReplyDelete(a) Reopening shorts at the 1030 window. RYTPX (Rydex 2x Inverse SPX) and RYWYX (Rydex 2x Inverse EM). Keeping it small.
(b) Picking up a little SLW (Silver Wheaton) on the morning pullback to 14.22.
(c) Reopening a position in EXAS (Exact Sciences) @ 8.17.
EXAS- Simply a quick trade or do you actually thin the test works?
DeleteI know the test is far more accurate than the old FIT test kits, and that patients overwhelmingly prefer Cologuard to a colonoscopy. My wife (and my boss' wife) both opted for Cologuard. It's probably just a matter of time before the product gains acceptance as 'standard practice.' I opened a small long-term position in the big guy's account.
DeleteSo your take is the test works and the comments from the FDA are wrong? I'm not trying to pin you down here. I just don't understand.
DeleteThere's a small (but significant) chance the markets pull back to an attractive entry point by today's close. Should that unfold, my strategy (given the limitations imposed by Rydex mutual funds) will be to 'lock in' gains on the short side by opening equal-weight positions in the corresponding leveraged long funds. If sufficiently attractive, I will 'size up' by going 'above and beyond' what is needed. It's unfortunate that retail investors need to come up with these types of workarounds, but as we all know it's not a level playing field.
ReplyDeleteI see why people like GOPRO's now!
ReplyDeletePretty quiet market and Blue Jays playing this afternoon - I am done for the weekend - long weekend for Canada as this is our thanksgiving
Happy Canadian Thanksgiving! My friends in Boston used to celebrate that because one of my friend's wives is Canadian. Happened to coincide with the playoffs so we would get together and watch the Red Sox play. Great times.
DeleteBIIB , it looks like I could have picked any other bio and been better off, 261.75 says uncle.
ReplyDeleteZINC moved 97% in 5 days for a Goproner by Marko.
Too funny, I pulled up the chart of that on Stockcharts and read the name and my mind read the company name as "Horseshit Holding Corp". Some sellers last week have to be saying that to themselves.
DeleteTELE- Totally.
DeleteMark and Goboner, lol!
Delete"David, Are you selling Puts you own or naked Puts?"
ReplyDeleteI was buying VXX puts after the late August crash, and now I am preparing to unload them. I was a bad student of market history, and so I started buying VXX puts too early. Had I looked at the daily charts of the 2011 crisis (available through Yahoo), I would have noticed that VXX tops much later after the VIX tops. Same thing happened this time around -- VIX topped on August 24, but VXX topped much later. So only the puts that I purchased late into this crisis, when VXX was at $29, are nicely green for me, but the other ones are still a little in the red. Luckily, I started buying puts very cautiously, in small amounts, increasing the dollar amount of each purchase as VXX kept going up and as it became a better and a better deal. My heaviest purchase was when VXX was at $29 (30 strike, March 2017 expiration) and those puts are nicely green now. I'll sell them last, since they have the longest expiration date, and will sell first puts with the lowest strike price ($21 and then $25).
SPY is still following the 2011 script, pausing at the peak level between the double bottom. It may even pull back from here a little, as 2nd_ave expects. Or, if the 2011 script holds up, SPY will simply launch forward another 5 points or so, till 205, at which point it will stall and THEN will have a nice pullback, below the 200 level (say to 195), so as to scare everyone once again.
ReplyDeleteNotice that GLD is also flirting with the highs established during the first rebound after the early August lows. If GLD goes up just a little more, above 111.11, then buyers should really start piling in, as the chart will then have a nice sequence of higher lows and higher highs.
ReplyDeleteZINC - I forgot to monitor that one. Happy Thanksgiving, BB! :)
ReplyDeleteIBB had an H&S, looks like it's played out now.
http://www.finviz.com/quote.ashx?t=ibb&ty=c&ta=1&p=d
SCON - What a great short.
ReplyDeleteDB looks awesome right here. Great hold BB. I think that's a home run from here. Such a low risk spot right now for them and CS
ReplyDeleteLooks like Ferrari symbol will actually be RACE - kind of cooler than FRRI and may help drive trading
ReplyDeleteEmerging markets look good. Almost switched to a bullish stance near Friday's close, but EEM failed to pull back below Thursday's close, and I prefer a lower-risk entry. Hope to see late boarders tested next week, followed by a sustained push through resistance. Once institutional buyers begin boarding, we'll leave the trade on auto-pilot. Commodities, energy, and miners are all buying opps on pullbacks. My only positions right now are SLW and EXAS. (I'm holding four positions in Rydex funds, but it's a 2 minus 2 equals zero situation.)
ReplyDeleteI'm glad I got lucky and went all in 2 weeks ago. Have some room to maneuver now. Need to make up some lost ground
DeleteAnyone have a take on AA following the -7% post-earnings sell off?
ReplyDeleteI stopped following them closely after last years move. Just seemed too momentum driven to me at the time and now it's basically one total messed up chart that I don't think many people will trust. My cynical side tells me that the whole splitting up thing was a ploy to get the stock higher since the fundamentals suck
DeleteFolks, take a look at the chart of S&P 500 futures:
ReplyDeletehttp://www.barchart.com/chart.php?sym=ESZ15&style=technical&template=&p=DN&d=X&sd=&ed=&size=M&log=0&t=BAR&v=0&g=1&evnt=1&late=1&o1=&o2=&o3=&sh=150&indicators=COTLC%2813369344%2C26112%2C153%29%3BCOTDLC%2813369344%2C26112%2C153%2C16750848%29&chartindicator_3_code=COTLC&chartindicator_3_param_0=13369344&chartindicator_3_param_1=26112&chartindicator_3_param_2=153&chartindicator_4_code=COTDLC&chartindicator_4_param_0=13369344&chartindicator_4_param_1=26112&chartindicator_4_param_2=153&chartindicator_4_param_3=16750848&addindicator=&submitted=1&fpage=&txtDate=#jump
Notice that commercial specs are very rarely net long, and they have not been net long to the same extent as now in a VERY long time... On the other hand, the combined position of small specs and large specs is net short now, which is rarely the case and it has not been net short to the same extent as now in a VERY long time. So the current rally may have legs. I am thinking now that 205 level on S&P might not be the place where it pauses. S&P might very well run straight to its previous band of 210 before pausing...
Makes sense to me. I'm actually looking forward to earnings this Q.
DeleteThe average stock I follow is actually still down quite a lot and I'm seeing plenty of value in certain spots of the market. The lift up was aided by oil and gas stuff which mirrors the fact that lots of other stuff is still down 20%+. I think there's enough room to new highs of energy stays elevated
DeletePutting this idea into practice: just used all the money I got from selling my two SVXY lots to buy UPRO (3X SPY etf) at $60.49. Placed a sell stop limit order at $50.49/$50. Given the extremely lopsided position of speculators in the SPY futures and the fact that the price is not breaking down, I think the next move is more likely to be up rather than down.
DeleteI'd keep an eye on HYG and the USD/JPY. Those seem to be 2 good tells on the market lately. If they hold up I think we are good to go.
DeleteWhile SPY is hesitating, VXX is melting away. :)
ReplyDeleteGLD broke out to a new high and GDX is down 1.66%??? WTF? I am glad that GDXJ is not confirming this strange behavior. Maybe it is a great short-term buying opp for GDX?
ReplyDeleteUsing this pullback in GDX to add more options -- just bought a few Jan 2016 calls, strike $12, at $4.05. If GDX rises above its afternoon plateau of $16, then these puts will already be green, so I am paying almost nothing for volatility with them...
DeleteI am just betting on the fact that if GLD closes at the current level, it will place it at the highest level since the early August low, which should attract more buyers soon...
DeleteIf the market goes to new highs, Gold should make new lows. I think we could get our first divergence with miners though. In that scenario I bet miners don't make new lows. I'll be looking to buy GDX / GDXJ in this scenario, with gold at new lows.
Delete"If the market goes to new highs, Gold should make new lows."
DeleteWhy do you think so, Mike??? SPY and GLD have been rallying together since the recent jobs report. Both of them like the reduced prospects of Fed raising rates, which puts pressure on $USD.
Because I think there is still a lot of fear and the higher the market goes the less fearful people become, which is counterintuitive but its the way it works.
DeleteSure, but gold has not been trading based on fear lately -- it has been trading based on $USD. And $USD has been trading based on the likelihood of Fed raising interest rates soon.
DeleteWhy oh why do I keep thinking about TWTR as a LT buy.
ReplyDeleteWould you say you have a GOPROner for TWTR?
DeleteAgree with all of the above. Shorts are wrong. I think we've seen the lows for 2015, and will end the year up to +8% higher. Long EM, Oils, Miners at the close.
ReplyDeletenew post
ReplyDelete