I've been waiting for a pullback since July 27.
Reading through financial media headlines the past few days, anticipating a
pullback appears to be the 'odds on' bet. I'm beginning to think it
'ain'a gonna happen!'
Going long at the close, with a couple of kickers:
(a) VTWSX (total world stock market)
(b) VGENX (energy)
(c) X (US Steel)
(d) SNAP (the company formerly known as
Snapchat)
Risk control will take the form of (i) diversification (via
the world stock market), (ii) buying into a beaten-down sector (energy), and
(iii) small positions in two stocks which have declined -50% but may be poised
to rally on near-term catalysts.
Reposting for Mark:
ReplyDelete"Mark -- what is going on with oil services? They keep going down and down. Now almost at the level of Jan 2016 even though oil is much higher now. What about the thesis that the only real stopper of higher oil prices are US shale drillers, and so if they keep a cap on the oil price, then it would mean that they have figured out how to do A LOT of drilling at $50 oil, and hence they will require a lot of services. So even if the oil price stays flat, services will still be in demand in US. But this logic is not working out now -- do you have an idea why?"
If anyone else has an idea of why oil services are down so much, please share!
DeleteDavid- I don't have an answer to your question, but in my opinion it's great that you're asking.
DeleteIn my opinion, it means we're closing in on a reversal.
David- I don't really, other than whenever a commodity that has collapsed are rebounded then heads down again the supporting players always seem to be discounted at a lower level relative to the underlying if that makes sense.
ReplyDeleteMark, but USO is actually up today! It is up 0.8%! And XES is down 2%! Maybe there is something else that's wrong with the oil services industry besides the low oil prices?
DeleteJumped back in CBMX @ 7.20.
ReplyDeleteENPH- That's an ugly candle.
ReplyDeleteVolatility is shooting up -- we may have a big down day tomorrow...
ReplyDeletePlaced a sell limit order at $13.24 for VXX that I picked up at $11.24
DeleteEarly morning comments:
ReplyDeleteSteep declines in global markets this morning as North Korea calls our bluff. Will it provide the necessary 'fuel' to launch the next leg of the bull, or does it signal the beginning of a significant pullback? I'm not smart enough to know. My take:
(a) The fact that I'm mentally prepared to close the positions opened only yesterday is both a disadvantage (I should perhaps give it more time) and a significant edge (a fund manager would not have this kind of flexibility).
(b) I'll give markets 'til the close to make up my mind. It's usually at the 'close' when institutional players show their hand, and in any case with mutual funds I have no other option.
(c) In some ways this morning's 'take' is the reverse of March 2009. On March 8 I had liquidated all positions as it seemed there would be no end to the desolation on Wall Street. I woke on March 9 to the realization that my actions the day before were a 'tell-' one that signaled the end of the bear and it was time to go long. This morning's 'take' isn't quite as sure- but it's close enough to hold my attention.
Nice reversal off the morning lows.
Delete(a) The SPX is +11 points off the intraday low, and just -1 point from yesterday's close.
(b) My risk control measures are working. Compare the -0.9% drop in EEM (emerging markets) to the relatively muted -0.25% decline in VT (total world market). XLE (energy) and X (US Steel) are flat, and SNAP is +3.7%.
However, I have an opportunity to close the day in the green! I'm going to take it. Moving to cash allows me to clear my head and reconsider.
Edit: I ended the day slightly in the red. No regrets.
Placed a buy stop limit for XES at $14.50/$14.60. Its valuation may be good, but its momentum is currently down. If we get a big down day in S&P tomorrow, then XES will most likely follow.
ReplyDelete1/3 QQQ at 142.15
ReplyDeleteJust as I had expected: a small jump in volatility yesterday foreshadowed a large market decline today. Just sold at $12.90 the VXX shares I purchased at $11.24. What do you know -- I managed not to lose money on VXX! :)
ReplyDeleteOf course, this can be the beginning of the large market pullback everyone has been waiting for, and VXX will double in a short order...
DeletePlaced a buy limit order for CBMX at $6.90. Should have done it yesterday...
ReplyDeleteTomorrow we might have a large market reversal, so I just raised my buy limit on CBMX to $7.00 and got it at that price. This amounts to 1/2 of my trading position that I sold at $7.20.
DeletePlaced a buy limit order for more CBMX at $6.60 -- hey, you never know. :)
DeleteSometimes a successful trading move comes down to simply being a lucky dog.
ReplyDeleteDJIA -180 points, SPX -1.33%, NDQ -2%. EEM (emerging markets) -2.3%. VT (total world market) -1.5%.
Will we see another 'V' recovery? I can't rule it out, but it just 'feels' unlikely to me.
Should have kept my sell limit for VXX unchanged at $13.24...
ReplyDelete"Sometimes a successful trading move comes down to simply being a lucky dog."
ReplyDeleteI totally agree. :) I am glad that I didn't hold onto VXX for too long, and was able to sell it at $12.80.
Placed a sell limit order at $7.70 for the CBMX shares I picked up last week at $7
ReplyDeleteSPWR seems to have made a double bottom around $8.90 after its August 2 crash, so it will likely move up now. Placed a sell limit order at $10 for 1/2 of the shares I picked up at $9.25, and at $11.00 for the other half.
ReplyDeleteXES is basically at the January 2016 low now. I think many traders will treat this level as a good entry, and at least a small bounce should happen here. Lowered my buy stop limit on XES to $14/$14.10
ReplyDeleteTraders might have given up on XES today. Just bought some at $13.32.
ReplyDeleteXES did not continue its ascent, so I sold my position at $13.22, while the loss is still minimal. Instead, placed a buy stop limit just above yesterday's high at 13.60/13.70
DeleteTaking a swing at small-caps. Betting on a change-up pitch in the Russell 2000. RYRSX @ the 1030 am est window.
ReplyDeleteThe pattern of large up and down swings in the market after a prolonged rally often indicates the end of the rally since the traders are really unsure about its continuation and are willing to run at the sign of the first trouble and then jump in when the fear of missing the rally appears. This means that the strong wind driving the rally has abated and the sail is just flapping... When the big algorithms notice that the wind has abated, they'll decide that it is prudent to sell and step aside for a while.
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