Monday, August 8, 2011
08/08/11 Slaughterhouse 5
Being housed in Slaughterhouse 5 is, of course, how a group of POWs and their German guards survived the bombing of Dresden.
Likewise, I hope to survive the current assault on my positions via confinement in solitary.
Seriously, 90% of the pain associated with any sell off is emotional. And solitary, at least for me, is hands down the most effective state for managing emotions.
Yo, I'll take the hits that come with buy-and-hold. And I'll turn the other cheek if that's how the play unfolds. But I'm sure as hell going to enjoy cheering the Bulls when they're back in offensive formation.
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Make that Raging Bulls.
ReplyDeleteJust for TOF...SPY filled it's only open gap on the weekly today, back to Sept.
ReplyDeleteI seriously can't believe the VIX is 48.
Good stuff today, guys. It's even more important to post on bad days. Nothing clarifies my thoughts more than writing them down.
ReplyDeleteIf I had to guess, DJIA 9k might be a bottom.
ReplyDeleteAnyone still holding at 9k has no intention of selling, or is behind bars.
ReplyDeletetof- As far as I'm concerned, this is a market crash. No point debating definitions- it feels like a crash, so it's a crash. Down -20% in a few weeks qualifies.
ReplyDelete2nd - Yep I agree. A crash features all of the following:
ReplyDeleteExtreme volume
Extreme volatility
Excessive pessimism
Irrational calls (i.e, Geithner should resign, Depression is coming, etc)
The reason I don't see a Depression or even a recession coming are as follows:
(1) Corporate earnings were rising heading into this pullback, not falling
(2) Just about every company was cautious after coming out of the 2008/9 period, building cash and not hiring anyone.
(3) Total consumer debt levels were at the lowest levels since 1994 per the Fed.
These are not indicative of an economy that is caught off guard and quickly slips into a recession or even a depression. That usually happens when debt levels are high and no one is bracing for bad times.
This may go down as the first 'nice' crash, in the sense that we all knew the US population was partying too hard and overextended. I've commented many times about my amazement in the early 2000s at neighbors, coworkers and acquaintances who were able to 'afford' things I considered 'off limits' for myself: new vehicles every 2-3 years, remodels and/or vacations at the drop of a hat, private schools/nannies for the kids, dining out 3-4x/week.
ReplyDeleteThe government needs to cut spending. The government needs to raise taxes (ie, revenue). And J6P (j4p going forward, maybe), needs to do the same for his household.
IMO, that's kind of what the market is signaling. More savings, fewer purchases...but a solid foundation for the future of the country, and the stock market.
http://www.ritholtz.com/blog/2011/08/markets-hub-what-kind-of-investor-are-you/
ReplyDeleteLower market prices help in other ways also.
ReplyDeleteFor instance, it will allow many workers to dollar-cost average in at decent prices, leading to healthier portfolios as the population ages into retirement.
Mr. Huntsman bought HUN today. 100k shares @ 11.37.
ReplyDeleteFutes down ANOTHER 2%. Man, oh man....
ReplyDeleteGot to admit, the last few days have me spooked a bit.
i'm flabbergasted by this selling. we're now in a bear market officially. ES down to 1082. looks like next stop is 1010 on s&p cash. wonderful
ReplyDeleteRight now the Hang Seng is down %6.66. Seriously.
ReplyDeleteHolly shit. Crude's down another 5 bucks?!
ReplyDeleteKospi halted.
ReplyDeleteMan, everything I look at... unreal, Fing unreal.
ReplyDeleteWonder if Buffet's out of powder yet? Feels like there's something big going on, like a large bank going under and they're liquidating.
ReplyDelete"Anyone still holding at 9k has no intention of selling, or is behind bars."
ReplyDeleteI think I would try to breakout to sell my holdings.
I don't know for sure, but I feel like Obama lied to everyone today about why the market was selling off. I don't think it's over the downgrade, the timing is too convenient and the liquidation started before the downgrade was announced.
ReplyDeleteDamn, what are the markets pricing in here? The Market is never wrong.
ReplyDelete2nd > It's probably just a general fear that we're going down the debt tubes here. You know...the govts of the world are over-leveraged and unable to bail anyone out given the lack of ammunition.
ReplyDeleteThis selloff is very similar to the 1941 sell off. It dropped 23% in about a week or so on the WWII fears (which would equate to 1,030 or so current mkt). The market rebounded about 70% of the gains (which would equate to...lo and behold...1,250 (prior support)) then it dragged to new lows.
The good news: After hitting new lows it was the buying opportunity of a lifetime. Within four years it doubled and in 23 years it was up 10 fold.
You could say this is the global equivalent of a shakedown.
ReplyDeleteOne thing I'm pretty sure of. The money that was (finally) put to work in the market the first half of this year? If those investors aren't out yet, they aren't far away from bailing.
So you guys won't consider the possibility there's a large bank somewhere, perhaps in Europe, in trouble?
ReplyDeleteYou guys are nuts, this was no shakedown, buyers left the building.
ReplyDeleteBye guys, now I've been taking to myself for months, it's been great...
ReplyDeleteBut they may be back in the morning. All I know, CP, is that my experiences with 'desolation,' be they in or outside the markets, have invariably been 'darkest before the dawn' scenarios. And the 'reason' for that is likely rooted in human psychology.
ReplyDeleteCP > I don't think so man....I honestly just think it's a classic panic selloff. Think about what propelled this market higher over the past 2 years - it wasn't roaring econ news. It was continued intervention by govts + slow yet somewhat steady econ growth + solid earnings. What have we gotten in the past 2 weeks:
ReplyDelete*US Govt being forced to slash spending + 0.4% GDP print + weak econ reports + a bit of weak earnings guidance
When confidence isn't high in the markets, it was only a matter of time before it collapsed. That's what we're seeing. However, my terrible timing aside, I personally think that we're at a good value right now and that we won't be going down the tubes once again.
It all comes down to 'interpretation.' How many times have you awakened to view an unchanged situation differently?
ReplyDeleteOr as Miss Carolina said in 2007...everything "like such as".
ReplyDeletehttp://www.youtube.com/watch?v=lj3iNxZ8Dww
Differing perspectives- that's what trading is all about. Why else would there be buyers/sellers at any point in time?
ReplyDeleteWe might actually be better off if Miss Carolina explained the selloff. God knows her guess is as good as anyone else.
ReplyDeleteBYD @ 6 and HERO @ 3.
ReplyDeleteYou say buyers have left the building. I say sellers are leaving the building- leaving buyers to pick up the 'trash.'
ReplyDeleteCP I agree. The Downgrade is a side show. The market is saying T notes are by far the safest investment in the world. I believe Europe was still the reason. Like JB I was up watching/trading the market. The ECB announced their stimulus injection by buying distressed debt, Italy. Europe actually turned green for an hour then faded and then started selling hard. The market basically told the biggest central bank in the world and their Bazooka, F---You. I think our market saw the reaction and started pricing in ineffective central bank policy world wide. Investors have lost confidence in the Central Bankers ability to goose the markets. Thats the loss of confidence people are talking about.
ReplyDelete'Buy when there's blood in the streets?' Come on, man. What happened?
ReplyDeleteWe have all reminded each other that when the time comes to buy, WE WON'T FEEL LIKE BUYING. Remember that one?
You might be right CP. I have no answers at all. I'm going to watch BEXP tomorrow. VERY solid report and great guidance. If that one sells off, well...
ReplyDeleteI did email MOG to get his take. I'll report back.
Holding VXX still from 23.95.... considering selling at open tomorrow or placing tight stop at 35. Traded 36 afterhours. nice 50% gain for me.
ReplyDeleteThoughts? sell high sentiment cant get much worse here IMO. Considering going back long. VXX position has kept me even YTD
Im with you 2nd. I have stayed away from my portfolio and have lots of cash to deploy, I missed the last 100% run.
ReplyDelete"If that one sells off, well..."
ReplyDeleteMark - It's gonna sell off...let's be honest. People are all left wondering "what is it the market knows that I don't know?" This is fear begetting fear. It's a natural human reaction. In a rational world people wouldn't be rushing to the exits after a 20% drop over the span of a really short period of time. And they wouldn't be selling things with RSI(7)'s of 3 to 6. But that's what happens when fear sets in. Its the reverse of buying OPEN or TZOO at 100+ times earnings. It doesn't make sense.
Pz- Good to hear from you!
ReplyDeleteI still believe that buy-and-hold will save my a--, not so much from an a---whipping, but from a whipsawed a---whipping.
ReplyDeleteNow I'm really scared. 2nd is still awake.
ReplyDeleteFor instance, had I still been in ST trading mode the past two weeks, I honestly believe I would have ended up trading leveraged ETFs...to my detriment.
ReplyDeleteBeen staying away from market....didnt want to chase and didnt want to sell my VXX to soon. I did sell my Spxu WAY early...but thats life
ReplyDeletemy limited long positions are down 7 to 25%.
Time to act is near IMO
Two companies that I would definitely be dipping my toes in had I done it all over again and waited another 3 days to deploy my cash:
ReplyDeleteBCPC + DXPE
Two of the stronger companies I follow. Both have gotten thrashed. I was looking at my YTD performance which fortunately is still doing great given some lucky trading for 7 months and I was really kicking myself today about buying so early and being down now 20% from the level I was at last week...then I realized that these two companies above, which I consider to be two of the best run companies in the market, are down 17% and 21% respectively from the levels I bought last Wednesday...it's clear to me that this is nothing more than panic selling across the board. And it's not the small guys. It's the institutions and the hedge funds.
It's difficult to sleep during historic events.
ReplyDelete2nd- PZ's return?
ReplyDeletelol
ReplyDeleteTHis has woken me from my slumber. :)
ReplyDeleteOne thing I still can't quite figure out:
ReplyDeleteIf the European banking industry is going down the tubes, which is what I think caused this whole selloff, then wouldn't the LIBOR rates be rocking? They haven't budged over the past week. In fact, they have even gone down if I'm reading this correctly.
http://www.global-rates.com/interest-rates/libor/libor.aspx
What's the worst-case scenario comparison out there? Probably the -90% sell off in the thirties? Could any of you take that?
ReplyDeletePz - If you're just getting long here then hats off to your patience. It has been justly rewarded.
ReplyDeleteFuck. Gold is up 100 bucks.
ReplyDeleteI think we could see a 87 event very easily with the machines in charge now. circuit breakers will let it go down how far? What happens when they turn it back on?
ReplyDeleteAnd here is my guess about past week's selling :) I think the people are worried that, for several reasons, we might be going into another recession, and so all investors are taking profit from the 2009-2011 bull market before those profits disappear. Unfortunately, people have 666 as a psychological anchor for how low S&P can get in a recession, and hence selling at 1200 makes perfect sense. I wouldn't be surprised if S&P gets below 1000 before the first wave of "end-of-bull-market" selling subsides.
ReplyDeleteI have some longs and VXX. Enough longs that I havent made any money this year, but I have at least 60% cash ready to deploy. Now I just have to do it. I wasnt able to last time.
ReplyDeleteI've lived through the crashes of 1973-74, 1987, 1997-98, 2000, 9/11/2001, and 2008-09. Now it's 2011.
ReplyDeleteA few people I know lived through the Holocaust.
What about Bosnia? Darfur? What's it like to lose everything you own? And your family?
This is a -20% sell off. They want you to extrapolate the fear out to the Holocaust. I just don't think we're there yet.
I have 2000 shares of UXG that I bought at 7.95 and 6.26 that I thought would move with the gold run...so far that is getting me clobbered.
ReplyDeleteInteresting numbers, David.
ReplyDeleteI tell you, I'd buy ASX right here if I could...But I can't, and have been drinking...oh well.
ReplyDeleteAlright, I'm calling it a day. I'll leave you with this thought- make up your own minds, b/c your own advice to yourself is at least as good as any you'll find elsewhere- probably much better- you know yourself better than anyone else.
ReplyDeleteCP!!!! Holly Cow buddy! Some dude on Bloom just said he thinks the market is pricing in another major bank to fail but it wont!
ReplyDelete(a) You can't b/c you've been drinking.
ReplyDelete(b) You've been drinking b/c you can't.
(c) You can't, and you're drinking.
(d) You can't. And you've been drinking.
I'm with you. (d) is the best scenario, as it demonstrates maturity- you simply accept the fact that you can't buy ASX right now, and don't allow the disappointment to interfere with your normal evening activity...I mean activities.
Geitner is staying because the weasel thinks he is needed again to save the system. Along with Ben. Only this time he is in charge of a much depleted US Treasury. Ben's balance sheet is bad too. BAC down 20% today. Hold onto those bars on the roller coaster. Wish we had a crash worthy seat as does the Black Hawk helo.
ReplyDeleteBEXP - Great earnings and increased oil production. Probably same into next qtr and 2012. Too bad its only up AH enough to make up a fraction of today's 15% decline. The overall "market" is a steam roller. I am holding, holding and holding on for dear life.
ReplyDeleteOf several oil explorers/producers I checked, BEXP has the highest beta save tiny KOG. It's 2.85. Compare to OXY (a more recent holding) at O.99. BEXP is just plain volatile, in either direction and I think the direction will be up in the future.
Crazy - my worst day out of the past three was the day the market was flat. What's up with that?
ReplyDeleteIt looks like they're trying to rally things.
ReplyDeleteIt's funny..during the whole bull market they were saying that we were rallying because "they" were supporting things. Yet where were "they" in 2008? Where were "they" these past few weeks? Is they we?
All the oil producers follow the SPX down first then seem to double down with the decline in crude. That's not good but will work in their favor when crude retraces up. Tonight crude futures went down to $76 but have gained back up above $78. I seem to remember that there is something called OPEC that might keep the price up.
ReplyDeleteI see green everywhere like such as!
ReplyDeleteAussies up 6% from intraday bottom. Nice mate!
BEIJING (Dow Jones)--The world is likely to see a third round of quantitative easing in the U.S. soon, but the possibility of the U.S economy suffering a double dip isn't big, People's Bank of China adviser Li Daokui said Tuesday.
ReplyDeleteCurrent market volatilities are purely caused by "blind actions" of U.S politicians, which lead to excess short-term fiscal austerity in the U.S., Li said on his personal microblog.
"The QE3 is to be launched soon, which is actually a second bailout, and the financial market will rise quickly," he said, adding that high-quality assets and currencies will benefit from such easing, though long-term Treasurys will fall.
"A double dip in the U.S economy is not likely, as asset prices will recover fast," he said.
Once again, S&P futures had an amazing recovery late in the evening, just like yesterday, which didn't prevent today from being a 6.66% down day :) Well, at least gold, which spiked up during the first part of the evening when S&P futures tanked 2%, did not give up its gains...
ReplyDeleteLet's see if the SPY can recapture 1,200...
ReplyDeleteS&P futures are up 0.6% already! That's too bad -- I wanted to see VIX spike to 60 tomorrow and finish loading up on VXX puts...
ReplyDeletehttp://www.bloomberg.com/news/2011-08-08/mgm-resorts-beats-estimates-on-macau-boom-vegas-recovery-1-.html
ReplyDeleteIgnored in this mess:
“If you’re getting growth in the Luxors and Monte Carlos and New York New Yorks, that’s telling you that the U.S. customer is spending more money,” Chairman and Chief Executive Officer Jim Murren said. “That’s encouraging to us.”
Notice SSO = TNA
ReplyDeleteJohn Mauldin has just put out an Outside the Box special, where he recaps this morning's David Rosenberg's letter. Here are a couple of interesting excerpts from it:
ReplyDelete"Yes, the market is near-term oversold but the fact that the decline last week took place on one of the largest volume periods of the year — 8.62 billion shares on the NYSE on Friday alone — is a sure sign that the ‘buy the dips’ mantra that was part and parcel of the two-year recovery that ended last April has morphed into a ‘sell the rally’ environment. The VIX has soared to 32, but true capitulation occurs closer to the 45 level. Stay tuned."
Apparently, he used Friday's VIX close of 32, but today VIX did close at 48, which is the level at which Rosenberg expected capitulation to occur. So maybe the fact that S&P futures are up 1.5% already does mean that tomorrow will be an up day...
Another interesting piece from Rosenberg's letter:
ReplyDelete"History shows that every time a AAA country gets downgraded, the budgetary belt is tightened and yields decline every time."
David - I wonder when Hussman will get positive on things. I'm suspecting he needs to see a VIX of 90 and S&P of 800.
ReplyDeleteDefinitely a dead cat bounce can be very lucrative here, 50 % retracement is about 100 S+P points. David what month are you using on your VXX puts. I am going to bid OTM ones after I see fed meeting reaction mananna. I don't mind chasing.
ReplyDeleteMPEL is best of breed for casinos. No Vegas exposure! A bonus.
ReplyDeleteHi Guys - I bought yesterday (PID, SPY and FFNOX) and I will be buying again today.
ReplyDeleteWon't be trading futures, it was too tough yesterday and I expect more of the same today
Wow, glad I was out with a friend last night and missed all the negativity! Sounds like it was perhaps a capitualitory time?
ReplyDeleteTOF mentioned last night that copper was not really confirming the downturn and I think that this is a really important point. If things were that bad, wouldn't the price of Copper be reflecting this? Instead it has moved down to $4.00 which is the bottom of it's trading range. If it holds here (and I think it will
as China needs Copper regardless of what happens in the financial markets), that would be a good sing that equity markets are also getting ready to bottom.
For what it's worth (and probably not a whole lot given what's happening in the markets), 1400 is 25% upside by year end from here:
ReplyDeleteGoldman Sachs Group Inc. GS +1.80% reduced its year-end price target for the Standard & Poor's 500 Index to 1400 from 1450 due to lower gross domestic product growth estimates in the U.S., Europe and Asia.
The investment bank also lowered its 2012 earnings estimate to $102 a share from $1
MOG's take? Loss of faith in political leaders, slow grinding improvment, no recession. He's a buyer.
ReplyDeleteBro - what's new on the building front? I'm seriously thinking of spending some time and money and just focusing on trading and investing, job prospects are almost non-existent. We can team up!
ReplyDeletewow, hadn't looked in a few days, MITK has gotten hammered
ReplyDeleteJB- Nothing cooking. Markets like this only make it worse. I'll call you.
ReplyDeleteOut of VXX finally at 33.43. Lost 3 bucks overnight. But 10$ aint nothing to piss at.
ReplyDeletehttp://www.marketwatch.com/story/fbr-upgrades-wells-fargo-to-outperform-2011-08-09-87500
ReplyDeleteES is starting to look sick already, might have one of the shortest relief rally's in history
ReplyDeletecomms are joining the locals in going short, need some buyers to step in
ReplyDeleteJB- Yep. BAC also. Not good.
ReplyDeleteI'll be around bro, give me a ring
ReplyDelete22 is important, can't believe we are back there already
ReplyDeleteinteresting tid bit- after two weeks of relentless selling by GS in the ES late yesterday they turned around and started buying, they have continued to buy this a.m.
ReplyDeleteJB- Can you ask them to buy some MITK?
ReplyDeleteJB > How can you tell that GS is buying?
ReplyDeleteWe need a big up day today and then follow through tomorrow to get the bears scared...otherwise this is just a bounce before heading even lower.
What's up with C?
ReplyDeleteCP- Where would you add to SVM?
tof - traders audio.
ReplyDeleteMark - I'll see if I can slip them a tweet!!
day trade
ReplyDeletespxu at 22.27
stop 22
BEXP- Wow, I take a shower and...
ReplyDeleteI know we're going into a Depression and all but NLS had a really good report today, in a quarter which is typically their worst quarter. Here is what the CEO had to say:
ReplyDelete"Our management team is pleased with this quarter's marked improvement in operating results during our most seasonally challenging quarter. We continue to see improvement on a number of key internal metrics, such as credit approval rates, media efficiency and operating leverage. After just two months with Nautilus, I am encouraged with our prospects and have confidence in our ability to continue building on the positive momentum we have established."
http://finance.yahoo.com/news/Nautilus-Inc-Announces-bw-610209959.html?x=0&.v=1
that was quick
ReplyDelete:(
FOSL's been cut in half.
ReplyDeleteSVM - Added some this morning, perhaps silver industrial demand won't fall off a cliff?
ReplyDeleteConsidering we're headed into a Depression, and all.
CP- Thanks. Did you see MOG's comment?
ReplyDeleteBAH - Looks interesting...
ReplyDeleteKeep um up boyz! At the close.
ReplyDeleteStrong chance we close down IMO.
ReplyDeleteWith this economic Depression and all, commodities demand should be falling off a cliff. We all know what happens to prices when demand falls off a cliff...
ReplyDeleteYep, these miners will be going out of business soon and filing BK due to the economic depression and all.
ReplyDeleteNice to see banks are hitting their 52 wk high's in this depression, and all.
BTW, let's not pay any attention to the charts or TA, let's trade based solely on balance sheet.
ReplyDeleteTC - Gosh, I bet yesterday's buyers get fleeced, considering commodities prices are gonna fall, in this depression and all.
ReplyDeleteTC - If you had even bothered to look at this chart (Bet you didn't!), you might understand my agnst over the past months.
ReplyDeleteEconomic vitality doesn't push commodities prices down, especially when government is throwing the currency into a fire in order to balance over two decades of massive trade deficits.
Unless maybe you prefer to stick your head in the sand.
Only a coward would stab someone in the back and instead of engaging, run.
ReplyDeleteDamn CP is fired up. JB can you grab us some beers?
ReplyDeleteIs this market expecting Ben to do anything today. I hope not.
ReplyDeletehttp://finance.yahoo.com/banking-budgeting/article/113281/insiders-are-buying-marketwatch;_ylt=AreUsDZkIdhjtCXSwJjMI8u7YWsA;_ylu=X3oDMTE1Nm80ajkxBHBvcwM1BHNlYwN0b3BTdG9yaWVzBHNsawNpbnNpZGVyc2FyZWI-?mod=bb-budgeting&sec=topStories&pos=2&asset=&ccode=
ReplyDeleteAlso saw this...not exactly the sign of a big credit induced top:
"Credit card defaults posted a significant drop in July as U.S. consumers continue to place a heavy effort towards repairing personal finances, according to Fitch Ratings .
Noting an 18-month streak of declines, the credit rater said its index for delinquencies over 60 days declined to 2.46% in July. Early stage delinquent balances, reflecting borrowers who have missed at least one payment, was steady at 3.34%.
"U.S. consumers are charging less and swiftly paying off existing balances in increasing numbers," said Fitch Managing Director Michael Dean . "Default rates are also pulling back more quickly than anticipated and appear poised for further improvements in the coming months."
Credit card chargeoffs, or those expected to be uncollectible, fell to 6.33% last month, marking the first dip below 7% in two and a half years.
The monthly payment rate jumped to 21.76% in July, increasing 36 basis points to reach a level that Fitch heralded as an all-time high."
MAKO!
ReplyDeleteCheck out my luck, guys: the market is up huge, the Chinese small cap ETF (HAO) is up even more, but the 3 Chinese stocks that I am holding are all down: CADC, CAAS and SORL!
ReplyDeleteAlso, I feel kind of silly for selling MITK yesterday and rotating half of that money into VXX puts -- even though VXX is down today, I would have had a large absolute gain if I had just kept my 1000 shares of MITK...
"David what month are you using on your VXX puts."
ReplyDeleteRoBear, I really wanted to use October or November expirations, but they don't exist! So I had to use September. Maybe I'll roll over my puts into October (once it appears) if VXX doesn't collapse in the next couple of weeks.
"not exactly the sign of a big credit induced top:"
ReplyDeleteNot understanding your point, I can only speculate on what you may be alluding to.
SVM - Set my hard stop just above my purchase price this morning, refuse to take any loss on this new position..
ReplyDeletePedestrian walking through Bethesda (Maryland): "I bailed."
ReplyDeletetof - sorry, was out...beers on the way for all, esp for CP...:)
ReplyDeleteCP > I guess I'm just looking around and trying to read the tea leaves man. usually before big recessions we have people completely unprepared (i.e., highly leveraged, etc) for the rough times.
ReplyDeleteCP- I cant tell if your being sarcastic regarding commodities.
ReplyDeleteBusiness of people bringing their junk gold to dealers up 50% over weeks ago.
ReplyDeleteCP -- make your bets on gold and you won't have to worry about commodities. Gold has clearly separated from the rest of the pack since the monetary expansion in 2008 and started going up IN A STRAIGHT LINE. The slope of that line is the speed with which US is accumulating debt. CBO predicts about $1T per year for the next 10 years, so the slope of the uptrend in gold is likely to remain the same for the next 10 years.
ReplyDeleteI should admit I'm upset about more than this market (as if that's not enough!), headless ducks throughout the woods over here, a literal blood bath...
ReplyDeleteEverything haywire!!!! :(
The artists may be starving, but their school isn't. (Duke Ellington)
Mark - Commodities - Obviously they were run up last year, and it's been a blood bath there all year for the most part (aside from oil until now, obviously). My point is my belief commodities can't continue the weakness if recovery is real.
ReplyDeleteSo I restate, it's my impression base metals bottom prior to equities. I'm hoping base metals have finally bottomed.
Not attempting to influence any choices, just describing my personal trading strategy and maybe, if I'm correct (or incorrect), someone else can benefit.
And maybe I'm clueless and can't find my tush with a flashlight...
30 minutes to go here...
look like a stop run.
ReplyDeletewell lo and behold my stops in WNC got hit. Out at $4.90 with a 20% loss...yeesh. I also took the opportunity to get out of a lot of stuff including my BGZ short at $50.50 and my BTU...in fact, I'm not in anything anymore.
ReplyDeleteDon't think my holdings and my mental strength were prepared for a massive liquidation. I don't want to lose all of my gains this year. Going into last week I was up 200% YTD...I'm now up 140% and am going to the bunker.
I also bought a few SPY puts expiring this friday at $2.9 ($115 strikes).
Crude's crashing.
ReplyDeleteDavid - Good point, and I hope/expect positive economic news is forthcoming!
ReplyDeleteGold - I really don't care for chucking my dinero into it directly, I want my money on the economic recovery.
Anyway, SVM does now own(should I say, run) a gold deposit, which may be a nice hedge, but they also produce a spectrum which lives or dies on the cross in accordance with global economy.
Crude under $80!
Just bought some Honda (HMC). Good balance sheet, decent dividend, P/E under 10, well positioned for the emerging market with their fuel efficient cars and motorcycles.
ReplyDeleteNormally, I go for unknown smallcaps, but I think with this market, large caps may provide a good return with less risk.
Got some other large caps I am looking to buy and will probably do so over the next few weeks regardless if the market goes up or down (lower=cheaper, higher=safer) unless we get a huge bounce and they become too expensive.
My sell on BTU was $43.82 which represented a 11.5% loss in just 3 days. Selling on weakness...ugh. I made a huge mistake in being stubborn this last week and paid for it dearly. I've always stood by the theory that if the market goes 3% or more below the 200 day moving average then it is wise to steer clear of longs until after it goes back 3% above it. Look at the past year...we would be selling on the day of the flash crash or maybe the next day....then waiting until in the fall. While you would have been better off being in the market throughout then you would have had no way of knowing for sure if that was going to happen...and when you got back in you would have had PLENTY of opportunities on the long side. Shit I think I still could have gotten REDF at $3.5 on its way to $15...and I'm sure there were plenty of other opportunities like that.
ReplyDeleteThe reason I'm moving to cash is unfortunately I think too many people are "hoping"...i.e., longs hoping we bounce higher so we can sell and shorts hoping we bounce higher to short. what if we don't?
Oil tanks, news leaks?
ReplyDeletePartial short covering day?
ReplyDeleteI think we move higher after an initial sell off. After Ben
ReplyDeleteNow crude's rallying!
ReplyDelete"U.S. closer to 'junk bond' status than triple-A: Bove"
ReplyDeleteThe political foot dragging and denial aren't going to fool the market.
"Exceptionally low rates until at least 2013."
ReplyDeletewow! Volatility!
ReplyDeleteBen thumbs his nose at Wall street.
ReplyDeletewhat did he say... i dont have good access right now
ReplyDeleteGold popped too, as it should. Oil/gold up good signal for equities, I believe.
ReplyDeleteBen said - "Exceptionally low rates until at least 2013."
ReplyDeleteHe put a date on it.
"A lot of information from FED to digest." FED anticipates sluggish economy for at least two years.
ReplyDeleteI have digested it. 2 years of zero interest. The dollar is toast.
ReplyDeleteI'm OK with the Fed's decision.
ReplyDeleteEveryone expected Ben to mention some specific measures he would take if the shit hits the fan, such as implementing a cap on Treasury yields (everyone *knew* he will keep the interest rates low for a long time). He didn't mention anything specific and just said that things will sort themselves out as commodities decline further. The market sold off in disappointment.
ReplyDeleteTo deploy cash today...that is the question.
ReplyDeleteWow, what a nice shakeout after the Fed's announcement -- a deep drop into a red followed by a reversal into the green...
ReplyDeleteYou can't tell me the market expected Ben to announce QE. Sure, he's going to say something like that that would immediately pop real money to over $2k/oz...
ReplyDeleteHe still has a blank check in his pocket but seriously, the market was expecting him to fork it out? I don't think so...
What options does he have. Most of the ammo has been used. Where are we market wise compared to when QE2 was anounced? That right...lower!
ReplyDeleteKinda sounds like the FED isn't quite so jovial about the pace of recovery as some folks were/are, considering the Depression and all.
ReplyDeleteWell, the market has already sold off, so I guess Ben figured if nobody wants to participate then they're welcome to take their marbles and go home.
ReplyDeleteEquities are oversold here, right? Why should
Ben burn powder now and let the market hold him hostage?
yeah market looks pretty good here...it took some hits to the face but bounced right back...may hop back in on the long side for a trade.
ReplyDeleteI think we're looking at a bear trap, myself.
ReplyDeleteI spoke with ECU's president on the phone today and he said that both ECU's management and that of Golden Minerals agrees that bringing the Velardena production to its maximum capacity is priority number 1. However, he said that it is not easy to do that, and it may or may not happen by 4Q 2011. Still, they will be gradually implementing various enhancements that will keep increasing the oz of gold/silver produced, and hopefully sometime in 2012 they will finally maximize their production. Also, he said that they hope to build the new 2000 tpd sulphide mill in 2 years rather than in 3 years as someone from Golden Minerals told me. So I am still holding ECU, waiting for better days to come.
ReplyDeletehopped back into my BGZ short at $52.2 and $51.8...pretty large position
ReplyDeleteCovering my BGZ short at 1,146 ES
ReplyDeleteCovered BGZ short at $51.45
ReplyDeleteLong BGZ at $50.58
ReplyDeleteFed's statement was right on I thought. Give the economy time and wiht low rates, things should do fine. Think it hit the target. QE3 would have caused a huge selloff and not worked anyhow.
ReplyDeleteSomeone get me off this ride I think I'm gonna throw up
ReplyDelete"The dollar is toast"
ReplyDeleteYeah, well look backward at what's been going on in this country for over two decades now and wonder why.
I can accept this reality, a lower dollar doesn't increase the debt like some people are attempting to claim, no one has described that mechanism in a way I can comprehend.
I still think the current dollar is superior to a commodity backed or a global fiat currency, everyone must be accountable for their fiscal habits and if a fiscal problem is exposed then what's wrong with a currency adjustment?
It's our fault, no one else's, for not holding DC's feet to the fire and throwing out the puppets. We can't be all things to everybody, who has that kind of wealth?
This is fair, aside from not taking down the criminal ponzi artists that knowingly enabled, and profited off of the tailgate party.
Let's get back to business and take corrective actions to make sure the banksters don't continue controlling our destiny.
Agree BB. Do or die time. Enough of this crap.
ReplyDeleteSTOP SET ON BGZ at $50.2
ReplyDeleteStopped out of BGZ
ReplyDeleteVIX below 40. I think that's important.
ReplyDeletejeez got completely faked out of this move today
ReplyDeleteGood comment CP.
ReplyDeletelong BGU now....
ReplyDeleteLong full position on BGU
ReplyDeleteA weaker dollar in terms of commodities, puts a collar on excessive waste:
ReplyDeleteSo can you agree that US consumers habits have a horrible impact on the environment? Does driving a giant SUV all over town to cart the kids to a Chucky Cheese dinner and drop them off and pick them up at school because we don't think they should have to ride the bus make sense?
These are just a couple examples, there are plenty of others if you stop and consider the concept. An unsustainable, voracious commodities binge played a big role in our JPM-sponsored tailgate party.
A weaker dollar puts a collar on mindless waste.
BGU off....$3k gain.
ReplyDeletejeez talk about violent moves. i should have just stayed in my original positions....now i know why people don't trade this day...although a lot of people do fade the initial move after from what i've read.
ReplyDeleteAnyone else think this is a good time to start a Gold / Silver short?
ReplyDeleteBB short VXX same effect but get time decay as well.
ReplyDeleteThis market will have to break through 1180 to make it to 1190...
ReplyDeleteBB - I think we need to wait for confirmation of a trend change before shorting gold.
ReplyDeletehaving said that, i have some awful timing lately so I'm the wrong one to ask.
MAKO SHOULD OF COULD OF. 40 wacks for in action. Almost bought in the 21s, but noo a real chicken.
ReplyDeleteLong BGZ at $46.33 and $46.19 after hours
ReplyDeleteCan you believe it, guys, that even despite the amazing EOD rally, two of my Chinese stocks (CAAS and SORL) still remained in the red dumpster???
ReplyDeleteDavid - I honestly can believe it. I had the same crap happen with my stocks mid day and it's the reason I decided to bail...just awful timing. Yeesh.
ReplyDeleteholy sh*t! I roll out after the fed announcement, to pick up the extra beer for CP, and the market is in the red and I come back to find that equities exploded higher.
ReplyDeleteanyone hear credible commentary while it was happening that made any sense? I'm totally blown away
JB - We were oversold man. Not much more to it than that. We all knew it and were all waiting for it to happen. When it initially went lower it was nothing more than a shakeout...
ReplyDeletethanks tof!
ReplyDeleteWHOA....MOTR
ReplyDeleteStopped out of my BGZ after hours at $45.7 avg
ReplyDeleteIt was a good ole FED day shakeout that was juiced by the volitility. Anything can happen from here.
ReplyDeleteJust so you know Doug Kass believes we hit the lows for the year, which is nice. That's on the heels of his buy call on 7/27, 7/29, 8/1 and 8/4!
ReplyDeleteI suppose I shouldn't be talking...what with my move to cash at 1,140 today after dip buying at 1,240
A stressful weekend for the world's bankers and politicians, followed by a sleepless Monday, and all with a single question rattling around in their heads:
ReplyDeleteHow can we fool them again?
I liked kass several years ago, but then he seemed to be showing up on tv every other day and his calls got worse and worse
ReplyDeleteI Keep hearing the word AOL on the squawk box all day. WTF is it 1999. Does anyone own this stock? Might as well talk about woolworths.
ReplyDeleteMan I had a rough week. I closed all of my dip buying longs from what I perceived to be a bottom last Wednesday at a solid 20% loss. My portfolio is still up huge YTD but this was an eye opener. I haven't acted as stubborn as I did on these longs in quite a while, ignoring when prior support levels were broken and just waiting for (hoping for) a bounce. A bounce came but lo and behold it didn't juice my stocks and got my scared...
ReplyDeleteAnyway, I sold everything at 1,140 after what I perceived to be weak internals and strength eroding into the Fed meeting. At 1,100 I felt smart...now, not so much. Used too much emotion in my trades this past week. Time to regroup and allow things to shake out...putting myself in solitary for now.
Writing that down helps soothe my anger a bit...
ReplyDelete