Monday, August 15, 2011
08/15/11 Buy High, Sell Low
Today's rally is already as old as Elvis, and bears are celebrating having been steamrolled with 'dos dobles.'
David- Do you realize you're asking me to give up on 'Buy Low Sell High' in favor of 'Buy High Sell Low?'
Did I pretty much cover all the relevant topics in two sentences?
PS- 'Can't happen.' That's what happened last week. And probably what will happen this week.
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Stopped at TJ's this afternoon. Just opened a bottle of Mission St. Brown Ale, which surprisingly always tastes like it just came out of a keg. True 'draft taste in a bottle.'
ReplyDeleteDo you realize that not a single market analyst predicted last week's moves?
ReplyDeleteIt would have been one of those 'press the high-low' bet 5x in a row type calls. It only happens in Vegas.
So what are some of the 'can't happen' bets right now?
ReplyDelete(a) We bounce right back to SPX 1375.
(b) We sell off to 1000. Oops. I've read that one more than once. That can happen.
(c) The unemployment rate dropped to 8.9% in July. And btw, we f---ed up on the rate for June.
(d) A surprise bill to raise the debt ceiling by 4t appears out of left field.
(e) European finance ministers get ----faced on a Swiss bender and...solve the European debt crisis!
OK, so it's all fantasy finance. But wait, what happened again last week?
D.T. Topic of the evening? Why is draft better?
ReplyDeleteAlright, alright, alright. Gimme +200 on the DJIA for Tuesday. Red chips across the SPX, NDQ, RUI. Side bets on the BRIC.
ReplyDeleteCP- Last week sure looked like forced selling to me also.
ReplyDelete"D.T. Topic." Isn't that for people who QUIT drinking?
RB- You need to get out to the local pub more often. It just tastes better.
ReplyDelete2nd_ave -- I am suggesting taking a small loss on an ill-timed strategy before it becomes a large loss. You've done it many times before as a trader -- why not do it now? At the very least, I think you should let the MARKET tell you its future direction but drawing a "line-in-the-sand" (say at today's intraday low of 1187, like I did) and then switch from long to short when that line is violated. Wouldn't it be nice to make up on the short side the small loss you've taken so far on the long side?
ReplyDeleteFrom someone who was born in approximately the same era as many of us comes Tom Petty's various market perspectives:
ReplyDelete"Waiting is the hardest part"
"Free Falling"
"I won't back down"
"Runnin' down a dream"
2nd_ave, if you insist on selling your position at a higher price, then you may have to wait for 3 years before S&P rises to 1400 again. You are not an average J6P, however, and you have other options besides being in cash -- you can do trading! So you have to evaluate the opportunity cost of buy-and-hold for 3 year with a 0 return against the alternative of trading for 3 years and getting double-digit returns every year (or triple digits if you just follow TOF :)).
ReplyDeleteDraft is better because of the CO2 used to push it?
ReplyDeleteI always thought there was a difference between a keg tapped with an air pump vs one tapped with a CO2+N2 bottle?
2nd/RB - Gosh, it's about time I break down and get myself a 12 pack of brew. It's been many months, perhaps a year, I can't recall.
ReplyDeleteIt's more like the difference between fresh peaches and canned peaches. Or fresh apple cider and bottled.
ReplyDeleteI actually like bottled beer better.
ReplyDeleteCP- We can't have a regular contributor to the blog admit to going a year without a 12-pack.
ReplyDeleteDavid- I hear you. But is now the time? You want me to buy gold at 1765 and sell CSCO at 16?
ReplyDelete2nd, What do the charts tell you? :)
ReplyDeleteYou guys surprise me. I would rather drink at room temperature a pint of (unpasteurized) apple cider that's been fermented on the kitchen counter for a week, than an ice cold bottle of Sierra Nevada IPA.
ReplyDeleteCharts? What charts?
ReplyDeleteSeriously, when it comes to charts, my attitude is: Let the pros decipher them, and come up with a take. Then I'll try to incorporate their takes.
ReplyDeleteCP- Holly cow man. I agree with 2nd. Time to tip a few...everyday!!
ReplyDeleteFunny thing is, I was within feet and the thought had crossed my mind as I passed by the beverage isle in the grocery store tonight.
ReplyDeleteInstead, I was obsessing over the $12.99 pricetag on the 2.5lb bag of frozen chicken breasts in my basket.
So in checkout, I whipped out my store discount card (the one they make you keep in your wallet) and they whacked $6.50 off the price.
It hardly felt worthwhile shopping in that store today, (brand new store 1 mile away) when I could've done as well and loaded up on groceries+++ without overpaying had I been willing to drive the 66 mile round trip.
The least they could've done was post the discount price on the freezer shelf.
At least Poncho finally had a good dinner, he's been eating ground beef all week and much prefers chicken "meats".
I may as well try to read my own EKG and second-guess the cardiologist.
ReplyDeleteI don't have the time to learn to read charts properly. So I don't.
"2nd, What do the charts tell you?"
ReplyDeleteThey tell me there is a ton of 'Thank god I can get out here" money at SPX 1265ish.
"I would rather drink at room temperature a pint of (unpasteurized) apple cider that's been fermented on the kitchen counter for a week"
ReplyDeleteI could go for that too. The German Heffers are room temp unpasteurized.
66 miles RT to find a grocery store with decent prices! That gives me a much better idea just how far out you live.
ReplyDelete"David- I hear you. But is now the time? You want me to buy gold at 1765 and sell CSCO at 16?"
ReplyDelete2nd_ave, gold, unlike any stock, does not have a fair value because it doesn't have a steady cashflow. Instead, the price of gold goes down when the economy grows faster than monetary base (as was the case between 1980 and 2000) and it goes up otherwise (as was the case starting 2000). The price of gold is characterized by its RATE OF CHANGE, which is about 30% per year. It will keep going up at this rate, so $1765/oz will look like a bargain a year from now. CSCO may or may not look like a bargain at $17 a year from now.
You may be right, David. But it's a gamble I'm just not willing to make.
ReplyDeleteFor the record. Draft Beer is far superior. I just want to know why it is. Fresher? Gooder?
ReplyDeleteI can recover from a sell off in CSCO. If gold sells off hard and never looks back, I could be blogging from Chile.
ReplyDeleteRB- The way I look at it, God created draft beer. Man created mass-packaged bottled beer.
ReplyDelete2nd - Yep, it pays to have a chest freezer. ;)
ReplyDeleteSometime before inflation hits, I plan to buy a chest freezer myself ;)
ReplyDeleteBen Franklin, Best Quote ever."Beer Is God’s Way Of Saying He Loves Us."
ReplyDelete13 Bucks for 2.5lbs Wtf. Need to be long Tyson.
Forget Tyson. Buy CALM. After all this time, shorts STILL account for 36% of the float.
ReplyDeleteAs pointed out earlier- if you don't think it can happen, it's happening in this market.
ReplyDeleteGold - I think we could easily see $1628 and/or $1692, those were targets that were blown through without regard. $1760's probably isn't a good entry.
ReplyDeleteI'm hoping the gap up from ~$1675 doesn't fill, that could be mark a long sideways consolidation or even perhaps a downtrend.
As for tomorrow, Elvis says it all in the intro: "Thank you, you're a good audience. [cues the band] 'Steamroller.'"
ReplyDeleteI'm going to reflect on the vagaries of life for an hour before lights out. See y'all on Tuesday.
ReplyDeleteRB- Please. Your in no position at all to make this call. A keg of Schlitz in a modified fridge in your car port doesn't count.
ReplyDelete1692 - Date of Salem witch trials.
ReplyDeleteReading you guys has me drinking David's nadurra, tastes better the second time around.
ReplyDeleteGeez CP, even in Hawaii I can get 6.5 Lbs of Tyson chicken breasts for $19 at costco. Damm Texans must see ya coming.
This comment has been removed by the author.
ReplyDeleteSomewhat humorous.
ReplyDeletehttp://online.barrons.com/article/SB50001424052702303996204576496253290533090.html?mod=BOL_twm_col
Levels
ReplyDelete1346-1101
1194
1224
1252
$INDU hasn't revisited the 38.2 retrace either, we should probably anticipate the possibility.
ReplyDeleteInteresting, last year's low of 1010(binary 1010 converted to base 10 is 42)
That number 42 just keeps coming up.
BTW 2nd, DOW 1000, and yes I'll go all in!
ReplyDeleteNo sorry, 101010 is 42.
ReplyDeleteDraft beer is not pasteurized and must be kept cool even in cans. Somehow tastes better if done properly and stays cool. From an old beer drinker now on red wine mostly. BTW, Schlitz is a sweet beer. Budweiser and Pabst are not. Pabst was a favorite of mine. Also the old Falstaff of St. Louis, a nice bitter taste. So many good craft beers today. Sierra Nevada Pale Ale stands out as does Newcastle Ale.
ReplyDeletePasteurization. That's it. I like a drier beer myself.
ReplyDeleteThe Art of a waterfall decline.
ReplyDeletehttp://www.youtube.com/watch?v=t4CUNVYxxZM&feature=player_embedded
No question, draft beer hands down. Ever consider the fact that on a sub-conscious level, we all prefer draft beer because it is generally served in a pint glass (16 ounces) vs. a bottle's 12 ounces? Usually for the same price.
ReplyDeleteSomething to think about!
Just cracked the evening's first Deschutes Mirror Pond Pale Ale from Bend, Oregon.
Just love Portland- More craft breweries than Starbucks. And there's a Starbucks on every corner:)
Report from Buffet:
ReplyDelete* Berkshire was putting capital to work last week Monday.
* Europe can't escape their problems mainly b/c they haven't committed to printing if necessary as needed. The US has this option.
* Millionaires should start paying their fair share of taxes.
* The debt ceiling raise up debate was a dangerous game of chicken and he disapproves.
Nothing interesting I can find. Why do I wake up so early for this?
ReplyDeleteIP was good.
ReplyDeleteGermany reported a Q2 GDP gain of 0.1% q/o/q, 0.5 was anticipated.
ReplyDeleteFitch to the rescue!
ReplyDeleteMy gold puts are looking pretty ragged this morning. Think it was David or CP who warned me against this. I try and stay away from shorting into a parabolic uptrend, but sometimes can't help myself!
ReplyDeleteI'm still pretty much fully long and still believe we finish the year up significantly from here. I'm disappointed that the bad macro news stole away from a good earnings season and now we get into the quiet part of the quarter earnings wise where seem to loose faith in the market (the last couple quarters at least) and the market seems to drop.
SVM - I've got S1 at $9.23
ReplyDeleteXLF making a bottom here, finally?
ReplyDeleteIf we continue down the dip buyers will get real skittish which should add to the downside. I suspect we erase yesterday's gains today but we shall see.
ReplyDeleteWhat up with SD? Bucking the trend.
ReplyDeleteHEK getting VERY interesting.
ReplyDeleteJB- I had a dream about XLF last night. Seriously.
ReplyDeleteWhat's up with BIDU? Been hurting lately.
ReplyDeleteGPL - Accused of running a promotional scam:
ReplyDeletehttp://seekingalpha.com/article/287591-great-panther-shares-likely-to-continue-limping-lower?source=yahoo
Is this bearish? Might be...
ReplyDeletehttp://finance.yahoo.com/news/Credit-card-late-payments-hit-apf-3565073399.html?x=0&.v=1
Has COOL got it's Momo back?
ReplyDeleteMark - you need professional help! I had a couple of dreams last night, none of which had anything to do with the markets...LOL
ReplyDeleteNow if the market reverses the bearish open that will scare the shorts from yesterday and just bolster the dip buyers looking for more and confident that the world's governments printing presses will come to the rescue....today is an important day in my mind...
ReplyDeleteinteresting action so far this a.m., VAL has been resistance, ES and TF, but just now we have moved back into the bracket. One worry is that the A/D line has been very negative, given that we haven't sold off that hard.
ReplyDeleteTRIN is moving back towards 1, let's see if the A/D can sync up with the ES
ReplyDelete"Is this bearish? Might be..."
ReplyDeleteIf bearish, more so for banks and short term only? Once these debts are paid, banks no longer collect their insane rates. Maybe banks finally pass on low rates to consumer?
Once consumer is deleveraged and weaned off credit, and assuming he doesn't come back to credit, that means banks no longer skim off the consumer and the consumer doesn't pay the added expense of high-priced credit, hence consumer has more money left in his pocket.
CP- Yeah, my thinking. I also kinda wonder if the financial crisis has changed a generation, much like the great depression did.
ReplyDelete30% for MOTR the last 2 days.
ReplyDeletehttp://www.google.com/finance?q=NYSE%3ASH
ReplyDeleteLook at the 6 month chart...sure looks like a bullish setup to me, which is part of the reason why I'm long SDS. If this was 6 months ago we would be going long anything with this setup...why not from the short side now?
There goes COOL.
ReplyDeleteTOF- Because it feels like a win just being in cash on a pull back? And losing on the short side feels worse than losing on the long side?
ReplyDeleteBEXP is an animal today. What a move!
ReplyDeleteVery impressive rally so far...I suspect we gap up very soon to breakeven. I might have to cut my SDS loose.
ReplyDeletewe didn't break below VAL, TRIN is now below 1 and A/D is up to -1566, so now I'm looking for a long in either the ES or TF
ReplyDeleteGL guys.
ReplyDeleteI'm setting my stop on SDS at $23.4 from my buy yesterday. This market isn't ready to pullback is my take...
ReplyDeletewhat's the deal with BIDU man?
ReplyDeleteAlso, most of the leading momo stocks are red...if they flip their switch then i would be looking to go long.
wow...India hasn't even bounced...they're now below where they were when the rest of the world bottomed last week. That's a weak market.
ReplyDeleteCopper looking weak again.
ReplyDelete"China's middle class is booming."
ReplyDeleteCopper - Gold's fair price comparison to oil and copper yesterday was $1527, indicating a high level of concern?
ReplyDeleteI suppose PM miners will experience decent cash flow this quarter assuming PM prices remain high?
Put another way, gold is trading at a 16% premium relative to oil and copper.
ReplyDelete30:1 odds of being born in USA
ReplyDeleteBuffet interview with Charlie Rose
http://www.charlierose.com/view/interview/11845
Fitch - AAA - I agree as well, as Buffett said, b/c the US is capable of printing the debt down to "manageable" levels.
ReplyDeleteToday could just be profit taking after the large upmove we've had. I don't think this is the end of the bounce.
ReplyDeleteTOF- Great observation regarding the inverses.
ReplyDeleteSDS, QID, TWM, SKF etc. are big breakouts on huge volume above long term moving averages (w/ the 50 moving up through the 200) after a long period of consolidation.
These are the types of charts that make our careers- the MITK's, TZOO's, BOOM's, TASR's etc.
Unfortunately, these charts will start losing their appeal if the market breaks yesterday's high.
"wow...India hasn't even bounced."
ReplyDeleteWhat's the problem, are exports down? Has the Rupee gained too much against western world currencies, therefore cutting off export income?
Too many people chasing too few goods, causing inflation?
CP - there have been a couple of articles in The Economist recently regarding India. I see two major problems: culture of graft/cronyism and massive infrastructure issues. They really go hand in hand. India either needs to go the Western route (quasi-capitalism) or the China route (command and control). Either route requires that they drop the Caste system.
ReplyDeleteI still see India and China driving the next huge bull market, as I posted the other day we will see 1B+ folks move into the middle class and those folks become middle class via consumption.
Jesse - I think we could even break yesterday's highs and still have the breakout pattern setting up. I'm going to loosen my stops to around a 5% loss...I still think we get a waterfall drop again...
ReplyDeleteLouise Yamada was on the Breakout thing on Yahoo...
ReplyDeleteSLW - Experiencing trouble breaking out.
ReplyDeleteI think we saw the top in the rally
ReplyDeleteJB > I really like a lot of things going on in India longer term and think MMYT will be a big winner over time...
ReplyDeletehowever, i had a conversation with a guy from India over the weekend and he told me that the split between the rich and poor is getting worse over there (i.e., no middle class rising yet) in part because of corruption.
I believe if this market pulls back, it should be bought.
ReplyDeletetof - bingo, they've got to fix that otherwise there really could be civil war....FD - I still am long India, lots of exposure to BRIC's
ReplyDelete"I still see India and China driving the next huge bull market, as I posted the other day we will see 1B+ folks move into the middle class and those folks become middle class via consumption."
ReplyDeleteI'm inclined to agree, which explains why I think the market hasn't experienced an insane selloff, unless maybe you consider the current weakness insane(supportive). The question in my mind is what happens between now and then, which could take another half to full decade? The answer from my perspective is to attempt picking a bottom.
"Think it was David or CP who warned me against this. I try and stay away from shorting into a parabolic uptrend, but sometimes can't help myself!"
ReplyDeleteBB Canada, it is perfectly fine to short into a parabolic uptrend, which is superimposed on a near-flat long-term trend. But gold has a 30% linear y-o-y long-term trend, and the recent move up does not look parabolic at all. I heard it mentioned several times that over the past 10 years gold moved up in a set fashion, spiking up and then staying flat for several months (sometimes even a year!), etc. My point is: it is silly to short something that you know will be 30% higher in a year, and then 30% higher yet again in one more year...
SYK/MMM/XOM - Look like decent entries here to me.
ReplyDeleteCP > India has a lot more political / leadership hangups than China though, so the hopes that it will grow as much as China did in the 2000's is probably wishful thinking. China is able to mobilize it's economy a lot quicker because of the way their govt is set up is my take on things...
ReplyDeleteWNR - If the Libya situation is resolved soone, the WTIC/BRENT spread (~$20) should collapse and WNR should come off, is my theory.
ReplyDeleteIf Buffett is so well off and flush with cash and thinks highly of our future, why doesn't he use his cash to put some Americans to work instead of giving it to the government?
ReplyDeleteJust took off the SPXU. Nice trade.
ReplyDeleteTo be really bearish you need the market to get back below 1172. that was a big support area from last November and obviously the tops from last week's monster truck rallies.
ReplyDeleteAnd an area to reload shorts
ReplyDeleteOK folks, my 1187 "line-in-the-sand" has been broken, and I just sold all my VXX puts (flat on the bunch I bought after the US downgrade, $500 loss on the bunch I bought before the US downgrade).
ReplyDeleteUnfortunately, something happened a few years ago and Buffet has become a sort of puppet of the government.
ReplyDeleteHe has even been paraded in front of the White House on a couple of occasions after his "high level meetings" with the government.
The government has its own agenda. Let's be honest, they could care less what he has to say. He has only been used by the government to sway public opinion.
I have a ton of respect for Warren, but over the past couple of years, it seems as if both he and the government have started to privately panic (rightly so). If his advice and opinions were truly sought by the government, it would be like any other high level government meeting. It would be conducted in complete secrecy. You would never hear about it. Puppet.
I *am* aware that the best setups on the long side happen *after* the important support level is broken and then the price jumps back up above that support level. 1187 was the intraday high on Friday, intraday low yesterday and the bottom of the morning pullback today. So I am sure many traders are watching it and got stopped out right now just like I am. However, only a few of them will jump back in on the long side if S&P should rise above 1190 -- I'll try to be one of those who jumps back in for a trade to 1230.
ReplyDeleteI was just a little upset that I'm missing this downturn in the form of being short. I then just realized that I'm really up over 4% for the day as I was a little leveraged in TBT which I decided to sell after hours.
ReplyDeleteAs we say time and time again, sometimes cash is an outstanding position. Cash will go parabolic this year.
"Market in death cross mode: Louise Yamada"
ReplyDeleteSomeone else mentioned L. Yamada, I thought I'd post her comment.
http://slopeofhope.com/2011/08/mercy-should-alloy-our-stern-resentment.html
ReplyDeleteI TOTALLY agree with this pattern and is what I had in mind here when I went short yesterday. I was thinking we will not get back up to the 1,250 area that everyone is eyeing on this first rally, but instead would see a smaller rally with a big drop back, then a huge throwback rally to prior support. So basically EXACTLY what was drawn here. This pattern set up in early 2008.
just blew threw my sell area of previous day high on that spxu trade...took it off after watching it struggle to hit my target of 19.20...blew up instantly to 19.50ish. The way it goes.
ReplyDeleteSome weak leading momo stocks out there...
ReplyDeleteWe just had a small rebound rally on S&P from 1182 to the prior support of 1187, and that rally just failed. Preparing to join the dark side: placing a buy stop limit order on 100 shares of TZA at $48.25/$48.30 (sorry -- that's all the cash I have now from selling my S&P calls yesterday and VXX puts today).
ReplyDeleteDon't you guys think this is more about the financial transaction tax than anything else?
ReplyDeleteMark > I think the problem is Europe isn't really acknowledging their problems...I mean they are but aren't considering them urgent. They want to set up a European government where all countries will have balance budgets and then they can do Euro Bonds. You know how long that would take? Also, they think their current bailout fund is adequate in size which is silly.
ReplyDeleteI think lower stock prices and panic will change their mind.
Great chart TOF. I totally agree w/ it. I think there will be some tremendous opportunities on the long side during this bear over the next couple of years.
ReplyDeleteThe market will continue to test the downward sloping 200 day moving average several times over time. Just wait for instances when the markets are several standard deviations from the 200 day. If the S+P is at 950 and 200 day is 30% above at 1265, go F'ing long in a BIG way.
Wow-
ReplyDeleteGo to stockcharts.com and plug in SDS, TWM, and EEV. Go to weekly view.
50 week moving average has been resistance since '08. It is now support. Very bullish weekly charts.
So...if the week closes around these levels, and the weekly charts stay roughly the same, I will go into puts or leveraged etfs in a big way at the end of trading on Friday.
ReplyDeleteWell, my buy stop on TZA did not get triggered, and instead S&P decided to rocket back above 1190. This action is telling me that the right posture is long right now, since MANY people got stopped out on the break below 1187 and now the northbound train is much lighter. So I just bought 10 September 119 SPY calls for $4.09, and I'll sell them if today's low is violated (say S&P drops below 1180).
ReplyDeleteFactory output - Auto sector was the bright spot.
ReplyDeleteDavid,
ReplyDeleteI still believe you need real demand, not just investment demand for Gold to have it continue upwards. I read that demand is falling off due to high prices, which makes sense. Why buy gold jewelry when you can get platinum for the same price and it looks just as nice and generally if higher valued?
I started buying gold stocks back in 2000 and owned quite a few of them over the the years, but sold the last of them last fall when gold was around $1350 and India demand was falling off (mistake in hindsite).
To me, it feels like 2008 and we've pushed too far to the upside and we should get a good-sized pullback soon.
Now that the break of 1187 looks decisive now, bought 3 more SPY 119 calls, this time at $4.25 -- will sell these "extra" calls if S&P drops to $1185.
ReplyDelete"I still believe you need real demand, not just investment demand for Gold to have it continue upwards. I read that demand is falling off due to high prices, which makes sense. Why buy gold jewelry when you can get platinum for the same price and it looks just as nice and generally if higher valued?"
ReplyDeleteBB Canada -- MANY observers have commented already that gold recently became an alternate currency. Has jewelry demand for gold risen 10X since 2001? No, but gold did rise almost 10X. Gold is simply responding to $USD printing every year, which happens at a rate of about 30% per year.
"To me, it feels like 2008 and we've pushed too far to the upside and we should get a good-sized pullback soon."
If you feel like you can time pullbacks in a security that has 30% annual uptrend -- may the luck be with you! I don't think I have such astuteness...
Well, today's shakeout below 1187 forced me out of VXX puts (which weren't working because VIX futures were in backwardation and near-term fear was not subsiding) and into a twice larger position in $119 SPY calls, after having sold $120 calls yesterday when S&P was above 1200. So assuming that S&P rises to 1230 now, I will be happy about my actions yesterday and today. :)
ReplyDeletehttp://chart.ly/jc726ia
ReplyDeletebeware of fakeouts....they're happening all over the place. i'd rather take a longer term view and set stops a little wider than normal...it's all just a game anyway.
ReplyDeletelonger term view = trend is down...look at SH as your guide...classic breakout pattern
ReplyDeleteMark - Vad posted this link on the cc site re transaction tax... http://bit.ly/q9gGYT
ReplyDeleteRetesting 1187 from the upside now -- looks like that level is holding so far...
ReplyDeleteTOF -- I agree with you about fakeouts. I almost *want* myself to be faked out a few times now, as I haven't practiced taking a small loss and "flipping the pancake" quickly if the charts suggest doing so for a LONG time now. :)
Add SODA to the list of totally busted momo stocks (NFLX, TZOO, REDF, SIFY, SFLY etc. etc.)
ReplyDeleteIf this pullback was the start of a new bull market, outside of MITK, we'll be hard pressed to find many momo stocks to lead the way.
GMO - Off @ $3.90, stopped out. Probably low of day, I'm Honey Badger at this point.
ReplyDeleteSDS, weekly view is as you guys have said, B/O with heavy volume. Weinstein, Stan would call this a buy based on the break of the 30 week ma where you would buy the break or wait for the retest. Seems to me that we are in the retest stage now and TOF is right on here. Just a matter of how you want to play it.
ReplyDeleteThe 30 week ma generally corresponds with the 100 day ma for the dailies, both compelling.
Gold, yes we could pull back, but with negative real interest rates it will continue to have a bid (bullion) as an alternate place for your money.
Curious Kyle, if you hate swing trading why do it, why not focus on a method congruent with your personality?
Most likely will scale into SDS.
T3d - Good Point
ReplyDeleteCP- Your whole position?
ReplyDeleteTOF, I agree that the big red arrow is pointing down now, but being an astute trader you have to admit that today's break of 1187 ran MANY stops, and the fact that S&P reclaimed that level and just now has tested it successfully from the top suggests that this rebound rally should have legs to at least 1220... Unless, of course, the market gaps down to 1150 tomorrow and finishes the day at 1100. :)
ReplyDeleteDavid, can we NOT do that? Thanks.
ReplyDeleteDavid - I don't know anything for sure, unfortunately, when it comes to the market....all I can do is make me best guess. My decision to just go full boat into SDS on one day was a bad one so I would recommend doing what T3D is saying...scale into it. We can still see another 5% move up and be in a down trending market...
ReplyDeleteGMO- Yep, all the core position gone, dropped below my tolerance level one too many times.
ReplyDeleteI'll wait for lower prices, too much risk considering the circumstances.
THQI 1600@ $1.80
ReplyDeleteSanta Monica college gunman- usually an indicator for traders to buy futures.
ReplyDeleteActually TOF, we do not know yet if going full boat into SDS is wrong, too early to tell. It was a much more aggressive approach, but seems to suit your style.
ReplyDeleteOff @ 1.85
ReplyDeleteI'd love to see some big drops in the market if only so I can get better prices on longs.
ReplyDeleteMy favorite stocks right now for the longer term would have to be:
IBKC
MMYT
DXPE
BCPC
CP- Got it. Thanks.
ReplyDeleteT3D > I'm willing to bet we go higher first...if history is any guide then it's just way harder to pick one spot on the short side and stick with it. There is a global vested interest in higher prices going against you so to assume you're right at that time is just being stubborn. I don't know why I did it...but I have a feeling I will be stopped out first before the true drop.
ReplyDeleteFactory output best in 4 months.
ReplyDeleteI guess you guys already knew this, but I just found out, so now you know too, in case you weren't aware.
TOF-
ReplyDeleteAs iron maiden (or even the old 2nd ave) use to say "be quick or be dead"! :)
Well you are probably around B/E, you can always reduce exposure some and seek clarity.
ReplyDeleteNot advice just thinking out loud.
FED still extremely loose, global slowing growth is attempting to overwhelm this tonic.
Mark - Funny thing, I overlay GMO and SVM on the same chart and they look almost exactly the same, LOL.
ReplyDeleteNot that it matters, except SVM offers a balance sheet and it appears two of their four products is selling near all time new highs...
Who knows, maybe the Chinese government will buy them out, or something... They bought GMO and it popped, could happen to SVM as well?
T3d > My risk isn't that great...shit I've put 100% in far riskier things than SDS before...like Mark said it's tougher mentally when you short and you're losing money for whatever reason. So even if I only lose 5% it will "feel" like I've lost 20%.
ReplyDeleteThe market is trading up no bad news...that's a good sign if you're long.
OK SDS, first scale 23.80.
ReplyDeletePlan is the weekly has to fail to take this portion off. If I get nervous I will use IVV which I can trade w/o commission to manage.
Market could easily trade upto 1224 or 1252.
IMO,
ReplyDeleteI think we are moving back to a market based on fundamentals, stocks are cheap, earnings are good and today was just a correction / profit taking in the rebound from the fear-based selling of the last 2 weeks. Won't be straight back up, but wouldn't be surprised if we don't get a good entry point on the way back up.
Looks like Demark Pivot of 1198.08 is putting a lid on things going into the close
ReplyDeletePicked back up 3K shares of MITK @ 8.80.
ReplyDeleteBGU at close 10% allocation
ReplyDeletePill > Ballzy...betting against T3D.
ReplyDelete2nd may say +500 gap up tomorrow.
ReplyDeleteI say +50 gap up.
"Pill > Ballzy...betting against T3D."
ReplyDelete:) I think we are just talking about different time horizons here. T3d and TOF have a horizon of several weeks and are ready to endure a few more days of the upside.
Pill and myself are playing a time horizon of a few days -- he will probably close his BGU tomorrow at 1220 and I will start scaling out of my SPY calls tomorrow at 1220 as well.
MS,BAC,C led the big banks down today in that order all over 4%.
ReplyDeleteAm I the only one looking at FAZ, the 3X bear financials?
I think we get a big move tomorrow. Most likely higher.
ReplyDeleteSDS weekly, based on the chart stops could be set at the following levels based on your preference:
ReplyDeleteAcquired 23.80
Potential stop levels
22.50 -5.46
22.34 -6.13
21.99 -7.60
20.79 -12.64
I would not use 22.50 instead 22.47 or 21.99 instead 21.94 and I prefer mental stops.
Today's range closed just about 50% level.
Not ballzy to bet against me, I can be easily wrong, but if I do not take that weekly SDS chart trade here I should just turn off the computer and play tennis.
GL
i'm just kidding fellas...hopefully we all make a killing and don't have to worry about anything in 5 years except which brews taste the best and why CP can't see to get himself around to buying a 12 pack.
ReplyDeleteI did my best David impression and "found" another $500 to trade with so I found some $117 SPY puts expiring this week and rightly bought them after the close when SPY was at $119.75 (you can trade SPY options until ES closes)
I say we go to at least 1220ish short term...buying into the 1187 holding today theory. T3D is looking out a bit more I think as he talks about scaling in with the SDS. I may unload a bunch of longs as we approach 1220 to 1250. Did well with the SPXU trade from yesterday so I'm pressing the bet.
ReplyDeleteMaybe we should start a collection for CP and send him RObear's finest ale courtesy of the fellas from the hood.
ReplyDeletelater
I loved TBT over 27 yesterday. It dropped to 25.85 today. I won't analyze the chart. If I loved it over 27, there's no reason to hate it here.
ReplyDeletePicked it up 26.13.
Don't love it to much Jesse. I loved it at 34 and I'm not loving it right now. Luckily it'
ReplyDeletes is a small position. Hopefully decay wont crush me on this as a longer hold and pray position. I have never had a failed TBT trade. Trying to keep that alive against my better judgement.
How low can they go?
Not a bad day today with a 1% pullback considering we were up 7.5% in the previous week.
ReplyDeleteOption expiration this week as well which tends to be an up week. According to Springheel jack over at SOH, SPY $128 is max pain, so could be some pull from these higher.
Jesse -- TBT in the short term will MOST LIKELY be VERY correlated with S&P. So a long TBT position makes sense now, since I think the chances of tomorrow being an up day are greater than 50-50.
ReplyDeleteDavid - Why are the odds of tomorrow being an up day greater than 50-50?
ReplyDeleteI'd say it's about 99% odds of a big down day tomorrow...only reason: we had a huge layer of uncertainty added to the market today with the European news...and at this point we don't need uncertainty.
ReplyDeleteUnfortunately the only way I see we get out of this mess is if they just kick out Italy, Spain, Portugal, Greece from the Euro. They can they devalue their currency and start anew. That would be very volatile for our markets for the near term, but longer term it would resolve the Euro issues...however, France isn't in as good shape as people make them out to be.
ReplyDeleteAlso, with debt levels as high as they are in the US, we are going to have very big problems longer term that will unfortunately put a cap on the rallies in the market. The reason being, as everyone knows, we really can't continue to monetize our debt without big repercussions (inflation, pissing off every other country in the world). So we will try to pare down debt a little bit over time.
And if we manage to grow at faster rates then we will see unfortunately see big rates of inflation kick in because of all of this massive intervention, so they will need to cut down the Fed's balance sheet as a result. What we're left with in terms of a market is probably this huge trading range occurring for years. I love the idea of buy and hold on individual stocks but unfortunately I'm highly skeptical of it being a good strategy for at least several more years.
I hope I'm wrong but it seems that trading this market is the best way to go about it for a while...
Umm...APWR?
ReplyDeletewtf
TF - I don't see a big down day tomorrow. European problems are pretty well known and expected at this point. On the other hand US economy might not be in as bad of a shape as the market already priced in. Basically we price in a recession that might or might not happen. So far HD earnings look good, automakers rebound. On the more technical side we tried to go down deep today and failed. The fact that it is option expiration week does not help the bear argument either. Any real negative news you saw after market that is not yet priced in?
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