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31
Oct
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By: Idan In: Trading Blog
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Follow me on Twitter: korenidan87
Any thoughts about positions or charts over the weekend? Post them here!
A lot of people have been thinking about the 1020 level. The way i’m thinking of it… is as soon as we touch 1020-1025… we are hitting the prior low. This has not happend since June-July. What would happen is that I believe we would form a H&S. However the bears will let only a smal tiny right shoulder form and then break it down very quickly so that we continue moving lower. IF we never each 1020-1025 and start rallying very soon… then we might have another move higher.
Bullish Case:
The ratio of puts being purchased divided by calls ($CPSE) is the same as March 9th, 2009.
Confirmation #1 that the bottom is near.
The 41-trading day cycle is showing a major bottom is comming in the 1014-1035 area in the next couple trading days.
Confirmation #2 that the bottom is near.
Bearish Case:
1014-1020 area has a lot of support, if these levels get taken I expect the market to drop rapidly to 985. If 1014 breaks… P3 is definetely a possibility. If 985 breaks, P3 has started.
I’m out on all of my long call options on a break of 1014.
I’m out of all my long stock at sub-985.
October 31st, 2009 at 11:20 am
http://social.stocktock.com/photo/very-bullish-chart-for-2009?context=latest
October 31st, 2009 at 1:02 pm
Great post Zee.
October 31st, 2009 at 12:24 pm
Zee do you think the 1020 support will be the bottom? Im in the camp right now of a mini rally Monday due to the over sold condition then later in the week with all the economic data coming out and I do think the unemployment number will break the 10% mark and that will send the S&P to 950 by years end..
October 31st, 2009 at 12:25 pm
Im all in cash right now anticipating a slight rally Monday and Tuesday then right back to EDZ and SRS for the rest of the week.
October 31st, 2009 at 5:01 pm
year end? Might hit it by end of week
October 31st, 2009 at 1:19 pm
Thanks for the post Zee. It will be interesting to see if your theory plays out.
October 31st, 2009 at 2:13 pm
Everybody should be open to both possibilities of P3 and 1120.
This is one of the most important weeks in a while.
Dave: 1020 will likely hold on monday/tuesday.. but wednesday’s FOMC could kill 1020 and so could the unemployment number.. GL everyone.
Wednesday, November 04, 2009
Economic
2:15pm FOMC rate decision
Thursday, November 05, 2009
Economic
7:00am BoE rate decision
7:45am ECB rate decision
8:30am Preliminary Q3 Nonfarm Productivity (last 6.6%),
Q3 Unit Labor Costs (last -5.9%),
Initial Jobless Claims (last 530K),
Continuing Claims (last 5.797M)
Friday, November 06, 2009
Economic
8:30am Oct Nonfarm Payrolls (last -263K),
Oct Unemployment Rate (last 9.8%),
Oct Manufacturing Payrolls (last -51K),
Oct Average Hourly Earnings (last m/m 0.1%, y/y 2.5%)
October 31st, 2009 at 6:46 pm
Agree with the bearish scenario, but the largeer magnitude wave count, in my humble oppinion, is a little too bearish. Please correct me if I’m mis interpreting…It looks to me that the count on latest chart is that we are entering a major 3 wave?? This is too bearish and would take this market so far down, I just can’t get on board…I would count it as an ABC to the current high to complete a 3 count B….and now we have begun a C down..again, bearish, but not 3 of a 5…if I’m missing something please feel free…new to the site, but have been a student of Elliott Wave for ~ 20 years.
November 1st, 2009 at 12:00 am
so, how low do you see us go?
The SPY will fall down to the 200 day moving average and find support.
I have the SP-500 completing the A-leg of a large A-B-C corrective at about 1030. Then a rally to to about 1070 to 1080 for B-leg, followed by a C=A drop 70 points back to about 1000-1010.
http://pugridironsma.blogspot.com/2009/10/oct-30-2009-afternoon-update-wave.html
October 31st, 2009 at 3:26 pm
The only problem with that is that your ABC long term is not correct. We have not seen a C pattern to the downside yet. Both Dow and S&P made new highs in 2007, and the Nadaq did not make new lows this time around… therefore at least one more push lower either a C or a Wave P3 is required, much like in 1929
November 2nd, 2009 at 12:26 am
you’re a fucking idiot
Margin debt still at highs not seen since 09/08. At or near record highs which has flagged all
downmoves since 1929.
3 inside reversal days inside a month. 200 point rally thursday was met not with follow thru
but an op to sell by pros. A bounce is not a slam dunk on Monday, Fridays selling was not
panic driven and too orderly to indicate a bottom. The put/call ratio and the vix were coming
off fresh lows indicative of overly optimistic views.
The fed will not change its lang, it is supporting a new bubble.
I am very interested, almost bewildered by citibanks response to an analysts view that huge
writedowns are coming due. Not a denial, not a refutiation. . . just amazing that the analyst
figured it out?
October 31st, 2009 at 2:12 pm
Where can I see the figures on margin debt?
Hi Guys,
I don’t expect any huge drop. I guess that SPY will park at October 2nd lows.
Anyway, I am monitoring the following stocks, for long positions.
My criteria was:
- All of them already had the bullish cross (MACD & STO)
- Their PPO (21,89) reached the maximum negative divergence and they started to recover
NTES and FLO – Earnings after the middle of the month
UTHR – Had earnings last Friday
All major banks are reaching their maximum negative divergence. I expect a reversal very soon. Right now Citybank is the only one that is starting to show any life. Anyway, I would say that it is to early to play with them. But they should be monitored very closely
Enjoy & trade wisely
I’m counting on us dropping to near 1020 sometime next week. After that, I have no idea whether we bounce or drop so I am very short term bearish and very long term extremely bearish (in terms of the dollar anyway) but a Santa Claus rally is more likely than not.
October 31st, 2009 at 5:03 pm
I think when we start seeing retail sales that will squash any Santa Rally this year unless we fall hard in november
Down sprial of hell of nearly 52k since 10/2. Was short, when market rallied each time including the 200 points run up.
1020-> 1068 down 32k. first week.
1068-1095 down 6k second week.
115-122 amzn down 4k third week.
dow 9830 -> 9920 down 10k fouth week.
Pretty shitty outcome there. As market gets more volatile, I am retrenching to reduce risks.
Still holding 500 amzn short and 2 dow contracts short. It’ll probably take me 6 months of good trading to get that back.
October 31st, 2009 at 3:34 pm
Before coming back you need to take a week off to relax and clear your mind..re-evaluate your trading strategy..
Also if you post your trades intraday here, there are many guys here who are very willing to help.. I have a question.. since you took a $6 loss from 1068-1095 I assume you were short. Why are you short more than ever now at 1036.. BUT YOU COVERED OUT OF FEAR AT 1095? Complacency in the market will get you killed.
Ok your short at 1068-1095 (and you likely covered).. now that were 7% below from when you covered your shorts initially, your short even more? WTF?
A word of ***caution***, next week is likely to get even more volatile with Fed decision rate + unemployment numbers.
in the end it’s only money…
October 31st, 2009 at 3:37 pm
Didn’t realize I posted the paragraph of shorting thing twice.. darn..
October 31st, 2009 at 4:39 pm
Great Job Zee..very balanced view of both sides.
It should be interesting next week.
October 31st, 2009 at 5:10 pm
Taking some time off to regroup is good advice. All traders go through rough patches where nothing seems to work. I had the worst two weeks of trading that I’ve had in many months during mid-October. The tendency is to press on trades after taking losses and this typically leads to more losses. I could feel myself heading that way so I just took a Friday off from trading so I could have a long weekend to get my focus back.
Everyone needs to have a general trading plan with rules that keep things on track. Looking back at those two weeks, it was clear where I had gone off track from the plan that I know works for me. After regrouping, I finished up the month with a strong week and I hope to carry a renewed focus into November.
It’s a tough game but sites like this can make it a bit easier. I definitely owe some of the posters here a steak dinner!
Best of luck to you in November.
October 31st, 2009 at 10:25 pm
I agree 100%. Trick is admitting/recognizing it’s time to step back.
I took 3 days off last week.after going long into GS; seeing it was a poor trade minutes after I got in; but not selling because I was ticked that the stock wasn;t behaving as I thought it would/should. I held on stubbornly while it dropped thru another R knowing the entire time what was happening and being too stubborn to get out w/ a break even. When I begin cursing a trade and daring it to go against my plan- time to call it quits for a few.
October 31st, 2009 at 11:14 pm
Or dropped thru another “S”. Darn alphabet- tricks me every time.
Unless we get a gap up of 50 points on the SPX I’m going to make a nice profit on my 3X short ETF position.
Going to stay open minded about P3. This was either a profitable trade for me, or a profitable investment. Either way I win.
Looks like we are creating a massive MA pattern on the over the last 15 years. Target is the abyss.
October 31st, 2009 at 5:05 pm
Which etf you holding?
1020 is the completion of a rounded reversal from 10/02. Is it the end before the completiion a head and shoulders that brings us to about 940, the market will tell this action. The dominant down trend (from the Oct ‘07 highs) has held firmly at this point. Do we need to test the gap and the confluence zone at 1120 area, I think so, but not before this rounded reversal finishes and gives a nice M pattern to look at. A break above 1130’s/1160’s ( I know the dispertion is wide) but the market may have to test the 61.8% level in the 1230’s before the real downside action begins. Just my thoughts and the market will show it’s true hand soon enough
Doomsdayers: Don’t forget the Fed and it’s HEnchmen (i.e. GS, etc). The infamous ‘They’ will pull out all the stops to rally this pig one more time to year’s end: Market tanking now and you can kiss the holiday shopping season and our retail-dominated economy with it.
Nope, it will be stick-save after stick-save, and bear trap after bear-trap short-covering rally thru Dec.
Just my $.02
This is why I’m in PUGridIron’s camp: Rally up to 1080-ish for right shoulder, down to 1000-ish and then finishing December with a blow-off 20% run-up to 1200 before the big dump.
I’ll keep my VIX 30’s open in case we do fall thru 1020, ditto my AMZN 115-105 put spread, but I’ll look to pick-up SPY 106 calls if a bounce looks like it is in the making Mon, protected by those VIX calls.
Finally, my HOG Feb 18 puts have almost doubled, picked them up at $.30 I was surfing CraigsList and ran across a broker with about a half-dozen 2007- 2008 Harley repos, they now have to compete with their already-sold inventory. Yikes.
Who leads the market? From what I have learned here; Banks and financial stocks.
Short of everyone working for the government, which would take time anyway, banks are in a catastrophic condition.
http://newsusa.myfeedportal.com/viewarticle.php?articleid=462
October 31st, 2009 at 6:57 pm
The banks have been broken since the start of the big rally – why will the party stop now?
Also, liquidity has been leading the market higher. Short squeezes(remember Thursday?) will contribute to the blow-off top.
November 1st, 2009 at 5:21 am
Their ‘numbers’ are catching up to them. GMAC back again, ING cut in two, FDIC Friday’s and their party was at our expense.
* Rate Of Bank Charge Offs Surpasses That Set During Great Depression:
“…yet another comparison with the Great Depression emerges, one that shows that the current period is in fact even worse than what occurred in the years after 1930. Moody’s has released an analysis which shows that the most recent rate of bank charge offs, which hit $45 billion in the past quarter, and have now reached a total of $116 billion, is at 3.4%, which is substantially higher than the 2.25% hit in 1932, before peaking at at 3.4% rate by 1934.”
* GMAC Becomes First ‘Bank’ To Come Back for a Third Bailout
* Moody’s Sees Bleak Prospects for US Banks
‘For most banks, third-quarter earnings were at best modest and in many cases they recorded sizeable losses,’ Moody’s said. ‘As the majority of our estimated credit costs have yet to be taken, we believe earnings prospects for the fourth quarter of 2009 and for 2010 are bleak for many U.S. banks.’ — Moody’s
Links for these quotes included in above link. Now, this does not mean there will not be another party (or that they may try to keep this one going), but they will first need to create a situation of panic before congress funds the world banking system again, is my point.
While I would like to be as bearish as many people here, I don’t want to let greed cloud my judgment and analysis. As of Friday’s close the VIX and Dollar both locked in “sell” signals for Monday, which means we could actually see a huge (200 DOW point) green bar. The MACD histogram on SPX, DOW, & Nasdaq are all about to cross over to the positive side, just one more reason for me to take caution. Stochastic on all three index locked in a “buy” signal. It’s true that the market can do whatever it wants (instead of a 200 DOW point pop we could get a 400 DOW point drop), so I kept all of my short shares. However, I used 8% of what I made since shorting on October 19 to buy up what I could towards Friday’s close, and if we get an early Monday weakness I’ll buy more. SPX 1020 should hold for once, and a strong one, as 1014 is 38.2% retracement of the big drop. Any major resistance that is broken solidly should NOT break on the first two back test attempts. October 2 we got a strong bounce off 1014, and this time we should get a bounce that is at least 38.2% of the first bounce. I don’t want to be trapped in a squeeze situation (although all my shorts are protected by calls). I am still neither a bull nor a bear.
In my projections for the rest of 2009, I still see possibilities of SPX 800 (or much lower) or SPX 1120,
I think there are a couple things to watch out for on both sides. I think everybody needs to be aware of traps being set on both sides now. Evidence of this is already showing up.
Bears side: Any gap down or move down will more than likely find support at the candles from the end of August. Consider taking profits around 1031, and for sure by 1027. You can always, and will, find another entry.
Bulls side: When you decide to buy this next dip (if you haven’t already) I think you could get a range from the low on the 8th of October, and quite possibly at the very most the lows on the 22nd and 23rd of October. If it were to get above these areas, we could retest the highs, but I don’t see this happening.
These are the best scenario’s I see setting up for both sides on the SPX. I don’t expect any sudden movements (150+ points) in either direction until the next bull trap has been set. The bears have been diligent in protecting their profits, and are expecting a bounce to profit from. I think there will be a point this week when all the bulls gain so much confidence again, that the (bear?) rug will be pulled out from under their feet quickly.
For options traders out there, I think this is gonna be rough on theta, so protect yourselves, and don’t let it eat you up. Personally I expect to see this market whipsaw over the next couple of months.
Good Luck,
Ox
People all over yahoo boards are saying they’ve loaded up on FAZ because DOW is going to 3000 , 5000 or 6500..
I have posted my ‘yahoo sentiment indicator’ over the months at ST, and everytime we are close to the theoretical cycle low, Yahoo posters always claim the worst is coming for the stock market… lmao.
November 1st, 2009 at 2:23 pm
I’ve loaded up quite a few call options on Friday. Any more weakness on Monday will be my second chance at adding more call options in anitcipation of a squeeze. Too many people shorted last week, and I had trouble getting my broker to find shares for me to short. That set off the alarm that we’re going back up, fast. I’ll start dumping my NOV call options on November 11, or when the S&P goes past 1060.
November 1st, 2009 at 2:24 pm
This is my last post of my bullish case.. It was fun. Enjoy.
These were all written on Nov/01.
FAS Boards
rprx_pos:
I know it’s only sunday but I’ve been watching futures all weekend.
It dont look good for FAS longs on Monday… Huge gap down tomorrow.
We could see FAS at 25 by next friday.
FAZ could hit 100 by December.
Thank me later
getalife443 responds to him with ‘what a waste of a weekend LOL!’ & erainmaker says: ‘Don’t you find it a little unusual tha they have been stuck on negative 239 since Friday PM?’
LMAO.
FAZ Boards
labob 49: I got my fas puts all set for tomorrow’s crash of the dow again. trust me……real easy..7800 dow not without a shot
sht_house_r…: I sincerely believe and am extremely confident…the SPX is not just going to pullback…it is about to collapse.
ceramicgall…: I’ll be happy to see Dow 8000. That means FAZ will be trading around $58.
AMZN Boards
jerseycroon…: Look, this stock is worth maybe $50.00 now but certainly States with deficits are soon going to demand that AMZN pay taxes. Also, this book reader is not going to amount to much…. Believe me it won’t. So mow you’re stuck… well no your not. I guarantee this stock goes down to $30.00. Yes, $30.00…… It was all hype….. Wall Street has been known to do that here and there. Just sell and maybe you even made some money. If not, it will prevent losses. I am currently tryimg to live a purer life…
sxyam: Fair market value for AMZN this year $60 and next year $75 base on the earnings est for this year and next year.
GS Boards:
sledkane: THIS WEEK IS THE ANNIVERSARY OF THE GREAT DEPRESSION CRASH BLACK THURSDAY ,BLACK FRIDAY , BLACK MONDAY ,AND BLACK TUESDAY
powerplayab…: I hope your right we need a 500 pt drop!!!!!!!!!!Gvt stopped buying stocks last week -so hopefully no more propping up!!!!
AIG Boards:
gusvondel12… Possible? Dow retest 8500
crfelix@sbc…: How about 6500? 666???
piranhalad: Well, we’re definitely going through a correction right now.
It would be really nice if the Dow were to retest 8500, but it’s unlikely that it will go that low. Again, the lower the better, since it gives us a chance to re-enter the market and get some good deals.
AS2009 1 minute ago
TRADE IDEAS:
Here are some ideas on my picks for the week, based on my analysis of multiple stocks that were posted by different people.
1. WFR: Currently at strong support @ 12.3. However, if it breaks this level, the next support is at 11.78, 10.4. I would play this with a bracket trade to the next resistance / support area. The next resistance (if we bounce from 12.3 is 14.96-15.13 area.
2. PALM: The fact that it broke and closed below the 200 MA is very bearish. I see this as a continued play down to $10, before a possibility of a bounce. This one also confirmed a break of a double top pattern on Friday. Entry would be on a continued break below Friday’s low, with a stop just above the 200 MA daily.
3.LVS
- On the daily timeframe – LVS on Friday pierced the necktie of the 20/50 MA and closed below the 10 MA
- It also touched the top of the channel and bounced back down from it – the thing is on the weekly timeframe, this channel actually looks like a bull flag, with volume decreasing / lower in the same timeframe
- Also the last time it formed the bull flag on the weekly, it retraced 50% and bounced from the 20 MA. It has done this same 50% of the move up from July with this week’s candle and bounced from the 20 MA weekly this week.
- Based on the daily indicators, this thing looks ready to pop upwards, once it can break the channel line of the bull flag @ 16.70. However, on the weekly timeframe, this could consolidate some more
I would enter calls, if we get a high volume breakout & close above 16.75 as the next tgt is 18 … supports are LT rising trendline @ 14.32 and horizontal support @ 13.50
I would welcome other people’s thoughts / inputs on the above …
Cheers !!
Good points one and all. I’m biased obviously, as I listed on this board that I was 50% short 25% long and 25% cash when I first posted her 3 weeks ago. Then I updated that this past Monday early morning when I became 100% short, where I remain now. Obviously I don’t have a crystal ball, and have only been doing this 3 years, so I have far less experience than others on this board, but I really don’t see any reason there won’t be a continued correction, and a major one at that. Perhaps some whipsaws here and there, but I believe that we’ll be reversing the patter of the past 7 months, and will now have maybe 4 down days to one up day, until we get down to possibly 750 on the SPX and possibly 8300 on the Dow. I see a large bullish sentiment here, and while it could turn out to be right, I’d say be very cautious there, as I expect we’ll have a time where we drop 5%+ in a single day very soon
November 1st, 2009 at 5:30 pm
No disrespect intended, but the 2 facts that 1) you have only been doing this for 3 years and 2) you really don’t see any reason why there won’t be a correction and a major one at that, is in and of itself evidence that the market will reverse course and shoot up. Never be 100% short or 100% long. It will kill you!
November 1st, 2009 at 5:45 pm
‘you see a large bullish sentiment here’.
not really.. I know only a couple bulls and semi-bulls on this board (bullish bear, Fritz., woo…)
I think it’s just me, but after working on a trading floor, you realize that the big sell off in march was ‘man-made’ with the intend to stir retail investors away from equities while they can profit..
They already made money on the way down.. now they’re doing it on the way up. Why not join them?
November 1st, 2009 at 6:06 pm
There is very little money to be made on the upside. To join them now, is to join them on the short side. I actually agree with goingtoretireoneday on the basic direction the market will take over the next few months, certainly by Jan 2010. Its just that there will be some violent up days as the market starts its descent and those 100% short will get wiped out. I’m 70% short and was 80% short 2 weeks ago. When the bear market rally shoots up again, I will sell calls and thus increase my short percentage. If we continue to drop, I will increase my calls until we hit 1014. I write out a plan of when to buy and what to buy, when to sell and what to sell of calls and puts, when and what to short and cover, and try and stick with it without letting greed or fear interfere. Recently I’ve been leaving a little to follow Idan’s trades.
November 1st, 2009 at 6:13 pm
How do you know they are on the short side? Are you on the trading floor of Goldman Sachs?
November 1st, 2009 at 6:26 pm
I do not know and I am down 11% since April, so clearly I do not have an inside track. But the dollar seems due for a reversal, 3rd quarter earnings are coming to an end, the real PE of the S&P is still well over 100, the 2010 mortgage resets are upon us, commercial loan crisis just starting, CIT bankruptcy could cripple small business, unemployment is going over 10%, the government has few bullets left without triggering hyperinflation (which I am insured against) and the last few opex’s have left institutions with huge caches of stock that has never been disposed of. So there is no reason not to be more short than long, although the S&P could still shoot up to 1225 and back to 900 in a single day, wiping out every amatuer short before the crash.
November 1st, 2009 at 8:31 pm
You are all missing the mark.
Swine flu will tank the economy and the system, up here in the north
it is filling hospitals any emptying schools and malls.
The danger is not herds of elephants, its microbal virus about to destab thru fear and death. The cost of keeping a few alive will skyrocket as the system of greed and profiteering ruin the free economies.
consumption of a type not previously known.
You can bullshit away GDP, falsify employment and P/E’s, you can do
phony bank stress tests. . . . but the entire world sits teetering on a
few high profile death reports and outright panic.
November 1st, 2009 at 8:38 pm
I really hope not man
Swine flu is getting huge here in quebec..
November 1st, 2009 at 9:43 pm
Thanks for the insight and support Jeff. I do realize that being 100% short is a bit risky, and possibly going back to 50% short 25% long as a hedge, and 25% cash may be the thing to do soon. Or possibly just 25% short 10% long and 65% in cash could even be smarter for a while. However I do think we may just tank for a good 2-3 weeks without too much upside, so I might just stand pat at 100% short for the month of November, or most of it at least.
November 1st, 2009 at 9:39 pm
Point well taken, and I thank you for your opinion and advice.
November 1st, 2009 at 9:38 pm
No disrespect taken my friend, and I appreciate your opinion and advice.
Just looked at my figures above, and I meant to say 850 on the SPX, although 750 could be possible.
I think we have more downside for the following reasons:
Taxation: Several indicators were pointing at buying the market about a year ago. Those that bought would need to hold for a year in order to only pay capital gains. Its been a year.
First day of the month has been some pretty bad days for the market lately.
Good Luck, I’m holding TZA
There’s nothing wrong with being 100% anything if you’re right, and if you minimize your losses and maximize your gains with good money management.
November 1st, 2009 at 9:45 pm
Makes sense to me Chacro, and thanks for the support of my position.
Well, they did it. CIT filed chapter 11 today.
Not that it’s really any surprise at all, but i wonder how (badly?) the market will react.
Common and preffered holders will be wiped out, and likely the $2.3B taxpayer $’s as well.
November 1st, 2009 at 6:37 pm
also wonder how CSE and BBT will react. Maybe/could be beneficial to them.
CSE e/r monday morn. Put in a second daily hammer on very heavy volume Friday. Will be watching with interest.
November 1st, 2009 at 6:45 pm
Market reacted very well to GM’s chapter 11 filing on June 1 2009.
May not be a market moving event as we would think.
Lehman was a shock (to most people), but CIT isn’t.
November 1st, 2009 at 7:57 pm
yeah, I don’t really care one way or the other with my market neutral approach.
seems too much effort goes into deciding which way the overall markets will head, when a highly selective approach for both longs and shorts makes more sense, to me anyway.
My shorts still- CTXS VMW WHR and added HAR short fri after the e/r, as planned. Covered SWI friday. Playing most longs very ST only and only on exceptional e/r’s, of which there have been many lately.
November 2nd, 2009 at 3:38 am
GM and CIT are different animals. One employs people, which largely (at that stage) would not be too greatly effected, saved even. The other (not discounting the valued people that do work for them offer.) employs largely bank accounts which they use to fund their commercial real estate enterprises – big difference is my take.
CIT down 11% in after hours action.
Bad CDO and CDS – Enough of those mixed in with CIT to negatively effect many aspects of the banking and financial sectors:
http://newsusa.myfeedportal.com/item.php?&itemid=1125415
November 1st, 2009 at 11:33 pm
Well – this was already announced as a possibility on Friday – was one of the reasons for the mkt falling so hard … not so sure that this will be such a big event … for all you know the mkt may rally on removal of uncertainity…
November 1st, 2009 at 11:37 pm
yes agree, it was definitely one of the reasons financials got hit so hard Friday.
November 1st, 2009 at 11:39 pm
And actually it was revealed as a probabilty much more than a possibilty.
Zee, how are you positioned going into tomorrow? I think that you said a low will be put in on or around November 4th. Do I have that right? So, with that date upon us, is it safe to assume that you are bullish on the market for November and December and that you plan to be long very soon (if not already)?
Thanks in advance for the information.
November 1st, 2009 at 8:13 pm
I am planning to go long massively on any dips this week because the market should theoretically place it’s low for the year this week. I know it’s a bold statement. We have 2 very big market movers, and I think the market could see the bottom on one of those dates.. If we suddenly dip 20 points on the fed day..
I am already positioned long into tomorrow.. but these are investments.. I’m no touchie until 1150-1200 on the S&P
Trade 1 SPY Dec 112 Call (L)$100.00 50 $5,010.00
Trade 2 DOW Long Stock $23.73 420 $9,976.60
Trade 3 AFL Long Stock $41.47 240 $9,962.80
Trade 4 CYH Long Stock $31.11 320 $9,965.20
Trade 5 AMD Long Stock $4.63 2160 $10,010.80
Trade 6 RIMM Dec 80 Call (L) $33.00 60 $1,990.00
November 1st, 2009 at 8:19 pm
1150-1200…
Good luck holdin until 2018
November 1st, 2009 at 8:26 pm
Go back to the stocktock.com archive, and check the postings of Oct2nd,2009, and September 3rd, 2009.
On both of these days, I said to buy becaues the market is going to make new highs.. what happened after those dates? the market made fairly big bottoms and then we rallied 10% afterwards..
I don’t want to be snarky or anything but I have been oftly right the past couple of months..
November 1st, 2009 at 8:41 pm
snarky..LOL…a ape throwing darts at the wsj would look like buffett during a 55% bounce in the index’s..what happens in the next few weeks should be interesting to say the least.. My money is on s and p hitting 875-900 by jan1
November 1st, 2009 at 8:42 pm
A flippant commnent deserves a snarky reply. And anyone discounting the possibility of the Fed and henchmen driving this market higher has clearly not been payine attention to recent events.
Re: your picks: can you share how you selected them? I bet no one else here is playing CYH or Aflac. RIMM has been beaten down, thunder stolen by Apple. It may fly.
Do you have any protective measures?
THanks
November 1st, 2009 at 8:52 pm
so I guess the reason to put money to work on the long side is THE FED WILL SAVE THE MARKETS AT ALL COSTS…
sorry friend thats not a good approach in my book. how much money does the fed have left..pimo..
November 1st, 2009 at 8:54 pm
There is a diff between being smart and lucky. From memory i only
seem to recall you making off handed remarks towards others while
changing sides after the fact.
Go listen to the kenny rogers song called the gambler and give it a rest.
Its not important that i am bearish or bullish. Its the market and the money
flows. right now money is headed to gold and out of SPUs. Smart money
always knows something that dumb money don’t.
November 1st, 2009 at 8:57 pm
changing sides?….I don’t think so buddy..painfully obvious i’ve been short and wrong for months now…at least i’m honest though…
ohh and gfys
November 1st, 2009 at 8:38 pm
As far as long term trends are concerned, as long as the October 2nd low isn’t breached, zee is still right with his approach towards EOY.
My target isn’t the 1150-1200 level that zee is targeting, but I too would not want to short without hedge into next week. All three major US index locked in “buy” signals and Dollar & VIX locked in “sell” signals at EOD Friday. I bought a bunch of call options (in addition to all the hedged shares short that I held) on Friday at SPX 1035-1039. I really hope we drop a bit more on Monday so I can buy more call options. My minimum upside target is 38.2% of the drop from 1101 to the most recent low.
I will keep all of my protective call options unless the market all of a sudden turns and kills the October 2nd low. For now my data and charts are telling me the probability of an up day tomorrow is far greater than a down day. I won’t give away what I’ve made since October 19 for forcing trades or ignoring the probabilities.
November 1st, 2009 at 8:45 pm
dans work…
http://1.bp.blogspot.com/_TwUS3GyHKsQ/SujQCG5GNbI/AAAAAAAACXg/BjwDZwvkZuk/s1600-h/spxdaily.png
the trend broke at 1042..not much sure what else you need to see…we also touched the bear market trendline at 1101…i’m not worried about a 15 point s and P bounce when were facing and 150 points sell off soon..
November 1st, 2009 at 8:56 pm
I myself believe the long term trend IS broken, and I think the market is heading lower in by EOY. What I was saying is that we can’t assume there won’t be any more upswings prior to the October 2nd low being taken out.
I only target SPX 1060 – 1066 before we go lower, but I would like to profit from the upswing, too.
Whether zee will be correct with market making new highs or not is irrelevant; as long as he has trailing stops in place he’ll still make money. If someone shorts the market now without hedge he/she may likely be squeezed out first and miss the best shorting opportunity of our life time.
I will still find stocks to short next week, but only on overbought stocks. Trading isn’t about being right 100% of the time, it is about striving to be profitable more than 90% of the time.
November 1st, 2009 at 10:04 pm
The cycle theory shows no indication of us going lower. T
Goldman: IMO you can’t use 666 for drawing any trendlines. I would rather we use [1]2 and (B) from Daneric’s chart.
Futures are up even with the CIT announcement.We might have a bounce tomorrow i am kind of surprised that they futures are up but it may be just that the dollar is down..My ideal situation is a nice bounce Monday then go to inverse ETF’s at the highs of the day in anticipation of a sell off..
November 1st, 2009 at 8:51 pm
futures are really meaningless ….how many times have they started down a hundred and reversed overnight. How the dollar trades against the euro by start of trading in europe holds a whole lot more weight then a futures number based on a small amount of contracts 13 hours before open…
Personally I think beginning Monday we rally to new highs, mostly based off of short covering and people chasing the market.
November 1st, 2009 at 9:38 pm
For those who missed it, a dude who frequents ST started his own blog recently, and posted last Tuesday with bulish and bearish scenarios for the next 6 mos or so, based on Elliot Wave theory:
http://pugridironsma.blogspot.com/2009/10/long-term-bull-and-bear-models.html
More recent posts describe the Head and Shoulders that Idan refers to.
Even if there is only a 20% chance of new highs by year’s end, look at Dec. SPY 110 and 115 calls. 10 – 30 baggers to be had IF-IF-IF the blow-off top can be seen.
Late nite S&P futes up 5.00
No idea of what fair value is, in other words, how much they pumped the futures at close
not to show a down 3-400. . .
Nas futes flat. . . WTF ?
Anyone else short CIT last week?
November 1st, 2009 at 10:46 pm
I wasn’t.. but i told a bunch of my friends it’s going to 0 if it doesn’t make a new high this week.
November 1st, 2009 at 10:49 pm
CIT is non shortable.
November 1st, 2009 at 10:50 pm
But you could buy puts.. they went up A LOT this week.
November 1st, 2009 at 11:31 pm
What makes you think it’s not shortable? It was shortable if you could locate shares..I don’t imagine there will be any available tommorrow morn though
You do know it’s a myth that stocks under $5 are not shortable?
November 1st, 2009 at 11:39 pm
It’s not shortable because I work at a trading institution where the sole purpose of us to scalp, and do high frequency trading.. Trust me , we have access to the best routes and potentially even the Specialist himself.. however CIT cannot be shorted legally.
I play CIT on a daily basis..
Here are my stats.. CIT is actually hard to trade when it’s tanking, because usually your order keys are shorts and not ’sell’ so when CIT is tanking, I have to manually place a sell order..
CIT
Shares Traded 360,200
Growth 740.18
ecn Fees 353.4588
NSCC / Trade & Execution 72.040
SEC / ETFA21.872
NYSE / TAF 9.120
NSDQ / LSE Liq 9.005
Net 274.68
November 1st, 2009 at 11:50 pm
I’d sure like to know why it can’t be shorted legally, as long as there are shares available to borrow. Do tell me.
November 2nd, 2009 at 12:13 am
Sorry I missed this message the first time.. Didn’t mean to ignore the question.
November 1st, 2009 at 11:42 pm
Symbol: CIT
Availability: 700′000
Exchanges: VWAP, BEX, IDEAL, ATD, CSFBALGO, CSFBCROSS, DARK1, JEFFALGO, NITEECN, TMBR, NSX, LAVA, ISLAND, CHX, DRCTEDGE, DBALGO, NASDAQQ, LEVELATS, CBSX, EDGEA, TRACKECN, BATS, IBSX, MIBSX, ARCA, NYSE, ISE
November 1st, 2009 at 11:53 pm
I trade 500,000 shares.. daily on stocks under $5.. I’m pretty sure I’ve traded CIT.. and it’s not shortable.
You cannot openly post on the ask on any of those ECN’S posted above and get filled shares short. You have to post directly on the specialist which means you have to know the specialist on CIT or a connection similar to this such as you know the people in ALGO who knows the specialist in CIT. Get it?
November 2nd, 2009 at 12:01 am
Don’t care whether you’ve tried bottom fishing CIT long or not.
Why is CIT so special that it’s not legally shortable????
Umderstand the question????
November 2nd, 2009 at 12:07 am
I’m not 100% sure to be honest of the REASON.. the specialist is allowed to make his stock non-shortable for a if he feels that the stock could potentially face selling pressure and harm investors if shorts were allowed. Just my own theory.
CIT was shortable before July 2009, before it sunk below $2.
The NYSE has a bunch of stocks that are non shortable.. the reasons being is not clear.. ex: FNM, VG, HEB, ..
November 1st, 2009 at 11:50 pm
This was already announced as a possibility on Friday guys …
November 1st, 2009 at 10:50 pm
Why are you angry the markets at up.. haha! Bears are about to be caught.
S&P 1200 HERE WE COME.
November 1st, 2009 at 11:24 pm
I don’t even know how to reply other than LOL
November 1st, 2009 at 11:27 pm
I must have been gone when the Bulls got the “trap immunization”.
November 2nd, 2009 at 10:16 am
Do not ignore the very real phenomenon of huge rises in the shares of worthless companies:AIG, Fannie, Freddie, Lehman. Shorting can kill you even if the company is bankrupt. Don’t go all in on a “sure thing”.
With the way the futures are going I don’t know if I’ll even get a shot at buying more call options at low prices. I knew I had to get some in on Friday; otherwise, once the market gaps up at the open it may not look back.
Looking for a quick $10k profit on Monday. Again, I don’t care which direction the market decides to go as long as it is one long (nasty if you’re on the wrong side) bar either way.
November 2nd, 2009 at 1:56 am
I think I’m gonna get some DEC $115 SPY Calls and sell the $115 for NOV. 26 cents per call, and so I can pick up a TON of them cheaply.
November 2nd, 2009 at 2:42 am
I was looking at the same – Dec 115’s or even 118’s, maybe get them for a dime if we open lower.
I have come to the conclusion that I am my own best contrarian indicator: as a rank amateur my first instinct is to go short in a big, greedy way. TA helps me moderate the urge, but also to understand that there are millions of other chumps thinking the same way, bag-holders all as the professionals will whipsaw in both directions to steal stops and shake-out tentative hands.