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04
Nov
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8:16pm
People know that I hedge my bank accounts (CD) with 20% GOLD… well today i took it all off… after it rallied from 970 to 1100… I think deflation will remain over the longer term.. and even if inflation rises 2-3%, I made a nice 11-13% on my GOLD trade which will hedge my CDs for at least a 12-24 months of inflation.
5:13pm
I’m short 1000 shares of SPY at $105.17 into tomorrow. Have a great day!
4:30pm
Shorting afterhours makes sense to me.. even if you get stopped out tomorrow… the Bears won today, and that keeps P3 options in play, and a move to 1020-1025 more likely now, as SPX ends below 1052 in a reversal day.
2:45pm
Here is the SPY 10 minute… look at levels.. we are trying to break 1061 again.. not sure if we can make it.. but definitely a level to watch. The dollar i also falling on H&S formation… unless it rallies back above the 22.50 level soon it might be broken:
2:39pm
Does anybody have a list of VERY VERY Overbought stocks? and VERY VERY Oversold stocks?
2:33pm
Stopped out of my other puts at 1.33… so nice 12% there..
2:29pm
If market holds the bearishness under 1051-1052 here.. i’ll be adding a lot of puts at days end!
2:22pm
We finally hit the 1052 as support again… now we can bounce… but if 1052 breaks.. be careful to the downside, if 1061 breaks careful to the upside! FED to hold rates for EXTENDED period of time… is not necessarily good for the markets. People were hoping to see some sign of life…
2:20pm
Huge rise.. and huge decline in the markets.. and now stabilizing.. let’s wait this one before picking a side (like i said before).
2:18pm
We continue to wait for the FED, which is taking it’s sweet ass time… (excuse my language)… the volatility is huge though, the options that usually have 1 cent spreads have 8-10 cent spreads… dollar is declining though.. that could be a sign of a move higher..
1:50pm
Get ready for the 2pm-2.15pm reversal…. where do we go from here?? if today ends BELOW 1052… I expect a big down day tomorrow.. if it ends above 1061.. i expect a big upday tomorrow. Anything in between would make me slightly bullish but not confident enough to buy calls.
1:22pm
Always wise to lock in some profits before a market changing event such as the Fed Meeting at 2:15pm… taking half off of my PUT position at $1.27 here (++8%).. the rest i’m stopping it at 1.10 (hence i’d be up no matter what)..
12:53pm
The Financials are close to reversing lower here… they are not enjoying the same rally.. that’s putting a burden on this rally.
12:27pm
GOOG has been consolidating above the resistance line, which is technically a bullish sign, however, if you zoom in and look at a 1 minute-2minute you would see that the consolidation is actually a head and shoulders. How do you play this? Anyway you want… just put a tight stop, and you might be in for some good money. I love these types of set-ups.
12:05pm
I placed my SPY 103 Strike Price PUTS back on at $105.91… $1.17 a contract.
11:55am
I got stopped out of my put SPY position flat… but i still recommend trying to short the SPY on a small position because 1061 is hard to break.. and we failed to do it already.
11:28am
I got stopped out of GOOG with the 0.01% profit… this stock can still go higher after a possible retracement.
11:25am
If you wish, you can raise the stops a little bit on GOOG… although it looks promising if it can break $545..
11:18am
I am not sure which direction we are going, but even though the SPY pulled back a little… GOOG is outperforming momentarily… i’m putting a stop at $544.35 to break even no matter what (+0.01% at least). These prices that i talk about when i put a stop are the ASK not the BID.
11:09am
As woo suggested… I’m adding a little bit of puts here.. as 1061 level held.. and putting a stop above it. This means i’m actually slightly hedged with my GOOG long vs SPY put position at the moment. Let’s not forget that I also sold GOOG calls a long time at the 580 strike, and AMZN at 120…
10:53am
Into Google at $544.10 with 150 shares. GOOG is also overbought on the very short term scale so a retracement is very possible… STOP is at $542.30… if it gets hit… just walk out.. and wait for another break of that resistance level, which could happen even today. A break of 545 however, would be the ultimate sign that GOOG is ready to jump.
10:52am
GOOG is now breaking it’s resistance.. or at least trying to… a break of that would lead to a nice short term intraday long trade.. here we go:
9:53am
A break of 41.10 on the USO (oil) would probably bring us to the highs again, or 41.50-41.60.
9:44am
Yesterday, we saw GS break it’s first resistance line, putting it back in a descending wedge formation… that was the first hint for going long GS… but if you’re hoping GS 60 min would do a strong fib retrace, you want to see the second resistance of the wedge break at 175ish today:
9:39am
Here are the SPY 60 minute fib retracements assuming 1029 was the short term bottom… you can see where the strong resistances lie:
9:34am
If we hold 1052… 1061 is the next level to watch out for, but so far 1052 is very strong.
9:29am
The SPX is about to open above the 1052 level.. however i suggest to not go long at the start of the day, wait a little bit and let the market digest… it might just start at 1054 and shoot down below 1052 in a few seconds.
12:37am
Today is fed meeting, so i would keep positions about 1/2 the size of what they usually are. Even if things seem SO SURE to you, you should refrain from playing big money today. As you can see in the SPY 10 minute chart, it looks like we are in a bear flag formation (governed by the two green ascending lines). A break of either green line should provide a bigger push in the trending direction. There is also a bigger channel governed by the Red descending resistance and the Blue descending support. If the red resistance breaks we should get another push higher (i would go long). Although rememeber that 1052 is a very important level, and will NOT be broken easily. I would go long after 1052 is broken as well, otherwise my target of 1023 still stands.
does anyone have any inside info on the fed announcement here on stocktock. anyone good friends with bernenke
November 4th, 2009 at 2:37 pm
keep it on the low, but buy the dollar and short gold.
November 4th, 2009 at 2:38 pm
or was it the other way around.
November 4th, 2009 at 2:42 pm
Googled the above name first billion response were
timothy franz geithner jew
Why? We back to nazi stars being pinned on people?
November 4th, 2009 at 2:45 pm
BTW i doubt any MOT parents would give a middle german name? At least mine would not.
As best i know tim is not a MOT. . . .
November 4th, 2009 at 2:45 pm
i guess it is that whole rothchild deal that makes people nervous.
November 4th, 2009 at 2:48 pm
Though many recent Fed Chairmen and Treasury Secretaries have been, Tim Geithner is not Jewish.
November 4th, 2009 at 2:57 pm
Nor was Volker. Proves, you need not be a MOT to be despised, LOL.
Greenspan was/is Nigerian. Many answered his emails during the
dot com era.
November 4th, 2009 at 2:41 pm
Those people are at their Miami mansion with a hot girl of every flavor on their arm by the poolside, not on stocktock.
November 4th, 2009 at 2:51 pm
Those who are in the same room of Bernanke, 15 minutes before, have absolutely all digital devices removed from them. Also, I heard they are in a room where there’s a protective digital securitized wall–some high frequency firewall–where even if you had a cell phone, it would be disabled.
I mean, if you had the information.. it would be too easy. . You would use the info to buy/sell futures contracts at 2:14 of the S&P and be a millionaire at 2:17.
November 4th, 2009 at 2:56 pm
Umm… sometimes, but certainly not always Zee… that blow off top on the last Fed decision was certainly not the “expected market reaction.” I guess you could have played the expected part, i.e. the initial spike, but even if you had known the info you might not have seen the drop coming their after. If you played the trade right sure, but my point is sometimes the market doesn’t react to the decision “as expected.”
November 4th, 2009 at 2:58 pm
well they would only play the sure things.
i love the fed, because without them this country would not be number one, that is what is was told recently by someone.
guys wouldn’t every fortune teller be rich if that stuff worked.
is that a bull flag on the spy?
November 4th, 2009 at 3:04 pm
it technically is… but in the last 2 months.. bull/bear flags really didn’t work out… this bull flag is also way too long… so it’s weird… i suggest you keep stops instead of worrying about which flag this is.
buy order in for 200 more ERX @ 44.00; heading out for a few hours.
November 4th, 2009 at 3:59 pm
filled
i have no idea where this is going
November 4th, 2009 at 3:12 pm
down and dollar up
November 4th, 2009 at 3:15 pm
the dollar is getting killed
November 4th, 2009 at 3:27 pm
killed? uup : 22.53????
Wait a little bit.
November 4th, 2009 at 3:44 pm
the dollar still getting killed
November 4th, 2009 at 4:15 pm
no it is
let the paper burn
who is hotter jessica alba, jennifer lopez, or brittney spears.
November 4th, 2009 at 3:42 pm
Albertta Pip Eline
November 4th, 2009 at 3:47 pm
i looked her up on youtube and she is not my kind of chick, a little to greasy
the initial push will be important, but i dont know about how important.
something is happening
The most muted market response I have ever seen. That to me means people really want to dig into this report. Bearish in my opinion.
msnbc.com: BREAKING NEWS: Fed pledges to hold rates at record-low levels for ‘extended period’
November 4th, 2009 at 3:42 pm
Should we pretend to be shocked?
S&P approaching HOD..
GRMN beat expectations – I believe it is way oversold.
The dollar is tanking watch the market rocket up..
dollar is pure toilet paper. It’s embarassing being an American. The Canadians already give you dirty looks when you pay with dollars.
Wow, if my timing were this good all the time…
I executed my plan of getting rid of half the call options during the run-up and half afterwards, worked almost to perfection. Riding it out on my hedged shorts. The SPX hasn’t reached my minimum target, but the DOW has, so we’ll just watch this thing whipsaw and hopefully die next week.
November 4th, 2009 at 4:17 pm
RUT might be D.O.A
November 4th, 2009 at 4:18 pm
I agree Fritz. Friday and next Monday are the days to watch for me.
November 4th, 2009 at 4:22 pm
Keep an eye on the weekly chart on the DOW, SPX, and Nasdaq. The MACD momentum has already turned negative for Nasdaq.
500 DZZ @ 15.00
with the type of bearish action I see on Dollar I don’t think we get a sell off this month. I see a lot of big bet on the bear side of the dollar and that is enough to think this market could flow up, but I guess the upside would be short covering not any new accumulation from big boys.
AXP could roll over and start dying next week. I have a target price of $0.97 for this stock, perhaps by September 2010. I am shorting this stock into oblivion.
November 4th, 2009 at 4:31 pm
what is the short interest.
November 4th, 2009 at 4:36 pm
25 million shares sold short, I hold 5k of those shares.
November 4th, 2009 at 4:42 pm
Fritz I am marking that down and will check in 6 months
November 4th, 2009 at 4:47 pm
Watch out Fritz, Buffet holds a good portion of AXP and you are betting against a proven champ.
November 4th, 2009 at 4:56 pm
Does he hold a big chunk of JPM as well?
After the past two weeks, I think I need to have full faith in my market timing system. With two more coming in 2010, I doubt Buffet sees those coming. After all, he lost a big chunk of cash during last year’s meltdown.
Faz looks like it’s working towards a crossover on stocktiger
http://stocktiger.com/live/faz15.php
GS just went negative really quickly.
GS & JPM are now on the negative side. Good thing I only bet with King Market Manipulators for the FOMC ride. Now I am betting against them.
It was nice while it lasted.
November 4th, 2009 at 4:47 pm
A phenomenon that I often see is that if we are not within 0.5% of the highs of the year, the market has a high chance of crashing or entering some sort of wave called P3.. Hmm…
November 4th, 2009 at 4:59 pm
Gotta look at both side of this to make money. I’ll probably be a bull right along with you if we rally into the high 1070’s on strong volume. Market has a long way to prove itself at this point.
Until then, I’m a bear.
SPX looks like it might be forming a triangle now from October 29th. That’s a continuation pattern, and it’s bearish.
November 4th, 2009 at 5:14 pm
Hey Chacro, that was a sweet finish huh? Very encouraging for us bears going into tomorrow methinks!! Lets knock’em dead tomorrow, down 2%+!!!!
November 4th, 2009 at 5:02 pm
.5% or 5%….
November 4th, 2009 at 5:16 pm
Goldmansuchs: how are your puts fairing you?
60 spy december 80’s
20 spy december 90’s
40 spy december 95’s
60 spy december 100’s
12 spy jan 100
20 spy march 80’s..
November 4th, 2009 at 5:18 pm
There he is …:)
November 4th, 2009 at 5:28 pm
Goldmansuchs: Here are the analytics for your options portfolio.
Position $contract equity nov2 $contract equity nov4
60 spy december 80’s 0.25 1500 0.22 1320
20 spy december 90’s 0.72 2460 0.61 1220
40 spy december 95’s 1.32 7200 1.12 4480
60 spy december 100’s 2.3 13800 2.08 12480
12 spy jan 100 3.35 4020 3.1 3720
20 spy march 80’s.. 1.23 2460 1.15 2300
Nov 02 Capital 31440
Nov 04 Capital 25520
Net LOSS: 5920
ROI: -18.89%
Minute wave iii possibly started. Again, this should break support levels over the next week or two. From the 1100 highs it has been P3 down out of a textbook so far. This luck has to run out for me sooner or later.
November 4th, 2009 at 4:48 pm
I don’t know if you’ve observed the same, but I felt the selling off since 1060 this morning was very professionally done.
November 4th, 2009 at 5:07 pm
Dude, I called it way up there!
November 4th, 2009 at 5:26 pm
Yeah you got that one there.
I still made money on my call options though. I’ve said before it didn’t matter whether you get the general picture right, what matters is being able to adapt at any time and remain profitable.
I have not lost a trade since October 23.
November 4th, 2009 at 5:32 pm
Thats great.
November 4th, 2009 at 4:51 pm
Son of a bitch look at it go. My ETFS were deep in the red for the day now they are green across the board.
Wow what a sell off…It will be interesting what tomorrow will bring.
November 4th, 2009 at 4:54 pm
feel like the trading environment of last feb and march-crazy intraday and end of day swings
November 4th, 2009 at 5:02 pm
If Zion is any indication the talk of commercial real estate being the next bubble to break could be right on. Look at the 4 week on this Utah based bank that is heavily invested in NV (LV especially) real estate.
November 4th, 2009 at 5:04 pm
4th inside reversal day in month and half.
We are going to crash. They can prolong the agony, they can support stocks,
but the russel was down 1.5% and the banks are rolling over in a death roll.
I suspect the dollar crashes setting off stox imploding.
Anyone else kept track of the professionally tracked selling?
November 4th, 2009 at 5:17 pm
Good call my friend. I’ve been 100% short for 9 days now and its been a roller coaster ride for sure. I just don’t see how we don;t crash hard very soon. There should be no 1120 level for spx for a long long time!!!!
November 4th, 2009 at 4:58 pm
gonna be UGLY tomorrow…day after FOMC usually dictates the market movement
November 4th, 2009 at 5:33 pm
I can equally say this is bullish price action.
If you look at the Dow Jones Industrial Average since it’s inception, upside gaps are almost always filled. Therefore you can say that this price action was in fact not bearish, but it did what probability wise it was suppose to do.
What we had today was a filling of the gap so that we can go higher.
I am selling short position right now. As predicted come 3:00 PM sell off. I have made a killing these two days. We could open lower tomorrow but I do not think we will go lower than 9690 if that much. I am in the arena of double bottom for this sell off and then up. Depending on tomorrow I will be a buyer. If you want to short GLD is your short. It is downhill from here. Little upside I think.
November 4th, 2009 at 6:50 pm
JROD and Idan,
Idan predited reversal happened close 2:15 pm. JORD predicted 3:00pm sell off. It was amazing. Can you help us to learn which techniques you used for such predictions? Thanks!
S and P is now almost a perfect gap fill – hard to imagine a run up tomorrow with unemployment numbers looming on Friday – any thoughts? Wondering how much SDS to hold into tomorrow…..
Idan,
Do you see a sell off going into tomorrow?
Thanks in Advance
November 4th, 2009 at 5:14 pm
Ok there you go! another one wants a sell off. I am sure “goldmansucks” and his sidekick with show up soon
I am still holding my bids. Currently one leg is hedging another
GS – Long. But it dropped
AMZN – Short. It behave as expected
I do think that we will have more zigzag until Friday. But my bias is still bullish
November 4th, 2009 at 5:13 pm
CSCO great results…Lets see if NASDQ rallies tomorrow. It had some good correction built into it.
Thanks to health care DOW was up today, otherwise financial pooped and coouldhave been a lot lower.
November 4th, 2009 at 5:34 pm
earnings down 18%, revenue down 13% vs last year – how is that good?
November 4th, 2009 at 5:41 pm
also, the stock price is about where it was before the October 08 crash…
November 4th, 2009 at 8:58 pm
You are comparing pre-lehman numbers? hunh?
I dont think Cisco is going to propel the market higher. This action today was undeniably bearish. There is also a ton of European economic data out tonight as well as their rate decisions and talk from Trichet. Plenty of possible Euro bear, dollar bull senarios. Call me crazy but I think the bears are getting strong.
November 4th, 2009 at 5:44 pm
My gut agrees with you. Plus IMO the “ordinary investors” who are up 80% since lows are going to get nervous with the large swings. Reminds them of earlier action. I would think they will lighten up or stop bying dips, if they havent done so already.
November 4th, 2009 at 5:53 pm
Mark,
Where do you find the European economic data releases?
November 4th, 2009 at 6:15 pm
Fritz:
Her is one site:
http://www.worldeconomiccalendar.com/
November 4th, 2009 at 6:16 pm
Thanks!
November 4th, 2009 at 8:02 pm
Yup… thats the one I use… nice seems to have pretty much all that you’d want, except I think the China ones.
Fritz – you mentioned that you were holding long till 1075-1080 or 10K on the Dow – can you share what made you change your mind …
Also, what are you seeing in the next few days ahead …
November 4th, 2009 at 6:13 pm
When I saw the slow bleed down to 1055, I knew I had to get out of my calls, so I devised a game plan of giving half away during the run-up (when investors bid up both equities and call optinos), and another half in the ensuing madness.
What I see tomorrow is that unless SPX 1045 holds, you can probably say goodbye to SPX 1075-1080.
I will enter SSO call option again tomorrow (hoping for a quick blast off to 1066, and if it doesn’t happen within the first two hours I will be out), but I am prepared to lose ALL of my money put on this hedging trade. I will only deploy 3% of my porfolio on this trade.
November 4th, 2009 at 6:13 pm
*run-up to the FOMC announcement
very interesting day today!
i wonder if the S&P will drop below 1029 or bounce from there?
November 4th, 2009 at 5:57 pm
it’ll probably get a small bounce at 1029-1031.. but i expect it to fall underneath 1023, where it will get a bigger bounce..
November 4th, 2009 at 7:12 pm
Idan, we expereinced several big sell off days. Are they indicating market volatility or could be an indication for potntial start bear market?
November 4th, 2009 at 7:38 pm
So far these are signs of a potential bear market…. but nothing is certain until bigger support levels break at around 1000-1014. The first of signs is hitting 1020-1025.
November 4th, 2009 at 6:06 pm
added more sco, but concerned that there is disconnect.
No crystal ball here, but I think it looks very very dangerous for longs the next couple days. Any nice guys on this board should be really careful with tight stop loss orders, you work hard and are decent guys who deserve to keep your money. Any arrogant and critical antagonistic guys who have made $$$$ from this rally but still want this manipulated market to go up and insist on staying long, please go ahead and stay long with no stop loss orders, why would you need them anyway, as we’ll just keep going up forever with no correction, right?
November 4th, 2009 at 6:40 pm
If we are right about P3, then you might have to change your handle to “Goingtoretiresoon”
November 4th, 2009 at 6:57 pm
I hope so Chacro old buddy, I hope so!!
November 4th, 2009 at 7:40 pm
We just experienced two 7% corrections in a 2-month span during a bull market and we’ve been stuck in the 1000 range for what, 3 months now? Is this not enough evidence to go long? How much consolidation do you honestly want?
I’m long.. and I’m definetely not selling anything unless we clearly break 1014 and hold it under for 2 days.
I could equally say, if your a bear you better be scared.. I mean GS could at any time put on their buy trading systems and manipulate the futures up +1% for 5-10 days consecutively. We’ve seen them do this in March and they did it again in early September. They could at anytime do it again in November and squeeze the shorts.
November 4th, 2009 at 8:03 pm
Good points Zee. However a 7% correction or two 7% corrections during a 70% rally do NOT constitute legit corrections in most people’s books. When we see a 15%+ correction then its reasonable to expect more upside. Until then, with P.E ratios what they are and this rally getting more and more overextended and on low volume to boot, I’ll have to say we’ve most likely seen a top a couple weeks ago as far as I can tell. Just my 2 cents, and I would remind the longs to be very very cautious!
November 4th, 2009 at 10:39 pm
Zee, I don’t believe this is a correction. I believe P2 was the correction. You are definitely the contrarian here so that might be good for you. You have your stop and I have mine. One of us will be right. If I’m wrong, I’ll stop out and probably go long. I’m not married to my position. The charts are telling me we revisit the lows. It’s that simple, really. Why argue about it? We are using different indicators.
Idan – I am looking at BAC as very oversold ….
November 4th, 2009 at 7:39 pm
Yeah it is.. but not as much as i expect it… i want more than that… BAC lost 4$ but to me it’ll be oversold if it hits 12.65 in the next few days.
November 4th, 2009 at 9:17 pm
Can you share what your criteria is for determining oversold … why would it be oversold if it hits 12.65 – just trying to understand better ….
yesterday I said that you have to book your profit very quick regardless you are bear or bull. We do not a sustain move in any direction. When market drops there are buyers that buy since we are oversold and when marke rally then there are sellers who are waiting for that to get rid of thier longs especially those who have a big position in long. As I said before we should consider this situation to continue until it changes.
I didn’t get out of my longs intraday.. Was up 15-16% momentarily on my portfolio, and everything went downhill from there.. Still up 7.36%
Maybe I should of just booked my profits.. time will tell
November 4th, 2009 at 7:49 pm
Zee, What did you trade that had given you 16% gain?
November 4th, 2009 at 8:05 pm
Most of my gains intraday came from SPY calls.
I’m still up though because of the likes of CYH, AMD & RIMM (all up +5%).
November 4th, 2009 at 7:59 pm
There were some pretty nasty divergences since about 11AM… I’m surprised that didn’t cause you to pull the plug.
November 4th, 2009 at 11:04 pm
Can u give more details – what exactly u were looking at 11 am ?
Hi Guys,
Only my 02 cents
I am BURNED bear….so tired to fight against the tape. The bias is almost bullish. Bear time is almost over. We can have some minor drops but they will be reversed promptly
http://www.freestockcharts.com/?emailChartID=028e5a87-dada-4ce2-a6be-3d493edc22ff
Enjoy and trade wisely
New Zealand jobs worse than expected, apparently they only need so many people to sheer sheep.
November 4th, 2009 at 8:20 pm
If ten kiwis lose their jobs the rate climbs by 20%.
Priorities. A kiwi man’s responsiblities are to his mates, his sheep and 3rd and
last his Sheila.
Where men are men and sheep damn nervous.
This is a 44-year study from November 1964 to January 2008.
The study asks the question ”how profitable would it be to buy the DJIA on Nov 1st, and Sell it on Jan 1st the next year”.
Results
If you did this strategy alone (Bought the index on the first of November and sold it on the first of January), you would of returned 420.86% over this time period. How does this strategy compare to holding the DJIA over the 44-time period? It fairs pretty well, considering your exposure to market risk is 83.33% lower. The DJIA gained a wooping 911% over the same time period if you were exposed to the market for the complete cycle.
On average, the DJIA gains 3.58% from November 1st to January 1st of the next year.
During the 44-year time period, they were only 4 occurences (1969.. – 13%, 1973.. -11%, 2007 ..-9%, 2008 ..-14%) where the market sold off more than 10%.
Only 9% of the time is the DJIA ‘considerably lower (>9%)’ in January than in November.
Only 27% of the time since 1964 is the DJIA in lower in January than in November.
They were 0 occurences where the market sold off more than 15% during the months of November to January.
The Probability the DJIA is lower than 8245 by January 1st,2010 is theoretically 0 as a sell-off of that magnitude has never happened in the past 44 years.
November 4th, 2009 at 9:51 pm
Great stats, but if this year has taught us one thing it’s that there is a first time for everything.
November 4th, 2009 at 11:02 pm
Perfectly stated LewDog!
November 4th, 2009 at 10:12 pm
Zee what did the market do last November???
November 4th, 2009 at 11:43 pm
Shady: What has the market done every november except ‘69, ‘73, ‘07 and ‘08
lmao
November 4th, 2009 at 10:22 pm
Zee get over this November ramp. Lets review last Nov.November 5th the market was at S&P 1001,on the 21st it plunge to 755 and manage to recover to 886 on the 28th.So seasonality is not what it use to be,if nthat was the case,why didn’t the market sell in May and go away.
November 4th, 2009 at 10:57 pm
Seasonality has not worked the last 3-5 years
November 4th, 2009 at 11:43 pm
why didn’t the market sell in May and go away?
On the other hand, seasonality predicted this quite well if you followed cycles.
November 5th, 2009 at 12:45 am
in the past yes,put not the last couple of years.Sell in May and go away,when was the last time that workrd?
November 4th, 2009 at 10:55 pm
How many Novembers since 1964 were preceded by a massive 65% 8 month equity rally?
November 4th, 2009 at 11:09 pm
Excellent point Chacro. I understand everybody must have their own opinions, but its just hard to see why a 70% rally is NOT enough for some people. They cannot fathom any reason for any significant correction, as if its something completely alien. Truth is there should haver been a valid correction of 15% percent long, long, long ago! Maybe you and I will be wrong, but it just doesn’t make sense to me that we keep rallying higher and higher and higher after a 70% rally. Not only that, but with a rally such as this, based on liquidity, the falling dollar, and market and futures manipulation, it would really seem that we created a bubble that should burst and the correction could be an absolute avalanche of 30%+. Several respected experts with good track records are calling for a 25-50% pullback, yet some perma-bulls not only disregard this entirely but say that the most we’ll possibly see is 7%???? Just my 2 cents, but I think we’ll see the SPX at 850 if not lower very soon.
November 4th, 2009 at 11:24 pm
If the market pullbacks 15% in nov-jan, in 2009.. it will be the first time ever, since the DJIA started being tracked where we’ve had 3 back-to-back years of 10% corrections from November to January.
Given that we’ve already had 2 back to back years of -10% , where historically the average return is +3.58%, the probablity that this year will also be a -10% correction is EXTREMELY LOW, and nearly 0.
We all know outliers happen Shady but are you seriously going to bet for an outlier to happen? Why would you do that? Technial analysis is placing bets where you have a mathematical edge. If you go bearish into new years, 63% of the time since 1964 you will lose -3.58% of your portfolio’s worth.
Goingtoretireoneday: I’m sure Idan agrees with me on this, If you traded during June, you know 870 is a brick wall that bears will not crack.. 870 IS cement . Also, the markets have rallied from their lows 55%.. and the nasdaq 65%, NOT 70%.
The nasdaq is still down 3000 points from it’s peak in 2000.. The s&p is still 450 points down from it’s peak. The DJIA is still 5000 points away from its peak…
‘Several respected experts with good track records are calling for a 25-50% pullback’ .. Can you cite some examples with their actual track records and previous calls?
You say ‘it just doesn’t make sense to me that we keep rallying higher’.
It’s natural as a investor to feel this way. Markets are suppose to confuse the shit out of you.
BTW, for those invested in 2007, you are likely DOWN money.
I’m not going to lie to you, the economy sucks, but what if it’s getting better and the market is looking forward 18 months to reflect that?
November 5th, 2009 at 12:45 am
Good points once again, Zee. Let’s just leave it at that, we both have different opinions, and I don ‘t need a debate, not enough energy for it. So I think we pullback strongly, and you think we don’t, the future will tell us who’s right, and either way, lets try to make some money.
November 4th, 2009 at 11:14 pm
“The Probability the DJIA is lower than 8245 by January 1st,2010 is theoretically 0 as a sell-off of that magnitude has never happened in the past 44 years.”
This is the second untruth you have foisted on us in the last few days. First the nonsense about companies receiving TARP funds not being shortable. Now, either your math skills are lacking or you chose to lie. I can assure you that if an event does not occur in 44 trials, all you can say with reasonable certainty is that the probability of the event is less than 10%, probably less than 3%. But it is even remotely possible that a 50% coin toss can come up heads 44 times in a row.
You’re crying “bull” with a desperation and that has and will make me increase my short percentage.
November 4th, 2009 at 11:28 pm
Since 1964, the market has never sold off 15% during the months of November-January.
Of course it can happen, but if it’s NEVER happened, why BET for it?
November 4th, 2009 at 11:29 pm
Jeff, it is not possible that head comes up 44 times in a row.
November 4th, 2009 at 11:30 pm
P(44 heads in a row) is .000000000000000568434
I think it’s safe to say P = 0
November 4th, 2009 at 11:43 pm
You are correct about the probability of heads coming 44 times in a row, but we are not talking about a 50% coin toss. Take the number of 2 month periods the market has crashed over 15% in the last hundred years and divide by 600 (the number of fixed 2 month periods in 100 years). If the number is greater than 6, which I believe it is, you are talking about a 1% phenomenon. I will assume the number is 12. Then the odds of the market dropping more than 15% in a fixed two month period is 2%. If you have a bag with 98 white tiles and 2 red tiles and pick 44 times ( and throw the tile back in after each pick) there is a good chance that you will never pick a red tile. But the odds of a crash greater than 15% are still 2%.
November 4th, 2009 at 11:53 pm
The market has never crashed 15% from 1964-2008 if you held on November 1st and cashed out on Jan1st. That’s my whole point. Therefore if it’s never happened in the past 45 years .
It probably happened once in 1929 and maybe once in 1937 (this is just random guesses, I still think it has never happened).
I’ll even give it to you that there has been 12 occurences that the market has crashed 15%. Your seriously going to put your hard earned money on event X happening where the probablity of event X happening is 2%.
However if we use the real probabilities than, 2/600 = 0.0033%
Your going to bet all your money that Event X is going to happen where the P(event x happening) is 0.0033%.
November 4th, 2009 at 11:58 pm
Hold up, one calculation of mine is wrong since I mis-read your comment.. I meant 2/100 = 1% NOT 0.0033%
And you mean 12 occurences happening in ANY 2 months.. okay I mis-read that.
Bah..
November 5th, 2009 at 12:01 am
And we are in the midst of the most toxic bear market rally since the 1930’s. Just look at the leaders, AIG, Lehman,Citi. Bankrupt and near bankrupt companies have led this rally. It is a rally symptomatic of an economy where revolution, hyperinflation, anarchy and fascism are real possibilities. How often have those happened? It is a tragic time for America and the world and this rally is more of a ponzi scheme than Bernie Madoff could ever imagine. Banks borrow from the fed at 0% and use the money to buy treasuries paying 2% and each other’s stocks. So that the market has not dropped by more than 15% in the next two months in the last 44 years is a tiny variable in the equation. I don’t bet 100% and there is a good chance for a Santa Claus rally with the crash not starting until January.
A severe market crash to new lows is the healthiest thing that can happen to this country. If we put it off until after Christmas and allow folks to get even deeper in debt believing all is well, we increse the probability that the country will not survive as a Western Democracy.
November 5th, 2009 at 12:15 am
Jeff, I agree with 100% of what you say.. time will tell.
November 5th, 2009 at 12:24 am
Everybody wants to get back at the investment banks.. how by shorting. GS knows this.. so what will it do? Create patterns in the market to make it look like everything’s falling, and then it will place a $5b buy order in the futures.
Will GS kill the markets and then let everyone buy stocks cheap? No! You want DOW 5,000 so you can pick up GE at $3, WMT at $25, GS AT $30 admit it.. Everyone wants the markets to crash so they can profit. Everytime the market corrected, since March everyone swore we were finnaly going to have that big correction.but deep down it’s because they wanted to buy stocks cheap because they felt it was unfair they didn’t get any..
. Once again we are in the same situation, and GS will just put a 5$ billion buy order to buy the SPY futures in1-2 weeks time and boom +1%.. BEARS will keep saying don’t worry P3 is coming.. lol I bet when the s&p is 1700, Kenny or Daneric will make up some weird inverted flat correction that is happening..lmao.. Kenny has called the top numerous times back at 1020 during September and he turned out to be very wrong.. so take this P3 with a grain of salt unless we break 1014.
November 5th, 2009 at 2:23 am
Zeeshan Bhai! Well said. Bears who missed out on the last upturn now want in . They want the market to tank so they can buy at the lows..GE at 6 and Citi at .97 LOL. The second week of march was an opportunity of a life time to buy stocks of companies at ridiculous prices.
Those who think Citi is bankrupt and should go away needs to get their head examined. Citi has a HUGE foot print world wide and it is a BRAND name same as BAC in the US.
I know unemployment is close to 15% but the rest of the 85% are still working and spending. I am all up for a 10-15% correction if that ever happens I am will buy with both hands if we ever get there.
We all need to make money BEAR or BULL. Analysis is the key and bears lack it at this point IMHO. If we were having the same conversation last year I would have agreed cause the news was bad! credit spreads are all out of wack and people were scared.!
GLTA
Zee one more point,look into the stock alamac,it has not forcasted right the last 5 years
November 4th, 2009 at 11:30 pm
Well how does it forcast? What is it using?
November 5th, 2009 at 12:52 am
History as you so often state
November 5th, 2009 at 12:57 am
Zee,just for the record,I am not talking crash the last 2 months,I think a 10% correction is at most 10 days away.Lets say 950 from there(mid Nov) I would then think we ralley to 1150 to EOY.Now going into January to June we test and break 2008 March lows.
November 5th, 2009 at 2:25 am
Shady. if you look at the majority of the stocks (excluding health care) you will notice that they are about 10% lower where they were few weeks ago with some exceptions.
Health care was lagging and now they are coming up which is why they are keeping the dow in + territory.
Here is what I am looking at going into November opex:
No clear “buy” or “sell” signals locked in on the three major index, but the VIX did confirm a short term “buy” signal. This signal has worked well during P2, but it was not so good during P1. If we’re truly in P3, I’d expect another inside reversal day tomorrow.
I did the simple fibs after market close today and realized there is a possibility that 1045 is a support to launch the SPX to 1066 – 1074. There is also a possibility that 1061 was it. With my hedged short position going into tomorrow, if I see the futures holding above 1042, I’ll pick up another batch of SSO call options. Please note that I am prepared to lose ALL of my money placed on the SSO trade as a sudden drop that wipes out SSO play will mean great reward on my shorts.
The weekly charts show some serious divergence, to the negative side. However, the best setup for a perfectly bearish scenario, is for the market to pop to 1066 – 1074 tomorrow and close under 1061, followed by a flat to slightly down close on Friday. With this setup, SPX 1014 can be broken next week and we’ll probably be staring at a 100 point loss on the SPX in one week. On the contrary, if we continue dropping tomorrow, I expect to see 1014 by Tuesday November 10.
When I got rid of my JPM and GS calls soon after the FOMC, I knew something was wrong with the picture and I looked at the weekly charts for clues, and spotted the financial stocks either have shown potential MACD zero-crossover (to the negative side) or have already crossed to the dark side. If the bulls want to surprise the bears and cause a zero-crossover failure (which means further rallying), they will have to show us SPX 1120 by end of next week and 1200 by November 13. I doubt that will happen. Why? Nasdaq weekly has already gone negative.
If tomorrow and Friday play out like what I expect, then the road map to a possible Christmas crash (I believe Gerald Celente also brought it up in his trends forecast) could be realized step by step.
I noticed POMO days started in March and they exhausted the last few billion of that 300 billion dollar fund just recently on a Thursday when the market rallied over 200 points. Strange coincidence that the whole rally started about the same time as the POMO days isn’t it? Institutional selling has increased much greater than institutional buying. I forget his name but he is well known and was warning that the dollar trade (on CNBC this morning) will likely result in a big crash in commodities whenever the dollar starts a significant rally. Stocks will likely drop hard as well when that happens. This should happen within months from now if not sooner. As soon as the dollar starts rallying many people will be trying to sell first to lock in profits. If they can’t get their sell orders in, panic selling may start.
I believe the average American is looking for ways to cut spending worrying about all the extra taxes, higher costs the democrats are going to add to health care and then possibly to energy, and who knows what else. That’s if our jobs aren’t outsourced to China or India because they won’t have those high energy taxes and high health care costs. Less spending means a slowdown ahead. Current elected officials will get the picture or get the boot. Unfortunately that can’t come soon enough for many people. My two cents.
Retail money wants to play the year end rally. We go higher. Little fade this afternoon to draw in more shorts. Then BAM. Close over 10k.
I started looking for some luxury cruise “deals” and am finding that most of the ships
in January are almost sold out. These are the high end lines such as Seaborne, Celebrity etc. Where is this big bad recession?