Disqus - Friends of Cole

Re: November Lows Breached!

moo — Fri, 04 Jan 2008 11:10:16 -0000

Tim,

What is the next fib price down for IWM below 73....???

Re: New Range?

moo — Wed, 09 Jan 2008 11:23:21 -0000

Tim, you may want to take a look at MON....it looking very ripe.

Re: How the Mighty Have Fallen

moo — Fri, 11 Jan 2008 18:55:00 -0000

I second the motion to have a "day traders" chat area. That would be terrific!

Re: Pop and Drop

moo — Mon, 14 Jan 2008 10:08:53 -0000

MA (MasterCard) is looking very weak right now. Once it breaks 174.5 or so ... look out below!

Re: Short JASO, short FSLR

moo — Mon, 14 Jan 2008 10:14:12 -0000

MA (MasterCard) is looking very weak right now. Once it breaks 174.5 or so ... look out below! Most credit cards are looking very weak and MA has been the strongest amongst them.

Re: Roundtable

moo — Tue, 15 Jan 2008 10:51:03 -0000

STT has been immune to the sub-prime and today is the 1st crack in this unstoppable upward trending stock. Me think this is only the beginning for this stocks downward spiral.....

Re: Vive la Petite Résistance!

moo — Wed, 16 Jan 2008 17:11:57 -0000

Yes, It was mechanically perfect to the penny filled. I bought put as well here, when IWM reached exactly 70.70, right Tim?

Re: Vive la Petite Résistance!

moo — Wed, 16 Jan 2008 17:31:09 -0000

Tim, I'm really bad at exiting my trades...do you have a topic on this in your book or in one of your videos?
For ATI, the 200 day Volume Weighted Moving Average Price is 65.21. I think once ATI goes below this, the stock will start being accumulated and will likely place a trailing stop. How are you going to manage the exit of this trade out of curiosity? My position is rather large and has me restless these nights. I'd appreciate anyone else's input as well. Thanks and good trading to all of us!

Re: How Low?

moo — Thu, 17 Jan 2008 16:47:08 -0000

Hi 2sweeties,

Are you saying you go long when RSI 5 crosses from below to above 11? Do you use RSI to short? If so what High RSI value crossing from above to below do you use?

Re: Too Much, Too Soon, Too Fast

moo — Fri, 18 Jan 2008 11:27:17 -0000

some stock I'm looking at that have not been broken ...err...yet...: TNH HUM FCSX MO ICLR LNN ADM KWK CVD AMED ESRX AFL AG EBIX DAR SDTH

Re: Too Much, Too Soon, Too Fast

moo — Fri, 18 Jan 2008 11:29:00 -0000

sweeties! thanks for your verbose and very valuable explanation on RSI and historical prior counts...very interesting. When I have more time I'll look more into this! Right now my eye is lock on the ticker monitors.

Re: Too Much, Too Soon, Too Fast

moo — Fri, 18 Jan 2008 11:35:26 -0000

$IXF - Nasdaq Financial 100 is going down into the gutter...

Re: Too Much, Too Soon, Too Fast

moo — Fri, 18 Jan 2008 11:36:57 -0000

Adding to calls on QLD as a safety hedge. I was adding to my put/shorts most of the morning.

Re: Sulk-Free by the Morning

moo — Fri, 18 Jan 2008 11:43:29 -0000

$TICK is huge negative at times today. Not much upside so far...

Re: Sulk-Free by the Morning

moo — Fri, 18 Jan 2008 11:48:49 -0000

Tim, were coming towards the 66 level for IWM...hope we bounce from there to load up more!

Re: Sulk-Free by the Morning

moo — Fri, 18 Jan 2008 12:00:16 -0000

Approaching 30 on VIX!!! Fear is HERE!

Re: Beartard

moo — Fri, 18 Jan 2008 13:00:58 -0000

Tim,

Hope this helps to stop flip flopping in and out of fear.

I sense you are perceiving the market at a more macro $TICK way and act accordingly.
This will cost you, since you are being driven to act by emotion.

STOP IT!

You need to see the other outstanding signs THAT WE ARE IN FACT IN A BEAR MARKET.

PERIOD.

Trust that fact, get rid of your old pattern and why not try and lock profits in short positions (instead of getting in and out, which is very costly) with wide hedge?

Take the empirical evidence from Dr. Brett:

* I've also noted that we've seen unusual strength in the Adjusted NYSE TICK during the latter portion of this decline. Either the measure is quite early, or it is not doing as good a job with timing as it has in past cycles (which may be ways of saying the same thing). This is why I look at multiple indicators and base my decisions on the weight of evidence, not just the readings of any single measure. In a bear market, markets become oversold and stay that way. We're seeing that in many of the measures I'm following, such as Technical Strength and the number of stocks making new lows relative to new highs. We're also seeing weakness spread from small caps, housing, and financial to the broader list of stocks, including the large caps and consumer-related stocks. This is evident in the Advance-Decline lines specific to the common stocks traded on the NYSE and the S&P 500 Index, both of which are making new lows. Weakness has also spread to the international markets, as noted recently. It's the weight of evidence as a whole, not any single indicator reading, that is important in gaging market strength and weakness.

Re: Beartard

moo — Fri, 18 Jan 2008 13:50:16 -0000

FOR YOUR CONSIDERATION and REQUEST FOR COMMENT:

Folks, you may want to put HUM on your radar....its been a remarkably strong stock if you look at its long term charts, but since WE ARE IN A BEAR MARKET, all stocks will take a hit. I'm betting this one will too...take a look.

I am seeking the strongest stocks now. They will deflate accordingly. My current strong list include:
AG, LNN, MO, ADM, SDTH AFL STT MA and HUM.

My former strong stocks that made money for me to add to existing "strong" stocks were: MON, MOS, STT (still strong but has much more downside) , CHK COF SU

Re: Beartard

moo — Fri, 18 Jan 2008 14:01:10 -0000

OK, here is your psych lesson for today.

Who are you? The intelligent trader or the unintelligent trader?

Here is Dr. Brett's thoughts on the subject:

In the two previous posts in this series, I advanced the notion that emotional intelligence—not the elimination or minimization of emotion—is essential to successful trading. Emotional intelligence, we have seen, requires attention to one’s feelings and clarity as to their nature and source. By understanding our experience, we are able to transcend it.

So how does emotional intelligence show up in trading practice? Below I offer pairs of behaviors contrasting emotionally intelligent and unintelligent trading.

Intelligent Trader: Notices frustration building and pulls back from the screen to figure out what’s going on in the market and what’s going on psychologically.

Unintelligent Trader: Becomes frustrated, does not attend to the feeling explicitly, and acts on the frustration by taking on too much risk.

Intelligent Trader: Has a strong degree of conviction in a trade idea, knows why that conviction is running so high, and acts decisively on the conviction.

Unintelligent Trader: Becomes overconfident after a winning streak and increases the frequency of trading, thereby changing what produced the streak in the first place.

Intelligent Trader: Feels fatigue or distraction, realizes that this could interfere with decision making, and does not make any major trading decisions.

Unintelligent Trader: Feels fatigue or distraction, tries to ignore or push past it, and makes poor decisions.

Intelligent Trader: Thinks through various market scenarios ahead of the open or ahead of economic reports and is prepared to act accordingly.

Unintelligent Trader: Does not think through market scenarios in advance and reacts impulsively to the market’s first move at the open or following a report.

Intelligent Trader: Is aware of subtle cognitive and emotional cues when a trade “feels right” and acts on the implicit pattern recognition.

Unintelligent Trader: Becomes so caught up in catching the exact high or low on entry that he misses entering the position on a good trade idea.

Intelligent Trader: Recognizes quickly when trade is wrong, accepts the disappointment, and channels attention toward learning from the failed trade and preparing for the next idea.

Unintelligent Trader: Perceives that the trade is wrong, cannot accept the disappointment and pushes it away, and turns the short-term losing position into a longer-term hold.

Intelligent Trader: Feels boredom, recognizes that nothing is happening in the market, stops trading for the day.

Unintelligent Trader: Feels boredom and tries to relieve it by putting on trades with a marginal risk/reward edge.

Intelligent Trader: Sees that the market is moving, feels eager to get in, recognizes that others are also feeling eager, so waits for a pullback to enter.

Unintelligent Trader: Sees that the market is moving, feels eager to get in, does not reflect on the feeling, and chases the market move.

Much of emotional intelligence boils down to a three-step process:

1) Pay attention to what you’re feeling
2) Figure out why you’re feeling that way
3) Use the information from your feelings to guide your next actions

The first step toward emotional intelligence is simply recognizing that feelings contain information, but that the information is not infallible. Only after recognizing and gaining clarity about our experience can we make wise decisions as to whether to trade, fade, or ignore those feelings.

Re: I Think It's Ready

moo — Fri, 18 Jan 2008 14:38:54 -0000

I just added to my hedge. I will not be shaken from my short positions.

Re: There Will Be Blood

moo — Fri, 18 Jan 2008 17:52:46 -0000

To have faith is to trust yourself to the water. When you swim you don't grab hold of the water, because if you do you will sink and drown. Instead you relax, and float.

-- Alan Watts

Re: Your Tax Dollars at Work

moo — Sun, 20 Jan 2008 20:03:16 -0000

Japan's NIKKEI 225 is down over 2.5% right now!

Re: Your Tax Dollars at Work

moo — Sun, 20 Jan 2008 20:09:13 -0000

Thursday the Chairman of the Federal Reserve expressed his support for a significant fiscal and monetary stimulus as a preemptive strike against a U.S. recession. The market answered by dropping over 300 points. Today the President of the U.S. broadly outlined a non-specific plan for economic stimulation. After the Administration's plan for $150 billion of economic stimulation was made public, the DOW closed almost 60 points lower. The result of the Bernanke/Adminstration fiscal and monetary stimulus is a total Dow decline of 479 points, according to my calculations.

Nothing said by either luminary addresses the problem, including those that developed this afternoon by the downgrade of the debt of Ambac, one of the four major bond insurers, MBIA, MGIC and similar companies dealing in OTC Default Derivatives. Should S&P and Moody take similar action, which is expected, two trillion in debt should also be downgraded. The downgrade of the debt of the guarantor must impact the debt they have guaranteed. So the two trillion is debt that may well and should be downgraded now is another domino of titanic size.

This afternoon's problems are new and their size says both Kings Are Wearing No Clothes" with respect to their presentations of Thursday and today.

The general equities market must be calmed. Should the Dow crater, another major domino falls. Let's see how the PPT (Price Protection Team) brings the Dow in Tuesday morning in pre U.S. trading and then how Tuesday closes. The DOW better be higher each day than the indices are before U.S. trading or as the last two days demonstrated, the PPT has lost its tight control of the equities markets. Watch the pre-open indices and closing Dow very closely.

If the equity markets cannot be calmed then:

* Recognize this is the Formula happening like everything else much sooner and much bigger in its implications than anticipated.
* Gold will rise to $1650 as an almost immediate effect of what will be done to attempt to fend off a total panic starting to take place in general equities, therein threatening to be followed by all credit markets of all kinds.
* The funds and hotshot short term traders in gold shares will be killed by the upward explosion of the gold price about to occur.
* The PPT and the Fed will step out of gold’s way because gold is one of the tools used in 1930 by Roosevelt and in 2000 by Bush. It will be used again now on the upside.
* Gold is the only insurance there is against what all this means because a panic in equities will blow the financial system, already coming apart, to smithereens.
* All country funds would shut down on any further investments in "at the wall" financial institutions.
* The rollover in credit and default derivatives would exceed the entire foreign debt of the USA.
* The rest of the $450 trillion dollar mountain of derivatives would start a disintegration like nothing you have every seen in your lifetime.
* Consumer demand would slam shut.
* The auto industry might as well go into liquidation this coming Monday, avoiding the June 2008 rush.
* The US dollar would burn a hole in the floor going directly to .5200 or lower.
* As the dollar disintegrates gold would rocket to and through $1650 in days.
* The markets for general equities would all have to institute total trading halts every 100 points on the downside for 30 minutes each.
* All commercial call loans would be called.
* All debtors one day late on any payment, lacking grace period, would be liquidated. All debtors over one day of the grace period would be liquidated.
* It is clearly visible to anyone with eyes or a mind to think that the PPT has lost all semblance of control in the equity markets and will soon in all remaining markets.
* The commercial paper credit market which is almost dead will die totally.
* Should no emergency action take place soon, you will see an old fashioned panic of the 1929 variety.
* Just as emotional fools sell gold and gold shares, be assured that more emotional general equity fools will unload and bring the averages down more than ever in history in one day.
* Recognize this is the Formula happening like everything else much sooner and much bigger in its implications than anticipated.
* Emergency action will be all splash and theatrics but truthfully the cat is out of the bag. It buys some time but corrects nothing. It makes the Formula 100% correct.
* There now must be EMERGENCY ACTION because the Chairman of the Fed has BOMBED OUT PUBLICLY and a PANIC is about to occur. Expect EMERGENCY ACTION in days, not weeks.

If you have not protected yourself, you may only have days to do so. Protection amounts to a simple act: As much as possible eliminate financial agents between you and your assets. Own gold or equivalents equal to one half of your liquid net worth. Then you insure your entire net worth. Do not have margin debt. If you have debt you must own gold fully paid equal to that debt to insure it.
Posted On: Friday, January 18, 2008, 5:35:00 PM EST by Jim Sinclair @ http://www.jsmineset.com/

Re: Your Tax Dollars at Work

moo — Sun, 20 Jan 2008 20:29:00 -0000

Note: this was post after Market close on Friday

Ambac Downgraded, Cities Seen at Risk
By STEPHEN BERNARD and LESLIE WINES
The Associated Press
Friday, January 18, 2008; 7:14 PM

NEW YORK -- A downgrade of bond insurer Ambac Financial Group Inc. is likely to have far-reaching effects, making it more difficult for cities to issue new bonds and forcing further write-downs at financial services companies, analysts said Friday.

After Ambac scrapped plans to raise $1 billion in capital, Fitch Ratings cut the company's crucial financial strength rating to "AA" from "AAA."

The downgrade likely means Ambac will not underwrite any more business, said John Flahive, director of fixed income for BNY Mellon Wealth Management. Market prices of existing bonds insured by Ambac and MBIA Inc. were trading lower before the downgrade, and Flahive suggested any downgrade could accelerate the decline.

Ambac and chief competitor MBIA together insure $700 billion in municipal bonds, and MBIA's "AAA" rating is also under threat. The company issued $1 billion in bonds this week to preserve the rating, though that may not be enough to satisfy the ratings agencies. MBIA said in a statement Friday it intends to keep working toward maintaining its "AAA" rating.

Re: Your Tax Dollars at Work

moo — Sun, 20 Jan 2008 20:32:38 -0000

From The Economist, a magazine I respect...

Bond insurers
All fall down?
Jan 18th 2008 | NEW YORK
From Economist.com

Huge new problems in the capital markets?

AMERICA’S big bond insurers, which have underwritten some $2.4 trillion of private and public-sector bonds, usually go about their business largely unnoticed. But now they are looking distinctly wobbly they have started to attract attention. If one or more of them were to topple over, there will be a huge knock-on effect on banks and other financial institutions that rely on their guarantees. This in turn will further worsen the credit crunch and cause an even bigger headache for policymakers already grappling with a sharp slowdown in the American economy.

The threat of such a financial domino effect looms large. Moody’s, a credit-rating agency, has signalled that it might downgrade the AAA-ratings of two of the biggest bond insurers, MBIA and Ambac, in the near future. On Friday January 18th, Ambac said that it had dropped a plan to raise $1 billion of new equity capital to preserve its rating—making futher downgrades even likelier. In response, Fitch, another rating firm, cut Ambac's rating.

MBIA, which recently managed to raise $1 billion of new capital on top of another billion that it received from Warburg Pincus, a private-equity firm, will almost certainly need even more money if it is to preserve its AAA-rating. ACA Financial Guaranty Corporation, another insurer, is in even direr straits. In December its single-A credit rating was cut to junk status. The firm begged its trading partners to give it more time to sort out its problems. But by Friday it had still not come up with a rescue plan. The state insurance regulator of Maryland, where ACA is incorporated, has already assumed responsibility for some of its operations.

Bond insurers in effect “lend” their top-notch ratings to lower-quality debt, raising its value in the eyes of investors. Any cut in those ratings may make it impossible for the bond insurers to take on new business and would reduce the value of the securities they have already underwritten. Such cuts are now a distinct possibility because the insurers have underwritten billions of dollars of mortgage-backed securities, including those notorious collateralised-debt obligations (CDOs) that have now gone sour.