Disqus - Friends of avcacio

Re: How Bad is the Break?

dowoper8tr — Thu, 20 Dec 2007 10:50:09 -0000

i think it takes 24 hours to work. I tinkered all day yesterday and voila! Looks to be working this morning.

Re: How Bad is the Break?

dowoper8tr — Thu, 20 Dec 2007 10:59:03 -0000

You want to see a trillion or so $$$'s just milling around at sub 3% rates? Check out the $IRX (3 month T-Bills). SOMEDAY, that $ is gonna get tired of less than 3% with inflation running like it is. Gonna be FORCED to chase yield eventually and all it takes is one enterprising hedge/pension/mutual/soverign fund manager to start the stampede out of the $IRX. Until then, I am finding it hard to get more overly long here. Cant we please just have 1 big downside purge so we can load up on some mo-mo names at bargain prices!!!! Bears win short term and Bulls win long term. Everybody gets theirs.

Re: How Bad is the Break?

dowoper8tr — Thu, 20 Dec 2007 11:41:11 -0000

my guess is the FED pursues the recession angle. We have DEflation in homes and land--most peoples largest investment--so FED uses rates to continue greasing the skids. Problem is that all this new liquidity is just sitting there in bills and notes! When that dam breaks, it could be a powerful bull force.

Re: How Bad is the Break?

dowoper8tr — Thu, 20 Dec 2007 11:42:23 -0000

where do you get your VWAP feed from? Are you on a desk?

Re: How Bad is the Break?

dowoper8tr — Thu, 20 Dec 2007 14:08:30 -0000

beanie is leading the pack on the disQus comment board. His LDK is getting hammered today so I may venture over there to see if there is any 'spin' going on.

Re: How Bad is the Break?

dowoper8tr — Thu, 20 Dec 2007 14:19:26 -0000

BTU looks like a juicy long very soon. If it forms a handle here then that would fit quite nicely with the 2 year cup formation being traced out. Hard to find anything to NOT like about this chart for a long term bull trade. Maybe coal is like pork--the Other white meat??

Re: How Bad is the Break?

dowoper8tr — Thu, 20 Dec 2007 17:24:58 -0000

Things that should concern a BULL:
look at a WEEKLY chart of the bull run in the $SPX since '05 and plot the PPO, the 50 day EMA and the $VIX with it. Ominous looking. Everytime SPX hit or pierced the 50week EMA it bounced back with the PPO confirming each bounce. Since summer of '05 every bounce off the 50week EMA (6 times) the PPO staged higher highs confirming the higher highs in the SPX. You will see VIX hits absolute highs at the same time SPX hits absolute lows---UNTIL November of this year when VIX realtive top preceeded SPX bottom by about 2 weeks. That decoupling is odd.

Secondly, SINCE Oct this year the SPX made a record high but PPO made a LOWER high. Late Nov/early Dec the SPX again bounced but PPO couldnt break its downtrend. Barely budged and that is negative divergence. RSI and STO confirm the weakness in SPX.

2Sweeties' insider friends better come out HARD with those buy programs since we are once again a hair under the 50 week EMA on the SPX BUT this time the PPO is sinking like a rock. I wouldnt bank on these buy programs working for more than a few days here. This market is structurally unsound for a BULL.

What could right this sinking ship for more than a week or two? MASSIVE Fed intervention coinciding with MASSIVE foreign bank intervention. Remember, it takes months for liquidity to start flowing through all its channels; moreso now since banks are in such a weak position and will use any available liquidity to unload bad debts first in order to shore up their balance sheets. Consumers will have to wait for their help. A pop in the BKX could lead the overall market by months so I wouldnt use their strength as an all clear signal. Their pop will be more about repairing their balance sheets than immediate strength for the markets.

Re: How Bad is the Break?

dowoper8tr — Thu, 20 Dec 2007 17:50:56 -0000

whacky things with expiration and shortend number of trade days this month is affecting the VIX. VIX is 30 day forward volatility but this month has played havoc with the calculations. Still, there looks to be something going on here. Complacency in the face of serious danger or simply a stairstep down for volatility against a backdrop of climbing market? I was leaning towards the latter a week ago, not so sure now.

Re: How Bad is the Break?

dowoper8tr — Thu, 20 Dec 2007 17:58:34 -0000

there is an icon (called OPTIONS) right above where the comment section starts. Toggle that bad boy. If you cant see it then you may need to register? i see it right above your anononymous picture.

Re: Riders on the Storm

dowoper8tr — Thu, 20 Dec 2007 22:15:20 -0000

As odd as it sounds, Tim may be right--or very lucky--in his puts here. If anything, he is most likely a day or two early on his puts given the great earnings tonight that should spurt all the indexes higher at the open. Tim has a way of fading strong morning markets and is a daytrader, so his money management is tight. Dont worry about him.

Look at these stats for the VIX v/s the SPX after such abnormal disconnects as we have had recently. Keep in mind this is the VIX and not the RVX which is the true RUT 'fear' gauge. RVX too new for any meaningful data, apparently.
http://traderfeed.blogspot....
I hate things i cant wrap my mind around and this last week or so of VIX is one of them. Good luck figuring out why the results are what they are according to TraderFeed. Only solace i find is that VIX and SPX only sport an estimated -.70 correlation, so i have read, so perhaps that explains the unexplainable???

Re: Does the VIX Trend?

dowoper8tr — Fri, 21 Dec 2007 11:44:22 -0000

thanks for the link, very good info in there! Liquidity is the opposite of volatility so it makes sense that as banks have been pressured--due to a sieze up in liquidity--that banks suffer and volatility climbs. The 'tell' in my mind is if the banking sector can truly regain its footing with the FED 'help' and claw out a bottom here. If banks truly start an uptrend then the VIX will continue its downtrend. I still stick to my thesis from earlier that we will see a BKX spurt of bargain buying but it will be very short lived. Too much structural damage to the banking sector that wont go away in a month. A bet on banking = a bet against the VIX. AS banking goes so goes the market.

Re: Tagged

dowoper8tr — Sun, 23 Dec 2007 16:27:58 -0000

Gonna be an interesting week that will be challenging to develop a trade plan around. If you think the $IRX, $TNX and $BKX show scared money and are inverse to the $VIX, then a trading bounce for the first 3 could be ahead for this trade-shortened light volume week while more pain ahead for the $VIX. I am pegging an $IRX yield of 3.2% and 4.3% on $TNX in the next 2 weeks which would mean VIX tags 16 level while RUT and NDX outperform the SPX. Afterall, roughly 17% of SPX is FINANCIALS, BUT the rest of SPX could suffer from a rate bounce implying further strength for the $USD. So, RUT and NDX look to be best poised for further strength here; SPX could be in a quandry while the BKX sees some bargain hunters the next 2 weeks.

Re: Merry Christmas!

dowoper8tr — Tue, 25 Dec 2007 19:10:41 -0000

I like the way you stand up for JC, Tim. Your wit, humor and conviction always keep this blog the most interesting read of the day.
Merry Christmas to you and yours as well as all your great readers and posters. Stay safe over the Holidays!

Re: Merry Christmas!

dowoper8tr — Tue, 25 Dec 2007 21:25:51 -0000

http://www.investmenttools....

Some links to get our minds back to the markets what 2008 possibly holds. Hard to argue that the above charts are anything but bullish. However, the below link sure makes a great bearish argument. Chilling actually:

http://blogs.marketwatch.co...

Could an 'unbelievable' bull market happen in the face of a looming crisis that seems inevitable? Maybe the the 'safe' trade plan for 2008 is to play both sides of the market.

Re: Welcome Back

dowoper8tr — Wed, 26 Dec 2007 13:25:17 -0000

Not so sure FCL is a 'dead horse'. Looks like a stallion coming out of the gates for a long bull run to my eyes. Have you looked at a 3 year chart? Coal getting some positive press and high oil = good things for coal ? You must be looking to daytrade this for a few points here or there??? Near record P/C OI readings puts you in the camp with a lot of other bearish traders calling a top at this critical juncture, but 3 days of short interest might be enough for more squeezing of your OTM puts coupled with some volatility implosion. Are you trading this one short and front month because the OTM puts are 'cheap' or do you really see FCL rolling over into a serious correction? To a longer term swing trader this looks like a juicy long play on any crest of the $54 level.

Re: Welcome Back

dowoper8tr — Wed, 26 Dec 2007 13:31:17 -0000

Posted yesterday but may hold some clues:

http://www.investmenttools....

Quite bullish looking. Of course the other link I posted in the same post is quite frightening. Choose your side :-)

Re: Welcome Back

dowoper8tr — Wed, 26 Dec 2007 14:03:07 -0000

The last 5 days have seen money flowing back into the '07 money makers: materials, energy, tech, chemicals and mining. The 'global growth' story continues to offset our housing and credit woes. Good luck calling tops on these sectors.

Re: Welcome Back

dowoper8tr — Wed, 26 Dec 2007 14:32:06 -0000

I could see a front month trade on the 55 or possibly the 50 puts here as FCL could pull back a bit here before attempting to blast through that juicy 2 year resistance at roughly $54 level. Your 45 puts look like a long shot, though.
Longer term support and resistance levels are VERY interesting when overlayed with options sentiment at those levels, and it looks like put players are betting this one fails to breakout. A contrarian by nature, i am thinking they are underestimating the strength in FCL and coal in general. Nice place for an enterprising fund manager to put on a squeeze before expiration.

Re: Boxing Day Blues

dowoper8tr — Wed, 26 Dec 2007 19:01:47 -0000

Hang in there Tim, you have traded through tougher times than this.

Re: Boxing Day Blues

dowoper8tr — Wed, 26 Dec 2007 22:53:34 -0000

I dunno. I have a sneaky suspicion that somehow the VIX continues stairstepping down and bases in the mid-high teens with the only spurts coming from 1st qtr bank 'revelations'. Seems like the market just sops up the bad news and moves on.

I see the 3rd chart in this series of charts (the SPX/Vix ratio chart) and it looks as if a powerful rally is building on the back of lower volatility levels. That would be quite incredible given all the negative sentiment.

http://www.investmenttools....

Got me all kinds of screwed up trying to figure out what 2008 holds.

Re: Bhutto Assasination

dowoper8tr — Thu, 27 Dec 2007 11:31:47 -0000

Did I hear she was forced out 8 years ago due to corruption? Just how corrupt does one have to be to get the boot from Pakistani politics?

Anyhow, what does Tim do today? Take any profits off the table, let them run, get back to even and then shut'er down or get bold and add to positions that were red yesterday but green today?

Re: Chicken Little

dowoper8tr — Thu, 27 Dec 2007 13:16:15 -0000

a bird in hand beats 2 in the bush. A profit you take is one the market can't. Besides, you respected the Fib line which has been your friend for quite a while.

this market looked strong pre-market but got whacked on the assassination news. Strongly favors this selloff being a newsdriven flash in the pan.

Speaking of flashes, anyone fortunate enough to own a few thousand shares of CSUN before today? I ALWAYS miss those kinds of moves------ UNLESS they go against me.

Re: Chicken Little

dowoper8tr — Thu, 27 Dec 2007 13:34:43 -0000

is that 'HitMan' in your avatar or are you just one menacing looking person?

Re: Chicken Little

dowoper8tr — Thu, 27 Dec 2007 16:28:21 -0000

Market discounted any bad news at the close today, IMHO.
SPY, DIA, QQQQ's look like they could bounce soon from handle-like formations. IWM too choppy after todays action but why not a bounce here too. Wouldnt be surprised to see 146 on SPY, 132 on DIA, 51 on QQQQ met with some buy orders. All look to be at bullish x-overs on MACD's.
There is an expiry on Monday in the ETF options and some indexes according to adamsoptions.blogspot.com. Wonder how much influence that has on things from here?

Re: My Most Valuable Lesson from 2007

dowoper8tr — Thu, 27 Dec 2007 19:35:05 -0000

Tim, your drawdowns are quite simple actually. As a 99.9% bear trader your portfolio naturally balloons during the market slides. By increasing your trade size and amounts during the downslides you are getting bitten by a very real but silent killer---volatility. I bet your best trades that turned sour were ones where the VIX was ramping and your positions were all green but you kept adding to the positions. Vix ramping is your friend as an options buyer but it also MAGNIFIES the volatility of your OWN portfolio. It's like someone silently levered your existing portfolio without your knowledge. Profits and losses come faster and take out your stops far quicker.
When Vix ramps 25-50% in a week, as it does more frequently these days, that should be your signal to put on 1/2 size positions. With fewer $$ at risk you can afford to widen your stops more than usual and stay in the game. You will NEED to widen your stops to stay in the game. Your gonna make profits (or losses) 25-50% faster anyhow because of the ramp in volatility, so the effect on your P&L will be similar as to what is was before the ramp when you had 2x the positions.

If the name of the game is minimizing losses and letting winners run, then this should help you greatly.