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Or this.... Agree this area is important, but more so because of the previous ST high. At least on this chart we're thru the channel again, but let's see if we can make a higher high.
Stopped out of most of the stuff w/the exception of DXO and the currency plays. Potential ST double bottom on the NYSE, but it could just as easily fall apart and then there's nothing but air till Nov lows. Treasuries selling off throughout this decline is somewhat disconcerting as well. (however, selling off from artificial levels). As AJ has pointed out banks made fresh lows. Rest of the market is probably not too far behind. Very high cash again.
I don't disagree IT, very ST I still think it's possible to have a multi-day rally start from here, but agree it should be sold into or shorted. Right now I don't see any catalyst for a multi-day rally. No follow thru from yesterday really has to disappoint the bulls.
NYSE channel and potential double bottom
if we break thru here there's really nothing but air until the Nov lows.
Given that banks are leading and how oversold they are I took a few positions w/the idea that this should last at least 1/2 day or so longer. USO, DXO, FXC, FXE, BAC, XLF
All short term - especially BAC, XLF
Banks have been up all day more than the market. On days like this I'm not so tempted to short. However, if this rally continues for a few days...
I've been short here and there, but haven't been big time short since they changed the rules overnight. Just sitting out the carnage though isn't a bad thing.
NYSE support
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=34840737
I'm indifferent on a ST bounce.
Regardless I wouldn't hold you to anything, but yes I see where you are coming from. Joined you in NEM above 40. Action suggests everything is going lower. Will probably use a very tight stop though.
I'm not shorting gold here, but I do find it interesting that you're shorting gold while at the same time thinking that the DOW has an IT target of 10,000+. At least at this pt in cycle they seem like the same trade to me. If gold stocks get hit here I expect it'll be mostly because deflation is still too strong and money is still coming out of stocks too fast.
Of course I've followed you enough to know you're right more often than wrong.
I'm mostly cash here (approx 85%). I have some mid cap gold producers which are still quite a bit cheaper than their big cap breathren, but liquid enough to be bought. I have a few currency ETFs as well. I'm indifferent ST. Nothing looks really compelling to me yet long or short on a risk/reward basis. Your NEM short does look interesting, but FA wise I have a hard time shorting anything gold related. If EOD action is weak I may join you in NEM short as a partial hedge on my existing holdings w/a tight stop. Action in gold (not shares) relative to the markets and the Dollar is quite good.
I don't have a gun either. Too often they are used on the owners or occupants of the house thru heated arguments, drugs, accidents etc. I'm 6' 2' 220 and I own a big metal bat. Hopefully that's enough. I work out of my house and have a dog so if someone is checking out houses in advanced I'm also thinking why bother w/us.
We'll see where gold stocks close relative to gold. That's usually a good ST indicator.
Impressive gold strength in the face of Dollar strength, market weakness and oil weakness. Broke once above the trendline previously. If this is real we may test the low to mid 900's on this move. As I expect more potential market weakness I'm holding off doing anything. If markets get weaker I think gold/gold shares may start to fall again. Still have some gold coins and some mid cap producers if I'm wrong. Until BAC/C stablize there's really not much pt in going long much here. I probably will buy more gold coins if we start to threaten the high 800's again.
I take that back I did do a small purchase of some Euro's today. First entry just a ST swing trade.
Oil/gold/SPX still seem to be tied somewhat together. The past two days seems more like short covering, op-ex and speculative buying. So far it looks just like an oversold bounce, but it could obviously develop into more. Right now I don't think we'll get much past the a retest of the rising wedge breakdown on the daily SPX. With BAC and C down today i think it's more of a time to further raise cash and sell into strength. Not shorting here unless it's purely a day trade in a leveraged ETF. I'm tempted to buy some USO today, but if the markets head lower next week I think it'll stay under pressure. I'd continue to stay away from small/mid caps until bank stocks bottom and turn higher. But I'm also more cautious here protecting gains from last year. Not my best year in % terms, but my best in absolute terms. Do you have any physical gold here? If so what % of your liquid net worth? I only have about 2% in gold coins currently, but I may increase it to 4-5% if gold goes back to 750-775 again.
Thanks will look into more in the next few weeks. If I establish an account there or elsewhere I'll try to let you know which one i chose and why.
So do you have a forex account? Where do you recommend? I'm not sure if I'm going to trade forex yet, but I would like to prefund an account w/a min balance so if the sh*t hit the fan I can wire money into it much faster. Ideally a discount forex broker or something outside US borders.
(edit) Agree on the happening faster. I would have set up more shorts had I thought we'd fall this far this fast again. I was at least expecting a retest of the breakdown area from the rising wedge. We may still get a minor Obama bounce, but I would expect nothing more than a few days unless something changes on the FA front.
With respect to NYSE/SPX isn't the NYSE bigger? Shouldn't it superceed the SPX? (at least ST w/respect to a potential bounce). Agree w/HFTOM of markets over the IT, just not sure ST.
As you say the SPX is made up of more bank stocks. With C falling like this SPX will probably continue as well. NYSE still has one more decent support pt approx 2% below current levels.
Well I'm glad your back. Thanks for sharing your story. I'm guessing that you've been trading longer than I have and I have a good deal of respect for your trading so I was curious how you handled it. I didn't know why you left - just saw you gone one day. I think the good traders know there's no shame to going to cash and that every once in a while one's FA/TA/EW picture does not match w/the market. The bad traders keep trading, the good one's take a break and realize they're only human.
Some market, slow grind down right thru various support pts leaving no obvious entries for new shorts. Still very high cash overall right now. On a risk/reward basis some of the currency ETFs look decent here (FXE, FXC). Long term I know that I should set up a true forex account as these ETFs may melt in a true crisis.
If you don't mind what did you get hit w/last year that made you want to stay out of the markets (sector/stocks)? What would you do different seeing the same data?
One trader to another.
I'm more on the deflation side as well at least for the foreseeable future, however I must admit while I acknowledge as possible your targets I'm hoping they are on the far side of the bell curve.
I admit the market could go higher ST. I have zero shorts currently. Right now stocks are still falling on neg. news. I expect at least one more decent multiday rally, but I think I'd rather sell remaining longs or short. The one area I will add if the markets break higher is oil.
I guess I'd also add to fxe, fxa, and fxc if the market breaks higher.
It may play out the same. I agree with your logic. However ST the correlation with the market direction may come in stronger. Viewed on a daily basis there's a fairly high correlation IMO.
Still too much oil being stored and that gives incentive for current contract to decline in expiration. Like you I'm watching very close and have traded a few times the past month, but only a very small long position currently. Used today's bounce to lighten up my buys from Friday. S&P in decending wedge which should get resolved to the upside. I'm thinking one more decent bounce for the broad market and then it's shorting time again. Don't have a lot of conviction ST so I'm staying high cash. FXC, FXA, FXE might look good in another 1-2 days if the current trends continue.
On oil I'm noticing that S&P near it's lows and oil is still off it's lows. Small divergence, but if it continues to hold then oil will be a safer buy again (15 min chart). On the daily they are still trading too much together for my comfort. I'm very high cash currently waiting for a clearer picture in ....anything.
Probably an ok short, but with more people downsizing and more people renting (having extra stuff to store from houses previously) demand should be ok for storage. SWAG.
Well deserved. Now you can spend even more time trading. Dangerous for the rest of us.
NYSE 15-min, hopefully it comes thru
We're finding support off the falling Oct 14, Oct 22 highs. Probably some bounce/chop here for a bit. (SP 500)
The chart from the original message that I replied to showed just 1 pt from the 2004 lows to the present for the trendline vs the chart in the current message makes it look like all the lows from 2004 align. Will be interesting if 835 provides any support. Again thanks for the charts. When you get multiple pts from the 2004 aligning then I agree it can have some significance. Although I would expect any bounce to be somewhat temporary. I can't imagine breaking lows and not ultimately testing the 2002 lows in the S&P w/them being so close (assuming a breakdown).
I typically just stick w/log.
What's the validity of that trendline in your opinion? I'm a fan of TA and I like your charts in general, but it seems too arbitrary to me. Contains 2 points separated by how many years w/no real correlation. 835 or something around there and a backtest would probably make sense regardless as that's the typical MO when support goes. Again trying to learn, not nitpick as I do appreciate all the charts you provide (and agree w/most).
In this case if we break 850 I suspect we go 2-3% below real fast before testing the breakdown. The pattern the last few days has been to ramp the market in the final 20-30 mi. Maybe short covering maybe PPT playing games. Either way the odds on bet is a break to new lows this week. Gold is also showing the way liquidity wise and it looks like it wants lower levels.
Japan under 8K. Will we follow and break to fresh lows tomorrow? Typically we lead vs follow, but today's ramp off the lows felt more like short covering than any real buying. Too many looking for 775 area and then a decent rally. Wouldn't surprise me if we blew right through it (over multiple days of course).
(edit) Apparently the market doesn't. If you chart the VIX vs the S&P 60 min (6 months to 30 days) and then 1 min over various time frames you'll see the divergence very clearly the past 2 days on the 1 min. May not mean much since it's only 2 days.
I don't see a retest of the lows so soon especially w/forced selling decreasing and credit conditions improving so I'll say that this will still resolve higher, but the last hour has me wondering if we'll test 930-920 area first before going higher again.
Not much in the way of news tomorrow.
Despite markets falling VIX is barely higher. I tend to feel the ST/IT direction is going to be opposite LIBOR and other measures of financial health (not saying much I know). Keep it simple at least till we get to a more obvious over-bought/over-valued situation again. Right now the LIBOR direction is down and will likely continue for a bit.
When the high quality cheap stocks start to get expensive again I'll get worried.
I thought the last LEH CDS settlement netted out only 6-8 bil in payments. How is this one different?
Looks like we still need a 5th wave off the C.
$30 in the next 2 weeks imho. $40-$45 possible w/colder winter over the next 3-6 months. Swags of course.
Again forced selling. Nothing wrong w/company. $12 will prove to me an amazing buy ST/IT/LT. At least I suspect....
Obviously industrial use will decline. Some homes will go unheated if they are in foreclosure. People will dial down the thermostat this winter to save money. How much is factored in at these prices? I'd say 150%, but again in this environment, who knows....
I saw the same article when it hit. Seems to me shorts are just looking for any easy targets. They say CHK has a lot of debt and they hit it. In reviewing their presentation looking over their cash flows, hedges and when the debt matures this seems like a no-brainer at these levels. but in this market I'm not ruling out sub $10 at some pt. However a recovery to at least the mid 20's during the next 1-4 weeks seems likely unless of course we have S&P at 500-600 level first. I doubled my position today at 12.5 area. Unfortunately first buys were at 23. I'll double it again sub $10 if seen. They have lots of options to pay down debt w/internal cash flows, asset sales or reduced cap ex.
I guess there's concern now that CHK won't make it debt payments. I don't see this happening, but only way to explain it at 12.5. Will be a hell of a bounce. From what level I'm unsure at this pt.
Fed has not lowered rates simply because they are trying to protect the Dollar here. If/When Europe starts to lower the Fed may have some room to cut w/out trashing the value of the Dollar. If the Dollar starts to fall to new lows we'll get more capital flight both internally and from abroad. Also we'll get oil and other commodities stay stubbornly strong or gain even in the face of a global slowdown/recession.
I look for a coordinated easing effort from the world's CBs at some pt soon. That way they can flood the system w/liquidity (the only thing they know how to do) without trashing the Dollar alone.
We'll see.
(edit) I think it depends on how it was quoted from spot the day before since gold trades almost 24 hrs a day.