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Swing trading virtual portfolio – the lost week

So, I am on vacation this week. But we still get a new post :) I will try to check in once or twice a day. Probably before opening and at or after close. Enjoy and let’s keep it rolling!

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  1. So futures down a point (i.e. flat still), treasuries up a little before Existing House Sales report (they’re betting it’s near a 10 year low, and hence flight to quality), oil up a tad to 115.17, gold flattish, NG flattish, EUR flattish… wait for eco.

    Interest-rate derivatives imply banks are becoming more hesitant
    to lend on speculation global credit-market losses will widen.
    “Credit jitters have resurfaced throughout the markets,
    which is creating an underlying bid for Treasuries,” said David
    Schnautz, a fixed-income strategist in Frankfurt at Commerzbank
    AG, Germany’s second-biggest lender. “Weak existing home sales
    should also keep a bid in place.”


  2. GM Mark.   Early crude trading up ~1%.

    Russia – despite some returns that Phil had mentioned I’m not sure this is the place to be right now. Apart from BP’s troubles Hermitage has been a big believer in Russian investment.
    http://online.wsj.com/article/BT-CO-20080822-707445.html?mod=hps_us_my_industries


  3. GM SEM. – yeah I saw the overnight hit 115.80 but now close to 115… looks like futures declining into oil and LEH falling bc:

    UAL Corp., parent of United Airlines, lost 1.7 percent as
    crude rose for the fourth time in five days. Lehman Brothers
    Holdings Inc., the fourth-biggest U.S. securities firm, dropped
    3.5 percent after Columbian Bank and Trust Co. of Topeka, Kansas,
    collapsed amid bad real-estate loans
    . XTO Energy Inc. and
    Chesapeake Energy Corp. led an advance in oil and gas producers.
    “The closure of Columbian Bank awakened investors’ bad
    memories and shows that we are not through with the topic yet,”
    said Monika Rosen, head of research at BA-CA Asset Management in
    Vienna, which manages the equivalent of $41 billion. “The rise
    in oil prices also affects the market.”


  4. BTW, RT, thanks for the info the other day.  Going to open a paper trading account right now… just don’t know if it’ll work on my firewall (hence why I use IB in the first place: java based).


  5. GM Mark – hope you are around this week -  :D


  6. Well, my paper traded 1293 short futures at the close Friday with rsi2 in OB territory and just everything else would have turned out pretty nice!  futures trading now at 1285, so "up" 8 points from the short point… hmmm… swing trading futures… holding a $65,000 / contract position (leveraged 50/1) overnight / over the weekend… crazy ROFL.


  7. JPL – what up brutha!  So far so good, but this week "should" be really busy for me.  Gotta ton of work in the pipeline (which is good!!  I needs to get paid!) but will mean less fooling around with you guys.  We’ll see…
    :)


  8. Finally got a chance to do a little looking around over the weekend. Couple questions came up as anyone has time.

    1. Does ToS have backtesting capability? Does Tos have PP on their chart options? OPX has neither and wondering if it is time for a change. Almost did it earlier, but managed to get a better rate so I have stayed.
    2. k1/Film and all —   Reading back over the delta neutral trading and condors as well as the ToS site – it looks like there are a couple of the condor sites (including the one that you had discussed) that had autotrading via ToS. Thoughts from anyone on any of the condor sites (would like to believe their results but always skeptical) or any thoughts on autotrading? Tks!


  9. I have to say, I am eager to get into futures because I am tired of the premium needed on LT SPY puts.  And just premium in general is to be avoided if possible.  There is nothing more annoying than losing money on sideways action.


  10. SEM, K1 is the one to answer that.  I am not much of a back tester.


  11. Film – it’s funny, I’m always slightly hesitant to discuss futures at all, b/c the concept is very different from anything cash markets… I mean truely they’re used by big boys to hedge (like RT and I were discussing over the weekend).  Nothing wrong with speculating with them IMHO (as LONG as you know what you’re doing, otherwise you’re wearing multiple R losses) but as a hedge to current put or call options, it can be a pretty powerful way to stay market neutral (not just delta neutral on a position)…


  12. 8:56 *PAKISTAN COALITION SPLITS AS SHARIF QUITS OVER JUDGES DISPUTE


  13. Wife and daughter are headed to the AAPL cube in Manhattan – time to go long  :-)


  14. Mark
    TOS has a java – browser based product also.
    Don


  15. Don – hmmm… do they also have Advisor account set ups?  I.e. can I controle multiple accounts from one account?  I manage my parents 2 IRA’s for them, plus my measly little personal account, but can make trades in all three thru IB’s Advisor account service at one time… that’s kind of what sold me on IB in the first place.

    Plus the commissions are cheap…


  16. GM all,
    No margaritas yet this morning so I am allowed to post. 
    About futures, Mark is right. This is why we will have strict rules about stops and money management. I think it is fine to use them for speculating but you absolutely don’t want to let losses run.
    My only concern is that they usually don’t trend as well as some of our favorite equities.
    AGs looking strong this morning.


  17. Mark – Yes you can download the ToS desktop and I was able to use it from large public clients with serious firewalls. If not you can always open the web based trading platform.
    Sem – ToS has a thing called ThinkBack. I think that is the backtesting feature but I have not read the guide on it so not sure how it works. And yes they do have Pivot Points. I still use the trading platform from Scottrade for graphs though since I know how to use it :-)
    Sem/Autotrading + Condors – Hmmm … I remember K1 saying that he preferred the delta neutral stuff to condors since you cannot adjust condors if it goes against you. As for autotrading as a personal preference I would not do it. But I am a control freak and I do not even setup automatic payments on my bills so …


  18. Mark
    Yes you can maange multiple accounts via the ToS java product. I used it from work for 2 personal accounts, plus I was used it to paper trade with.
    Don


  19. Mark, ToS is AWESOME for managing multiple accounts.  You have a nice little window for pre-trade allocations and if you accidentally or on purpose buy all of the shares in one account or in the wrong account, you can pull up a support chat window and they will move the positions whereever you tell them.  Very handy if you are trying to do make a certain price.  One thing they do not do yet is AON trades.  However, they are talking about adding it.


  20. Is Saut on vacation or what?



  21. Opt/AGs – Of course they look good. I bit the bullet last week and closed all my calls with them along with the sizable loss so it figures now they are taking off. Plus I think with oil up and nobody wanting to put money in financials there aren’t that many choices left (sorry my frustrations coming out again. Maybe I need a margarita).


  22. com:
    CME Group-CME target lowered to $390 from $435, maintain Hold@DBAB

    Deutsche Bank believes dilution from the NYMEX acquisition will likely exacerbate weak volume trends, causing negative year-over-year EPS comparisons. However, the firm thinks the deal strengthens CME’s competitive positioning in the long term. :theflyonthewall.com


  23. Technology: Distributor checks seem normal@FBRC

    Friedman Billings said recent checks with Asian chip distributors were mixed vs. prior checks, neutral from chip stocks. The firm said Asian distributor chip shipments in July grew 18% month over month, 7 points above expectations a month ago and 2 points above the 5-year historical average. The firm is positive on chip stocks at current prices given that wireline/communication and PC related chip demand remains seasonally robust. The firm prefers product cycle stories MRVL, SLAB, or BRCM or restructuring/margin expansion stories like ONNN, NSM, MSCC, IRF, ATML, or FCS. :the


  24. So, I have started paying attention to the S/R areas defined by INO if anyone else is on their list.  They have been pretty so far.  So, initial support is at 1285 (10dma) and second support is at 1280 (20dma).  First resistance at 1294 (Friday’s high), second resistance at 1305.  FWIW!


  25. TOS-Agreed. I use it to trade OPM. I wish they had a feature where you could buy the same stuff in all accounts at once though. Would make my life much easier.


  26. Opt, thanks for the new post.  Glad you liked the title.


  27. Opt, would you be using hard stops when trading futures as speculation?   Or you only thinking of using them for delta neutralizing?


  28. Film / Cnicola / Don – you da mans!  Ty gentlemen… apparently I need to do A LOT of research the next few weeks.


  29. FIlm, I love the title LOL. I am using stops when trading futures the same way we do with options. As Mark pointed-out last week, the only way it differs is how we calculate position size as there is no delta. It is in fact much simpler.
    But I will discuss all this when I am back.


  30. SEM…on condor sites, for what it’s worth, Monthly Cash Thru Options lost the least during the big drop in January (many lost over 50% and even 100%). They have a free 45 day trial which I tried but did not follow up with. Basically, I prefer the RUT or SPX for condors as opposed to IWM or SPY because of commissions. You can get same return from 1 RUT condor that you would from 10 IWM condors. The trick is to have enough cash for adjustments if the mkt. gets too close to one of the verticals.


  31. Weird, DJIA is calling itself up 110 rather than down 110.  Same on Yahoo and ToS…..  that has got to be screwing with someones algorithm.


  32. CHK being bought this morning, testing 48.50 right now, and R1 at 48.6333 pretty soon…


  33. You know, it’s funny… I’m officially a noob now.  Suck.  Have to actually pay attention to what you guys trade / how you trade LOL.  Gotta any tips?  ;)


  34. LOL.  That’s awesome, Mark.  Now you know how we feel.  ;)


  35. Opt,
    ToS does have feature to buy in all accts at once – before you click on Confirm button for an order, you will see on yop right a button for "switch to multiple accts".  from there on it is self explanatory.


  36. Film – yeah, not as excited about it :(   Not that I can’t do it, just love the way I did trade / was relatively successful.  But no worries, just gotta re learn the game a bit… fun fun.

    Existing house sales in 18 min…


  37. CMan, that’s great ‘ll check it out!


  38. Film – Saut has it up now FYI:  http://www.raymondjames.com/inv_strat.htm


  39. COH really good to us this morning.


  40. Holy COH!  

    Thanks Mark.


  41. RT – tks for the feedback. Will check it out. Are you doing anything regularly with condors (either by yourself or via an advisory)?

    These guys website claims are great at 10% per month with low risk – wish it was as easy as committing $100k and earning $10k per month just sitting around!


  42. Any news on BRCM?  Opened down below S2!!


  43. Film – you still long those CHK 47.50′s?  I went long some Oct 50′s Friday close to the low at $2.60…. mmmmmm mmmmm MMMMMM love me some nat gas.


  44. CMan – I think:

    Aug. 25 (Bloomberg) — Broadcom Corp., the chipmaker for
    flat-panel TVs, agreed to buy a unit of Advanced Micro Devices
    Inc. for $192.8 million to sell semiconductors used in lower-
    priced models likely to be in demand for digital broadcasting.
    Broadcom, based in Sunnyvale, California, inherits more than
    530 employees and will get access to AMD’s customers, the
    companies said in a statement today. It expects to close the
    purchase in the fourth quarter.
    Broadcom, whose customers include LG Electronics Inc. and
    Sharp Corp., is betting a switch in the U.S. to digital
    television next year will make some older models obsolete and
    increase demand for less expensive digital TVs.
    AMD’s digital-TV business loses money and will dilute
    Broadcom’s earnings next year, the companies said on a conference
    call today. Broadcom, also a maker chips for mobile phones and
    video games, had its slowest sales growth in five years in 2007.


  45. oh, and these headlines from their CC:

    8:51 *AMD DTV BUSINESS WAS OPERATING AT A LOSS       :BRCM US, AMD US
    8:48 *BROADCOM DID NOT CONSIDER BUYING AMD HANDSET BUSINESS  :BRCM US
    8:36 *BROADCOM ACQUISITION WILL CUT 4Q EPS BY 3C     :BRCM US, AMD US
    8:35 *BROADCOM MADE ANNOUNCEMENT IN CONFERENCE CALL  :BRCM US, AMD US
    8:35 *BROADCOM WILL `APPROACH GAAP EPS NEUTRALITY’ IN Q4 2009
    8:35 *BROADCOM’S AMD PURCHASE TO BE DILUTIVE IN 2009         :BRCM US


  46. 10:00 *U.S. JULY HOME RESALES RISE 3.1% TO 5 MILLION RATE


  47. WTH is going on with DJI? It keeps bouncing around. I saw ToS saying they had some issue with calculating it but Scottrade seems weird too.


  48. Autotradeing – Tried on a paper acct  for FX – bad idea (my experience).  That is one sure way for them (brokers) to make $$.  It is like giving them your check book with some rules!!!!!!!!!!!.   I am not a control freak and still I don’t like it.


  49. Mark,
    Thanks!


  50. SEM…I don’t do anything regularly yet….have tried a few RUT’s . I don’t subscribe to a service. Most of them are about the same….typically, sell a vertical that will net you a 50 gain on a 1000 risk. Haven’t figured out the adjustment aspect yet, but last month I did do a 2x roll up when the RUT got close to my call side and it did save me a loss on that side of the condor and of course the put side finished with the 5% gain. I guess I could’ve rolled the put side too and made more than the 5%.


  51. good mornging all,is there anyone in RIMM?


  52. Mark, still long Oct 47.50′s  Looking for a NT trend change, hanging tough.


  53. Film – yes, unfort FRE helping financials out this morning… as long as financials up, energy down.j.. no matter how good the company.

    :(


  54. Anyone follows AMLN?  Looking for opinion.


  55. Morning everyone.
    Hey FIlm, are you still in RIO ?. A little disappointing the last few days and now it’s back to the 5ma. Let’s hope that it bounces form there !.


  56. Still in RIO.  Hopefully for a long time.  Jan-10 and Dec calls.  It is trying to make a big turn, had nice trendline break and had to expect some consolidation, but hoping we won’t have to go back to 25.

    FRE can’t help themselves.  They are going to zero.


  57. Trying to be in positions that won’t require any adjustment this week.  Most my stuff is long dated.  I have COST and SPY puts in Sept, CHK in October.  Hoping to get that big red candle this week on SPY to signal the next major leg down.  But need to get SPY down below 1261 for that thought can rest easy.


  58. FRE – agreed.  But right now might be being bought by the bond holders is my guess… as a hedge… bonds go up in value, stock sells off, etc.  it’s what happend to BSC too, hence why it went form 2 to10 in 2 days… FWIW…


  59. Well, it went from $2 to $5 because of that.  It went to $10 when they upped the price, if I remember correctly.
    I think it goes out at $2, but that probably means $5.


  60. Mark..when does the next futures month become the one to trade : i.e. , when would i need to switch from ESU8 to the next one..Z8 i think.. !!  ToS switches automatically but if i have to start swinging, I’d hate to be long/short overnight and wake up to a different contract month….thanks!!!


  61. RT – nw, it’s usually the Thursday the week before expiration… i.e. Friday Sep 19th for ESU8 to trade, most big boys will roll to the next month on the 11th… then of course the 18th, and the 19th will see no volume comparatively.


  62. sorry, "most boys will roll to the next expire i.e. Dec, not "next month"… "


  63. Lotta volume selling CHK donw to 47 soon, S1 is about the same level as Friday’s LOD… 47.7567 for S1 today.  watching for further weakness or pop off 20 dma of 46.7430… interesting time, 200 / 20 / 5 dma’s all within a point of each other… it should do "something soon" relatively speaking.


  64. sorry can’t type, 46.7733 is the S1 and close to Friday’s LOD of 46.8777… above teh 47.7567 number is hte PP today… my bad, off my game today.


  65. Thanks Mark. Will be interesting to see when ToS switches…


  66. SPX still down, ma’s keep you short the whole way… sh*t I wish I could day trade… then again I wish I shorted the OB level Friday at 93… would have taken half off at S1, then with the fail of the ma’s stayed short the other half looking for S2 or lower.  Depending on the action.


  67. To note what I was talking about, here’s the SPX chart I was posting last week, when Friday we closed in OB terriroty on the rsi2 setting (above 85) and subsequently when price was trying to close above the channell that it broke… tested Friday… and obviously failed again… hmmm….
    :)


  68. RT – thanks for the condor comments – homework for next weekend!

    Mark – which calculator do you use for pivots? – I ran CHK this AM with Friday data and had PP=47.76 and S1=46.77. This was per pivotpointcalculator.com


  69. SEM – yeah, see my 10:49 comment… really off my game today sorry brutha.


  70. Mark, I am holding here and not worrying until it gives me reason to worry.  Natgas prices should stabilize, they were silly at $13 now silly under $8, IMHO.


  71. Yeah Mark – me too – can’t type and should be working  ;-)


  72. Film – yeah agreed, just making intraday comments.  Holding until CHK gives me good returns. 

    For what it’s worth, SPX testing the 5, 20, and 50 dmas pretty much at the same time (relative LT and ST trend is all together!)… market looking for where to go the next month IMHO… see my above 5 month chart at the legend to see what I’m talking about.


  73. sorry for the spam, bored until I get my next transition…
    spx sitting on its 2 day close right now…


  74. Looking at market map – about the only place I see green is on the legend.   :-(


  75. Hi folks,  new subscriber here.  I had a couple of questions regarding the strategy, and where and how to start.
    I read here:
    http://optraders.googlepages.com/5mastrategy5
    http://optraders.googlepages.com/5mastrategy4
    along with the FAQ.
    First question:  It seems like opt doesn’t use hard stops.  It also seems that the buying power used is actually greater than the risk identified.  So for example, Opt writes:
    "Our risk on this trade is 2% of $25,000 or $500…Our risk or maximum loss per option is $0.625, which 0.5 (delta) X $1.25 (risk on stock).
    The number of contracts we should buy is our total risk divided by the risk per option: $500/(0.625*100) = 8"
    But since there are no hard stops (and even if there were hard stops, but the stock gapped down or up overnight), the real risk in a black swan is the entire options value no?  So like in the example, if you were to buy 8 AAPL ATM option contracts 1 month out, Say you got the 175s which are 570×8 – $4,560 (I realist that’s different than the sample cause AAPL is now higher…).  Is that not correct?  which is actually more like 20% of the $25,000 portfolio instead of the 2%…
    I have seen AAPL gap down precipitously in the past which is why I’m asking the question.  Has this been your experience? Or is a gap down usually pretty unlikely if you follow the lagging or leading method?  do  you follow the lagging or leading method when earnings aren’t happening either?
    Also, as a newbie, whats the best way to start if I want to mirror the portfolio?  i was thinking of papertrading the new trades that come about.  Or should I try to put on some of the older trades too and follow them?

    Thanks!


  76. Talk to you in a while guys.  Keep it real.  I mean Real, Brazillian-style.


  77. Oh, a couple extra questions/clarifications…
    In the portfolio, I presume, if a line is red and says "short", that you’re supposed to buy and ATM put instead of a call right?  No selling options short right?
    Also, in my above sample with AAPL, if the options take 20% of the portfolio buying power, that only leaves room to put on 5 trades total no?  Each risking 20% of the portfolio potentially?  in a black swan type event… 
    Thanks.


  78. Mark,
    SPX:  What time frame is that chart?  Do you use rsi2 for intraday signals (5 min chart) only or for daily charts as well?


  79. CMan – that’s a 2 day chart with a 5 min setting on the ticks, 8, 21, and 34 ema’s.  the rsi on that chart is meaningless and really need to take it off since I only watch truely ma / price relationship on intraday trading basis, and if there’s no trend (i.e. ma’s flat and price not moving) then I watch the macd set up (4,11, with 15 as the signal… gives you decent high / low signals for quick day trades). 

    I have 4 screens and 7 charts up at all times… 1 day, 2 day, 5 day, and 5 month to see when all LT set ups and ST are happening… rsi2 setting only good on a 3-6 month daily chart.


  80. bargainman,
    You are correct – Opt does not use hard stops.
    As to stocks gapping against you, technically you are right.   Opt will have to answer it but my observation of his trades tells me that he is quite patient and disciplined with his trades.  If he does not see any real reason for the gap against you – he would reduce the exposure by 1/3 at support/resi and be patient with the rest.  But again – I am just intereting his actions and have been known to be wrong  many times.


  81. Hi bargain,
    Our fearless leader is on vacation this week but he does check in from time to time (in between pina coladas).
    In reference to the risk part: if you pay 1k for a call and your stops take you out at 900$ (which is why we have them) then you risk only 100$ not 1k. And as a noob I have no idea what you mean by a black swan event.
    Yes red is put and yes we only buy calls/puts. Phil’s side is for more complicated fun.
    As for entering positions I am not sure. I waited for a while just following what Opt did and paper traded some until I felt comfortable that I can follow. I think it is a personal decision.
    Hope this helps and I am sure Opt will have better answers than this.


  82. bargainman – I can’t answer any of your questions b/c their specific to advice on contract sizing etc… can’t do that legally b/c my job.  Anyone else here have a sec to help him out?


  83. well there you go!


  84. Mark – Only if you are not busy, can you post the sector buying/selling today? As far as I can tell on my watch list everything is selling. I have to figure out how to do a chart like yours. Scottrade only does normal trend and is not as obvious …



  85. Bargainman,
    I echo cnicola’s advice of papertrading first.  I was with tradestation before this who (at the time) did not have papertrading – - cost me a bunch of $ and still trying to recover from it.  Market is alawys there and will be there  later when you are ready.


  86. Bargainman…I believe you are correct about losing much more in a gap or black swan event. You could always widen the stop or go to 1% R to lower the overall portfolio % per trade.


  87. RT,
    Opt does not recommned going below 2%.  His suggestion is 2 to 3% risk.


  88. GM all, looks like a bad day for AAPL  and many other techs.


  89. Thanks Mark.


  90. Back from vacation, same old mess. Anyone charting COH? Looks like the selling is starting to pickup some steam.


  91. ma’s keeping the world short the SPX, S2 is 1272.1266… if broken looking for 70 support intraday… the pit doesn’t usually like to go short past S2 to s3 but we’ll see…lots of sellers out there.


  92. whoops!  spoke too soon LOL.


  93. Did I read this here or on Phil: Friday there was a sell-off about same time and he said it was Europe before closing their market.


  94. or too late I should say.


  95. BTW in what world FRE is up and everything else is down?


  96. I think short is the new black.  Just peeking at the charts while chasing my boy around the house.  Was there news on that drop or just a moment of clarity by the drunken bulls?


  97. Cnicola -

    NEW YORK — Ailing mortgage finance company Freddie Mac (FRE) easily sold $2 billion of debt on Monday, reassuring investors that it and sibling Fannie Mae (FNM) can fund their operations without a government takeover.

    Fannie Mae shares rose 4%, and Freddie Mac stock gained more than 11% in late morning trading in New York, even as broader markets fell.
    Fannie on Monday announced it would tap the debt markets for $2 billion in three- and six-month bills.
    An analyst said the companies, which own or guarantee nearly half the mortgages in the United States, were unlikely to be nationalized, which also soothed market jitters.
    Investors have been dumping stock and have pushed the shares down more than 90% since March on fears the housing slump would leave the two mortgage giants insolvent, and shareholders would be wiped out in a government bailout.


  98. few tidbits for you to nibble on:

    Aug. 25 (Bloomberg) — Copper rose on speculation a rally
    by the dollar may stall, renewing demand for commodities as a
    hedge against inflation.
    The dollar last week dropped 0.5 percent against the euro,
    yen and four other major currencies, halting five straight weeks
    of gains. Before today, copper gained 14 percent this year as
    the dollar basket dropped to a record in March. Most commodities
    are priced in dollars and often move in the opposite direction
    of the U.S. currency.
    “If the dollar does start to weaken from these levels,
    then you get commodities as a whole rising,” said Jonathan
    Barratt, managing director of Commodity Broking Services in
    Sydney.


  99. Aug. 25 (Bloomberg) — Natural gas in New York fell to the
    lowest in more than six months amid speculation inventories of
    the furnace fuel will be adequate for winter heating demand
    starting in November.
    Production is increasing while seasonal temperatures limit
    the need for gas to produce electricity to power air
    conditioners. U.S. power-plant output decreased 3 percent to 83.5
    million megawatt-hours in the week ended Aug. 21, according to an
    analysis by Genscape Inc. Supplies rose 88 billion cubic feet to
    2.655 trillion for the week ended Aug. 15, the Energy Department
    said Aug. 21.
    “Storage is headed to 3.5 trillion, maybe more,” said
    Scott Hanold, an analyst at RBC Capital Markets in Minneapolis.
    “That reality isn’t fully in the market,” so prices may decline
    “as gas storage continues to inch up.”


  100. SEM (and others interested in delta-neutral on ToS) – Just got on today, juggling a couple calls. Will post answers a bit later when I get a few minutes.


  101. Aug. 25 (Bloomberg) — U.S. stocks fell for the first time
    in four days as a Kansas bank’s failure and speculation American
    International Group Inc. will post a loss heightened concern that
    credit writedowns will keep rattling the financial system.
    AIG, the world’s largest insurer, tumbled 5 percent after
    Credit Suisse Group said the company may lose $2.41 billion this
    quarter on mortgage-related writedowns. Washington Mutual Inc.
    and Huntington Bancshares Inc. each dropped more than 4 percent
    after Columbian Bank & Trust Co. became the ninth U.S. bank to
    collapse this year. Lehman Brothers Holdings Inc. slumped 7
    percent on concern a Korean bank will reconsider a potential
    investment in the fourth-biggest U.S. securities firm.
    “The market’s going to struggle until we get a clear
    indication that we know what the bottom is in the financials, and
    that may be a while,” Peter Sorrentino, senior portfolio manager
    at Cincinnati-based Huntington Asset Advisors, which manages
    about $17 billion, told Bloomberg Television.


  102. Mark,
    Fundamental Q:  PIT – who are these folks trading for?  Are they the ones that eventually get our orders (and of course in addition to the market makers I presume).


  103. K1,
    Good to see you back!


  104. CMan – pit boys – trading for their flow and their clients (GS, MS, MER, etc).  Futures spread is always .25 on ESU8, so I believe .10 goes to the exchange and .15 goes to the pit trader who made the position for you.  But there’s also boys in the pit who, like that PP history thing I’ve posted a couple times says, follows the market and will add to their positions at PP’s to go the other way, or change positions and follow the trend if sellers / buyers in control (for example, look at a 5 min chart with volume today of ESU8… see the volume spike thru the SPX S2 before noon EST?  That’s the pit changing any longs they had picked up at 75 into shorts and following the other sellers down… Hence why 70 "might" prove support for those looking to flatten their positions, but if not then 65 or 60 are next support levels… we’ll see… trend down, follow trend, but 70 "should be" support. 
    :)


  105. Hi guys – I’ve been following you quietly for a couple months now and want to dive in a little deeper.  Can you tell me what kind of charting software you use?  I’ve been using Stockcharts.com on my iMac and want to move to something more robust now that I’ve got Vista running.  Appreciate your thoughts.  Thanks.


  106. News – just saw S&P ratings cut on more Alt-A bonds…


  107. Thanks for the answers guys.
    Cnicola
    you wrote: "In reference to the risk part: if you pay 1k for a call and your stops take you out at 900$ (which is why we have them) then you risk only 100$ not 1k. And as a noob I have no idea what you mean by a black swan event."
    The question I had was in reference to "what if you couldn’t get your stop out in time?"  For example, AAPL on 18 Jan it closed at 161.  On the next trading day it opened at 148.   Even crazier, back in Sept 28 2000 apple closed at 26.75.  Opened the next trading day at 14.09.  An almost 50% drop with no chance to trade out.  That would have wiped out the calls for sure.  It’s not likely of course but all you need is one of them and it can wipe you out…  But even if the market didn’t gap, since the stops aren’t ‘hard stops’ in other words opt says not to put in computerized stops at the broker, then if  you stepped out for lunch and came back and the stock got halved, your options position would likely be wiped out..
    A black swan is an unpredictable very rare event that causes the market to crash or causes unprecedented changes.  9/11 is the classic one people refer to these days, although the crash of 87 was likely also one.
    Anyway, hopefully I’m not being too pessimistic here.. I just want to understand the worst case scenarios.. I’ve been burned a few times by assumming "oh that’s so rare, it’ll never happen!"  Thanks all, hopefully Opt can chime in when he checks in between margaritas!  You see, this is why I’m worried… my timing is always perfect!  I join the service on the very week Opt is out!!!  :-)


  108. Mark, any more levels that should hold?  LOL?


  109. bargainman-
    I wouldn’t worry too much about this week.  It is typically one of the slowest trading weeks of the year.


  110. What are the bonds paying? Interesting: Fannie and Freddie’s existing preferred shares are trading like junk bonds, yielding around 17 percent to 19 percent instead of around their 6 percent dividend levels.


  111. Bargainman, 9/11 was actually unlike any of the other events you noted.  That one truly was a surprise.  Although, we were firmly in a bear market downtrend exacerbating a fall.  All the other events had many warning signs.  I am not saying I was there and I saw them, but in the current environment, any wonderful news that would move the market up will be met by lots of selling as there are too many people in the world trying to raise cash.  On the other hand, a very bad piece of news could drop us 10% before buyers decided to test the waters.  The risk is now to the downside, much like it was in 2000 and 2001.  But in 1999, the risk was to the upside as the trend was strongly going in that direction.

    And your timing is perfect.  There is almost nothing you will ask this week that can’t be answered by many people here as we all have the same questions when we start.  When Opt is back, you will look like a genius with all your smart questions.

    Can’t stop peaking at the SPY cratering.


  112. SEM- Backtesting is ‘easy’ in ToS in the sense that they now provide full access to the OPRA history data, via the thinkback tab. This doesn’t work well in the sense of automated strategy backtesting, but it is possible to pull up the closing prices for equity options going back quite a ways. I do my backtesting with a spreadsheet, so this works fine for me, but it is a bit time consuming.

    Autotrading condors- the guys who run the condoroptions site seem to do pretty well, with a monthly goal of 10% gain on risk and performance quite a bit higher than that. For a while I got excited about condors, but eventually got bogged down in the amount of premium consumed by commissions (condoroptions focuses on condors that pay approx 65c on 2.00 risk, and using my commissions you give up 12c to commish). Please recognize that I mean condors aren’t *my* thing, not that there’s any problem with them.


  113. film, Other than TA is there any other reason you like CHK ? is that because we need to consumer more natural gas during the winter time?


  114. Film – no. No there aren’t.  :(

    And like I said, "should’… I also said lots of selling pressue, 60 or 65 are next supports if 70 don’t… the fact that S2 doesn’t even get close to holding tells me how many sellers there are out there… S2 is very hard to break in a "normal" day…


  115. mrs falbo- welcome, this is quite the group here. I strongly recommend you open a paper trading account with thinkorswim and get the hang of their software. They have two different chart packages built in (ToS Charts and Prophet) and generally as a platform they rock.


  116. Hi bargain,
    I actually think this the best week to join Opt’s service. It is quiet and I highly recommend taking advantage of this to read some of the back threads and get a feel for how things go here. Between my full time job and watching this pretty much all day I barely have time for the mound of trading books I bought or for reading past threads. Also as a starting point maybe look at current open positions and see when and why we went into them …
    As for stops I am not sure I am the best person to answer. I am watching this full time so basically I see what opt says and also make my own decision based on my own feel of the stock (and I just buy lunch and get back so not enough time to get surprised :-)    ) . I will leave Opt or someone else to answer that better.
    As you will see from prior threads we have winners and we have losers. With his system winners are by usually in higher number than losers and as long as we let the winners go as far as they can ("just follow the trend" :-)   ) overall you should always make a profit.
    Also Opt usually has a balanced approach with both puts and calls so whichever direction the market goes you still have some positions making money.
    Not sure about catastrophic events but if I thought they would happen more than once every x years I would just stay in cash. And again: "You should always invest only as much as you are willing to lose" (now I am being the pessimist :-) )


  117. anyone have any thoughts on GS?  I’ve got one naked long january call – last week people were bullish, any thoughts now?


  118. bee, I believe NatGas has very good LT fundies so I expect it to find support right here.  It has to keep moving up and my stop is now the LOD, sort of, since I can’t mess around with a ST trade based on LT fundies.  Since I am in Oct calls, the LT fundies only sort of help.  Really should have caught the bounce at $42, if I was paying attention.

    You can see how close I am to closing this trade here. 
    http://i35.tinypic.com/104ndkj.png


  119. bargain- just to reiterate what the others have said, the main components of the system are Discipline and Balance. By keeping our discipline and taking losses while they are still small, we keep ourselves from being in trades against the trend. By keeping our discipline with regard to position sizing and appropriate R, we keep any one position from knocking us out of the game. By striving for balance in our positions, across sectors, markets, economies, and even puts/calls, we increase the possibility that a Black Swan will be painful but not deadly.

    I strongly support Film’s suggestion that you use this week to do some backtesting on charts, ask a bunch of questions, figure out what your R is, and go through the motions of calculating position sizes and paper trading some. It isn’t hard, but it isn’t automatic either.


  120. film, Would you mind telling me how you make your trades? like for CHK, you bought in today  around 47.7? and set a stop around the LOD which is 47.2? I just wonder about if we trade option on this one, would bid/ask spread kill the trade since the stop is really tight?


  121. GS – I bought Oct 175 calls last week Troy. Its down with the market today but it is near a strong support.


  122. I have a feeling the Q’s and SPY should recover a little bit by EOD. Volume is low on the selling and indicators like MACD and RSI are strengthning slowly.


  123. K1 – Thanks. Your explanation was much better than mine.


  124. Oh – I mentioned last week the 400 dma failing on a LT daily chart… just to put things in perspective, here’s 2 charts to look at (b/c I can’t make the daily chart any longer unfort:

    02/27/95 thru 02/25/03 SPX… look at the 200 and 400 dma and when they crossed (white arrow, March ’03)… also look how long the market went down until it found a bottom (2 years).

    08/28/00 thru 08/25/08 SPX… now the 200 and 400 were taken back to the upside in 06/2003, and subsequently the 200 passed thru the 400 UP in 10/2003… you can see how the 400 has been support the last 4 years, and then broken in December last year… now 200 breaking the 400 to the downside (first time since 03/2001) and 200/400 both downward facing.  I.e. if history repeats itself, then there may be another 1-3 years of selling pressue in the LT charts…

    Ha!  Sorry to sound like such a LT downer on a down day.  I guess more than anything I just want everyone to have perspective for the future… who cares if the market goes down, why don’t we make money while it does?  I.e. when I see the SPX test 400 again in the next 6 months, you’ll be DAMN sure I’ll be loading up with some puts. 

    And DEFINITELY not saying the market’s just going to go straight down the next few years… but at the same time I’m prepared for anything.  ’01 saw the tech bubble pop… what bubble(s) is there that could make us fall the next few years?…  just trying to get those creative market juices flowing! :)


  125. Pat – SPX / market recover… agreed.  Like I said, very rare to see S3 or levels way below S2 tested in the market… if so then you know sellers are in control… the 8 ema has FINALLY been broken to the upside, but now 70 is resistance (that which supported now resists until price retakes, etc).  21 ema next big test, then S1 / 34 ema test about the same time… if all broken price should recover to 2 day close then / or S1 range of 82… but we’ll see… don’t think so for some reason.  Feel like we’ll test the 61 support of late tomorrow or something… if so rsi2 "should" be close to OS territory again… FOMC minutes tomorrow.


  126. Mark, also it looks as if the 200MA is becoming a resistance during this downturn.


  127. Pat – the ONLY thing I disagree with your statement about is that the volume is low on the selling… here’s a 15 min delayed chart of hte ESU8 5 min chart… look at the LARGE volume bar selling it down before noon est today… lotta boys shorting… I mean 60k contracts in 5 min is 3.825 billion leverage traded… in 5 min…
    :)


  128. Pat – 200 dma – completely agreed.  If / when price gets there again the next 1 month – 6 months I’ll buy 6 month puts… (and prob ATM front month puts too expecting a pull back ST and LT).  Just saying….


  129. Mark – Very nice LT charts … are you sure you are a day trader? :-) Anyway it is amazing how things look once you take a step back …


  130. Pat – in fact, here’s a 5 month chart… you can see in the 2nd circle where it tested the 200 dma, the wick of the candle actually went and kissed the 400 dma… mmmmmm mmmm MMMMMM!  Love me some charts!


  131. Anyone looking to getting into APPL leaps? Seems to be following the same trend as the past two weeks of falling into that trading range.


  132. Casinos have been great trenders lately and appear to be at support – LVS, MGM, WYNN

    Anyone else watching this?


  133. Cnicola – was a buy-side portfolio manager for 3 years before I cut my teeth in sell side equity trading… so my training was LT fundies, taught myself technicals (and had some great mentors sort of)… like trading much better and now just an execution guy.  I.e. not making the big bucks like those at HF’s, but gain more experience every day until I get a notice that they’re bringing me out of the minors into the big leagues… i.e. LT outlook on my job too … some day
    :D


  134. k1 – thanks!  On OXPS they give you historical (4+ months) – open/high/low/close and it is up to you to do the leg work. Sounds like it is similar on ToS.

    That is quite a bite on condor performance – will have to take a look at some paper trades.


  135. Great stuff Mark! That would have been a phenomenal short. Gotta find out where I can draw charts like those.


  136. SPX looking to test the 34 and S2 at the same time like I said, 8 crossing the 21 from below soon too?  i.e. buy the market intraday?!?!?!?!  man I need to day trade!!!!!!!


  137. Fricken’ killing me… licking my chops like a dog here…


  138. Pat – what trading platform do you use?


  139. JNJr / AAPL  - I was thinking that I could hear Opt ask us: did you buy your AAPLs on this pullback? Unfortunately I am all tapped out on cash for now … Was thinking of maybe rolling my LEAPS to a lower strike from 165 to 160 or 155 but not sure it is worth the cash


  140. ooo fail!  LOL.  No long until 34 broken.


  141. k1 – thanks


  142. Mark – You know that wick on your 5 month chart. It was about that time when I decided to start trading and bought some LT stuff (ETFs)… As you can imagine it was quite the "perfect" timing.


  143. Cnicola – ha!  that sucks brutha.  yeah I’ve learned not to go against the flow… been burned too many times also.  But experience breeds maturity!


  144. I currently use Tradeking as my options broker and also some of Scottrade’s trader tools. I know I know, they are not great at all and from the comments on this board, I need to try out ToS soon.


  145. Bee, I don’t have the discipline nor system to qualify how I enter every trade.  Lately, I have just been trying to wait 36 hours before entering a trade.  I get pullback on every trade I find.  CHK I actually entered too hastily as I wanted to be in and was getting ready to head out.  But, if it holds the trend the entry matters less, right???  (I will admit, I don’t believe that even if it is true.  K1 can probably tell you if that is true.)

    JNJr, I would not be eager to jump into AAPL leaps here.  AAPL cannot fight the market if it rolls over like it looks like it wants to.  Look at the chart Mark posted a few minutes ago. in fact, here’s a 5 month chart   Trendline support is now trendline resistance and we are starting off this "normally quiet and positive week" with relentless selling.  Buying AAPL on scary drops is the only strategy I endorse.  These casual pullbacks are ST traps, IMO.  Whenever you catch yourself saying, "Whoa!" on an AAPL sell-off, BUYBUYBUY.  

    Just checked volume on Nasdaq.  Is that a misprint?  I see HUGE volume so far.


  146. alright, here we go again?  8 gonna cross the 21?  price going to test / break the 34 and S2 at the same time?  If it works the way it should, volume SHOULD buy it thru to say 75-80 level, then 82 level… just saying.


  147. Pat, you can download the platform for ToS in about 5 minutes.  Just need to create a user, don’t need to open an account.  Don’t know if it is real-time, but for a lot of things that doesn’t matter.


  148. Mark – Murphy on stockcharts uses ema 13/34 cross for market turns. Cross down was mid December, never looked back since.


  149. Pat- Film is right, the paperMoney account is 20 minutes delayed but that doesn’t matter for drawing charts, following Opt’s system, or seeing if the platform is right for you. Plus you get access to futures, futures options, and forex (if you care).


  150. Mark – Considering that at the time I did not even know how to buy an option (and only had a vague idea of what it was) and I needed friends to show me what and how to buy ETFs I don’t feel too bad.
    Also out of the 10k I used to play with I only lost 1k and that is not too bad for someone who had no idea about greeks or volatility or candlesticks until June – July :-)
    On my Scottrade account in the 3 months I played around with the 10k the total cost basis of everything I bought and sold was 52k which means I turned the money around 5 times in that time. Never understimate the power of brute force (just watching the screens and "feeling" where it will go in the next few days).
    Now I am slowly unwinding my positions and getting the cash in ToS. I am quite tempted to cash in the LT plays at a loss since I think I will more than make it up putting them to work with Opt’s ideas (especially in light of your 10 year charts).


  151. got you film!!!!!!!!


  152. Glanced at the hourly of AAPL.  Buy 1/3 at 170.  1/3 at 167.50.  1/3 at 165.  At 162.50, sell, pray, and invest in a metal detector.


  153. mck – nice!  That’s something I’ll have to create another chart and see if it works… also notice that he’s using fib numbers in his ema’s?????   ;)

    Also notice that he’s USING Ema’s, not Sma’s… I know we’ve discussed this before b/c I don’t know truely what’s better, but Op / most on here use SMA’s for LT charts… in teh finance world most CFA’s and PM’s look at LT charts from an EMA perspective… but SMA seems to make more sense when looking at the 200 or 400 dma’s.  So argue however you want, just something to note. 

    SPX price failed agian!  still no buyers… still trend is down…


  154. Mark, I don’t think "should" means what you think it means.  LOL


  155. Pat – I was on Scottrade and still use their charting service since I already learned it. You have to use Elite though to get anything good. They have nice charts and also alerts so if you can bounce your account to 25k then you download it and then just take the money out again since they do not check.
    I do most of the options trading on ToS now and I love it for trading and analysis but I think I like the charts better on ScottradeElite.


  156. Film – exactly!  There’s my idea of the future, and there’s reality.  One thing is a definite: the market is always right.  I’m not.  In fact, I’m never right.  I’d argue that I’m lucky all in.  So if the market’s always correct, and I’m not, then I follow the market… it will tell me when it’s time to buy or sell, I just wait patiently until it does. 

    price flat at 70, ma’s flat, 34 still the "LT" intraday trend, still needs to be broken (and S2 to the upside) for this market to keep buying.  watching… waiting until it gives the green light (or yellow which is now, or red if it fails hard).


  157. MRK – has anyone looked at MRK as a short right here.  It just tested the 89 intraday and failed that again.  On the daily, the 50 has kept a lid on it since it dropped below in Jan.  Right now it’s trading right at the 50 again.  Thinking of buying the OCT 35 puts at 1.75.  Seems like a low risk trade with little downside risk.  :-)


  158. Thanks Film & k1 – I’ll check out TOS this week.
    Cnicola, Elite is very good on Scottrade and does meet most of my needs. Too bad Scottrade itself is not the best broker for options & ST trading. Its great for buy-and-hold investors.


  159. Richard – hey man!  MRK – interesting 5 month chart, 50 / 20 / 5 dma’s all within $0.60 of each other… so very close… is there anything news worthy for it to go somewhere soon in the future?  Just curious. 

    Intraday 5 min – failed its PP, failed the 89 on teh 5 min and now testing it’s 21 / 34 for support… hard to say where this guy plans to go the next week / month… all ma’s so close but it seems to usually fail its 50 dma… depends on your time frame brutha!  But if you’re looking for quick flow then if it breaks its 21 / 34 right here, it should keep dropping intraday to follow the 89, if it retakes then it will at least go back to its PP (and maybe that’s the short?).  currently all ma’s flat…


  160. Richard/MRK – I would wait first until 3:30 or so to make sure the candle stays that way. But also if it does isn’t that a hanging man and in the book it says you should wait one more day for confirmation? Especially considering the sell off today it is holding up pretty well. If you do buy in I would scale into the position over today and tomorrow.
    (Disclaimer: this is my personal opinion and may be horribly wrong :-)   )


  161. Mark – he’s a fib proponent too, not overboard but definitely notices the levels. Here’s a blurp on the 13/34 signal. Looks like his bearhish wedge call is working out too.
    From 19th:
    RISING WEDGE PATTERN LOOKS COMPLETE…  A rising wedge is characterized by two rising trendlines that converge on one another. It’s generally a bearish pattern. The fact that the lower trendline has been broken is the usual signal that the rally has ended. Chart 12 shows another reason why this is a logical spot for the rally to end. It plots the 13- and 34-day exponential moving average combination. In my experience, that EMA combination generates excellent buy and sell signals. The last sell signal was given in early June when the red line crossed below the blue. The faster 13-day EMA rose up to test the 34-day this week. That test, however, appears to be failing. The black line below the chart plots the difference between the two EMA lines. Notice that the black line is starting to weaken at the zero line. That’s a logical spot for more selling to appear. And it appears to be doing so. The message in all of these charts is the same. Several key group and market indexes rallied to important resistance points and have started to weaken again. That’s a strong sign that the market is rolling over again.
    Followup today:
    BEAR WEDGE STILL INTACT … Last week I showed a bearish "rising wedge" pattern for the S&P 500. I wrote that the the S&P needed to rise above the lower trendline to negate that pattern. The hourly bars in Chart 9 show the S&P 500 backing off from that resistance line (see arrow). That’s another sign that Friday’s low-volume bounce didn’t really change anything and that the market’s technical condition continues to deteriorate. Bear in mind also that the market is also about to enter the seasonally dangerous months of September and October.


  162. Does anyone know what analysis software Op uses?  I think he might have said eSignal before but I’m not sure.


  163. Pat – Actually Scottrade did open their own options trading thing. It is not official but you can get in if you ask your branch. They just pissed me off when I realized I would have to redo all the paperwork and in person or in mail as opposed to ToS where most of the stuff to sign up is over the web.
    The only thing I miss from Scottrade was the money direct: with ToS it takes 2 days for a direct deposit to reach my account which means if I ever need cash quickly for rolling stuff I am screwed big time. With Scottrade as soon as you submitted the money are available (I am not sure whether they trust you or they check that fast but either way they have my stock in the account so it is not like they will lose).


  164. MRK – I agree with Cnicola. MRK had a hammer 2 days ago which could be viewed as a turnaround signal, and it’s holding up reasonably well today. 5ma isn’t up yet but could be tomorrow. To me this indicates that the path of least resistance is more likely up than down. But I could be way off of course !.


  165. mck – is Murphy using a daily chart or weeklies?  I created a one year daily chart with the 13 and 34 ema’s, but I see many times ST that could have proven nice for a short or long… I agree Dece shows nice break… but so did Nov really… his set up is very fast IMHO… the set up bases your idea… if 200 or 400 dma’s, I think in months or years… if 34 or less, I think in days or weeks.


  166. MRK – thanks Mark and Cnicola.  I’ll hold off another day.  I have no special info on the name – just chart surfing looking for trades.  This one looked interesting.  On further inspection, I see what you guys are saying and this truly could go either way depending on what happens later today and tomorrow.  Thanks.


  167. weird volume / price action in CHK just now… any news anyone?  Or maybe just a buyer down there… touched PP…


  168. Mark – I’ve seen him use both. Last one was daily, other was weekly. Can you see this image?


  169. mck – unfort not… no worries, changed it and here’s the 3 year weekly timeframe with the set up… looks like it makes more sense for LT purposes… I like it, will start watching it.  TY!


  170. Interesting Cnicola, I didn’t know that about Scottrade. I’ll check with them at my local branch. Thanks for the info.


  171. MRK – Maleko, I’m beginning to agree that now is not the time for this trade.  While the PP is still serving as resistance, the price is still above the 200 (on the 1 min).  So, at least from a timing point of view I should reconsider the trade.  In addition, we could end up with another hammer today, so it’s just best to wait to see on that too.  Thanks.


  172. Mark – here’s a blurp on ema13/34 daily and weekly from a while back http://i36.tinypic.com/2cs782g.jpg


  173. Mark – Blurp on the monthly emas too : http://i33.tinypic.com/vmrogl.jpg . Nothing earth shattering there for you but method is good to check if you think you’re seeing a trend.


  174. Sold some TIE.


  175. I believe Opt uses Etrade for his charts.  ToS for his trade analysis.

    On MRK, I never play these, but a straddle here on Sept 35′s may be the ticket.  Seems like a move above 35 would be strongly bought (less likely, IMO), but a failure here would push it back to 31 pretty quickly.


  176. quick sell program just hit the markets, all sectors down.

    mck – ty!  I love to read how others see it… always more fuel for the fire.  :)


  177. 34 proved too much for the lowley SPX today (and its S2).   LOD is 1266.38… gonna fade into the close at 65?  If for some reason it sells hard to 61 I MAY be a buyer into the close for a quick technical pop the next day… but seems unlikely.


  178. AAPL – Film – where’s she headed? That was a pretty good run up (1st 2 wks aug) but with less convincing volume than the run down in july. The volume wasn’t impressive on the break through 172ish. 170 looks like a key test for me on multiple chart views. I have some short 170 calls I’m hoping will evaporate.


  179. Mark – I was thinking about your 10 year chart with 200 and 400 and when they crosses on their way down. The million dollar question is: can you find an MA that provides support? We already know the resistance …


  180. Film,
    I too would like to know your thoughts on AAPL right now.


  181. wow! I let you guys one day and that’s what you are doing to the market. Ugly.


  182. I think AAPL is going lower.  I think the market is going lower and will drag AAPL down.  Once the next wave of selling eases, AAPL will rocket.  I want to see it touch 167, so I will be kind of screwed if it doesn’t get down that far and rallies.  But we will see, if there is strong selling and support, then I will buy.

    I own none right now.  Zero, zilch, nada.


  183. Yes ugly day


  184. Cnicola – in general, I don’t get higher than a 400 on a daily chart… the rest is all conjecture IMHO (less important to the big boys).  From here on out it will be based off lows made 1+ years ago… so you have to look at like a 4 year chart and know that 1200 is obvious support (b/c round number) then 1170, then 1135 (just going down the lows in ’05), then 1100 and worst case 1060.  I spoke with K1 a while ago, and we both agreed that below 1000 is like anarchy (partially b/c it seems so far away, but also partially b/c it’d be HUGE psychologically if we’re out of the 4 digits into the tripple digits).  That’s a f’d up market if it gets that low the next few years.  Just sayin…


  185. Opt – It is only 25 points …


  186. What happened that triggered this? (No CNBC here). Even commodities are down.


  187. 10 year chart – funny, I was just looking at 10, 20 etc as someone on a DM thread was taking a poll on whether or not SPX 1000 was a possibility. Once you back out to a long term chart it doesn’t look that implausible considering the confluence of ugly macro factors.


  188. AAPL-I only see good news today about better sales than expected for September’s quarter and enterprise. Buying some Leaps here, will buy more if it drops more. It is still in the flag.



  189. Opt - Everyone is buying FRE so not money for other stuff :-)


  190. mck – I agree with you about possibility of under 1000. If you look at the last top to bottom it was 1520 in Sep 2000 and 775 in Oct 2002. Now on same chart our top was 1565 in Oct 2007 and bottom …. Now I am depressed. I will go buy some AAPL LEAPS to feel better :-)


  191. GS – real disappointing today like other financials. Probably closing below 5ma.


  192. Mark, read this interesting (NOT UPLIFTING) analysis the other day:
    http://www.contraryinvestor.com/mo.htm

    Make a strong argument for a test of the 200 month MA, currently working around 986 on the SPX.
    http://i35.tinypic.com/264jd3d.png


  193. Cnicola, I think Rolaids are cheaper this week.  =)


  194. conicola – I wouldn’t bet on it, esp. as Mark points out that the data starts getting stale 4+ years out. But, in 2002 you might have been looking back at 1996 (6 years) as you fell into the abyss! If we do fetch 1060, there’s not much to hang onto until the 800 mark. Same conversation 12 months from now will be very interesting! Thank god this thread is trading trends instead of trying to pick those directions.


  195. Well, definitely picked the right weekend to keep my way too bearish posture.  Look at MA drop.  Never cleared 245.


  196. So I just looked at our positions and the only ones that are not looking good are AAPL, where we are going to sell another 1/3 (keep 1/3 as we are still in flag) and FCX that we are going to close.
    Everything else is still fine, especially COH :-)


  197. Geez Film, you’re creeping me out.  Don’t you need to play with your boy some more this afternoon?  :-)

    But I’m enjoying my AAPL puts and the misery of my AAPL callers right now!

    Also COST puts!


  198. Opt – Keeping RIG?


  199. Film – LOL


  200. 65… pop!  (didn’t see that coming at all… )
    ;)


  201. COH/Opt – that was a good play, thanks. I joined that trade on 8/20 and just sold my puts for +57%. Maybe premature but not looking a gift horse in the mouth these days. I don’t think betting against any retailer going into this season is unreasonable, esp. with stimulus checks wearing off now.


  202. Yeah, finally on the COST front.  I like the way that chart looks for us now.  [tinypic not working for me right now.  But, downward sloping channel under LT supply resistance.

    Richard, yeah, I have a playdate with Jim Rogers’ kid in a few.  LOL.  I have said it before, I will say it again.  Lots of good arguments for a 20% drop, no good arguments for a 20% rise.  Funds been loading up on stocks WITH LEVERAGE for the last few years trying to get better returns and now there is no one to sell them to.   All you need to do is spook the Boomers and we could have a MAJOR drop.  Can always count on those boomers to groupthink.  I really want to start a movement to get everyone under 40 to stop buying stocks and bonds with their 401K contributions.  We are getting fed worthless crap paper.  Let the boomers suck up the problems they created and we keep our cash once the laws are not so skewed towards them keeping their wealth at the expense of their children and grandchildren.  HAPPY MONDAY!!!

    And no offense to those of you who are boomers.  Individually you are all very nice, but as a herd, you are sort of domesticated turkeys.


  203. Film / mck – 200 month ma… yeah that’s just plain random.  Very artsy (as they note at the end…), but really just kind of silly IMHO.  I mean, that’s encompassing tons of political / social / global changes in one VERY LT moving average… I put much more stock in relatively close sooner ma’s then something as crazy as a 200 MONTH ma… just my 2 cents though.


  204. RIG-yes we kept. Barely down today.


  205. Film – 20% drop = spx ~1000.


  206. Hey, what do you guys show for volume today.  I have the nasdaq volume super high, but I get it from Yahoo.


  207. Coal stocks fell off predictably today – FCL, JCRR, ACI after a morning run-up that embarrassingly stopped me out. Selling half was the correct move, which I did. But selling the other half? Total mistake.

    Couldn’t find anything to buy today, long or short. Even the casinos that I was looking at (especially LVS) didn’t finish very well. Need longer term buyers accumulating toward the end of the day which didn’t happen.
    Also looking at shorting some high-flying food companies like GIS, DF, SYY and KFT but they’re not there yet.


  208. I am going though the posts to see if I missed some questions that need to be answered, but I see that everything has been answered already. Most of the time better than I would have. You guys rock, thank you!
    All answers are right, about what I use (Etrade+TOS), risk etc.
    If I missed anything, please ask again!
    Got to go play beach volleyball, but I’ll be back later tonight to answer. All in all it was a decent day today, thanks to small positions and good balance.


  209. .ixic (naz) vol 14,146,998 – thats 2x volume since aug 4.


  210. Mark, I don’t see how a 200dma and a 200wma can be valid but a 200mma is somehow ridiculous.  Seems like a natural extension.  If he was arguing that the 365 lunar calendar MA was significant, I would call that artsy.

    But, if you prefer, could you look at it the price target for a trough PE ratio based on historical lows and means.  I think that would get you to 1000 pretty fast, too.  But mostly, I think there is a huge supply of stock in the world, and very little reason to own it other than the Greater Fool Theory.
    http://en.wikipedia.org/wiki/Bigger_fool_theory
    Personally, I want to make sure all my sardines are eating sardines.  =)   I love that story.


  211. mck, do you mean double average volume?


  212. Just read the news on AAPL. 25% to 29% growth on Macs. That’s just amazing. 
    Remember that the stock price is down for the year, and the company is doing amazingly well. This stock will probably hit $230-$250 in 2009. Easy. Every drop is a great opportunity to buy more Leaps. Just remember that and ignore the doom and gloom. When everyone is scared is when you buy for long-term. 
    No need to wait for a bottom that might never come. Scale in.


  213. $172 to $250 is $78. Why wait until it drops to $170 or $167 if you believe in the fundamentals?


  214. Wow, if this can’t move the market up, we are in trouble.  Personally, I think an agreement to have troops out by 2011 sounds a lot like a timetable to me.  I bet Bush asked him to say that.

    http://news.bbc.co.uk/2/hi/middle_east/7580968.stm


  215. film – naz volume, yes, check this out: http://i38.tinypic.com/24gq5u8.jpg


  216. Opt, cause I am a fool.  Why else?  That and the S&P chart is scary as hell to me.  So, trying to be patient.  I see a $10 drop as likely and that would be a 15% drop, so I buy the breakout, but I haven’t lost anything being cautious on it the last few weeks, so I am not changing my tune.  Lots of great news is not moving the stock.  That is worrisome to me.


  217. Film, just come clean and tell us that you are the one and only Jim Rogers!!! No more pretending please! I truly admire Rogers and therefore agree with your posts regarding the possible long-term bear market.


  218. Film – if you follow A/D, Trin, etc. too you’ll note up vol only ~10% (12%) of up vol. Some say when you approach 10% on A/D it’s a trend. BUT, they typically factor in AD issues too, in which  case advancers were 27% decliners on NAZ. You’ll typically see those kinds of numbers on days like this anyway.


  219. Film – ha!  The reason it’s artsy is because those who control the money DO NOT watch a 200 month ma… I mean a 16.667 year moving average?!?!?!  What’s significant about 16.667 years?!?! 

    I’m a Transition Manager, and when we do pre-trades for clients we look at the performance of their current portfolio vs the performance of their new (target) portfolio over the LAST 10 DAY’s… b/c me trying to see what opportunity cost would occur by looking at a longer timeframe wouldn’t make sense for me trading today, or tomorrow, or this week (where the latest information is the most accurate).  So when I try to find a reasonable place for the market to be in 2 years, why use a 16.667 year moving average? 

    On the downside (just like the upside) lows (just like highs) made in the past will be the most obvious support points.  What we can’t predict at all is what will happen globally / economically / technologically / socailly the next 2-4 years.  What happens if Barak wins?  Does increased taxes on capital gains decrease the allure for st equity trading?  Does volatility actually die down?  Tons of what if’s… me I’ll follow the higs/ lows, and stay true to the ma’s.  1060-1080 is my green line in the sand, but if you’ll notice 940 is actually that last Low before the upside down H&S in ’01 – ’02 that ended the bear market. 

    Just saying, I’m watching those things that are most important to those who manage the money… i.e. not the 200 mma.


  220. Thanks mck, I thought I was seeing things.  That should pretty much set the tone for this week.  That tone being nasty, of course.  Might get a little ghost meow, but it looks like the shorts are going to rule this week.   At least I hope so since I am attending their convention.


  221. Film – as I understand it, NAZ leadership is required to pull the market out of bottoms (so some say). Not sure the opposite is true but makes sense. That was a pretty ugly downer.


  222. FilmFlam – you should check out this web site: slopeofhope.com.  and go back a couple of days (although I did enjoy the "grammer police" cartoon today. This is a heavy "bear leaning" site but he has had great vison as to what the market and sectors were going to do before they moved. Big Chart Guy…
    By the way I did buy APPL at 172 (third time this month) today, so will see. Been selling at 176. Love the channel but I would not be upset to see it go into the 160′s.


  223. Mark, I hear what you are saying, I am not saying that people are planning on it.  On the contrary, I am just saying that when you talk about a market normalizing, this is a line that has been support going back forever.  So, regardless of whether people are targeting it, it is a completely valid premise that it may cross it again as it has tended to do every 30 years or so.  I guess my final comment is that you know better than anyone, the market does what the market does.  If it did only what professional managers wanted, it would go up forever, right?


  224. JNjr, It has been channeling nicely.  I just avoid doing that with AAPL as I get crazy ideas in my head once I have a position.  If I am flat, like now, I have much better clarity.


  225. So when you buy APPL – you hear voices?? What are they saying?


  226. Film & mck – Etrade is showing slightly less than normal volume for Nas, Dow & SP500.  It’s showing 593M shares for the Nas.


  227. Film – definitely understand.  But / here’s the thing… do all professional money managers want it to go up forever?  That’s a good question to ask yourself… what does a professional money manager trade now a-days?  :)

    And yes, it does look like the 200 mma over 88 years has provided support 2 or 3 times (sarcasm font)… I guess my main contention is against the ubber bear.  Over the years I’ve learned to try not to be either bearish or bullish generally speaking.  I just try to leave it to the charts to tell me where to go.  But easy to say something has provided support over 90 years… why didn’t he use a fib number like the 233?  Or 155?  Anyways, if you look at the last 4 years of data, the 200/400 day SMA’s have proven to be much more effective in the ST / medium LT to tell you where support / resistance is.  I can’t read something like that and agree with it b/c what moved the markets in the 20′s, 30′s, 60′s, 70′s, etc was completely different (and NOT electronic) than what moves it today.  History repeats itself for a reason… but sometimes the angle people look at history doesn’t give the complete picture… that’s all I’m saying.


  228. The yahoo volume showed it starting today at yesterday’s close.  I think the exchanges are being run by low-level staffer as well.  You saw that the Dow was reporting its negative change today as a positive change for an hour or so.  That was from the NYSE, because I saw it on three different sources.


  229. JNjr, they say, "I see rich people."


  230. Wired.com’s iPhone 3G (AAPL) survey results are in: Performance is spotty everywhere – although Europe is notably stronger than North America. ’3G-rich’ metropolises are overloaded. Takeaway: It’s the service, not the phone.


  231. Mark – love the transition manager perspective. Man, last 10 days, that could be all over the place. So they just don’t want to see a hiccup when they move eh?


  232. Film- to your 4:12 comment regarding market measures, have you read David Rosenberg’s essay on these matters? It was in a recent Mauldin "Outside the Box" and covers some of the broad statistics about P/E levels and the market, and seems to support the SPX 1000 thesis. (The article is broadly available, search Google for your favorite location).


  233. Film, "classic"!! Hope that Opt is reading this during happy hour. Do check out the web site, as you and Tim are of similar mind set. Free Site for those who may think that this is a plug…


  234. mck – yes, well when we facilitate the allocation change we sell the old and buy the new securitie in the same day (staying market and sector neutral the whole time) b/c the client essentially wants to be in the new portfolio as quickly as possible and with as little market impact or opportunity cost as possible.  So we look at the way the individual names / sectors / portfolios have traded in the last 10 days to give us an idea for how they’ll trade today… if I looked at how they did in 06/07 it wouldn’t give me an accurate picture of how it trades today (that seems logical, but most have a hard time understand that concept for some reason).  So instead of on an annulized basis, we look very ST… b/c we trade ST.


  235. NAZ volume – good question. now that you mention it does seem odd. I don’t even know how they get the vol number (add all stocks in the composite?). Maybe it’s a data hiccup.


  236. Mark – that makes imminent sense as transitions on at least an individual basis are extremely disruptive. On the longer MA, EMA, etc. – IMHO they’re just indirecty ways of presenting historical pricing information. What seems relevent knowing who watches which indicators to understand when psychology kicks in (like pivots, etc). To that end, people love comparing to history even when it’s nonsensical. It seems to me looking back that far is helpful to the extent it tells you what’s possible going forward to keep you honest in your risk management.


  237. Data smoothing – just depends on your viewpoint. There are all flavors of smoothing (in college when the lab reults didn’t look too good that log/log scale straightened most things out.). From long distance, the earth appears smoother than a billiard ball, but tell that to someone on the side of K2. I guess if your investing horizon for a position is 200 months, maybe that makes sense.


  238. Mark, I understand.  It’s different this time. =)

    Just kidding.  You must understand that I believe in very long cycles.  I posted on PSW many, many times that there were certain topping signals I was looking for.  One of them I liked the most was when Warren Buffett cashes out.  He started a fund back in the early 60′s.  And he cashed out that fund 6 months before the top in 1969 and stayed out of stocks for 12 years.  He then started BRK at the bottom in 1981 or 1982.  So, I was looking forward to seeing how he was going to get out at the top this time. I thought giving it all away so that he is the biggest charitable donor EVER was brilliant.  There is no way for him to cash out of something that big, so what’s your alternative.  He wouldn’t want to have to manage all those businesses in a decade-long bear market.  What a headache.  So, he just removes himself from the equation.  I really didn’t think that was going to prove to be the early indicator that I thought it was going to be, and I kick myself now since I had the indicator and ignored it.  

    I think it is a little interesting that you think the things that are moving the markets are different now.  I feel like I am watching the same movie being remade, only this time they brought in a new villain, Capt. Credit Crunch.  Like you always say, I think, it is all supply and demand.  And right now I see almost endless supply of stocks for sale and almost none of them with a dividend.  We are hanging near the top of a huge run.  We probably won’t go to 1000 this year, but I would think we get there for sure next year.  I don’t know if you read much market history, but what I think is fascinating is the long cycles of when people think that stocks are safe investments and excited about them at the top, to the LONG periods where people swear off stocks forever after years of dwindling returns, false bottoms, and financial exhaustion.  It has been a long time since people felt that way, about 25 years.  Now, people believe that stocks are the cornerstone of the investing portfolio, that they must own stocks if they are going to maintain their wealth and outperform inflation. 

    Throw on top of that the demographic reversal of capital that we are going to experience for the next decade as the greatest generation of spenders and earners, enters retirement.  They all thought that putting money in stocks and bonds in a roughly equal percentage was the safe way to go.  If there is any one universal "truth" believed by most investors, that is it.  Well, it’s not.  Literally everything is playing out like I thought except for one very important difference.  It is all happening faster.  I expected the commodities boom and nearly bought into a commodities fund Rogers started back in 2003.  One of my best ideas not taken.  I just didn’t think it would happen so quickly.  I thought we had another few years of stocks rallying, but I underestimated the lengths that the oil pushers would go to accelerate the cycle.  Commodities should base for a while at this level before heading higher.  That is the commodities cycle.  It is another very long cycle.  But, it seems that all of these things are playing out faster than they historically have.  That is how it is different this time.

    Boy waking up.  Gotta run.


  239. SEM, "if your investing horizon for a position is 200 months, maybe that makes sense."   Point well taken.


  240. Film – and once again, if you see I agree that we should head down… I just don’t think it’s b/c we’ll test the 200 mma.  Same result, different idea / reason.  200 mma means nothing in the LT, and I don’t play LT anyways.  At the end of the day, in the trading world, there’s the one who says, "I had it perfect when I said to buy… " or "Man I was right when I said to short…"… but the most successful trader says neither.  They simply smile slightly to themselves and fly back on their G5 to their private island.  You’ll laugh at that I’m sure, but there’s MANY more successful traders out there you don’t read about in Trader Monthly and you’ll never hear about in public. 

    What’s different now is not that what’s moving the market (credit crunch, housing, etc) is different… that’s the same song and dnace.  The use of options (being able to be "short" with puts without using margin to short something) and futures is the difference to me now.  I.e. now I can make money any day all day if I day trade (speculation) or be short the market as a cash hedge in futures on my long onlies…  Much easier to do it with cash settlement.  I guess mainly speaking is yes, most people will "swear off stocks" after they get burned forever… but if you’re dilligent enough and try to learn, eventually you’ll realize with proper training and enough flow to start you can end every day FLAT and make thousands…

    I don’t care if the market goes up or down at all… 800, 2000, whatever.  I’ll make money every day if I want whichever way it goes.  THAT freedom is what’s changed the day trader world (and arcades and HF’s and prop desks… etc)  IMHO.  Just gotta change your thinking process now…

    As far as the long only crowds that make up most of the retail market… yeah they’re f’*cked. 
    ;)


  241. K1, etc. – this was an interesting presentation: http://www.aei.org/events/filter.all,eventID.1759/event_detail.asp#
    CSPAN covered it. The data Lachman presented was most interested. Most germain short term for him was exhaustion of the benefit from the stimulus package, etc.
    Gotta fly, didn’t do one scrap of work for the man today.


  242. Mark, you are absolutely correct.  I would be wise to remember that the current underwriter of my household (the wife) cares very little about whether my macro calls prove true or not.  She cares much more about the weekly performance.  I do think it is valuable to have an opinion on where the market is going and through separate means, we have roughly the same views.  I would much rather be in agreement with you than in opposition.

    But, tonight is Radiohead at the Hollywood Bowl, so I can finally knock that off my bucket list.  For at least the next 8 hours, the world is a perfect place.


  243. Munster is "reiterating."  Which reiteration is this?  The Nth, I think.  Btw, Blake, I never commented on your hilarious image of my smoking a cigarette and bouncing my knee all day.  Well, my knee does bounce all day, but thankfully, I gave up the cigarettes a few years back.


  244. Film – Radiohead tonight!?  You sonamabish.  I am Jack’s jealous rage. 

    And dude, I wasn’t trying to fight you… I think we agreed completely, I just got hung up on the 200 mma thing and focused all my negative energy on that…

    I have a very prolific opinion of the market too… just don’t beleive myself enough to bet the farm on it.  So I day trade / swing trade and follow it along… like one of those pilot fish that hooks on to whales and sharks or whatever… eat the scraps until I become a big fish too… but still in the massive ocean, doesn’t matter how big I’ll ever get… never as big as the market.


  245. "prolific" above doesn’t make sense as the adjective LOL.   Maybe I meant sincere or earnest?  Jeez…

    BTW, saw Radiohead this past summer for the first time… amazing.  Ridiculously amazing.  the rainbow show and tvs and SOUND!!!  I mean it was sick.


  246. Mark – prolific opinion means you have a lot of it? :-)


  247. Mark/Opt – If you and Opt are the pilot fish than what the hell are we? Algae? :-P
    And if we had a choice can you guys hook on whales instead of sharks? Less likely to be eaten in a famine …


  248. Cnicola – ha!  yeah you’re right… maybe I should have said "I have prolific opinionS"… just needed to change the noun from singular to plural.  Me talk pretty one day.


  249. LOL Mark – Love Sedaris. I think I read most of his books.
    BTW I threw your 200/400 dma theory on Phil’s side. Curious what reaction we get. Hope you do not mind.


  250. Cnicola – no not at all!  What I write is just my little ramblings anyways… not making a recommendation or anything ;)

    In the end everyone comes to their own conclusions… I just follow try to follow the markets. 

    BTW, I have to share this b/c he’s my buddy (we went to OU together, and he’s a creative genius) but here’s his blog.  watch the two videos at the beginning… this is the kind of gorilla advertising that I love to see (don’t have a TiVo, actually really enjoy many commercials).


  251. Film – very interesting point on Buffet – never much thought about it, but what a tell!

    Also in today’s mail was the quarterly from CGM – Heebner has not always had it right day to day (pretty bumpy ride this year), but cannot argue with long term. Sure beats S&P over the past 10 years, but even a good money market does that!

    Wife and daughter back from the cube – plenty of shoppers even on a Monday AM.


  252. pre-pre market news… i.e. sure to change:

    Aug. 26 (Bloomberg) — U.S. stock-index futures declined,
    led by mining companies, as metal prices retreated and investors
    speculated reports today may show the housing slump is worsening.
    Barrick Gold Corp. lost 2.4 percent and Freeport-McMoRan
    Copper & Gold Inc. retreated almost 1 percent as gold declined
    for a third day and copper fell in London on speculation supplies
    are adequate to meet demand. American Eagle Outfitters Inc.
    tumbled 4.2 percent after its third-quarter earnings forecast
    trailed analysts’ estimates.


  253. Overnight High on s&p futures was 1271, overnight low bad at 8 EST was 1262.50, fwiw…


  254. Let’s sell the last 1/3 of COH puts on a pullback today. 

    Coach-COH authorizes $1B share repurchase

    Coach announced that its Board of Directors has authorized the repurchase of up to $1B of its outstanding common stock by June 26, 2010. :theflyo
     


  255. And here’s slightly more updated:

    Aug. 26 (Bloomberg) — European stocks dropped for a second
    day after business and consumer confidence slumped in Germany
    and declining metals prices sent mining companies lower. Asian
    shares and U.S. index futures also fell.
    Bayerische Motoren Werke AG, the world’s biggest maker of
    luxury cars, sank 1.6 percent and Commerzbank AG lost 1.2
    percent after business confidence in Europe’s largest economy
    declined more than forecast to a three-year low. BHP Billiton
    Ltd., the world’s biggest mining company, slipped 2.7 percent in
    London. CRH Plc, the second-largest building-materials maker,
    decreased 1 percent after deteriorating markets in North America
    and Europe hurt earnings.
    The MSCI World Index lost 0.8 percent to 1,313.87 at 1:20
    p.m. in London, with all 10 industry groups decreasing. The
    index has dropped 17 percent this year as credit-related losses
    surpassed $500 billion and inflation accelerated, threatening
    economic and profit growth.
    “The economic outlook is very negative,” said Gregor
    Smith, a London-based fund manager at Daiwa Asset Management,
    who helps oversee $1 billion. “If we continue to see economic
    weakness, then corporates will continue to cut spending.”


  256. Radiohead at the bowl: only reason I was sad to go on vacation.


  257. GM Op!  HOpe you’re doing well / having fun.  What time is it where you are?  Like 7 at night?


  258. Op – fyi, the EUR’s down 140 pips this morning… that short’s gotta be making you feel real nice a good.  Eurozone just keeps looking shakier and shakier… maybe Domestic market really is the only place to be right now?  Things that make you go hmmm…


  259. Mark, it’s 8 in the morning right now. Perfect timing for me to check the market before breakfast and tennis lesson.
    Much better than the 530 AM I am used to in L.A. Euro is making me very happy indeed.


  260. 8 in the morning!  Oh you’re in my timezone!  Maybe I should have looked up where you were going LOL.

    And…..

    9:00 *U.S. JUNE S&P/CASE-SHILLER HOME PRICES FALL 15.9% VS YR AGO


  261. Opt your in the same timezone as I am in Texas. You need to move from Calif to Texas and make your life easier :) . Cost of living is much lower here also.
    Don


  262. that pushed oil up… and EUR… oil’s at 116.20 as I write, up 1.10… but this is all inital reaction changing / hedging… still got pleny of more news in an hour with Richmond Fed, Consumer Comfort / confidence, New Home sales… then FOMC minutes at 2 EST. 

    Market was up 1.5 points, now down .75… so still flattish / negative



  263. Don – I know I’ve asked this before, but where are you again?  Just north of Dallas (i.e. north of Richardson / Plano, etc)?


  264. Marvell Tech-MRVL downgraded to Hold from Buy@JEFF

    Jefferies downgraded shares on HDD inventory concerns and share loss at Research in Motion (RIMM) after checks indicated MRVL likely lost the design for the RIM Javelin to Freescale (FSL). The firm lowered their target to $15 from $22. :theflyonth


  265. Mark
    I am about 8 to miles north of Plano


  266. Follow-up: MasterCard-MA initiated with an Outperform@WBLR

    William Blair believes the company will capitalize on positive trends in the payment card industry. :theflyonthewall.


  267. Man a lot of Dallas-ites representing!  Very nice, we’ll all have to get together some time (BillBigD, JPL, Aussie and old buddy from Phil’s, Maleko?, you?)… if you’re ever interested at your discretion let me know: callamark@gmail.com.


  268. GM All.


  269. Mark – where are you based  :D


  270. Mark
    Sent you an email.
    Don


  271. JPL – moohahahahah


  272. Don – cool man, can’t check my gmail at work but will reply back this afternoon.


  273. Sold a little more TIE.  Still my biggest position.


  274. 5 dma’s keeping me long CHK… hoping for 50 plus still….


  275. but as BBD let me know, it’s getting the hurricane premium of course… but still looking strong…


  276. Gm everyone.
    The Euro and UK Pound really seem to be going down the toilet. Typical of course as I won’t be going back this year !.


  277. Mark – Warning dumb question coming. Buy-side and sell-side. What the hell is the difference?


  278. Cnicola – ha!  nw.  Buy-side examples is a Mutual Fund, Hedge Fund, Pension plan… a money manager.  A sell-side example is a broker dealer who trades for these money managers (like my firm) or the I-bank part of GS/MS, etc… they’re "selling" a service to the buy-siders (either trading, research, underwriting, etc).  Buy-siders manage the flow. 

    http://en.wikipedia.org/wiki/Buy_side


  279. Energy being bought, financials / tech / industrails selling right now… for now…


  280. and there’s the change, energy sells, financials / tech / industrials buy


  281. Hi Op,
    Hope you are enjoying your vacation!
    I am confused by your latest post on COH.  You said, "Let’s sell the last 1/3 of COH puts on a pullback today. "
    1) Are you basing this decision on the technicals or the fundie info about the buyback?
    2) If you are using technicals, doesn’t the system say to wait until EOD to see if the daily candle has breached the 5ma significantly?  Currently, there is just a slight breach, which I thought we were supposed to ignore intraday.
    3) My understanding of the word "pullback" means a pullback to the moving average, which is a good place to enter a trade in a trend.  Why would we wait for a pullback to exit a trade, since we would be losing more money that way? 
    I hope you can understand my confusion.


  282. Hi Opt,
    Oops, I see what you mean about a pullback.  It’s obvious when I look at the 10 minute chart, a pullback to the 5ma would mean exiting at a lower price of the stock.  It’s not so obvious on the daily chart.  Did I get your meaning?


  283. Optiondiva – I read the article this morning too and it was my thought also that it is worth it to get out. Fundamental events can affect the trends in an unusual way. And on a stock that we already had a good run why take the risk?
    Oh and I do not know if people saw Pirates of the Carribean but you know: "the (pirate) code is more what you’d call "guidelines" than actual rules"  :-)


  284. Film, Mark, Good call on CHK. Nice high probability trade.


  285. Arindan – ty!  Fun little trade, took some profits on half at the 2nd try above 50 with no follow thru… will hold the rest looking for 52.50-55 range (or 50 dma… don’t know the sector well enough to play it ST unfortunately… I might sell it too early, but would rather be profitable than hopeful…  still great LT hold kind of company IMHO.


  286. new bracket, financials / industrails / tech trying to be bought again… energy selling… hmmm… looks like setting up for fed in 3 hours…


  287. Aug. 26 (Bloomberg) — Cotton rose on speculation heavy rain
    from Hurricane Gustav may harm crops in states along the Gulf
    Coast that already were soaked by Tropical Depression Fay.
    Flash flood watches associated with Fay, which was a
    tropical storm before, are in effect for parts of Alabama,
    Georgia, North Carolina and South Carolina, according to the
    National Weather Service. Gustav, with maximum sustained winds
    near 90 miles per hour, may strengthen to a Category 2 hurricane
    before reaching Haiti today as it heads northwest, the National
    Hurricane Center said.
    “Right up in the Delta they’ve already had punishing rain
    from Fay,” said Ron Lawson, a managing director at Lawson
    O’Neill Global Institutional Commodity Advisors LLC in Sonoma,
    California. “It’s not an open crop, but it can only take so much
    water.”


  288. Starting to nibble on YHOO.
    I know ! ! !     I know ! ! !
    It’s a dog !
    Believe it’s going to get bought;  maybe not at $34, but at a price considerably higher
    than it is now.       We’ll see.


  289. albo – moohahahahaha.  What a boring day eh?


  290. You’re right Mark !
    Maybe I’m just looking for something to do !      LOL


  291. You’re right,  Mark !
    Maybe I’m just looking for something to do !      LOL


  292. Sorry.  Sorry. 
    My computer connection still screwed up.


  293. Cricola – Thanks for the explanation.  I’m a recent subscriber to this service, and am trying to follow the rules, but so far have made no money on the COH trade.  It’s discouraging when the stock does what it’s supposed to do and yet the option trades came out negatively for me.  I’ve been trading options for a few years, mostly iron condors on the RUT and am trying to branch out from there, also have sold a lot of naked puts and covered calls, so it’s not that I don’t have experience trading options.


  294. Optiondiva – No problem. Though that was my explanation and our pina colada impaired guru might have a different view. When did you enter COH though? If you had started at 30 it should have been fine no?


  295. Optiondva, you should have made money on COH.
    I don’t know why it didn’t work for you. At what price did you buy and what strikes ?. Also did you take the opportunity to take some off the table last week (we only had 1/3 left this morning) ?.


  296. wow just stared to use TOS’s platform/ acct. which is new to canada. very good compared to what im used to, although they dont yet have Retirement accts . im from Canada so we are a little behind on technology, but we finally got Think or Swim so today is a good day. you guys should see how prehistoric my old active trader TD Waterhouse platform- i think it was programed by a bunch of kindergartners.
    Mark – ive been toying with the FOREX section and it seems interesting. 100x’s leverage and no deadly theta….. am i missing something besides infinite risk similar to futures products?


  297. TTupp – yep!  essentially infinite risk and crazy leverage… I don’t play forex as speculation b/c it’s unregulated… but that’s just personal.  I don’t have a perfect grasp of what certain countries eco reports will do to the EUR, ZAR, AUD, USD, etc…


  298. Cricola and Maleko and Op:
    Here is my sad trading history on COH.
    Entered on 8/1 at 9:47:13, bought sept 25 put at $1.85.  5ma on daily chart was pointing down.  Two days later trend reversed and I held on waiting for resumption of downtrend. (Big mistake!)  We’ve had 6 days of downtrend, now but I haven’t been able to recoup.  Option is currently at .30 bid.  Any advice?


  299. GM all. TTupp- welcome to the ToS team! If you’re interested in forex, I’d recommend spending some time digging on forexfactory.com to get your head around the concepts. Different world than equities, for sure.


  300. Optiondiva, the problem is simply time decay. Your Sept option will start losing value in the last 20-30 days before expiration, unless the stock moves tremendously in your favor. You may want to buy options that are atleast 2-3 months out next time.


  301. Mark, since we are in a boring non-trend day I had a few futures questions if you don’t mind discussing this. Firstly this is theoretical, I don’t trade futures, but I am always interested to learn more and hoped you could spend a few minutes answering some questions.
    So let’s assume we open an account and funds it with let’s say $5K, we decide that the /ES (S&P500 e-mini) is good fun, now we know that a single contract will require 10% margin so we are blocking $4500 of our account to buy a contract. So initially we consider this from not looking at risk (bad idea, but anyway) and we have decided to sell a contract at 1270 and to our glee we see the market move down 20 points and decide that the $2000 profit is a great start and buy it back and book our profit. Champagne time, this is easy right… :-) . Next day we think well this was easy let’s redo we sell at 1250 and to our great disappointment history did not repeat itself and the market moved up to 1280 (urghh) a 30 point move, we lost $3000 on that day… depression.
    So what I am getting too is that I don’t understand what tactics are available to limit losses, now I hear about the limit-up/limit-down, but honestly don’t understand it. I know that usual tools like stop loss are available for any position, but what liquidity is around when you get a 100 point market move, which would in our above case wipe out our investor and have the brokerage calling round the clock to get their money back.
    I probably have more questions, but if you could take a stab at these it would satify my curiosity, thanks


  302. Optiondiva, 8/1 ?. Wow you’ve been in this some time !.
    Where was your stop for the trade ?. I can see that on 8/3 COH had a large up day, 5ma turned up and COH closed well above it.


  303. optiondiva – Looking at Opt’s chart he entered half in at 30.35$. Did you decide to enter on 08/01 on Opt’s call or just trying to use his strat on your own?
    Aside from that 5ma pointing down is only an element. The next day on 08/02 COH made what I would consider a spinning top:
    "12) Spinning Tops: This is when after a long trend, bullish or bearish, one or several candles are comprised of small bodies and small shadows. The market usually reverses afterwards. "
    That aside you should have had a stop loss level after which to exit instead of just holding on. That is also in Opt’s strat. And looking at the upslope on it you should have hit it no matter how wide your stops are.
    And if you are calling it a sad story I am assuming this loss is hurting so the next question is did you size up properly your trade size?
    BTW without any malice at all I am assuming you did go through opt’s strat at http://optraders.googlepages.com/5mastrategy.
    As for what to do now I have no idea. It seems it is stuck at 20-50 dma but intraday all ema are still pointing up. It also depends on how many contracts you bought.
    P.S. BTW do not feel bad about this. Before I joined Opt’s club I bought some calls at 12$-14$ and held on to them until I ended up just giving up months later and sold them at 2$-3$.


  304. Maleko,
    I plead guilty.  I don’t use hard stops.  The trade got away from me when I wasn’t watching and then the damage was done and I decided to wait for a turnaround which happened, but it happened too late in the cycle and time decay took over.  Expensive lesson.
    I guess this strategy requires all-day vigilance.  I wonder if anyone can make this work looking at it only EOD?
    Pat – I’ve never bought options so close in before, but decided to give it a try based on the "5ma System" which Op has posted where it states to buy near-month options.  Does anybody here follow this system literally?  It seems one has to interpret it a bit.


  305. Pat – From Opt’s link:
    "- For most positions, unless indicated, we buy ATM or slightly ITM naked calls or puts. We usually buy one month out, and never hold current month options 2 weeks before expiration."
    So we usually buy either front month if it is at the beginning or next month. Not 2-3 months out.


  306. k1 – thanks. i actaully made myself out to be less experienced than i am, although i havent actually traded on forex. do many people trade forex futures? or are those thinly traded? i would imagin those are mainly for hedging against currency fluxuations for companies ect.


  307. Optiondiva/Pat – Hold a sec. Time decay does not play much of a factor when you buy ITM or ATM and you consider the fact that by picking the right direction we will end up definitely ITM or deep ITM.
    Optiondiva – We do follow Opt more or less literally on entering trades. Personally I do look at what he suggests and make my own call if I like/know the company or want to go in it (or whether I can afford to get in). With this market I do admit you have to follow what happens rather closely due to the crazy swings in the market. Hell you can make tons of money now day trading or swing trading from a day to another.
    I am newish here too but I recall Opt saying that in calmer markets he would let his trades ride for weeks. Also the programmers are working on a way for Opt to send us email alerts when he enters or exits a trade (I think it will be a little extra).
    I think to follow Opt you need to change your mindset: I did some condors and spreads and man it is like watching paint dry. But they are nice because they make money for you without much intervention.
    Hard stops – I think this was raised by someone yesterday and I think you should ask Opt. I am on about 90% of the day so I usually just get out when I see something I don’t like. While it is not good to put hard stops especially if they are tight you do have to have stops if you do not watch it closely. There are other ways: put a stop limit, when it hits your stop point it goes into a limit order at a price of your choosing. I think it is a safer way.


  308. TTup, this may be amusing for you on Forex:


  309. Optiondiva,
    I explained this many times, but maybe you joined later on. Your options went WAY too far out of the money for you to "recoup" like you say. 
    You need to be very disciplined to trade. When the stock started moving up you should have sold your options and take your loss. This is the number 1 rule of trading and sorry to be strong about it but you can’t be profitable if you don’t follow it. 
    Then when the stock is at $31 and you have $25 puts, you need a $6 move to get ITM! That’s more than 20%!!!
    If at that time you believed the stock was going to go down, then you should have rolled to the $30′s.
    This is VERY important in trading but even more with options. Never let a position going against, HOPING that it will reverse. That’s what most amateurs do and this is why they lose money. And with options, most of the time in this situation, even if it reverses after a while, you will still lose money because your options are so out of the money that you need a huge move in the stock to make up for it.


  310. Optiondiva, I think Cnicola hit the nail on the head.
    As to hard stops. I don’t use them and I don’t think Opt does either (although he may correct me on that). I don’t know whether this strategy would work by just watching EOD (Opt is a better person to ask) but I think there are people here who workd full time so I presume that they aren’t glued to their screens all day.
    One of the relevations I had upon joining here is position sizing by setting the stop loss point. Previously I decided how much to buy by picking a number out of the air. Throwing darts at a board probably would have been more accurate.


  311. andy- i saw that- funny indeed


  312. I have to add that when you say that you have not "made money on the COH trade" it is not really accurate. You did not follow our trade. On COH we entered at $26 and sold at $25.
    Then, more than a week later, we entered again above $30 and it is now $28.
    You entered at $26 and never sold it, this is very different.


  313. Optrader- LOL! Yesterday I posted something huge and verbose about our main strategy being based on Discipline and Balance. Love to see the master reinforcing the lesson.


  314. Hey Andy – sure, I’ll see if I can answer some of these quesiton LOL.  But to begin, it’s $50/ point, so a 20 point move in your favor is $1k, not $2k.  Also, what you stated sounds like you had absolutely no clear risk management / stops in place right?  I mean if you’re 4500 margined, why take a 3000 loss (which would be a 60 point move, not 30… and let alone why would you stay short with the market going up 60 points?!?!?!?!)?  If you had bought 10 puts for 4.50, wouldn’t you have flattened your position way before it got 1.50?  What’s the $ risk you’re willing to make / lose on the trade?  If you think a 10% return on margin is more than healthy / day, then why not take it all off at 9 points?  9 point moves happen daily now. 

    So that’s first and foremost on my mind reading your questions.  When you enter the trade, WHY did you enter it (hedge to all your options i.e. you’re overly long or short, so you short or long futures to keep market neutral… or is it speculation on a price move in your favor to… where?)

    If you’re speculating, then you HAVE to have a clear idea of what you’re looking for… 5 points, 10 points, you’re fine taking a 5 point loss ($250/ contract, so 5% of the MV of your account), etc.  BUT if you’re speculating intraday, you better damn well sure know how the market moves (off eco, news, pivots, ma’s, highs/lows from prior days, etc).  I.e. when trading futures, even if you don’t get hte bottom or the top’s perfectly, you BETTER be on the right side of the trend.  If you don’t know how to read the market that way, I suggest watching charts constantly to see what they tell you…

    Lastly (and sorry don’t know if I’m answering any of your questions well at all… I’m terrible at articulating this stuff),  most speculators have points they’ll use to get out… 1/3 at 3 points, 1/3 at 5, hold the rest with a BE stop but looking for 10 points.  I.e. if you shorted 3 contracts at 1275, at 1272 you buy 1 back for $150 gain, at 1270 you buy another back for $250 gain, then it bounces back to 1275 and your stop is taken out at BE.  So you now made $450 today, and it’s cash settled, so it’s instantly in your account.  Liquidity is NEVER an issue in futures… you will always find a buyer / seller.  Unless you’re trading 4000+ contracts at hte market, you will never have liquidity issues.  You just have to have a system in place to make sure you’re losses are very small / non-existant (b/c you KNOW where it’s going), and your gains are contant… 1/3 at 3, 1/3 at 5, etc.  Or you can put trailing losses on the last 1/3 so instead of BE if it goes to 7 then back to 5 with a 2 point trail then you’re out the last 1/3 for $250 more in your pocket… etc.  There’s a billion different ways to play, the main thing is you have to know WHEN to play and WHEN NOT to play.  You can’t gamble with this money… you must always know what you’re looking for.

    Sorry if that’s the most convoluted answer ever.


  315. COH – Since today is really boring, maybe it’s time to have a little pow-wow and talk strategy. Support and resistance are concepts that my MBA program told me were bunk. But they’re real. 
    If you look at a 3 month daily chart of COH, you can easily see that it has followed some nice trends. On 7/11 it hit a nice low to close at about 25 after a long downtrend and then trended back up to almost 30 on 7/23. Let’s assume though that you missed those moves, as I did. As it peaked on 7/23 and began a downtrend, where might you expect that downtrend to slow, if not reverse itself?
    Seems to me that the answer is 25, and that happened on 8/1, the exact date of Optiondiva’s entry. If it breaks below 25 convincingly, that would have been a signal to go short as it entered into a new downtrend, but most traders would probably be looking for a reversal at that point and a long entry with a Sept 25 call option. 
    Optrader waited until the stock had rebounded past its previous channel high of 30 and noticed that after a few attempts to go higher and a doji, it broke convincingly lower on 8/18. Most of us went short with Sept 30 puts on 8/18 or 8/19.
    Lots of stocks jump over their 5MA each day and week, but to get the longer trends I think we need to look more intensely at support and resistance levels for stocks that have trended nicely in the past and just wait for them to hit predictable points of S/R, confirming the move, and then making our entries. 
    And I write this as much to others as I do to remind myself.


  316. im on the forex tab of ToS and am wondering where i can see vloume information for what is beaing traded here. more specifically on the chart…. anyone … lol


  317. TTupp – I don’t use ToS, but forex you shouldn’t be able to see the volume (just like you can’t on the SPX or Dow, etc). 

    FYI, Forex has more liquidity than the equity and fixed income market’s combined.  I think something like 9 TRILLION trades daily in the EUR… DAILY.  Please correct me if I’m wrong there, but futures and forex you should have absolutely no problem EVER finding a buyer or a seller… also the spreads should be "relatively" constant in forex, def in futures.


  318. OptionDiva, I just read my post and it sounded much harsher than I wanted it to be. Sorry about that.
    I just want to really insist on these points as they are so important and the reason why I started this blog. Always cut your losses short.


  319. Morning everyone.  Very late night.  Had to sleep in.  Missed a great exit point on CHK for some profits, but looks like there is plenty of room for further move up.  I will hold until we make a more serious run at the top of this channel.  I have OCT ITM, so lots of time.  But, nice to have a cushion on this one now.
    http://i35.tinypic.com/11tx1yr.png

    Similar, but inverse with COST.   Could have taken some out on the drop if I was awake.  Definitely will if we get to the lower trendline.  Only in Sept for these, so I will look to lighten next chance. (Tinypic dropping out again.)

    FXI looking nice.  Still looks like it could backfill some, though.  Will feel great when this thing gets over 43.  

    And thanks to whoever reminded me about RICK the other day.  My short stock is up 10%

    I am in a solar spec play with EMKR.  Anyone else ever trade this?  It is at nice price support, just got a changewave boost so it is stabilizes that could be some good support.  

    And finally, RIO and gold just hanging out.  I am cool with that.

    Radiohead was awesome of course.  Crowd around us was a bit unruly and talkative so that was a downer, but the performance was flawless.


  320. Mark-
    i knew forex is extremely liquid, buti wanted to see the volume for trading decisions, the same as i do in trading stocks/options..
    oh yea i meant to ask someone today, to see the volume of a particular index what do i need to do. like you said above, you cannot see the volume of spx on the charts, but where can i get this info?


  321. Optiondiva, I am an OTM option buyer at heart, but I have learned the hard way that Opt is absolutely correct about buying ITM for swings.  If I do ever buy OTM, I have a tight stop because if it goes against me, it will go fast.



  322. SVU and SWY – nice bounces off predictable support levels.


  323. Optiondiva, I just read your question about the pullback. Sorry if it was not clear. 
    Yes, I said to exit the trade, and it was based on the buyback news, nothing technical. 
    I said on a pullback because the stock was gapping-up and they usually pullback when they do. I sold mine when it pull backed to $27 because I had to leave right away and did not want to wait, but you could have sold at $26.55. Maybe some of you did.
    Does it make sense? Are you still holding? anyone else still holding here?


  324. Sorry, SVU not so much yet and SWY may turn up but it would take two weeks to get anywhere.


  325. If any of you still have some COH left (nobody should have more than 1/3 and you should already have booked some nice profits on it), there is no need to sell exactly now at this point, but you need to sell before EOD. 
    I would wait to see if it drops from here, try to catch a drop, and exit at the latest when the high on the previous candle on the 15 min chart is taken.


  326. Andy, as for your example, you will ALWAYS have the liquidity to get out of any trade that you are able to put on.  And the futures trade so much more of the day, you can get stopped out over night or in the pre-market when the index first starts to move, you don’t have to wait for the stock market to open to get out of a position, or into a position.  And you always use hard stops.  First because you will have to for margin reasons, and two because the liquidity is there that you don’t need to worry about getting gapped over, so there is very little reason not to.  If you are like Opt, and using it as a hedge for a larger portfolio, then you wouldn’t need to use stops.  But, for spec plays, it is suicide to not use hard stops in futures, as I understand it.


  327. Margarita is calling me. I’ll try to check in again before close. Slow day anyway.


  328. TTupp / Andy – I just realized also how completely harsh I must sound, and I’m terribly sorry.  Typing fast and doing a few other things at work… guess I wasn’t be super sweet all things considered.  My bad. 

    As far as volume intraday on the SPX, the only way you can really do it (unless there’s some service out there that can do it for you) is to put all 500 stocks by % weighting in an excel program with api’s from your broker linked into it.  Then it real time has to give you the volume traded for each one, then you sum them all together constantly. 

    Otherwise you gotta wait until the EOD like all us other shmos LOL.


  329. Mark
    thanks for the answers, obviously my example was ludicrous, but just to get the juices going, very good feedback. Now what about my limit-up/down question, does that apply on /ES ? And what does it mean…


  330. All- Phil just posted on the other side that Greg was going to try to reset the server. Not sure if this impacts us or not, but be prepared.


  331. I will buy rations and batteries, check!


  332. mark- where can i view eod data then?


  333. Reading the above COH discussion made me realize how little I actually know about options. Especially the process of selecting which option to buy etc. Time to go back to the study room.


  334. GS – I am backing up the truck and looting this one.


  335. Hi Op and all,
    I appreciate all the responses I got about my COH trade.  I think part of my trouble was in trying to learn a new system I entered too many trades at once and got overwhelmed with managing them all.  I’m going to work at this more deliberately and slowly. Currently I’m still in VLO and TSO Sept atm calls at 35 and 17.5 respectively.  I entered the VLO on 7/30 and the TSO on 8/15.  Both entries were based on green candles above the 5ma.  At this time I have losses in both positions.  I had thought that descending oil prices would help the refiners, but nothing has happened. Op, would you stay patient with these and roll out to Oct at this point or would you just take your losses and move elsewhere? I still think the refiners are going to pop one of these days.  There are still 24 days left till September expiration.  I have a 1/2 position in each of these. 
    I opened an FMCN Oct 30 put today which is doing nicely.  I just hope I don’t blow this one!!  I’d like to place a stop on it contingent of the stock moving above the 5 ma.  The problem at TOS is when placing a limit order on the option, you have to make the correct assumptions about future IV etc.  Your limit could be missed.  A market order will subject you to a .30 b/a spread.  This is the part of the trading strategy (exiting well) which I can’t seem to master.  Anybody have any advice?


  336. For those who are bored with this trading day, check out this 3-D stock market model. Really cool, as the color shows green for up trend and red for down. Just run your cursor over the stock name block and the chart pops up. Don’t know how very useful it could be but I like the colors…http://finviz.com/map3d.ashx


  337. TTupp – great question… I’m not 100% sure.  I’d imagine it wouldn’t be published until all "trading day" volume is completed (6:30 max for market makers in a stock)… so after 6:30 EST maybe?  Honestly never been asked that, nor needed to know it… I’ll look into that.

    Andy – limit-up / down… man I don’t know if this would ever happen unless 9/11 happens again.  I mean, the definition of limit-up is, "The maximum amount by which the price of a commodity futures contract may advance in one trading day."… So I’d assume it was the same thing as the market… if the market limits up or down more than 5% in a day, doesn’t it close for hte day?  The same would occur in futures, but this kind of action is rare… maybe once / decade? 

    The ultimate answer is that’s not important in normal trading days.  With futures, IF YOU’RE SPECULATING, you need to have VERY smart entries with clear signals you’re on the right side of the trade… smart stops to limit your risk, and smart exits to post gains.  A scalper is day trading trying to make 3-10 points / day (b/c ultimately a good scalper’s playing 100+ contracts, i.e. on a measly 3 point day "he’s" making $15,000 at the least…).


  338. Op, You got a great exit price on COH.  I unfortunately got out at 28.34.  I wasn’t watching during the first 10 minutes.  Perhaps that is the most important time to be watching?  I usually wait till the first half hour and all the volatility is past.  What is your stance re the first half hour of trading?


  339. fomc minutes in 4 min…


  340. Mark, thanks for the wisdom, I haven’t got time to sit looking at the screen daily so futures is not for me, but I like to keep learning, so I am just fooling around with ToS papermoney to learn more..


  341. Andy – very fun then!  Play with 100k… in fact, buy 20 contracts right now see what happens before minutes :)


  342. sorry, I’d acutally say follow the ma’s and sell the market… but really NO FUTURES trader would take a position before the minutes or big eco… they flatten and wait for the news (or they have big balls / margin and short away to 61).


  343. Aug. 26 (Bloomberg) — Federal Reserve policy makers agreed
    this month that their next change in interest rates will be to
    raise them, while reaching no conclusion on the timing of such a
    decision.
    “A number of participants worried about the possibility
    that core inflation might fail to moderate next year unless the
    stance of monetary policy was tightened sooner than currently
    anticipated by financial markets,” according to minutes of the
    Federal Open Market Committee meeting released today. At the
    same time, officials agreed that the timing of any move will
    depend on economic and financial developments.
    The minutes show a debate between Fed officials concerned
    about inflation, which accelerated last month to the fastest 12-
    month pace in 17 years, and those who say price gains will ease
    in response to the economic slowdown and drop in commodities.
    The Fed left the benchmark lending rate unchanged at 2
    percent on Aug. 5 and signaled that weak employment and
    financial instability will delay an increase in short-term
    borrowing costs.


  344. market flooring, not liking nor disliking at this juncture… being bought up a little here… looks like we should get to the PP again if "LT" ma’s taken over… but VERY small volume here in futures IMHO… usually see cumulative in the 3-4k on Level 2, but I see it around 2500 for buys and sells…

    For now thought there’s a bid… should see 70-75


  345. Optiondiva – nice call on FMCN, might join you.


  346. Andy – if you don’t have time for day trading, futures are still pretty stellar.  Either trying to stay beta  / market neutral on your longs (short a future) or the opposite for puts (long futures)… but if you want to swing it, try my little thing I’ve been testing.  When the rsi2 on a daily chart of the SPX is at or below 15, go long the market… at or above 85, go short the market.  You’d have to be in front of a computer maybe for part of it to find the entry, but the stop loss should be relatively clear (b/c if it’s way OS at 15 or less, then the market’s prob close to support, say for example the latest support which is 61 in this market… i.e. you could buy it if it gets close to 62-65 range, and put 57-60 as your absolute stop)… etc.  Just something to paper swing trade for a while, see what you think.


  347. Hi Cricola,
    I just found your post from 12:14 p.m.  To answer your question, I entered this trade on my own while following COH after Op made his initial trades in it. 
    You said: " Aside from that 5ma pointing down is only an element. The next day on 08/02 COH made what I would consider a spinning top:
    "12) Spinning Tops: This is when after a long trend, bullish or bearish, one or several candles are comprised of small bodies and small shadows. The market usually reverses afterwards. "
    That aside you should have had a stop loss level after which to exit instead of just holding on. That is also in Opt’s strat. And looking at the upslope on it you should have hit it no matter how wide your stops are."
    My problem with candlestick analysis is that you can always find exactly the opposite situation happening on any candle signal.  Look at the spinning top on 7/31.  Instead of a reversal the next day we had a big red candle and the 5 ma on the daily chart was still pointing down.  So much for the spinning top signal.  Granted, the next spinning top did signal a reversal.  I can usually find just as many (or more) dojis on charts acting as continuation signals as I do reversal signals.
    I have read the strategy numerous times.  But thanks for suggesting it again.  It never hurts to reinforce learning.  In one of the old posts there is a reference to a "Trend-following Strategy’ in addition to the "5ma (Paradise) Strategy. " I clicked on Trend-following but was taken to Phil’s main site where I don’t have a subscription.  Is there a way to view this strategy on this site?  Is it the same as Paradise or different?
    I certainly know I have lots to learn, but have been at this long enough to think I may be able to get there eventually.


  348. RMBS – breaking out above 17? waiting for close.


  349. Masterpayne,
    Thanks for your discussion of Support/Resistance levels re COH.  Of course, S/R levels are much easier to see after the fact than in the moment.  Nevertheless, this one is a classic example, and I should have recognized the points you mention.


  350. well that didn’t last long LOL.  volume’s still light IMHO, but trend is most certainly not broken :)


  351. wouldent you find it interesting to know at what vol the sp500 was operating at ? i dont know about you , but vol influences a lot of my trading decisions. ie spikes or crosses over ma’s could be negated on very low volume…


  352. mark- sorry to pepper you with questions, but what candlestick time frame on intraday trading have you found most effective?


  353. Thanks Mark


  354. Andy / Bee – you boys still on?  SPX getting very close to the OS level on rsi2 setting (15 or less)… see in this chart?  Now at 22.26?  Very fun… wasn’t 61 the Low of late… could it drop precipitously lower than that?  Dunno… but might be fun swing trade ATM’s down at / below 15… 126 calls trading at 3 right now… or futures buy at 1265… let’s watch (caveat, I’d be entering this trade early b/c it’s not truely in OS levels yet below 15, but it’s close… so it has room to fall further but odds of it technically bouncing back are ok… but MUCH safer to wait until way OS level…)!
    :)


  355. Masterpayne,
    Wonder if you got in to FMCN.  My trade is making money as of now.  Question is, will the 20 and 40 day ma’s act as support.  The Paradise Strategy says to take 1/3 profit at the 20 ma.  Where did you get in?  Looking at vol. however shows lower volume on the two daily red candles than on the previous 4 green days.  Of course today is not over yet. 
    Interesting call on RMBS.  Would you wait for a confirming candle tomorrow or would you enter at close today?


  356. Personally, I don’t like GS here.  I think it is going lower, would much rather short it on some solid bounce.  But, that is just my gut feeling.  I think GS sees 125 and 175 this year, I would rather enter at one of those prices than right in the middle.


  357. TTupp – nw!  and yes volume’s very important to me… hence why I watch volume on ESU8 (S&P 500 emini futures) and any other cash market security.  You can see exchange volume, but not index.  I’m sure a lot of it has to do with the fact that they DON’T want you to be able to do this… the big boys have big systems that do it constantly (hence why they play ETF strategies, etc to find arb opportunities).

    Timeframes - intraday I used to be a 1 min guy only, now 5 min (my wife’s happier too… I know I know, stupid joke).  Here’s an example, you see which you like better for indications (but the ma’s are the key… price relationship to ma’s, highs, lows, round numbers, pivots, etc… not the tick itself so much )

    CHK 1 min

    CHK 5 min


  358. Cnicola, I just checked.  That was you that brought up RICK last week.  Aren’t you glad you didn’t go long?


  359. Sorry, just looked at the charts I posted and they look messed up b/c I saved over an old chart.  The stuff in blue’s the only chart to look at…


  360. speaking of swinging, I had been speaking to BBD about BIDU popping off 309 or so b/c of this chart… dunno if it will correct but if it does it should see 320 again just to stay in the channel… but that’s really just gambling


  361. going off of what you just said, do you look at volume intra-day to determine a turning point? and also, wouldent the vol. on the full sp500 contract be more indicative of the entire market, or is the ES more liquid and a better indicator all together.
    do you look at rsi divergences too? i see you mentioned RSI2 i cant find anything like that on ToS.
    last thing- when you say piviots o you mean Fib. fans? is that what you are reffering to when you say r1, r2 ect.? which of all these crazy fib. tools are useful? im used to the standard retracement tool and like its results, but i welcome your knowledge with open orders…. hahaha


  362. what do he arrows and circles rep. on those tinypic charts?


  363. TTupp – ahh, great questions.  Well here’s a little kicker for you… futures ARE in the futures… they occur about 2-3 seconds faster than cash markets… so do cash markets move b/c of futures, or the other way around?!?!??!   That’s one of those "which comes first the chicken or the egg" questions… either way doesn’t matter.  Futures volume most indicative of who’s in control of the market… like yesterday when I mentioned to Pat that the volume that sold it thru the S2 was a HUGE volume bar before noon EST… not normal = sellers own the market = prob won’t recover… etc.  It’s all conjecture from there.  Spoos (SP) or minis (ES) doesn’t matter, I don’t trade SP b/c no leverage, each contract costs the market * 50… ES and SP just as liquid, but ES just as easy to understand / follow.
    :)

    Pivots… here’s the link to their explanation.  The rsi is simply the relative strength index… I put it at 2 (instead of the norm being like 14 or 9 or something) and I use 85+ as overbought levels, 15- as OS levels.  It’s a "relatively" good way to swing the market… but you use it on a daily chart, say a 3 or 6 month SPY or SPX.  You’ll see.

    Fib fans I know what you’re talking about, but I don’t use them… just pivots.  my moving averages, if you’ll notice, on the 1 min and 5 min are fib numbers though…

    The arrows and circles are simply things I quickly put on the charts to show where obvious resistance / support for the price was intraday.  the R2 for CHK, the 8 on the 5 min at 10 EST, the 21 on the 5 min before 11 EST… etc.  Low of day is 48.87, and the R1 happens to be 48.8767 today…


  364. Sorry, not sure if that hyperlink will work… try this one if it doesn’t


  365. GOOG – sorry to rush in here, anyone have a good TA feel for GOOG at this level?


  366. Mark – that link to Pivots worked. FYI, I had them in a spreadsheet, easy to calc. Then someone pointed out where they live in the TOS charts.


  367. mck – I figured, Pivot Points SHOULD be just something any basic charting package should have… they’re well known enough for that I’m sure…   But I guess I’ve been proven wrong one too many times LOL.

    GOOG – 460 (see the white line from the up break post earnings in April…)?  LOL.


  368. GOOG – if it’s channeling down, there’s more room below. If it’s consolidating sideways, it’s near bottom.


  369. GOOG better stop right here or it is going to 400.  I would watch it to see if it breaks below this current channel or breaks above this purple trendline.  Doesn’t look promising to me.  Of course, nothing looks promising to me right now.  Man, I am such a grumpy old bear lately.  
    Here’s the GOOG picture as I see it:
    http://i34.tinypic.com/2rfx5s3.png

    Don’t know if you guys watch for this, but I like his contrarian gauges.  They are usually pretty helpful.  Short version, not enough bears to be bottomed.
    http://www.marketwatch.com/news/story/contrarians-wonder-all-bears-are/story.aspx


  370. Masterpayne – been watching RMBS since yesterday and it is now running like a scalded dog. I keep sitting on my hands while this one flies because I can’t figure out what is making it turn upward. Buyout rumors??


  371. Optiondiva – FMCN, looking at gap after earnings as resistance at 28, not following


  372. I think if GOOG tests 460, it fails it.  Just my bias that the more times something tests a level the more likely they are to break through.


  373. Mark, sorry that I miss your message from 2:34, I was looking at COH for puts early , Only grap two contracts OCT30 P to balance my portfolio, now RSI is at 27 I think I will wait until it drop to 15 before I get into the trade just to be safe! 

    I got a side question for you , do you scale out your position like OPT ?


  374. bee – scaling – completely depends on the trade… when I was day trading, depends on how many contracts etc.  With swings yes I’ll scale out prob… it just makes sense.  If you’re up on 1/2, down on the other 1/2, you’re usually either flat or slight profit… bettern than 0 or loss…

    mmmmmmmmmmm, futures now at 68 from my paper buy of 65, and the 126′s are now 3.20/3.25 from my fake paper $3 buy… but tomorrow will tell you where it truely goes.


  375. Film/RICK – Yeah I saw your post but just was trying to keep quiet :-)   I guess not having anymore cash to play with things has its perks since I did not buy any :-)


  376. Mark, you know what , that’s what happen to me on scaling out, I got into rimm last week when it is at 124.XX, I got 4 OCT 140 call, and I hold it when it hit 134.xx last week my profit is about $1000, I thought I should trade with the trend and rimm might hit higher so I just keep all contracts right now my position is not making any money instead losing $300, I just wonder should I just forget scale out just take the profit that day when it hit 134 and reload later. I felt bad about letting all the profit slap away=) turning this trade to a loss, of cause I am holding on to it right now, I just felt bad because I felt like I made a bad decisions. 
    and mark, "mmmmmmmmmmm, futures now at 68 from my paper buy of 65, and the 126’s are now 3.20/3.25 from my fake paper $3 buy… but tomorrow will tell you where it truely goes." where is that 65,68 coming from , is that from the spy trade? sorry for asking stupid questions, in this trade did u wait til it hit OS 15 before you jump in ?


  377. Optiondiva – Don’t get me wrong I know it is easy for us to sit here now and tear your trade apart. The idea is that it is several things together: 5ma, trading channel, candlesticks. If it was that clear cut Opt would have programmed it and how he would be permanently on vacation …
    I think the mistake we all jumped on and is the most important is not getting out at a specified point. With my loss I mentioned I basically wiped out 3 months worth of gains and still made a loss after that. Which is the point:: unless you are George Bush you will make wrong decisions and the key is to accept that and just limit your losses. You had days in a row that said it wasn’t coming back. Also since normally Opt scales into positions by the second and third day you would have seen there is no point to put more money in.
    And BTW I am sure you will get it and these discussions are always a benefit for everybody. I definitely did not know about the channel for COH so I learned something new that I can look at.


  378. bee – no stupid questions, only questions.  No, check out my comment to you guys at 2:34 today… you’ll see what I’m talking about.


  379. JNjr – don’t know, can’t figure it out and really can’t figure if it should be followed. They were talking about it on Fast Money last night so I stuck it on my watch list.


  380. goog – thanks Mark/Film. I don’t see conviction one way or another, only slight volume bump over last few sessions but anemic overall. My guess is she rises/falls with the market. XLK & others looked to be forming an interim bottom, and with SPY, DIA, etc. running up at the close I figure there’s no trend so I bought out some short 500 calls. Hump day could be just that, a hump. God, what did people do before tinypics? Thanks!


  381. Sat on my hands today. May sit on my hands all week.

    Watching (and may keep watching/waiting for a week or two):

    Calls: BKC (at support), VRTX (support), TXT (support), LVS (support)
    Puts: CVC (waiting for resistance), ESRX, LOW, DF


  382. Optiondiva – agree with Cnicola. Also be true to what you want out of the trade and use the chart signals to guide you. Also never be afraid of taking some profit. Example: bought APPL at 172.50 and set a +$2.00 gain in the stock to sell 1/2 of my options, which it hit this morning.Will keep the other 1/2 until the trend breaks or my second price target is met. Shorted MA at 239 when it broke through 5dma. Out of trade at 236 due to a firm candle above the 5day. Keep your targets in mind, know how much you can loose and take some profit if it gives it to you. Keep holding 1/2 if the trend is not broken and if the trend breaks SELL.


  383. Film – you link in this post to the market watch article didn’t resolve. Also, on your goog chart, wondering how well you think that bottom channel works out for you, assuming parallel to upper? gotta run to a meeting, not sure why the day job doesn’t understand trading : )


  384. Masterpayne – yep not going to chase RMBS. I have enjoyed VOD as a short as it just does not want to get above the 5dma.


  385. RMBS – I recall Najarian saying something about unusually high call volume in the OCT 12 contracts. Apparently he jumped in yesterday when they saw the volume and are already out.


  386. UNG – anybody take a look at it lately? Not sure if anybody looks at RSI and MACD, but there has been some divergence from the stock’s downturn recently. Bodes well for a turnaround. ANy opinions?


  387. One quick comment, optiondiva. I don’t know about TSO and VLO, because I don’t know where your stop is. The most important part is, without question, to have a defined stop BEFORE you enter the trade. 
    You have to focus on this before you learn anything else. When you say "I entered this trade because blablabla…" you don’t tell me what your stop was. Entries don’t matter, exits are what is important, so please focus on that. 
    And yes, the first and last hours of trading are the most important ones.


  388. mck, I don’t think support holds.  I think we get to 430, that is where I will start buying, the first scary drop into 430.  I don’t think GOOG should be heading for 410 again.  But, it will be a small position.


  389. Well guys tomorrow really early I am off to Hawaii for my vacation until September 7th. Well not that my input will be missed much but I am so happy about going back there I am telling everyone :-)
    I will definitely miss the daily posts and hopefully SPX will still be in 4 digits when I get back …


  390. If I am ever half the trader that I want to be.  I will have a house in Hawaii.  I love Hawaii.  Did I mention I love Hawaii?


  391. Film – Kauai, awesome. Napali Coast, mmm.


  392. Film/GOOG – 430? Nothing would surprise me but I wouldn’t put money on that. Oil back up to 118, things are so jittery that it doesn’t take much for a (over)reaction. I don’t think anything says were out of the ugly downtrend yet. Volume on SPY since this mid-july recovery has been declining.


  393. Mark
    thanks for the pointers on futures yesterday, great educational points.
    I had another question, are there any daytrading rule for futures?


  394. 8:30 Orders for Durable Goods in U.S. Unexpectedly Increased in July
    8:30 *U.S. JULY DURABLES ORDERS RISE 1.3%; EX-TRANSPORT UP 0.7%

    Late start for me… woke up early!, but got in late.  Go fig.


  395. Andy – day trading rules?  What do you mean by "rules"?

    Film – CHK – should be nice little open for it!  Let’s see if she gets some legs to 52.50-55 range.  And there was this:

    Chesapeake Energy – CHK – cls: 49.45 chg: +1.45 stop: 46.90*new*

    Natural gas futures soared higher today and that lifted shares of CHK. The stock hit $50.24 intraday but failed to close over round-number resistance at $50.00. We are adjusting our stop loss to $46.90, which is under Monday’s low of $47.11 and CHK’s 10-dma. If you’re looking for another entry point wait for a dip back toward $48.25-48.00. We have two targets. Our first target is $52.00. Our second target is $54.85. FYI: As expected CHK produced a brand new P&F chart buy signal that now points to a $62 target.


  396. Mark, sorry not clear, limitations of the number of trades being done from one account on the same instrument.. As there are on stocks / options…


  397. Andy – there are none.  Futures are cash settled, so you won’t be stigmatized as a "Day Trader" by a brokerage… you can buy and sell them 100 times a day if you want.


  398. GM everyone.. Happy Wednesday


  399. FYI everyone, the NYSE is currently having connection issues… just fyi for anyone looking to trade stock this morning.


  400. oil’s currently at 119.20…


  401. Aug. 27 (Bloomberg) — U.S. stock-index futures rose,
    erasing an earlier retreat, after orders for durable goods
    unexpectedly advanced in July as growing overseas demand helped
    companies overcome a slumping domestic economy.
    Citigroup Inc. and Bank of America Corp. each climbed about
    1 percent after the Commerce Department report bolstered
    expectations that the economy is recovering. Fannie Mae and
    Freddie Mac rallied more than 9 percent on a Citigroup analyst’s
    report that new investments will boost profits, while Chevron
    Corp. and Exxon Mobil Corp. each climbed 0.8 percent as oil
    advanced for a third day.
    “As long as businesses are optimistic, we have a good
    chance of pulling out of this weak period in the economy in
    fairly short order,” said Peter Jankovskis, who helps manage
    $1.5 billion at OakBrook Investments in Lisle, Illinois. The
    durable goods data “was a very strong report, and the market has
    acted appropriately.”

    futures currently slightly up, 0.75 points


  402. GM All!


  403. GM All,
    Really not much to say this morning. Markets very calm and no adjustments to our positions. Would be great if that could last until next week.


  404. Connectivity to all NYSE destinations is now restored.


  405. hmmm….RMBS? 

    Any news? Somebody knows something.


  406. 0:01 Rambus Won’t Face Review of Antitrust Decision Sought by FTC
    8/26 Rambus Wins Decision Denying FTC Request for Review (Update1)
    8/26 Rambus Wins Decision Denying FTC Request to Reconsider Ruling
    8/26 *RAMBUS WINS DECISION DENYING FTC REQUEST TO RECONSIDER RULING


  407. random science I’m dropping on you:  The version of Billy Joel’s “My Life”, that played over the opening credits for Bosom Buddies was sang by co-star Tom Hanks.


  408. So all ma’s with the SPX intraday, but boring day playing the pivots… at R1 currently… should keep going up


  409. Thanks, Mark!


  410. 10:35 *DISTILLATE INVENTORIES ROSE 56,999 BARRELS, U.S. EIA SAYS
    10:35 *GASOLINE INVENTORIES FELL 1.18 MLN BARRELS, U.S. EIA SAYS
    10:35 *CRUDE OIL INVENTORIES FELL 177,000 BARRELS, U.S. EIA SAYS


  411. Gartner sees smartphone sales growing to $200B by 2012, good news for companies like Nokia (NOK) and Apple (AAPL).


  412. masterpayne – nw!  not sure if that’s the real reason, but looked significant.


  413. Sooooo… how yawls doing today?  Bored much?  No meat to talk about?


  414. US gasoline consumption based on 13 wk MA yoy (summer driving season) was down 238 kb/d or about 2.5%.


  415. SEM – what up brutha?


  416. Hi Op,
    In answer to your morning post to me about knowing my stops before entering a position, here is an explanation of my routine.  Before I put on the trade I enter the relevant info (stock price, stop based on stock price, option price, delta,) into a spread sheet I’ve set up which tells me how many contracts to buy.  I originally set my stop just below the 5ma on the daily chart of the stock.  However I don’t like to use hard stops.  I kmow I can use use contingency orders on TOS to get me out of my position when the underlying hits my stop.  However, I’m not comfortable using a market order to get me out of the option, because of the slippage, and thus must calculate where I think the option price will be so as to get the correct limit order price.  This is where my system bogs down, because I probably don’t use the correct inputs regarding the change in IV to pick the correct limit price.  Can you explain how your exit order is set up?  Do you base it on the stock price or on the option price?  If on the stock price  do you use a market order or a limit order?  If a limit order, how do you calculate a reasonable limit price?  Forgive me if you’ve gone over this before.  I must have missed the discussion.


  417. Hi Op,
    I have set my R value on my spreadsheet to 2% of my risk capital.  I do not risk more than 2% (1R) on any one trade.  The R value is what tells me how many contracts to buy based on the stop.  I hope I’ve explained this correctly. 
    My problem with the COH trade is that I did not have a hard stop, and the trade got away from me, and, knowing that COH was reversing every few bars I thought I’d wait it out.  Now I see that doesn’t work.


  418. Has anybody noticed the breakouts in VLO and TSO today?  No news on the companies.  With crude oil up I would think refiners would be down.  Any of you oil and gas guys understand today’s action?


  419. OptionDiva,
    You seem to be doing everything good (except on the COH trade :) ). I promise that if you stay disciplined with this, results will follow. I don’t put hard stops, I just enter the trade when my stop is hit. Most of the time limit orders that I change if I am wrong, sometimes market orders when there is great liquidity and it does not matter much. Don’t worry about change in IV. When your stop is hit on the stock price just exit at the best price you can get.


  420. Thanks, OP.  One more question.  Do you exit when stop is hit intra-day or do you wait till the last few minutes of the day?
    I’m thinking that your answer will be "Whenever the stop is hit."  If you don’t use hard stops and you don’t exit at end of day, you have to be watching like a hawk every minute.  Is this correct?


  421. Watching LVS and TXN – both good trenders coming off of support. Waiting for EOD.

    Having trouble finding good puts though. Things are falling, but not seeing good trends that I see continuing.


  422. TOS live chat today after the market closes is "introduction to trading futures (beginner version)"


  423. TSO and SUN are said to not have exposure to gulf – this is what BloombergTV said. Don’t know about VLO.


  424. Hey Mark – not doing much in the market – trying to move a client project along for end Sep deadline. Probably get to work the long weekend. :-(     But hey – puts bread on the table!

    Hopefully we get a little more Gustav hype going into the long weekend. What I do have is a little CHK and COP long – looking to sell before the weekend – who knows – this could be another non-event in the oil patch. Hope so for the sake of Blake and NOLA.


  425. VLO – big holdings in USG – ie. Corpus and I think in AL. Think TSO mainly W. Coast and SUN def E. Coast – Phil/NJ. Easy to check online if meaningful.


  426. I would love to see how many people are logged on today. I feel like it’s 5. 
    Should have taken this week off.


  427. AAPL being bought on big volume.

    SEM – yeah dude, me neither as you can tell by me spamming a board with no one on it LOL.


  428. news from the treasury I think’s going to come out… I think that’s why financials were spiking… dunno… just a rumor


  429. I know of one lurker that is hanging on your every word Mark. :)


  430. Denver – LOL.  Well, since this rumor started going around the floor, check out the most influential sectors and XLF in orange… things that make you go hmmm…

    sectors


  431. Hi guys.  Just checking in.
    BNI – Sold 1/3.


  432. Quite possibly my favorite scene from Perfect Strangers ever… it’s after they had been taking Karate lessons for a while


  433. HOD on SPX is very close tot he S2 (this is a 5 day chart, just showing you for reference resistance points… ma’s with it… let’s see if she can keep the slow build mojo going to 85-90ish you think?  R2′s gonna be hard though…


  434. Hi guys, any opinions on XOM for a ST put? Looks like its hitting a resistance. Thanks


  435. Optiondiva – to your refiners up question earlier, here’s the "news"

    Aug. 27 (Bloomberg) — Independent oil refinery companies,
    including Tesoro Corp. and Sunoco Inc., rose as fuel margins
    increased before a tropical storm that may disrupt operations in
    the Gulf of Mexico.
    Tropical Storm Gustav, which passed over Haiti, may head
    toward the U.S. Gulf Coast region, which includes about 41
    percent of U.S. refining capacity. Refineries along the coast
    produce about 2.36 million barrels a day of gasoline, or 28
    percent of the U.S. supply.
    San Antonio-based Tesoro’s shares rose $1.71, or 10
    percent, to $18.28 at 11:41 a.m. in New York Stock Exchange
    composite trading. The company’s seven refineries are located in
    Alaska, Hawaii and the western U.S.
    Philadelphia-based Sunoco shares rose $2.76, or 6.8
    percent, to $43.12. Sunoco’s five refineries, which are mostly
    located in the Northeast U.S., have a combined daily processing
    capacity of about 903,000 barrels of feedstocks, according to
    Energy Department data.


  436. to my BIDU comment yesterday about it going back to the 320 level to stay in the channel… nice little 30% return in those 310′s overnight


  437. energy just sold off hard there with oil popping back below 117 on big volume… would think other sectors should get the money coming out of the oil hedge so would think the market should keep going up.  We’ll see…


  438. Albo, nicely done on BNI. I was in CSX since 8/14 and took 1/2 as it failed 64.5, which was  resistance point. I have noticed that BNI, CSX and CNI trade relatively similarly. KSU is a great trender but I haven’t played it.


  439. Does anyone use an HDTV for a computer monitor on their trading setup? I went to Fry’s and they have a 32" HDTV connected to a PC, but the text doesn’t appear nearly as sharp and clear as a regular LCD monitor. I currently have 2  22" viewsonic monitors and would like to add more screen space but not sure what direction to go from here.
    Thanks
    Don


  440. I’ll rephrase my last comment, oil dropped to 117 so the market was bought during that time… if it keeps dropping the market will keep going up… if it flatlines at 117 we’ll stay ar R2… if it floors and comes back a bit then we’ll go lower. 

    Don – at work we use these with a quad set up


  441. Mark
    Do you have 1 PC driving 4 screens or 2? thanks for the responce


  442. nw, it’s one PC, but my system’s exceptionally fast so I think it’s partially my tech dept’s internet, exchange system, etc.  But frankly I’m not a techy… no NOTHING about that stuff…


  443. Thanks, masterpayne.  Still have 2/3 looking for higher prices, but not too comfortable
    with the chart and will exist at breakeven if necessary.
    Looks like you had some good candidates last night.  How do you screen for them?


  444. mark,what do you think about KO now? brother.


  445. bee – man KO’s really not something I’m interested in.  Sorry, I know everyone prob hates to hear that kind of sh*t, but I really only like to trade things that go all over the place all the time (ag’s, energy, financials, tech, etc).  A staples company that’s in the Dow is not something you’ll see me ever really touch… it’s like utilities… so slow I have no opinion LOL… sorry man.  You might want to ask someone else with fundies on that guy, that’s a pure fundies play to me (no technicians watching it, HF"s don’t hold it, only long-only Mutual funds… etc).

    I will say though, AAPL’s looking interesting here on the LT chart… 20 and 50 dma’s coming from below to support… will it close above the 5 dma today?  Dunno… but very interesting chart…


  446. FWIW, I think you take too much risk buying AAPL here.  Better to get it at 180 or at 170, but likely 164 or lower, IMVHO.


  447. mark, I hate KO too , tell the truth I should not get into KO last week, is so annoying with its movement!. I had apple since yesterday  !. I guess from now on I will only trade tech and AG + energy , I go though all the trades I made this years, the profits are coming from these sectors..


  448. TraderDon
    These guys have been a great help to me in the past on tech questions. http://techreport.com/forums/


  449. Film – you’re most def the AAPL guru and prob infinitely more correct than I!!!!

    I was just looking at the chart.  If someone showed me that chart without me knowing the name and asked me if I thought the set up was nice, I’d answer yes.


  450. Mark, you posted a CHK forecast first thing in the morning. Where did you get it from?
    Thanks


  451. Albo - 
    I use StockFetchr to do my screens. I screen at night or in the morning before the open for stocks that have large volume reversals at or near their support or resistance. Then I look at them with my own eyes in Stockfetchr, then again in TOS (sometimes the charts are distorted I feel). 
    Lots of stuff sitting at support, not finding stuff that is showing signs of high volume reversals at resistance. Look at MS on 8/11-12, CALM on 8/18-19, and JRCC 8/21-8/22. That’s what I am looking for – it precedes the 5MA crossover.
    It puts me in way too early with things at support like GS, PGR and CSX/BNI. Need to exercise some patience and discipline to wait for a confirming move.


  452. Hey Arindam – actually got that form a buddy… but he didn’t share where he got it from.  Sorry man.



  453. Mark, I agree AAPL is setting up nicely, I just think it ends with a nice hammer candle down to test the bottom of the flag.  If it breaks down below, then you can say goodbye to 1250 and hello to 1200 as we fly past it.


  454. As far as the AAPL chart goes, the circles are when the 20 busted from below thru the 50 dma (and what price did afterward) is what made me interested in it as a 1 or 2 month long candidate… but then again this is a shaky market.  Dunno… just saying… gotta be smart about it, but cute little set up it’s got going on now…


  455. Film – ha!  almost posted at same time as you.  yes def see what you’re talking about.  Who knows… this market breeds uncertainty…


  456. Albo – I agree with you on BNI, looks toppy. Thanks actually for pointing that out because there is high correlation between BNI and CSX, which I own. In retrospect, I should have chosen BNI over CSX as it has a higher beta and got a much more significant move than I got with my CSX. 
    Going to try and exit CSX today if I can get a decent price for it.


  457. That kid has future in acting.  Who would film themselves doing that and constantly talk out loud to themselves.  Although, if they figure out how to monetize youtube and kick back a portion to the content owners, little stunts like that could put you through college.  8M hits on that video.  And that is just that version, I think there were others?  Guten morgan, Euros!


  458. Mark, Did u watch IOUSA?



  459. Mark, it is tough, man.  I want to be long AAPL so bad.  I probably should since I am hardly delta neutral as you might have guessed.  The volume has been pulling back nicely in this flag, and I have so many SPX puts if the whole thing does go to hell, so I should balance it out with some AAPL calls.  I pretty much always regret not following Optrader’s advice on AAPL.  I am just festering with uncertainty you might say.


  460. bee – no I haven’t yet, but it looks interesting… almost saw Buffet speak last thurs for $20, but decided to drink a bottle of wine and watch the Olympics instead LOL.


  461. mark, LOL !!!


  462. Film – ha!  man I’m very conservative and not playing at all, so I understand your hesitance… crazy market this is.  I’d need a better break out to confirm like you said, def over 180 to completely jump on board… but this singular point might end up being one of the perfect times to actually go long some Oct’s or something… if history repeats itself then the 20 dma should propel it further up, 80 will fall then 85 and 90 will be the ultimate test (well, all honesty 192.50-192.77 range, but whatever)… when I see the 8 crossing the 21 in futures intraday, it usually heralds a pop in the direction those cross… the LT chart for AAPL seems to have the same quality with the 20 and the 50.


  463. Mark, looks like we want to be half out of CHK by Friday.  The weekend could kill this trade if the storm fizzles, then we can get back in next week.  Just hope to see 53 this week.


  464. Mark, I agree with all that.  Those are the technicals that will launch it and keep us in the trade.  To summarize my IA (that is Intestinal Analysis [tm]), the news flow has been stellar.  The failure to launch already shows how bad the market is.  I think that AAPL could still fly in the face of a falling market, but not before the deep pockets get back from the Hamptons.  But, agreed that we are almost there for a perfect 1-3 month run that should run right past 200 up to 240-260, IMHO, before consolidating back to 200.  That is the trade I am patiently waiting for an hoarding my cash for.  Agreed that some Octobers will be part of that.  Low IV since no earnings before expiration, but a fat, fast runway up.


  465. FILM – CHK – agreed completely.  I actually took 1/2 off my 50′s  yesterday in the morning when it was trading for $4… now looking for $5 on the last 1/2 which should be just about 51.90-52 range… otherwise I’ll get out a little below BE but it would have to drop below the 5 dma to be worth less than $2.60…


  466. I am ignoring the news flow and the P/L on CHK and just watching the chart.  Well, when I wake up on time.  Believe me, I will be up at 5:30 tomorrow.  I have to see how the morning shakes out, but all of my positions are behaving.  Only trouble spot is COST which has been nice enough to dive every morning, but is always way back up before I get to the computer.  Keeping its channel intact and below LT price resistance, so feeling okay.  But, SPY going higher is not going to be good for me.


  467. Optiondiva, most of the time I will wait until the end of day. Unless some big news hit that tells me that this is not a trade I want to stay in anyway. That was the case for example with COH’s buyback and the reason why I said that we would get out on a pullback during the day.


  468. Seriously – any ripe shorts out there? I am too long right now.


  469. Film – CHK – yeah no worries brutha.  I don’t know your entry, but you got int he 47.50′s right?  at 52 they’ll be worth 6.50… if the thesis is that it will get to 52 or more, you could easily but a GTC limit order out there to sell at 6.50 if you’re happy with that return.  Should hit and you wouldn’t have to watch it at all.


  470. and you could obviuosly also put a GTC stop limit at BE or a little above if something weird propells the stock down the next few days… whatever LOL.


  471. Accuweather now calling for Gustav at Cat 3 or more – showing the center of the projected track around Port Arthur. Landfall around next Tue. Dirty side (obviously) into LA. Like to think this is hype, but looks to be for real.


  472. Mark/Film/AAPL – ok, you’re scaring me since I have some skin in the game. I’m looking for AAPL to be weak near term. Mark, I love your charts – just wondering, the volume has been anemic on the gains during that period (your chart) so they don’t stick (the gains).  Trend looks to be in the dirction of RSI and MACD – no price divergence there yet. I have it hitting against the top of a triangle right now without conviction to go through. But, you can make any case you want with charts – it’s wicked hard to not see what you want to see and actually what’s there!


  473. …tech seems to be taking a dive here too, last hour.


  474. AAPL – Film, you continue to amaze me on this stock.  When you made your comment at 2:50 today about the possiblity of printing a hammer today, I thought "yeah, right".  But here we are, damn close to doing jst that.  If I ever had any doubts …

    I’m quite happy with the prospects of AAPL heading south for a few more days, as I’m fully covered and still hanging on to a 1/4 position of puts (since 179.16).  So, Film, I’m happy to hear your comments, but more hoping you’re correct.

    I do like the potential bullish set up though. 

    Mark, here’s a question.  I see that the 20 is about to "pierce" the 50 from below, but it has only done so by 32 cents as I write this.  Is that enopugh to make a trade on a $175 stock, or is that just rounding error or noise?  I can’t seem to get a handle on what’s a prpoer cross and what really doesn’t qualify. 

    Thanks to you both.


  475. Looked at my chart again and let ToS tell me what my target was.  So, I have a GTC limit sell at 7.10.  Thanks Mark, you are right.  I am not disciplined with setting limit sells or brackets.  

    Masterpayne, all I see is shorts.  COST is behaving well in a downsloping channel with at stop around 67.30.  COF has bounced a little, but I am waiting for a further pullback to confirm the downside break.  GOOG is going to test 460 soon and I think fail, but if we get a bounce in the AM, that might be the time to jump on that one.   What are you so long?


  476. mck – yep!  charts can tell you whatever YOU want them to tell you… hence why I always go back to the acroynm: KISS. 

    On my LT chart of AAPL, did RSI really add any value?  or the MACD?  Nope!  just watch what you like and THAT’S ALL.  Hence why Op’s 5 dma system is so nice… simple, with smart risk / money management you win some big and lose most small.  Etc… ma’s are my trend (for me at least) both in the intraday world and LT world… what they say and what price does based off them is what I follow. 

    Volume – as far as all the selling, remember why that happened… It was the new years, so all the institutionals offically had LT gains on AAPL… so they took their profits hard when the market decided to crater with China.  Do you remember that?  volume’s low all things considered, but so is the volume in the market right now, so that’s more important in my investment thesis than an individual equities volume… is the market buying stuff?  If not what is it doing (sitting on the sidelines, hedging, bulking up cash, waiting for an all clear signal… etc). 

    AAPL’s chart right now in a normal market looks good… should you not follow the chart like you should in any market (with caution of course knowing the macro themes of the moment)?  Smart entries, smart stop losses, position sizes… you know the rest.

    Did I just ramble on with no point?  Jeezus…


  477. Richard, I hate to downplay any of my "wonderous" calls on AAPL, LOL, but, I didn’t mean that it would print a hammer today.  In fact, today isn’t really looking like one to me.  I mean more like 6/13 with a big ol’ tail.  That is what I want to see.  

    mck, if I was short/covered, I would be stopping out of that at 178.  But, I think we are nicely working the channel down.  It all comes down to tomorrow, IMO.  If we have a really strong open tomorrow I will be covering like a crazyman.  If we have a strong down open, I will make myself a chai, put on an episode of the daily show and watch the money roll in.  Luckily, I think neither up or down will get away from us tomorrow with the big guns out.  For sure, I want to be out of my Sept SPY puts if I get a good strong move.  This theta thing is driving me nuts.  I definitely need a futures account for indexes and gold.


  478. Mark – I’ll take your ramblings any day chief!


  479. Richard – very good point, and like I said before "this could be the perfect point"… but it’s an early entry (i.e. conjecture, not an absolute).  If you really want the follow thru it needs to pierce it completely, and the smart boys are waiting prob until 180 (b/c the 20 should be thru the 50 at that moment).  In the stock world (not options which have finite lives) this would be an accumulate 1/3 position point, looking for the cross to accumulate more (if it pulls back to test the 20 above the 50, or if 180 is tested).  Just saying how the stock reads, not how to play the options…


  480. Film, Do you expect COF to come back to below 40?


  481. Film – geez, I’d like to see that kind of tail too.  But sometimes that kind of tail is in short supply!  :-)

    In this market just looking at what I can get.


  482. Jasper, this is what I see:
    http://i35.tinypic.com/keul20.png

    If we drop below that channel, we are going to 30.  I think this market will be retesting lows at every opportunity.  And COF breaking that channel is a perfect opportunity.


  483. Oh yeah, I can’t imagine the rumor to buy the financials is real.  Increases odds of a sell-off in my mind.  The good rumors don’t get so widely published.


  484. Mark – got it.  That makes much more sense, as this point seemed a bit early for a swing trade.  The 5dma is still technically pointing down – though only by 1 cent per day for  the past 3 days.  Once again, it’s counter-intuitive to me that we can be that precise on a daily chart – if ever – in these markets.


  485. AAPL – looks like it’s going to close just slightly above the 5 dma… hasn’t closed above it in a few days… tomorrow with GDP in the morning should be an interesting day!


  486. Mark – very wise on the relative volume question and other influences when history was happening. Cash sidelines too – many of these "drifters" are like springs getting ready to recoil in one direction or the other. If money rushes in, AAPL get’s bought, out and it’s the opposite. Tech could be looking a bit underserved on the sector charts, but it depends on the timeframe you pick. Only issue I see with 5MA so far is getting whipsawed in the choppy stuff (like now). I heard Bob Doll on CNBC saying things were just ok but to expect chop for now. Crap, now I’m rambling, or maybe just paranoid that I’m rambling…


  487. SPX finished right at 10dma.  Better than above it for all us bearishly biased.


  488. Richard – yes, well, I truely wasn’t talking about a swing trade if you think about it.  the 5 dma or rsi2 thing I’ve been playing with is for swings (1-5 day holds, etc) but when I discuss 20 or 50 or 200 / 400 day moving averages, you know I’m talking about a LT position (relatively speaking, like today would be an Oct or Jan call if you wanted to take a position).  B/C the 20/50 cross proved int he charts to give decent 2 week to 2 month moves in the stock, so the investing timeframe is different with the longer ma’s.  One thing I just noticed (b/c I really only just started using it the last couple months b/c it’s uncanny) but the 400 on my LT chart of AAPL… check out how it supported AAPL back at 120… I mean we all knew we should have bought some down there, but THAT is sick…


  489. Interesting – drop spx, dia and aapl on the same chart, like synchronized swimming.


  490. Mark, I was loading up at 117, but I unloaded at 155.  =(


  491. Film – ha!  yeah, I told my associate in crime here at work to double down and he picked some up at $117 too.  But he’s a stock only guy… so his gains are nice, but nothing like buying an ATM Jan call down there LOL.


  492. Mark, if the world does go to hell and AAPL touches its 400dma again, I think we can officially begin the climax run for the stock.  Assuming of course that it recovers.  I mean, we all know how much money AAPL is going to make, but every stock has a life span.  AAPL has been lucky enough to have a second life.  But, there must be a point at which the stock tops for good.  Just something I try to keep in mind when I am getting bullish.  The ride can’t go on forever, even though it probably should.

    I am out.  Later.


  493. mck – "paranoid that I’m rambling"… LOL.  It’s funny b/c choppy markets bring indecision… it’s easy to be long and say, "man I’m good at this!!"… when THE MARKET’s going up.  Everyone’s a buyer at heart, it’s human nature.  But when all you see is a squigly sideways line, people start thinking in circles.  Stay with the charts… if 400 provided support back in the day, and 400 is tested again on AAPL the next year, buy more.  etc.  400 supported the SPX forever, then SPX failed, and NOW 400 is resistance… the times they are a changin’.


  494. I was just beside myself the third day it tested 116.  The volume and tick action was like a frickin’ superbowl comeback.  I had absolutely no fear about going long at that price.  I wish those days would come more often.


  495. Film – agreed, for me it’s "have a plan, stick to it".  Only way to kill as much of the emotional side of trading as possible.  When I buy futures intraday, it’s b/c of a certain trade set up… but I already have in mind how many points I expect to get (5, 10, etc).  Just like with CHK, I have a target and a BE stop loss if my target isn’t hit.  So I’m either flat or nice little profit.  Every trade I make has a smart stop, stop moved up to BE when market goes with me, and a level I’m looking to reach in a certian amount of time.  When the charts turn on me, is when I flatten.


  496. OOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOO

    16:18 *FANNIE MAE STOCK TRADING HALTED, PENDING NEWS, NYSE SAYS


  497. 16:19 *FANNIE NAMES DAVID HISEY CFO
    16:20 *FANNIE MAE CEO DAN MUDD REPORTS MANAGEMENT RESTRUCTURING TO
    16:20 Fannie Mae CEO Dan Mudd Announces Management Restructuring to
    16:19 *CORRECT: FANNIE MAE SAYS ROBERT LEVIN TO RETIRE
    16:19 *FANNIE MAE RESTRUCTURING MANAGEMENT                     :FNM US
    16:19 *FANNIE MAE SAYS BUSINESS CHIEF LEVIN TO RETIRE
    16:19 *FANNIE MAE NAMES PETER NICULESCU CHIEF BUSINESS OFFICER
    16:19 *FANNIE MAE NAMES MICHAEL SHAW TO CHIEF RISK OFFICER     :FNM US


  498. Hey guys, related to CHK,  has anyone noticed the RSI and MACD divergence on UNG? Not sure if its too early to be bullish on it.


  499. 16:22 *FANNIE MAE NAMES DAVID HISEY CHIEF FINANCIAL OFFICER   :FNM US
    16:22 *FANNIE MAE’S BENSON FORMERLY WITH MERRILL LYNCH        :FNM US
    16:22 *FANNIE MAE’S SHAW PREVIOUSLY WITH J.P. MORGAN          :FNM US
    16:21 Stock Market Update: Dow: +89.64, Nasdaq: +20.49
    16:21 FNM: Fannie Mae confirms the co named David Hisey as new Chief F
    16:21 *FANNIE MAE BOARD ‘FIRMLY COMMITTED’ MANAGEMENT RESTRUCTURING
    16:21 *FANNIE MAE SAYS BOARD IS ‘FIRMLY COMMITTED’ TO DAN MUDD
    16:20 *FANNIE MAE SAYS CHIEF RISK OFFICER DALLAVECCHIA TO LEAVE
    16:20 *FANNIE NAMES DAVID BENSON EVP, CAPITAL MARKETS AND TREASURY
    16:20 *FANNIE MAE SAYS STEPHEN SWAD LEAVING COMPANY            :FNM US


  500. 16:24 *FANNIE MAE NAMES PETER NICULESCU CHIEF BUSINESS OFFICER


  501. Hey Pat – on what timeframe are you looking at?  And what are your setting for the rsi and macd?


  502. Am looking at the 1 month chart. RSI is from 0 to 100 and MACD is from -4 to 2 if that’s what you mean by settings. Its on Stockcharts.com.


  503. Pat – Options on UNG are very illiquid.


  504. Film, Thanks for the insight. Appreciated.


  505. albo, you are right, but this can be used as a potential long-term play on CHK or other related cos.


  506. Pat – ha!  no sir, stockcharts.com prob uses the standard for macd (12, 26, and 9 as the signal) and rsi (14)… there’s nothing wrong with that, but you need to understand what those mean (go to stockcharts "chart school" and look them up).  So those are relatively LT settings… but agree with albo, the options are too illiquid to play for me.  Also, this tracks Nat Gas the commodity… while I do believe technicals come into play, news and fundamentals for this market seem more important to me.  Ask SEM or Blake their opinion, I’m sure they’ll have pretty decent / knowledgable ones. 

    As far as CHK / HK / SWN, etc… the outlook for nat gas prices most definitely plays into their LT growth potential… but compare UNG’s chart to SWN, CHK, or HK… you’ll see the stocks started curving up much sooner than nat gas prices started to recover.  Maybe UNG lags what others knew about the sector (i.e. SEM has said over and over Aug is a bad month historically speaking for nat gas, so those who saw the sell off in the stocks knew it wasn’t necessarily meaningful and loaded up on longs to base them). 

    All in, I don’t think it’s ever too late to go long something… or short for that matter, it depends completely on the timeframe plan of your trade!  1 hour?  1 year?  What’s your idea?  Then the decision can be made.


  507. Thanks Mark. I misunderstood your settings question completely. Since CHK finally closed above the 50 mark, it looks like a good long-term bet to me i.e for the next 6 months or so.


  508. does ToS automatically change front month futures contracts in watchlists when the expire, or do i have to change this for every contract every month? if so when oes it do so?


  509. Pat – I have a lot to learn on trading, but one tough lesson I did learn is to stick to where there is liquidity and where there are decent spreads. To me there is no sense in playing energy with something disguised as a commodity. Suggest you check out a few energy companies as many different things are going on with each – some are mainly domestic and onshore. Some have exposure to a lot of high risk geopolotics. Some hedge a lot of their production so earnings may not be affected much if say gas is $6 or 10/mmbtu. Right now I think that Gustav presents a quick runup and a few people here were long energy thinking about the next several weeks. With Gustav my guess is a run-up into early next week then everyone waits on results. Unless something major happens there will be another opportunity to go long following a pullback. Normally natural gas inventories are built from early April to end Oct then torn down over the winter.

    Hopefully Blake is not out on one of the rigs.


  510. Check this out to visualize storm track and offshore production locations. A lot of the onshore industry, particularly refining is from Corpus to NOLA.
    http://www.accuweather.com/news-top-headline.asp?partner=accuweather&traveler=0&zipChg=1&date=2008-08-27_13:42


  511. Mark – I love your charts, thanks.


  512. WOW- in all my years of trading have i never seen a better straddle/ strangle candidate: DRYS. Beijing back to business =  dry bulk rates back thru the roof. plus that co trades at like 4.5x’s earnings for a company that has grown exponentially and has major plans for the future.


  513. Here is a good discussion regarding commodities , gold and whether we are in deflation or inflation. http://commoditywatch.podbean.com/2008/08/24/inflation-or-deflation-part-1/


  514. Kind of puts the US situation in perspective …I believe that in the US something like 4-5% unemployment used to be "full employment".
    German unemployment falls to a 16-year low. The jobless rate of 7.6%, while far worse than in the U.S., is the lowest since 1992.

    Additionally – talking to a friend in Korea last night who also has a China office. He is very worried about the China business climate. We have been talking about this for the last 6 months and it is somewhat masked by the Olympics. China has continued to tighten credit and at the same time pricing for a number of goods is quite a lot higher. Businesses are just grinding to a halt. Also, the "decoupling" effect is also not apparently as decoupled as most had assumed.


  515. Kind of makes you question what we planned on getting out of the whole invasion thing right?  (I know, silly political statement… just saying).

    SHANGHAI: China and Iraq have signed a US$3 bn deal revising an earlier agreement for China’s biggest oil company to help develop the Ahdab oil field, according to a statement from the Iraqi Embassy in Beijing.

    The deal, restoring a project canceled after the 2003 US-led invasion of Iraq, was signed late Wednesday by Chinese officials and Iraqi Oil Minister Hussain al-Shahristani.

    The revised terms of the deal increase the anticipated output from the billion-barrel field to 110,000 barrels per day from the originally planned 90,000 barrels per day, the statement said. The contract is to run for 20 years after production begins three years from now, it said.

    Saddam Hussein’s regime defied United Nations sanctions that limited direct foreign dealings with Iraq’s oil industry and signed a deal in 1997 with the state-owned China National Petroleum Corp.

    That contract, worth $1.2 bn at the time, gave a subsidiary of the Chinese company concessions to develop the field on a production-sharing basis for 22 years. The value for the renegotiated contract is $3 bn, the statement said.

    The new agreement will be a service contract, under which China will not be a partner in profits and instead will be paid for its work.

    A spokesman for CNPC, Liu Weijiang, said on Thursday that he could not provide any information on the deal.

    Once the contract is signed, it will be the first Saddam-era oil deal to be honored by the new Iraqi government. A number of companies say they signed deals with Saddam’s regime and demand that those be honored, or the countries involved be given priority on new agreements.

    But the Iraqi statement said that some technical services contracts with other big petroleum companies might be postponed.

    The ministry has consistently denied giving any advantage to companies with which Saddam signed deals, instead insisting that oil and gas fields and exploration blocks will be offered up for bids.

    Iraq sits on more than 115 bn barrels of oil, but decades of wars, UN sanctions, violence and sabotage have battered its oil industry.

    The Ahdab field is located in Shiite-dominated Wasit province, about 100 miles (160 kilometers) southeast of Baghdad. It has been the scene of sporadic attacks since the US-led invasion in 2003.

    As security improves, Iraq is trying to bring in foreign companies to help increase crude output from the current 2.5 mn barrels a day to 3 mn barrels a day by the end of 2008, and 4.5 mn barrels a day by the end of 2013. Shares in CNPC’s publicly traded unit, PetroChina, gained 0.23 per cent to 13.09 yuan early Thursday


  516. Anon – yes, that’s sort of the theme right now for most Portfolio Managers… US may be slowing, but Global Growth seems to be on the cusp of slowing at a much faster pace (at least for the forseeable future say 1-3 years).  But that’s economic cycles… just like the stock market, it can’t keep going up for ever.

    GDP IN 3 MIN!!!!!!!!!


  517. 8:30 *U.S. INITIAL JOBLESS CLAIMS FALL 10,000 TO 425,000 LAST WEEK
    8:30 *U.S. 2ND-QTR GDP RISES 3.3%; REVISED FROM 1.9% FIRST ESTIMATE

    Futures initial reaction is good!!!!!!


  518. Sorry – 8:12 post was me.


  519. Good if you are long!


  520. SEM – gm sir!  thank you for your 8:14 post last night, very helpful for me and others I’m sure. 

    FILM – you’re short an up trending market before big eco?!?!  You have balls of steel my friend!

    mck – your comment about my charts, ha!  nw, I love them too.  In fact, if / when I do go off on my own waaaaaaayyyyy down the road, I’m most definitely going to have to invest in a Bloomberg… unfortunately I’ll have to be making enough to pay the $30,000 annual fee for it LOL.


  521. Film – sorry, don’t know your position or entry or whatever, but if they’re Sep SPY puts you still have time to recoup.  Here’s the daily chart from yesterday’s close… you’ll see the rsi was around 68 EOD, and now should open up close to 80+ (i.e. OB terriroty)… if it does what I think it might it should get close to 1300 today ( where the channel from the last 2 months was heading) but it should fail, and depending on what you’re strike is you can prob double down there and get a nice average for the OB territory to sell off into on Friday (or later today if 1297-1300 is reached early).  Just saying.


  522. That is one of those MT plays, Mark.  Used to mean medium term, now just means "eMpTy" pockets.  But, I am short on a thesis that the top is in and that the selling will begin in earnest again soon.  Probably a mistake to think we would get a sell-off this week at all with everyone out, but the reaction isn’t ecstatic, and is hitting resistance at 1290, so that is good.  We’ll see what happens when it opens.


  523. Perspectives are interesting here – as I recall EU 15-27 GDPs were 1.5-1.7% for 2Q08 and the Euro was strong (while the US economy was in "recession" with +1.9% originally reported for 2Q08). Trichet continues the hawkish talk – wonder how long that will last.


  524. Mark, that is the scenario and the plan.  Would prefer it to close under 1294 today, but we shall see.  Should be taking it on the chin this morning, we’ll see how this goes.


  525. Film – of course, my bad I obviously don’t need to be telling you this stuff LOL.


  526. Yes you do.  LOL.   I doubt myself all the time.  I am glad that you agree that this should stall and fail, but I presume mostly because of the OB condition of your system.


  527. Film – partially… but no not completely.  I don’t just rely on that one indicator (but in a choppy market it is nice to have something that will help you know when the market may "take a breather"… but mostly b/c 1300 + puts us "in the clear" and I don’t think the market’s ready for that… just b/c GDP was better than expected, doesn’t mean the bad loans banks made are all good… so today’s theme is like Obama’s: HOPE… but tomorrow’s theme could give us anything.  Like I said, 6.5 hours is easy to trade in… anything past that you’re guess is as good as mine.


  528. GM all,
    Looks like a good opening:

    :
    SunPower-SPWR upgraded to Outperform from Sector Perform@PACS

    Pacific Crest upgraded shares as they expect positive data points in the back half of 2008, including strong Q3 results as they believe the company has been successful raising prices. Target $116. :theflyo


  529. Mark, what is the period you use for the RSI?  Default is 14.


  530. Mark
    Your SPX forecasts are priceless for a lot of us .


  531. GM everyone


  532. Film – 2 brutha.  for swing trading.  14 is "the norm"… but in a choppy market it can be extremely misleading… as any chart will show, the market goes up (or down) for 1-4 days, then down (or up) for a day or 4… i.e. it ALWAYS takes an interim breather… if you look at the 2 setting you’ll see it gives relatively close points of when that breather will occur… so to be completely safe buy ATM or ITM calls below 15, and ATM or ITM puts above 85… but only like Op’s system, for overnight or 2-3 day holds (depending on how the market reacts the following day and your feeling for it).  Either way at those points in time you usually can get away with a good 10-50% return on your money.  Like I’ve said before though, I don’t just rely on it alone… a lot of logic / macro themes go into my plays too (not playing before fed announcements, big eco’s, etc).


  533. yadnum – thanks LOL.  Man I’m just a snot sitting around spamming you guys.  Don’t take my word on most of this stuff… you gotta find your own pulse too (b/c I’m most definitely not correct 100% of the time.

    BTW, this is not going to blow your phone up or anything, but this is really funny: 603-413-4133.  Trust me, I’m not scamming you.  ;)


  534. SPWR-Bought back 1/3 of the calls.


  535. Mark, I show 92.7 on the RSI(2), that what you have now?


  536. That was for SPY.


  537. Good morning all.
    Sold some more TIE.
    BNI – sold another 1/3.


  538. for spy’s, I currently show 82.70… almost…


  539. Mark, what is different than yours?  
    http://i38.tinypic.com/2d9n5t.png


  540. Film – great question man, looks like it’s set up right… dunno.  I’m just looking at a daily chart (5 months, daily).  Here’s the equation in Bloomie

    Here’s how my thing shows it…


  541. Am I being too skeptical, thinking that the administration is tweaking all the financial numbers, in order to sway the election.  I thought they would drive down gas prices before the election, but what about all the other statistics, such as the GDP today?  After the election will everything go poof?


  542. How about this.  80 at 129.21 on SPY


  543. racer, come on, stop acting like it took them 6 months to figure out we had negative GDP last quarter of 2007.


  544. I love how CNBC was filming on location in Vegas YESTERDAY telling us about potential problems with casino stocks. To their credit, MGM was the name most often mentioned but look at LVS and WYNN coming off of support and looking like solid 5MA crosses.


  545. spy’s – I’ll keep the chart up and when I see 85 + I’ll post… but like I said, it "should" be just around the 1297-1300 mark on SPX… you’ll know we’re messing with OB territories there (at least form a short term perspective).


  546. racer – Do you really think the administration has the power to drive down gas prices?


  547. albo – What do I know, but just Bush’s mention of off shore drilling, and down it goes.


  548. film – all things considered, we’re essentially there… at least according to the rsi thingy… it’s up to you man.  you can wait until 85 is broken or get in "early" and see what happens the next few days.  IIWII.


  549. Mark, I think I have it right.  We’ll check EOD to see if we gel, but I think I have it.  It was RSI Wilder, instead of RSI, EMA.

    Albo, I do.  It is all just a matter of how much money it takes.  And if you enact policies to make people rich on the way up, you have some friends to bring it down if you need it.  But, I don’t think they will.  This pullback isn’t what I would call manipulation.  I think the Republicans are throwing this election away.  Why else nominate McCain?  It is sort of like when they nominated Kerry.  Who thought he had a chance?  Not me.  It is a brutal game, but I think THEY thought it was McCain and Clinton and they were fine with that risk.  But, now it is clearly Obama.  (I reiterate my "Outperform" rating on Obama and look for him to win with 52% of the popular vote and at least 80 more delegates than McCain.  Probably closer to 120.  I think the markets are going to take a huge dump on peoples quarterly statements, the ones they get in mid-October.  Obama’s going to be lining up prominent Republican backers from years ago, Republicans that Republicans still respect.  Clinton machine is going to turn back on, and this thing will be called at 9am Tuesday morning.


  550. I am salivating over AAPL puts.  So tempting.  Taking them at 175.90


  551. Opt, your old buddy WSM dropping hard today.


  552. Got a program I’m out for a bit CU!


  553. Film – I don’t for a minute think that the administration can manipulate oil prices.
    If they were going lower oil prices they would have opened the SPR.  However,
    I do believe that OPEC can and have  raised oil prices by manipulation on the futures
    exchanges.  For a very small percentage of cost , relatively, they can pretty much
    set the prices in the futures market.   If the Hunt Bros. could run silver up to $50
    in the early 80s, think how much more powerful the oil producing countries are with
    their billions and billions of petrodollars.
    I do agree with you that barring something unexpected, Obama will be the next
    president.


  554. Film – thanks for the comments.  I guess time will tell.
    Does history show anything odd happening to the markets before major elections?


  555. Albo, I know it is not a popular stance, but I don’t believe the interest of the Saudi’s and the interests of this administration are any different.  Call it what you will, but Bush will be the most infamous president of the 21st century when it is all said and done.  No one will remember Nixon, but everyone will remember "Worst President Ever, GWB."


  556. That is one of the first things I am teaching my boy to say.  Whenever someone says the word "Bush," he will say, "Worst President Ever."  I am going to teach him that and how to fight, just in case we move in next to Republicans.


  557. film, for your apple puts where is ur stop ? will it be above the R1 on the 5min chart ?


  558. 10:35 *EIA SAYS U.S. NATURAL-GAS STOCKPILES ROSE 102 BCF LAST WEEK


  559. My stop is the high of day.  Funny, I actually did a little mini-panic and sold half with a small loss.  Not liking the looks of shorts.


  560. XLF getting volume.  Getting nervous on some of this.  CHK trying out skydiving.


  561. Out of AAPL puts, my delta was way too negative to let that go, position was probably too big, but I wouldn’t enter puts now on the chart, so I am out.  LOOK AT XLF!!!


  562. stopped out chk.


  563. Manic that I am, got back into AAPL puts on its failure to break R1 when SPY rallied.


  564. film are you using TOS?


  565. MBI & ABK ! ! !
    Wish I were in !
    Will buy AGO if it closes above 50MA.


  566. seems like rim and apple are not riding the market …


  567. bee, yes on ToS.

    CHK has very small volume, but HUGE players on the options.  Look at the depth for Oct 47.50′s.  Large OI, and small volume today, I am holding my position.  I bought OCT’s for a reason and they are still positive.


  568. Mark, was your stop for CHK at BE?  You are all out now?


  569. No 3.80 put it on earlier today after compliance approval.  wanted to keep 1.20 and after it kept trying to test 50 and S1 before nat gas I got skerd.  check out my executions (I have 3 accts):

     

    SLD

     

    CHK

    OCT08 50.0 CALL Option CHKJJ

    3.80

    USD

    CBOE

    09:27:00

     

     

     

     

    SLD

     

    CHK

    OCT08 50.0 CALL Option CHKJJ

    3.80

    USD

    CBOE

    09:34:07

     

     

     

     

    SLD

     

    CHK

    OCT08 50.0 CALL Option CHKJJ

    3.80

    USD

    CBOE

    09:34:07

     

     

     


  570. And dude, it might / prob will come back.  Like I said a few days ago, I’m not comfortable enough holding things much in this market… I know when I don’t know anything, and rather then let myself sit in my ignorance I just put a limit out there I’m comfortable with taking and if it goes up good!  otherwise I keep my gains I know I’m fine with.  Now flat… back to swinging the market, no more positions for me.


  571. Amazing.
    Dow up 150.    S&P up 10.
    I’m bored silly.


  572. albo: THAT is why the Dow is the worst benchmark of all time.  It’s PRICE WEIGHTED… i.e. meaningless to almost any money manager in the world. 

    Here’s the real deal:

    Most influential sectors

    Followers (go staples!!)


  573. Mark – Thanks.  However, I’m still bored and it’s raining.


  574. We’re getting killed on our program… all on vwap currently hence why I’m talking to you all.  F’n sucks.  But our client wanted to buy financials, discretionary, industrials and tech… at 10:30 EST benchmark prices :(  

    And sell Energy at those same benchs… sometimes you can be the best trader in the world but can’t control a monster…

    XLE down 3%, Financials up 2.4%…


  575. albo – man this would be a GREAT day trading day.  check out oil futures on a globex chart  I mean that’s some awesome-ness… 120.50 to 114.  Amazing right?!  SPX popped PERFECTLY off the 34 around 11:40… buy 90 on futures sell 95-98 range.  Grrr….


  576. Missed it.   Missed it.  Missed it.


  577. fwiw, anyone following the silly rsi2 setting on spx, it’s currently 86.47 (I still think 1297-1300 is the "perfect" topping area so buy a put and hold for a couple days to 80-85 range (maybe 20-40% return?).  eh…


  578. I am long some LEH and some AIG.
    Very small amounts.  Dicey, dicey, dicey.


  579. Mark – DIA chart is similar to SPY on RSI(2) now too…


  580. khi2khi – dude (or dudette?) that’s a crazy moniker.  I am biased and only follow SPX (and sometimes RUT), but don’t like the DIA… or Q’s for that matter.  Just me.



  581. albo – do you have a screen that picks up movement for stocks between $10-20? Seems to be your M.O. ha ha


  582. well, for sh*t’s and giggles (looking for 1280-1285 on spx) the 130 puts are 2.65 now.  1-3 day hold.  paper trade for me…


  583. Mark,
    Got SPY Sept 130′s for 2.60. Why is the delta so high? I see negative 101.xx on TOS.


  584. Vijay – no idea… I see -54


  585. masterpayne – Good observation.
    This time of the year I find ‘em wherever I can.
    I tend to stay away from most of the high flyers. Too choppy for me. 
    When the market starts trending, usually Mid-September or early October
    thru Jan- Feb, I love the more volatile names, where you can jump on and ride
    for weeks at a time.


  586. FilmFlam- glad to see you come back into the APPL puts. The best trades this month have been APPL (Puts at 176, close 1/2 at 174, then out at 172. Buy calls at 172, sell 1/2 at 174 and sell all at 176) and P&G (with a beautiful range between 69.50 and 71.50 – that one I have only been buying calls at the low end and selling at the high "no puts"). APPL stops at 169 for the call and 179 for the put. P& G stop at 68.70.
    Been good trades for this market with clean entry, exits and stops. Note: I still own APPL stock for LT.


  587. Those AAPL shorts are paying off.  Moved stop up to small gain.  Had a double down order with a tight stop that got filled as well, so that is really saving my day so far.  Wanted to take profits, but letting the 89ema on the 5min chart keep me in.  Will take a bit of profit on the next touch of the PP, if I am so lucky.


  588. Mark – without being specific – what do your traders do for a pairs trade with spy puts?  TY bruttha


  589. AAPL beautiful today, very technical (HOD is 176.25 with R1 at 176.22, and LOD is 174.26 with PP = 174.21).  Well played putters!


  590. Mark, what charting software did you use to find the support for CHK? I like its display. I know you’ve all mentioned TOS before, is that the one?


  591. JPL – frankly I have no idea LOL.  WE don’t trade firm money, we’re an agency only execution firm (and 95% equity trading, 4.5% FI, .5% options… )… i.e. most of our clients are Pensions, HF"s, MF’s, and other buy siders… no pairs trades, and no trade ideas from us (we’re not IA’s under the 40 Act, hence why it’s sorta illegal for me to give any advice even though I’m lisenced to…).

    When we have a program trade, we’re selling a basket of stock and buying a basket of stock (maybe 300+ names total)… so we do natural hedging by getting the sells vs. the buys to dollar neutrality (sell 100mm, buy 100mm) and sector neutrality (selling / buying the same amount in each sector hoping less impact on individual names if they all behave relatively the same).  Does tha make sense?  Sorry dude.

    If I’M playing something, I’m usually one way and that’s it… no hedge, just smart entries and exits.  Waiting for the set-up…


  592. Josiah – no sir, Bloomberg.


  593. Mark – LOL – no problem – but thanks   :D


  594. Smart man, some day I’ll trade my way to one of those. In the mean time, it’s whatever scraps I can find.


  595. JPL – yeah it is what it is.  Our clients send the orders, we execute the trades for them at X cents per share… no idea generation from our firm.


  596. Mark – all my relatives in Louisiana are freaking out over this storm. Shutting down Nat Gas and Oil in the gulf and making plans for flooding in the Nat Gas fields in the Northern part of the state. Could make for some interesting price moves in CHK (but I would rather loose money than have them go through another hurricane). Easy for me to speculate from CA.


  597. JNjr- I find that sometimes it can be hard to keep emotional detachments or realizations out of investing. I felt the same way when my buddy got fired at FITB and I made a killing on their puts because of a Dividend cut. (I should add the two events were not directly related). I hope your family is okay.


  598. mark, I picked up some 130 puts @ 2.58 earlier today when RSI hit 86


  599. CHK’s support is definitely still there. This has been a sideways hour.


  600. JNjr – yeah man, CHK’s great LT… it’s just I’m not a good enough trader to know where it’s going to go tomorrow or the next day… I’d like to think the 50 dma will be tested soon, but today proved me relatively wrong.  That being said, it’s found nice support and is trying to retake its 5 dma (and 200 once again gave support besides the obvious R3 on the intraday chart).  Who knows, maybe this was just a flush… I must say the volume’s not heroic selling it down… who knows, maybe the R3 would end up being the "most perfect" buy point for it to test the 50 dma at 54 range. 

    I got what I wanted from it, now going to go back to my swinging of the indexes.  More comfortable with it.  SEM / Blake have to know better than I how these stocks / firms behave from Aug on, so maybe March’s might be in store.  Unfort I don’t know the sector well enough to feel comfortable making a good enough prediction about it.  So I go back to what I know…


  601. Speaking of "interesting" again, here’s that same AAPL chart from yesterday… have no idea.  But damn good looking LT to me (or maybe MT is more correct?)… or both say… dunno, volume like mck pointed out yesterday is still weak with all the big boys on the sideline.  Will the technicals bring the volume back?


  602. Josiah- The family will be good, as they always high tail it up to the relatives in the northern part of the state. Their main concern at the moment is whether LSU will pull a "michigan" against Appalachian St. on Saturday. Geaux Tigers!!
    Also if you ever needed a reason to not hold options through an earnings annoucement: SOLF and ENER!!
    I held the SOLF’s and got crushed, but learned and sold the ENER yesterday before they announced. Great news, slightly lower margins and it got killed today. Live and learn and broke even.


  603. JNjr – yes I wish the best of luck for your family… except for their LSU wishes.  OU’s going to cream everyone this year… (please gawd don’t prove me wrong my beloved Sooners!!!!)


  604. For charting software, anyone have any recommendations for cheap-but-good? Or, rather, low minimum-but-good?


  605. Go LSU and of course, the Orangemen  – right Mark  :D


  606. Josiah – I’ve heard from many big boy retail guys that esignal or TradeStation seem to be the best…


  607. Thanks, Mark. Anyone have an opinion on ATVI? They have a split coming up, but I think they’re probably the best in that sector right now… especially after their merger.



  608. JPL – boy you are entering a world of pain…


  609. albo – Let’s hope he’s still got a job!
    http://www.marketwatch.com/News/Story/Story.aspx?guid={19B02EE6-C6BC-4946-8028-D29D2BBD1874}&siteid=yhoof2


  610. APPL Puts -well that was a quick hit!! Feeling better FilmFlam.


  611. boy AAPL fell outta bed didn’t it LOL.  Film/ JNjr, you still short?  Well played if so!


  612. Josiah – Excellent !
    Day late and a dollar short?


  613. Intresting intraday notes from Murphy. Financials, retail & builders (xlf,xrt,xhb) were are  biggest drag on market, but RSI for all pointing up now. xlf crossing 50ma (again, got beat back a couple weeks ago), retail and homebulders both approaching 200ma. IMHO, could just be that inverse correlation with energy. I think it will occure to folks (from Mark’s bloomberg post earlier) that most the gdp pop was exports, and if we’re in gloabal contraction, that doesn’t bode too well for next Q. Seems to me only decoupling saves exports, but wasn’t that theory disproved this past year?


  614. spx so far finding support again at R2 and the 34…


  615. AAPL – hope someone was short there – long red candle (to 173) with vol spike intraday 5min.


  616. Mark – APPL puts out now. I was in between meetings and had a sell order in if APPL broke 173. Did not expect it till EOD though. Now wait to buy calls for the next ride up. FUN FUN.


  617. That CHK call is doing well. Thanks for the heads up, Mark. I find that screenshots like that give me a great visual cue of what to look for when I’m scanning charts. Opt’s strategy section is very helpful-but, for me at least-some more visual examples would shorten the learning curve.


  618. albo – CPHD


  619. Great trade on AAPL,  guys!


  620. Mark – 8/34/89/200 kiss – I’ve got 34 broken through 89 and kissing 200. Looks like it’s been trying to do that since noon. Stuck above s1 for now but only drifting (vol) back up to pp. That’s your kissing ma system though, how does it look now to you?


  621. Josiah – yes, Op’s system is greatness, and the charts helps me see it.  In fact, when I could day trade, I would use Chart Trader in Interactive Brokers… could put my short or long on the screen as a limit, wait until it hit (or move it if price moves away), then put a trail on it… after a while it was like free money (which is why they shut me down… I’m officially the reason no one can day trade at my firm… they don’t want  me to make too much money on my own LOL).


  622. CHL – maybe too late now, but after their 45% net report yesterday, and no pop, I wrote calls, good short opportunity. In spite of impressive headline, revenue only up 18%, and subs dropped for july vs june. Still a huge 7.10MM july subs vs 7.55MM june but a drop nonetheless. Also when reading about high bankruptcy rates over there, etc. and olympic effect waning, I wouldn’t expect CHL to get their glamor back until conditions improve. Just IMHO, might still be good for the 5MA followers.


  623. mck – sorry what name are you talking about?  brb, gotta cc real fast damn it!


  624. APPL  bought the Calls on the upswing at 173.40. Hope that I don’t get burned, as I usually wait for a price in the 172 range. Patience is a virtue.


  625. Mark/AAPL - not sure why you couldn’t just paste my post into bloom benz and it would give you the ticker : )


  626. Still in AAPL shorts.  Been a crazy trade, I keep moving my stops down and my out was set at S1 so it didn’t catch.  But, I ended up with a large position with a limit with a tight stop triggered and I was off to the races.  My price targets come from the ATR, so I was looking for 172.20 or yesterday’s low.  Now, I am going to go crazy long if we retake the pp.  In fact, I have to go.


  627. For what it is worth, my son hates this trade.  It has been very inconvenient for his schedule.  I keep getting pulled away right when it is getting interesting.


  628. AAPL puts – Film, your’e a much savvier trader than I on this name, but I took my put profits and ran.  This market is just too weird for me to try to squeeze the last nickel out of any trade.  As I write this, however, we could be setting up for antoher day trade short.


  629. Richard, afraid you may be right as the volume was too light to sustain the APPL push up.


  630. I keep coming back to this thought. We can’t go up until we know what stuff is worth. And until we put in a double bottom, we cannot go higher.


  631. The PP kept me in.  It is like I know what I am doing, sort of.  LOL


  632. Crazy stuff – APPL broke 173 and then bounced like a ball. Gotta have really quick fingers!!


  633. AAPL-Sorry I missed the action today. Good job everyone with the puts. Why is it weaker than the market today?


  634. Out of AAPL puts.  Twitchy finger on AAPL calls.  LOTS OF THEM!


  635. Of course, I must say, I REALLY hope I don’t have to buy them.  Technically, I should be in the trade, as we are still under the 8ema on the 5min, but I think there could be a BIG up leg starting right now.


  636. I just read the news about Job’s obituary. Ridiculous.


  637. Just checking in after being pretty focused on work all day. Good thing I wasn’t watching this. Not sure why energy is down unless some profit taking into the weekend. CHK and COP around my stops but did hear the head of Accuweather (a PSU guy – gotta be good) on Bloomberg TV – made it sound like Gustav would get legs real quick and may arrive Mon at as big as Cat 5 (although nothing assured).


  638. Tech not moving with the rally (.07 gain vs. the 2.4 gains in Financials and Ind. Goods). RIMM down, BRCM flat. MRVL is moving but probably due to the earnings tonight and they got so beaten down in the last two days. Also the Blogs are reporting that one of the financial web sites (bloomberg) had posted a "Steve Jobs Obituary" then quickly took it down. Must be a slow day for that reporter to be practicing "future news".


  639. Bought some AGO.


  640. AAPL-Great timing, Film!


  641. GO GO APPL to the close! Need to see some real volume conviction to lessen the number of Martini’s for tonight.



  642. Film – nice & nimble on those puts. I still have some Oct170 that I bought earlier at the big red candle. All but the fastest MA still pointing down but could be turning. Don’t see much conviction either way. AAPl looks off relative to other tech (QQQQ, XLK, etc) but maybe high relative to GOOG. Probably depends on the weather tomorrow so flip a coin.


  643. Never thought it would be such hard work to make money on a +18 point S & P day.  2 martini’s!!


  644. Film – look at chew!  You big boy day trading AAPL pawtna!  well played brutha.


  645. oooo didn’t know DELL was reporting after the close… man I really gotta get on top of things!

    Aug. 28 (Bloomberg) — Dell Inc., the world’s second-largest
    personal-computer maker, posted a profit that trailed analysts’
    projections, pushing the stock down 3.8 percent in extended
    trading.
    Second-quarter net income fell 17 percent to $616 million,
    or 31 cents a share, from $746 million, or 33 cents, a year
    earlier, Dell said today in a statement. That missed the 36-cent
    average of estimates compiled by Bloomberg. Sales for the period
    ended Aug. 1 advanced 11 percent to $16.4 billion.
    Chief Executive Officer Michael Dell is targeting more
    clients in countries such as India and China as growth slows in
    the U.S., where about 75 percent of adults already own PCs. The
    company, which has trailed Hewlett-Packard Co. in shipments for
    eight straight quarters, also is building machines in lower-cost
    countries to keep expenses down.
    “The changes that are going on inside Dell are a big
    deal,” Jayson Noland, an analyst at Robert W. Baird in
    Milwaukee, said before the report. “Their new manufacturing
    strategy should lower costs. Their new sales strategy, adding
    retailers and resellers, means they can’t charge as much,
    though.”


  646. Wow, does it seem like a bad idea to jump on some DELL puts tomorrow? Or should I wait for the news to shake out a bit? Down 9% in AH


  647. F \/ < |{, Dell reported.  I am sorry, that was necessary.    I did finally start scaling in to AAPL longs today.  We’ll see how that works out.  It was focusing on the puts that turned me bullish.  Couldn’t get to S1, three days in a row of days inside the ATR.  I think I may have been wrong to be bearish down here.  It is pretty clear to me that Obama is going to win this thing in a landslide and we have a very good chance at making some major changes, just can’t figure out if we are bearish enough yet to go up.  But, I am doubting that we are bearish enough to bring down AAPL.


  648. Mark, I lied.  I didn’t double down on my SPY puts.  I closed them AND bought AAPL calls.  I did take the AAPL puts for a nice ride because of that signal, but like I said above, my faith in the immediate drop is dropping fast.


  649. Almost went long V today, too.  I am out lots to do.


  650. I’d like to retract my earlier comment. Gotta stick to the strategy-although its hard to fight old habits, like thinking "Wow, those $18 Dell puts are still pretty cheap… and it’s at $22 AH". STRATEGY STRATEGY STRATEGY


  651. Hey guys, just checking in…I am on vacation, so I have just been relaxing.  Didn’t think I would miss out on much.  Picked up a small position on SKF calls at the close today…it is back at support on the 200dma.  Hope everyone is doing well, I will probably be around a little bit tomorrow, but won’t be paying close attention until next tuesday. 
    This hurricane is definitely having an effect…we have been evacuating our rigs in the Gulf, so this one may drive oil up, but the action in energy today wasn’t very convincing.  I had some RIG calls that I picked up a couple of days ago that I closed out yesterday because it looked so weak with a nice move in USO.  I am staying away from energy plays right now, but I am not an expert in the energy stock movement, I just know a lot about the industy.


  652. Hey Blake!  Look at you on vacation and you’re a junky like the rest of us LOL.  Agreed, like I said earlier about CHK… great company, don’t have a flippn’ clue where it’s going to go tomorrow or the next.  Too tuff to tell in this market.

    Film – yeah man me too, been too busy with work-y things to keep up to date on what’s going to move the market earnings wise.  That changes my technical analysis thesis on AAPL completely… technicals are one thing, a whole sector is another.  I’m sure people will easily see the difference between DELL and AAPL… but will any doubt come into their minds about consumer buying power going forward?  I don’t know.  I’m out of it now.  Flat as flat can be.  Back to the swing trading the indexes.


  653. I think this is one of those, "more blood on the trackpad" moments for AAPL.  AH crowd seems to understand that this is not a negative for AAPL.  We will see how the reaction is in the morning.  If DELL can’t bring down the indexes tomorrow we could be heading much higher.   Can’t believe I am flipping, but it is one way or the other from here.  Waiting for a big up move and a big down move, just don’t know which one will come first.


  654. OPT. G.M.  I try to study the strategy , but there is a problem with the layout on my screen , I presume there should be examples near the text , models from candlesticks , charts , etc. etc. , on my screen I only get the text , it’s very difficult to study the strategy without the examples , I hope you can be helpful.
    Thanks , enjoy your vacation.


  655. So a PCE in 9 min and Personal income / spending.


  656.      Aug. 29 (Bloomberg) — Spending by U.S. consumers slowed in
    July as the impact of the tax rebates faded and a pickup in
    inflation eroded Americans’ buying power.
         The 0.2 percent rise in purchases matched forecasts and
    followed a 0.6 percent increase in June, the Commerce Department
    said today in Washington. Prices rose by the most in 17 years.
         Americans, faced with rising unemployment, soaring food and
    fuel costs and falling home values, are cutting back on big-ticket
    items like automobiles and furniture. The federal tax rebates, the
    bulk of which have now gone out, will no longer keep spending, the
    biggest part of the economy, going.
         “The consumer is going to be in worse shape by year-end,”
    Joshua Shapiro, chief U.S. economist at Maria Fiorini Ramirez Inc.
    in New York, said before the report. “You can expect much slower
    growth in the third quarter and even slower in the fourth.”
         Economists forecast spending would rise 0.2 percent, after an
    originally reported 0.6 percent increase in June, according to the
    median of 75 estimates in a Bloomberg News survey. Projections
    ranged from gains of 0.8 percent to a drop of 0.1 percent.
         Incomes dropped 0.7 percent, the first decrease since August
    2005, reflecting the diminishing impact of the rebates. That was
    after a 0.1 percent gain the prior month, today’s report showed.
    The median forecast was a decline of 0.2 percent.
         The price gauge tied to spending patterns jumped 4.5 percent
    from July 2007, the biggest 12-month gain since 1991.
     
                                 Inflation
     
         The Federal Reserve’s preferred gauge of prices, which
    excludes food and fuel, climbed 0.3 percent for a second month.
    The measure, known as core prices, was up 2.4 percent from July
    2007, the most since February 2007.
         Adjusted for inflation, spending plunged 0.4 percent, the
    biggest drop in four years. Price-adjusted purchases of durable
    goods, such as autos, furniture, and other long-lasting items,
    dropped 1.6 percent. Spending on non-durable goods decreased 0.9
    percent, and services, which account for almost 60 percent of all
    outlays, were unchanged.
         Concern over both slower growth and rising prices led Fed
    policy makers to hold the benchmark interest rate at 2 percent
    this month.

         Rising unemployment, falling stock and house prices and
    stricter lending rules “were viewed as pointing towards weak
    growth in personal consumption expenditures during the second half
    of 2008,” minutes of the Fed’s Aug. 5 meeting released this week
    showed.
         The drop in incomes pushed the savings rate down to 1.2
    percent from 2.5 percent the prior month.
     
                               Incomes Drop
     
         Disposable income, or the money left over after taxes,
    decreased 1.1 percent. Adjusted for inflation, it fell 1.7 percent
    after declining 2.6 percent in June.
         Other reports indicate purchases of big-ticket items are
    weakening. Sales of autos and light trucks plunged in July to a
    12.5 million annual pace, the lowest since 1993, according to
    Bloomberg calculations based on industry data.
         The real-estate slump in also hurting purchases of household
    goods. Williams-Sonoma Inc., the biggest U.S. gourmet-cookware
    chain, said yesterday that second-quarter earnings dropped 29
    percent and reduced its annual sales forecast.

         Weakening trends continued through August and are worst in
    cities most affected by the housing slump, Chief Executive Officer
    Howard Lester said on a conference call. At Pottery Barn and West
    Elm, for example, purchases have suffered in Southern California,
    Nevada and south Florida, he said.
         “It is extremely difficult to know how the consumer will
    respond in the back half of the year,” Lester said in a
    statement. “We are also looking forward to 2009 with a very
    cautious outlook.”
         The longest expansion in consumer spending on record will
    probably end this year, according to economists surveyed by
    Bloomberg earlier this month. Retail sales fell in July for the
    first time in five months, led by a slump in auto purchases,
    according to Commerce data.


  657. Marlon – the links in the strategy don’t work but you could always look at the past entries and the charts on those dates to see what has been done in the past. Welcome!


  658. Good Friday morning


  659. GM guys, oil’s up 3.11 to 118.66 right now… market’s "only" down 3 points pre market… so will have to watch how financials work out today.


  660. So DELL should open around 22.50, say 11% lower or so?  oil’s up big so energy companies should rock this morning…


  661. Film-  you know the way AAPL moves way better than I do, but this chart just doesn’t look bullish to me.  AAPL doesn’t really look like it wants to go up or down, but if I were to take a position, I would be buying puts.  It has been moving pretty poorly compared to the rest of the market this last week or so.  I do like how low the Imp. Vol. is on it though.  It seems like you can get a lot of bang for your buck right now.


  662. Mark- let’s hope financials tank.  I started a position in SKF last night right at the close.  It is back down to its 200dma


  663. Hi Marlon,
    There are no examples in the strategy, but everything is real easy to follow. For 5MA strategy, we have many examples live here in the comments and you can always ask me questions. For candlesticks, we only work with the main,obvious ones, and you can Google "bullish engulfing" for example to get a lot of info.
    But again, don’t hesitate to ask me questions if there is something that does not make sense. I will be much more available next week.


  664. According to a source at AT&T (T), the upcoming BlackBerry Bold from Research in Motion (RIMM) will appear in stores on October 2, fully launching on October 6. BoyGeniusReport notes that this information "has not been double or triple confirmed".
     

  665. Blake, it is the combination of the strength of the market and AAPL’s anemic volume and consolidating trading ranges that are making me think that the scenario will be a rally into new products/services announced in about 2 weeks.  If we go down much at all, I will be tempering my enthusiasm, but if we go up I will be piling on.  We are definitely at an inflection point for both the market and AAPL.  I almost sent an email to everyone I know telling them that they should take this opportunity to go to cash.  And then we had a strong GDP, a more above resistance, and a twinkling of hope in my eye that things could really explode.  I may be right, I may be wrong, but I have TIGHT STOPS in either case.


  666. Makes sense film, I will jump on if it starts moving up


  667. DKS on the move again.


  668. MIchigan confidence in 18 minutes… forgot about that…


  669. 9:45 *U.S. AUG. CHICAGO PURCHASERS INDEX AT 57.9 AFTER 50.8


  670. This looks like a possibly 1305-1310 day based off if Michigan confidence higher than expected…


  671. maybe they’ll end the day strong going into a long 3 day weekend?  or take profits from 3 days of up?  Things that make you go hmmm…


  672. 9:47 *MCCAIN PICKS PALIN AS RUNNING MATE, CNBC REPORTS


  673. AAPL. From TheFlyOntheWall:

    China Mobile is reportedly set to subsidize the iPhone in China-Pacific Epoch
    China Mobile (CHL) is planning to subsidize the cost of iPhone handsets in China. Apple (AAPL) and China Mobile are close to the end of negotiations on subsidies that would allow the companies to avoid passing on the high cost of the iPhone to Chinese customers.
     

  674. 9:55 *U.S. AUG. REUTERS/MICHIGAN CONSUMER SENTIMENT INDEX AT 63.0


  675. ISEE index at 236.  That is pretty bearish from a contrarian point of view.


  676. mark, this time I bought ATM puts it works way better, then last time.!


  677. bee – very nice!  yes like I said, all thing considered, logic says profits will eventually be taken (for 3 up days in a row)… not sure if it will happen today or Tues or WEd… but you’d imagine a touch of the 20 dma at least for a little pull back before a push back up (maybe 1283ish?)… dunno.  Either way good luck!


  678. thanks marks!


  679. AAPL – Dell, go figure. Now with the other techs like goog trending down, AAPL would have to have something unusual happen to go opposite the group? Luckily I still have puts from that down candle yesterday (it made me think there are people with their finger on the sell trigger). I’m no TA guy, but I keep seeing volume bursts on down, but only drifting back up. Could also look at it as a down flag in a short uptrend which is usually bullish, or that it’s shaking out the last of the sellers (to put it in IBD parlance), but I don’t think those are as relevant in a larger downtrend.


  680. AAPL kissing that 20 dma right there… popping off now… let’s see if she can hold it and reverse course (all thi8ngs considered thought the intraday ma’s are downward sloping… if thru the 34 any time then looks like accumulation intraday… still volume’s too weak to give clear signals.  choppy market (with bullish bias next week?) continues…


  681. Mark – blomberg article, interesting on the relief checks wearing off. In that Desmond Lachman thing I posted from a seminar a month ago, he said that by about this time the stimulus checks would wear off and drag us down unless they got replaced with some other stimulus. Retailers around here are preparing for a terrible peak (holiday) season. I should think that’s gotta mute growth for AAPL, DELL, etc. However, did I just see Tiffany sporting record profits? Rich get richer? AMEN to your CASH call!


  682. What I see is no volume trying to sell it down.  Look at the daily chart.  I don’t see big sellers wanting out, I see buyers sitting on their hands.  And for good reason, the market looked like it was going to freefall.  There are some very convicted bears.  We will have to wait for this to resolve.  But, I still feel like any down move will be fast and should bounce at the 50dma around 169.  Unless things are going to hell, AAPL is the place to be right now.  RS is very good.  It has been a store of value in the crisis rather than a source of uncertainty.  It all comes down to the market.  If the market decides to run at Saut’s 1330 target, AAPL could lead that move.  

    Mark, the 20dma didn’t hold.  THEY broke it by $.02.  A nice break below today’s lows could get a little stampede developing.


  683. Sold the last of BNI.
    Chart still looks ok, but going to lighten up going into the weekend
    and 50% +  profit not bad on the last third.


  684. Film – was just about to post, there it goes!  the good move thru it on volume gives you the ultimate direction (down… so ma’s keep you short for good reason!  once again, intraday ma’s tell you the direction like they’re supposed to).

    ma’s on SPX still down too, it’s trying to hold S1 but profit takers should be abbundant into a long weekend.  Those short from yesterday gotta be feeling pretty nice right now… maybe up 10% or so?… you should be looking for 80-83 now… if ma’s sitll down from there then 78 is R2 and R2 USUALLY holds…


  685. film, are you looking to get in near 50MA? =) or will you wait, did you try to apply RSI (2) on apple daily chart near the oversold area now.


  686. This is annoying.  Every time I refresh the page it takes me to the top.  Is this happening to anybody else?


  687. Flat as a pancake.  Out like a light.  Check in later.


  688. weird market, spx breaks it’s S1 but SPY’s survive on it… low volume’s into the weekend.  Can’t read the action with big boys on vacation… not sure where to next.

    DELL hanging on its 200 dma right now… trying to at least… ton of volume selling there, one of the only places in this market today…


  689. AAPL beautiful save by the 50 dma (what’s kept it alive the last 14 trading days)… maybe 170 was the buy?  don’t know its relation but rsi2 was oversold at 170… you can look back at past OS or OB levels and decide for yourself (I feel like the rsi2 thingy works better on the market as a whole, less so on specific stocks b/c just like rsi on FSLR most of last year, you would have been OB from Jan to Oct LOL).


  690. CDR IV – Are you using f 5?


  691. 80-83 still the target for you putters… 78 ultimate.


  692. still very interesting… seems like pivots on SPY more important than SPX… weird slow market.


  693. CDR IV  Yes i got the same problem I use F5 , Albo is there another way to refresh ?


  694. Albo, I got out of CSX too and am actually watching BNI and UNP for a long shadow top and then a down move. Railroads have been great trenders for me (and apparently you too).


  695. refresh if you are using firefox change the end of the url to   #respond


  696. I click on the spot where I was last reading and then Refresh and it always goes back to that spot. (Just click on the screen, but you won’t see a cursor or anything).


  697. MarK, RSI is working really fine on RSI, I will exit my other positions , trading index is way better than other stocks in this kind  of market. Is 25% return from yesterday.


  698. Heat map looks bloody today – hope everyone has some puts.
    http://www.finviz.com/map.ashx


  699. I don’t think the 50ma is looking like good support for AAPL. It hasn’t in the past either. I think  Film’s prediction of 167 is very realistic just based on the trends here.


  700. bee – well done!  Really I like trading it b/c it’s diversified (rather than me making one bet one way on one thing)… that’s just a personal preference, but then again my hit ratio is infinitely better with it.  The way my puny little brain sees it, with SPY if I buy 40 contracts at 2.50 on the 130puts ($10k) I’m not sweating b/c I know I’m just a drop in the ocean of volume (30,848 contracts traded yesterday).  I.e. it’s so liquid and has so many other factors involved in the underlying’s movement ( I mean 168mm shares traded yesterday… kinda low volume all things considered, but MASSIVE volume compared to other equities) that they’re not going to game me.  I can feel very sure about betting a lot of money on its direciton (if you have the feel for it). 

    So place a $10k bet, a 50k bet, doesn’t matter (same with futures, you’re pointless to them unless you’re betting millions at a time) but making 20-40%+ overnight, in 2 days, etc on 10k or 50k eventually adds up rather nicely… you may have to wait a few days for the "perfect" set up but with smart entries, smart exits, trailing stops… you should be able to carve out a decent weekly / month / annual return. 

    Just saying… it’s how the big prop traders trade, so I try to immulate those who make the most money.  Thru Op’s system I’ve been able to fine tune my trading (both intraday and LT), and now feel fine placing bets and letting the market come to me…


  701. Pat – you’re absolutely right bro.  AAPL has no help…


  702. Is quite nice to learn things from you and opt, things I would never learn inside a classroom with my prof.LOL nothing is better to learn trading with real traders like you guys.
    BTW, for stop on RSI mark, where will you set them let’s say WE get in at RSI 87 where will u place the stop, cause we know for sure that eventually it will drop…


  703. Albo, nice trade on AGO, is still green when the over market is down.!


  704. out of SKF for now…maybe try later.  out for the day as well


  705. Bee – stop would be something like the high of the candle the last time the SPX got over 1300 or something.  I don’t know, it all depends on the market… but usually if / when I enter I’m pretty confident of my entry…


  706. intraday 34 break by price above with volume would make you close your position… it could always keep going down but better safe than sorry in any market (esp one with no volume to speak of.


  707. AAPL might recover a little bit now that I dissed it!! But good to know that GS is finally acting like it should.
    masterpayne, are you still in GS?


  708. nice volume breaking the 34… here’s the S1 test soon, 8 curving thru 21 (possibly)… could be head fake or trend change.  Nothing notable to give confidence…


  709. Thanks, bee.   So far looking ok.


  710. in a normal market , thru the S1 with 8, 21, and 34 changing pace to follow that’s an day trade "go long" moment IMHO… but like I’ve said hard to tell in this market.  S1 could prove resistance again. watching for the test of the 8/21 cross with price…


  711. mark, thanks


  712. decent volume loading up to buy on ES


  713. Pat, still in GS. 
    Look at what it did the last time it hit 153. How many other banks can lower guidance on it now? It’s all baked in. Did you hold after buying in at 153? It has been a rough while with me ignoring my stops a few times.


  714. and boom goes the dynamite.


  715. Mark and bee, what platform / broker do you use to trade futures? I am studying them right now and am looking a for a good place for quotes, trades etc.

    Also I have heard about the futures being more tax-friendly i.e. 60% of the gains being taxed at 20% rather than the regular tax bracket. Is this true?


  716. masterpayne, I am still in GS. I know its been a bit nerve-wracking but I think its finally paying off. It had strong support at that level plus RSI, MACD and stochs were showing oversold levels just like everytime it hit that mark. The only mistake I made was buying OTM calls instead of ATM.


  717. Okay y’all.  Staying pretty flat in my LT portfolios and totally flat in my trading account.  Watch for 168 for a bounce.  30dma usually more important than the 50.  Rallies tend to begin with a hammer candle through the 30dma.

    I am out to play some target golf at Angeles National.  Bring lots of balls and put away the driver.

    Mark, great calls as always.  Must separate the ST and LT trading plans.  I think we can stick a fork in MT trading plans.  Play the system, turn off the brain.  I will say that to myself a lot this weekend.

    EMKR is moving.  Been sort of pounding the table on that one.  Good stop at 5.50 or even $5.80 if you want to be aggressive.   COST and SPY puts are a distant memory.  Very few AAPL calls left, but will be glad to get into those on Monday when I can focus better.  

    If you want to get nervous about your bearish posturing, check out COF.  If that keeps going up, bears are in trouble.


  718. Trade idea – AMGN puts. Major indicators are weakening though it does have support at 60. Feel free to poke holes at this.


  719. Pat – I use IB.  I’ve heard from some they don’t like it that much, but it reminds me of an institutional platform… no bs, just a relatively simple OMS.  Commish is cheap I think ($4.80 / round turn), and same with options ($1 for 1, $0.70/contract  for 2+).  As far as futures I don’t know them well but have heard good things about http://www.infinityfutures.com.  you might think about  checking them out. 

    I’ve heard that too, but frankly haven’t been able to find really good info on it yet.  I’d speak to a tax advisor about that (and if you do share with us please LOL).


  720. Closed half my RICK shorts.  Made enough for a few lapdances.

    Futures (and index options) are taxed 60/40 LT/ST cap gains.


  721. Film – your flattery is shameless!  I’ve been extremely wrong on AAPL and CHK so far.  Sorry friend, really only a decent predictor of the S&P…

    The 89 on the 5 killed the uptrend for now… nice little resistance up there… so now breaking its Support and testing it’s 21/34 again… let’s see if they support or the 89 was the short again. market too low on volume to make good calls (and truely I shouldn’t make any call during lunch… lunch is filled with pit vultures trying to get the doctors / laywer day traders of the world to buy something before they short the shit out of it to test their stops).


  722. Mark- i had a quick question for ya. and by the way i apreciate all your help….

    ive been reading abbout pivots and want to larn more, but cant get my head around what time frame i use for the S&R calcualtions.  is it standard for what day its don for in the parst, ie like the previous day? or say intraday day trading, 5 days, 5 min period. im just kinda confused as to all of this.

    Thamks in advance , have a good weekend everone!


  723. Hi guys.  Great week.  I’m liking energy and especially financials holding their own here pretty good. Blake – thinking alike again –  Looking at the SKF chart, this is same 2-day pattern we had ending 8/6.  I don’t like the IV on the skf, so taking some Oct xlf puts to hedge GS JPM BAC longs.  We are OB on financials daily, but weekly ok, and I like GS relative strength today, and also XLF chart looking bullish with lots more ground to gain *if* it retakes the ‘big bounce’ territory.
    Closed out LVS long.  WYNN looks interesting now. Will wait for Montag.


  724. TTupp – depends on what you’re calculating, but pivots are just based off yesterday’s info for the Daily pivots (there’s also weeklies and monthlies, but that’s another conversation).  If you have a good software program, you shouldn’t have to calculate it all… they should just have them on your charts as a study (just like rsi or macd). 

    That’s the best thing about them… THEY’RE STATIC.  So it’s not based off today’s price action… it’s just natural points to bring price on equities / everything.  Here’s some other sites you could visit to maybe find more info on how they’re utilized:

    http://www.tradingmarkets.com/.site/forex/commentary/fxarticles/Day-trading-forex-futures-with-pivot-points.cfm

    http://www.tactrading.com/floor-pivot-trading.htm

    Hope that helps!


  725. Oh don’t know if I really answered your question, but on a daily, no matter the tick set up (1 min, 5 min, 25, etc) it’s based off yesterday’s High, low, close, and sometimes open.

    SPX testing the 89 agian… if it breaks, other ma’s with it, going to the PP of 1295.


  726. masterpayne – Nice trade on GS.   Would have joined you, but have enough
    exposure (and excitement) with LEH. 
    LOL – I hope.


  727. Pat
    AMGN looks like it will have to breach 62 resistance before it gets to its 60. I think there are better ones than this.
    I have been eyeing AFL as a short. Tested some highs above its resistance and is now in a fat doji. Waiting for EOD and might balance with some UNH calls.


  728. Casinos and railroads  = bread and butter


  729. AAPL – Film/Mark – Film says he sees no volume trying to sell it down. I’m trying to learn something – when I’ve looked at the 5min intraday for the past day or two, each down series appears accompanied by volume (see chart), while the ups are not accompanied by volume surges.  I think volume on down typically means selling pressure, at least on a longer term chart. I take that as a bearish indication, but I could be all wet.


  730. Hi Mark,
    Thanks so much for all the great info on playing the SPX .  I assume you are using the SPY options.  With a large position don’t you find commissions eat up most of your profit?


  731. mck – yes, I can’t say looking at intraday that selling pressure (like I posted at 10:41, the volume bar that pushes it in either way usually sets the tone for the day in that stock) is indicative of LT trend but it does tell you where it’s going intraday.

    LT chart, when I see very small volume comparatively speaking and price slowly going down feels like FILM said, just no one buying it… 

    Does that help, or make any sense?


  732. diva – no!  I would play futures first of all, and for example the paper short yesterday I posted about (the 130′s for 2.60) are currently 3.10ish… so 50 contracts would cost me $35 commish, and I’d be sitting on a $2500 unrealized gain… what is that like 1.5% of your gain?  Unless I don’t understand your quesiton correctly???


  733. Mark – yes, very helpful, always. I’m definitely NOT looking at that intraday pressure for LT, just for rest of day or maybe 2-3 days max when it’s at a crossroads and I’m trying to "guess" which way it will break. In this case, with the ugly environment, and somewhat toppy chart in a longer down trend, I’m looking at those vol pushes on the downs to mean a bias toward selling (slight or otherwise), or really something to say it’s not going straight up. I’m a TA hacker but fascinated by what’s going on behind what you see, millions of people like us watching candles and MAs shouting prices in the baazar. So you were looking at the 20 or 34 ma cross with volume to indicate intraday direction? Are you still using your old 8/34/89/200 system (amongst others) that you laid out for me once on PSW? Thanks!


  734. AAPL – quick aside, analysis for dummies I guess, but if PE compression is inevitible with inflation, and AAPL PE = 33 vs GOOG PE = 30, and GOOG dropping, wouldn’t that make AAPL relatively high compared at least go GOOG?


  735. mck – ha!  I still have the 1 min chart set up, but for the purposes of this board switched to the 5 min b/c people felt more comfortable with it… and so I became more comfortable LOL.  1 min still valid and wonderful, but I’ve become a 5 min dude now…

    as far as today’s volume in AAPL, what gave me the notice of the negative bias was the big volume bar right after 10:30 (which subsequently is right afte the first 3, 30 min brackets of the day… the IB period or "Initial Balance" in futures) when it broke below what was proving to be the low at that time (around the 20 dma).  The break confirmed the lower price action so shorters came in (just like in the description of the pivots in the pit, I beleive the same happens around big numbers / ma supports/resistances). 

    Does that help?


  736. diva – btw, sorry, of course buying and selling 50 contracts would cost 0.70 / contract so $70.00 for the buy and sells together, but still that’s only like 3% of your trade on a 20% return right?  And if you catch it just right and get a 40% return, then you’re talking only 1.5% of your return again… does that make sense?  Or not at all?


  737. Mark – for sure. I always look for trading above/below the hi/lo established in the first hour (i.e. the mind/markets stuff) to get an idea who’s lurking and what the subsequent action might mean. When I see the price getting pushed down by the shorts, but not rejected with equal vigor by buyers stepping in, then I figure the bias is down. However, I wonder too if that’s just shaking out the last of the sellers before one of those "other" buyers steps in and drives it up. I’m handicapped though by a job that only let’s me check-in so it’s hard to keep a good feel so I’m envious!


  738. I don’t have a futures account and am trading in my IRA which currently doesn’t allow futures trading.  Are you trading the emini (/ES)?   To trade 50 roundtrip SPY options contracts would cost me $125 in commissions.  I guess using your strategy with the RSI2 helping to find entries doesn’t work as well with options.  Any advice on improving the situation with options?  I like your reasons for going with an index rather than individual equities.  They always have surprises lurking around the corner.


  739. This last post was in answer to Mark’s response to my previous post.


  740. Sorry Mark, didn’t see your latest post.  Unfortunately I pay $1.25, not .70 in commissions per contract.  This is at TOS.  Would I have to change brokers to get the .70?  I like TOS.   I was looking at double calendars as a strategy at TOS, but the number of contracts needed to make a decent profit would cost hugely in commissions.


  741. diva – yes ma’am, the ES is my futures friend (which you might want to check, I trade for my parents accounts and have futures as an option).  Your commish is kinda high, but I assume you’re with a full service or discount broker like fidelity or schwab?  Is paying 5% in commish on a $2500 / 20% gain in the SPY  (i.e. you’re keeping 95% of the gain before taxes) too much?  Not saying it is or isn’t, just wanting to know what you expect from a trade…  on a 60% gain (which would be like buying the calls at 126 a couple days ago and selling at 130 for $7500 profit on $125 commish) is it still too much? 

    Of course this assumes you hit the highs and lows close to perfect every time… just asking questions b/c I don’t know what you think is acceptable in terms of $ or % return…


  742. mark, nice trade on SPY, I just wonder once we enter the trade @86 should be just follow the RSI chart instead of the 5min chart intraday.? seems like like it would give us a better result ?


  743. ahhh, sorry was writing as you last posted.  You know I don’t know about TOS, you might want to ask the board if they have contacts that you could call to see if you can get a lower rate.  IB is $0.70 / contract

    As far as strats I’m mostly a directional player (day trader by profession), so I’m sure others / more experience on the board would be able to help you with that.  Sorry.


  744. well I said 80-83 range just thought it would have happened sooner in the day… Bee you still long the 130′s at 2.50?  Cute little .85 there or so… 35%?


  745. SPX went out with a bang, LOD with volume surge.


  746. yeah lol 35% I justdon’t dare to bought too much yesterday, only 10 but after seeing your post this morning let me scale in next time, so I can build up more position.


  747. optiondiva….look at options on the SPX for the commission issue….one SPX will get you the same as 10 SPY….use the thinkback tab and buy the 1300 put at yesterday close, then move to today….pretty good profit off of 1 option


  748. Thanks,  Mark.  When you say you do futures in your parents’ accounts, did you mean in their IRAs?  If in their IRA’s did you have to get special permission from I B to do futures in a retirement account?
    I’ve learned so much from you.   1.25 at TOS versus .70 at IB is remarkable.  Do you have a ticket charge at IB?  I have no ticket charge at TOS. 
    Currently I’m more comfortable trading options rather than the Eminis because of the increased leverage in the minis.  First I have to prove to myself as a trader that I can make good decisions and keep the discipline.  So far, the jury is still out on that.


  749. RT, thanks for the suggestion re the SPX.  Sounds good.


  750. oh there you are Bee!  Umm… not sure what you’re asking?  Did you go long at 1286 earlier?  Or are you talking about when rsi was at 86 yesterday?

    Either way ultimately the rsi is the plan to "go short or go long" the index… but you need to have an idea of where it could go, b/c I’m not waiting for it to be OS again (b/c it can hick up in the 40-60 range on rsi and begin its trek upwards)… so you need to start looking at 5 day charts… see where levels were for the SPY or SPX (prefferably the index itself) and pick logica points for it to stop going down…

    Example, SPX 5 day - so rsi gets you in the trade, where does it stop?  You can see on yesterday’s gap open it opened around 83-84, so if it slow rises all day to 1300, my thinking is that the longs want to take profits and go flat (back to the gap open).  At least that how I see different points along a swing trade… the 60-65 range was easy to go long even if rsi wasn’t perfectly down there b/c of how well it’s held of late, but otherwise you could read it like that (plan of action, point to flatten your position).  Does that make sense?


  751. Albo – took a half position shorting UNP. Late day sell off after it crossed its high. Just FYI. If I hit it on the nose, that will make me feel pretty ninja to go long one railroad and short another. Train hopping.

    Probably should have taken some CPHD as it crossed its 5MA because it was good to me last time and is a good trender.


  752. Fidelity vs TOS – any comments on executions? I placed limit orders to buy out contracts on TM, first on Fidelity, then on TOS. Same contracts, same conditions. My trades didn’t execute at FMR, but did so right away on TOS. I have accounts on both and frequently execute similar trades in each, seems like a pattern. Anyone else? (the TOS trades were done on PHLX, while Fidelity uses Citigroup global which went to ISE).


  753. diva / RT – unless I misunderstood you, if you’re trading the index itself (SPX) you’re doing European… i.e. not a swing trade, you gotta hold it until expire.  Don’t do those unless you thing it’s going to be much lower than 1300 by expire…

    futures in IRA’s – no special permission… just requested it, showed how many years I’m knowledgable in it… voila.   :)


  754. don’t think you have to hold til expiry….you just can’t exercise til then….


  755. Mark,
    Isn’t the only  difference between European and American options when you can exercise them?  Why would that affect your ability to trade a European option at any time?


  756. Optiondiva  I’m at Just2Trade for options they charge $2.50 commission + $0.50 per contract very good service trading platform with streaming real quotes level 2.


  757. Thanks for the info Marlon.  This board is great.


  758. masterpayne, thanks for the idea. Re CPHD, the options seem too illiquid.


  759. happy long weekend everyone..


  760. Beautiful weather.  Going for a walk.  Have a great weekend.


  761. RT – you’re absolutely correct LOL.  Sorry board, I’m retarded.  Not thinking today at all.  European is all about the expire for exercise… in fact, I’ve never even looked at them in that way (I guess it makes sense just like trading Spoos or ES in futures… )… hmm… for that matter, don’t know if I’d ever trade SPY options again… and they’re cash settled just like futures!!!!  But not sure if tax wise the same, don’t think so… but still nice alternative!!!!!  Thanks RT!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!


  762. Alright going to eat with the wifey, had a great time this week (even though the comments were slow).  Sorry we focused so much on SPX (my fault for spamming the board so much)… I’m not the stock guru like Op :)

    Anyways, have a nice long 3 day weekend!


  763. pretty sure you get the 60/40 tax deal too…only downside is the spread…but you can usually get something dead between the given ask/bid at any moment so not as bad as it looks…


  764. RT – beautiful!  Have you traded these much?  I’ve never actually looked at them (b/c of futures of course) but now have to rethink everything.  The liquidity seems to be there for sure… hmmm…. not near as liquid as futures of course, but still not bad looking at  all.


  765. Mark..haven’t traded the SPX options but  I have the RUT options. A lot of the condor sites use both of those for their set ups because of the more bang for commission buck. Also, it seems that I remember Opt trading SPX puts one day as the market was diving..and was commenting on the profit %.


  766. masterpayne – You’ve been reading my mail ! 
    I first bought CPHD at $7 in  ’06, when I looked at the credentials of their management
    and board.   I held it for a year and sold it for $18.  Missed the ride to $33.
    Chart does look interesting! Never bought the options,
    but I agree with Pat, they are too illiquid.    Have a great weekend all !


  767. Mark
    could you educate me regarding your RSI strategy?  Since you write RSI2, I presume you use a period of 2?  When I looked at the graph here:
    http://i34.tinypic.com/df98gg.jpg
    I noticed that RSI was really high both on Aug 27 and Aug 28.  Is that the sign you use to buy a put?  The problem I have is that if you bought one on the 27 you’d be in bad shape, but if you bought one on the 28 you’d be doing great.  So was there some sign one could have used to know to buy the put on the 28 and not the 27?
    Do you have a post where you lay out the RSI strategy?  how does it related to the lagging 5MA strategy if at all?
    Thanks!


  768. bargain – hey!  First off, it’s really not a strat.  There’s nothing strategic about it… it’s simply a  way for me to look at the index and feel if there’s a chance of it "taking a breather" from whatever direction it’s gone in the last 1-3 days…

    The picture I showed was a 5 day, intraday graph… ignore the rsi there.  The RSI 2 setting only works on a daily chart (not intraday, so like a 6 month daily chart).   What I was showing in the 5 day is if rsi 2 is OS or OB on the daily, and you enter the opposite direction that it has been going in, that looking at a 5 day chart can help you see where it should "stop" going with your position… does that make sense?

    It’s relation to Op’s strat is non-existant I think… like I said, it’s really just a way to help see a decent swing trade opportunity in the SPX, but I have no idea how valid it is for an individual equity.  I know how the market moves better than individual stocks, so it’s what I follow better.  Does that help / make sense?  I won’t be in front of my bloomberg until Tues so I can’t explain with other charts until then.  Either way pull up a 6 month chart of the SPX with 2 setting on RSI, and 85 being OB level and 15 being OS level… it should show you quick 1-3 day holds to make avg 20-40% returns on you options (just guessing)… or at least  an opportunity to go flat if the trend’s more powerful than your ATM strike could contend with.


  769. Mark – Thanks so much for your extra support for us minnows while OP was on well-deserved leave. 
    Thought I’d throw out a chart that got my attention today – RES.  I came across it by accident, and have no position.  What a classic cup and handle breakout in May June.  OS on daily..  Last 4 touches of the 50ma have been great opportunities.  Crushed last earns, and impressively did not crater while oil had its month-long swoon. P/E a little high, but balance sheet seems strong with current ratio 2.7.  Real pretty trender since its test of the 200.  Right now pulled back to the 5ma.  At roughly a 52-week high, it will have serious resistance at 22, and 25-26 if it gets there.  Some of the calls bid/ask spreads aren’t too bad.  ???
    Also liking my old CKR here – Golden cross, and tests of the 50 and 200 great last month. Came back to 5ma, and 5ma point UP.  Stochastics turning up.  I have a very small position. Might add coming week.  Can be volatile, but also can be a great trender.  Options kinda suck – stock might be preferable.
    Enjoy your weekend :)


  770. I have been watching restaurant groups also, although the upturn will take some great economic news I fear. BKC, DRI, EAT.


  771. masterpayne, DRI looks like an immediate short, BKC looks like a short on a bounce, and EAT would be a cautious long to me.  Those are all just from looking at the charts and only the 2yr/weekly.  Notice the 200wma acting as resistance on DRI and EAT.   BKC hasn’t been around that long, but that chart looks like it is a long time from rallying meaningfully.  Again, those are all LT opinions.  If I pull up the dailies, they all look like they COULD bounce, but the LT picture makes me cautious.


  772. Film – total agreement. I am going to stop posting stuff that I am merely "watching" because that list is probably 200 stocks long and meaningless until the calls are actionable.
    I mean that I am watching them for a bottom and a turnaround. Clearly we’re not there yet. I am not sure what catalyst will spawn an unptick in consumer spending on restaurants, or if Burger King will come out with a new Whopper Senior…but I will be all over it when it happens.
    Check out the Barrons article on RT, DRI and EAT this weekend.


  773. hi opt
    hope you had a wonderful vacation.

    i was rereading your strategy this weekend, and wondered if you could direct me to a source where i could pull up a close up of the chart for the examples cited there, which is NDX between may and july of 2002.  i’m interested in seeing this chart without the subsequent 6 years since then, so that i can visually follow along with the body of the strategy examples.
    thanks so much.


  774. good morning, I am back in the office, so I should be around a bit more.  Oil getting killed this morning


  775. Blake – ha!  was just about to write,

         Sept. 2 (Bloomberg) — Crude oil, down 27 percent from last
    month’s record, may decline at a faster rate after the price of
    futures contracts fell below their 200-day average for the first
    time in more than a year.
         The CHART OF THE DAY shows the daily price of crude futures
    traded on the New York Mercantile Exchange converging with the
    200-day moving average. The last time that happened was on May
    16, 2007.
         “The 200-day moving average is viewed as a structural
    support level because it’s so long-term,” said Harry
    Tchilinguirian, senior oil analyst at BNP Paribas SA in London.
    Closing below it is a “stronger signal of weakness than other
    supports we’ve broken through.”
         Oil breached the 200-day average as slowing economic growth
    and unprecedented fuel costs slash U.S. demand for oil products.
    Gasoline demand fell for an 18th straight week in the week ended
    Aug. 15, to 9.579 million barrels a day, according to an Aug. 26
    spending report by MasterCard Inc.
         The decline “would indicate that a strong longer term-trend
    has been broken and we could be waiting a long time for the next
    bullish move,” said Hakan Kocayusufpasaoglu, director of
    commodity derivatives at Credit Suisse Group in London. “Others
    may view it as a change in trend and actually go short.”
         The movement need not only be viewed as a trigger to sell.
    After crude dropped below the 200-day average last April prices
    rebounded and had their biggest annual gain in five years.


  776.      Sept. 2 (Bloomberg) — U.S. stock-index futures advanced as
    lower oil prices boosted the earnings outlook for airlines and
    automakers and Korea Development Bank said it may buy a stake in
    Lehman Brothers Holdings Inc.
         Delta Air Lines Inc., UAL Corp. and AMR Corp. rose at least
    15 percent, while General Motors Corp., the biggest U.S.
    automaker, added 5 percent as crude sank to a five-month low.
    Lehman, the fourth-largest U.S. securities firm, gained 7 percent
    on speculation Korea Development’s investment would bolster the
    company’s finances after $8.2 billion of mortgage-related losses.
         Futures indicated the Standard & Poor’s 500 Index may
    rebound from two straight weekly declines after the U.S. market
    was closed yesterday for the Labor Day holiday. The benchmark for
    American equities has added 0.2 percent this quarter, the only
    gain among the world’s 10 biggest markets in dollar terms.
         The drop in oil “trickles down to the consumer and it also
    lowers expectations with respect to inflation,” Scott Richter,
    who helps oversee about $21 billion at Fifth Third Asset
    Management in Cleveland, said in a Bloomberg Television
    interview. “That’s good for the market.”

         Futures on the S&P 500 expiring in September gained 10.6, or
    0.8 percent, to 1,293.2 as of 7:59 a.m. in New York. Dow Jones
    Industrial Average futures added 104 to 11,645. Nasdaq-100 Index
    futures rose 20.5 to 1,895.5.
     
                        Subprime Losses, Oil
     
         The S&P 500 has rebounded 5.6 percent from its 2008 low on
    July 15 as oil tumbled 17 percent. The index is still down 13
    percent this year as subprime-related losses at global banks
    climbed above $500 billion and the U.S. economy teetered on the
    brink of a recession.
         Crude oil for October delivery fell as low as $105.46 a
    barrel today, down 8.7 percent from the close of Aug. 29 on the
    New York Mercantile Exchange, after Hurricane Gustav passed the
    U.S. Gulf Coast without causing major damage to offshore
    platforms. The fuel reached the lowest since April 4.
         Oil will likely drop further in the next three to six
    months, said investor Marc Faber in a Bloomberg Television
    interview today. He favors shares of AMR Corp., American
    Airlines’ parent company, even if the air carrier is

    “disastrous.”
         AMR climbed 15 percent to $11.85. UAL, which runs United
    Airlines, increased 17 percent to $13.05. Delta rose 15 percent
    to $9.31. GM advanced 4.3 percent to $10.43.
         Lehman added 6.9 percent to $17.20. Korea Development Bank
    is in talks to buy a stake in the securities firm, Chief
    Executive Officer Min Euoo Sung said, as Asian investors shore up
    Wall Street firms beaten down by the global credit squeeze.
         “I cannot comment further,” said Min, who headed Lehman’s
    Seoul branch before joining the Korean bank in June. Matthew
    Russell, a Hong Kong-based spokesman for Lehman, declined to
    comment.


  777. FYI-  Our rigs in the Gulf of Mexico are still shut in…  We are hoping to start ramping up production on Thursday.  I would say it is pretty bearish for oil that production is shut in throughout much of the Gulf of Mexico and the price is still dropping.


  778. 8:25 *DOE’S STRATEGIC PETROLEUM RESERVE OFFICE NOW OPEN 24 HOURS
    8:24 *DOE’S AUSTIN SAYS OIL REQUESTS MAY NOT COME UNTIL TOMORROW
    8:24 *DOE WOULD RELEASE OIL FROM RESERVE `WHEN ASKED,’ AUSTIN SAYS
    8:22 *DOE HAS `PRECEDENCE’ TO RELEASE FROM RESERVE AFTER STORMS
    8:22 *DEPARTMENT’S ALYSON SAYS NO REQUESTS YET FOR RESERVE OIL
    8:21 *U.S. ENERGY DEPARTMENT HASN’T YET BEEN ASKED TO RELEASE OIL


  779. Number of Louisiana refineries down – should start getting some damage asessments in the next couple of days. Power outages were noted, but initial reports don’t appear too bad. Have to wait and see. Even if all is perfect, restarting a refinery is not the flip of a switch.

    As far as crude & gas production, can follow daily shut-ins at mms.gov


  780. Question for a project I am working on. Anybody know where I can find posted prices for corn and electricity for continental Europe?  Sorry this is waaay off subject here, but not having any luck so far and have not figured out how to get quotes frol Liffe.


  781. SEM – man what a tuff question to answer!  Is there a difference between Corn spot futures prices and EUR corn prices?  Wouldn’t you just have to adjust it for currency?


  782. GM, everyone!
    Back from some amazing vacation. All refreshed and ready to make some good money now ;-)
    Windy, I have the same issue with charts. Difficult to look at them in details going that far. What I am going to do is find some other examples, maybe from our own trading, and update them in the strategy. Will keep you updated.


  783. I would bet there is a chart somewhere that shows the different ports available for delivery and the adjustment that you put on the spot futures price…this is how oil is calculated…based on one location in Texas, the value is adjusted for delivery at other ports around the world relative to the Texas location.  Basically, if you take delvery at XYZ port, then add $2.5 per barrel…


  784. GM everyone..great way to start a new month


  785. Mark & Blake – thanks for the thoughts. Agree that it is probably a viable approach. Over the longer term the arb will not constantly stay open. Tricky part is freight (say US midwest to US port to R’dam). Was lucky enough to get a website in China from a friend there that actually has a 1 year chart on grains – was hoping to be so lucky for Europe.


  786. Windy:  Try using "Advanced charts" at  bigcharts.marketwatch.com…I think it’s free.  In the timeframe tab, you will find ‘Custom’ as one of the options where you can plug-in any date.  You may have to change few other parameters to get going.  hope this helps.


  787. RBA lowered rates 25 bp to 7%. Should continue to help USD.


  788. Windy / Op – as far as following the NDX during ’02, you can use Yahoo Interactive charts to give specific timeframes… it’s what I used when looking thru Op’s system over a weekend a few months ago.


  789. Akamai-AKAM downgraded to Sector Perform from Outperform@PACS

    Pacific Crest downgraded shares as they believe competition and pricing pressure bring risk to estimates. :theflyonthewall.com


  790. Google-GOOG upgraded to Buy from Hold@STFG

    Stanford upgraded shares after channel checks indicated U.S. search market trends have stabilized as they believe GOOG’s market share gains are broadening, Q3 expectations are modest and the valuation is near lows. The firm has a $550 target on the stock. :t


  791. NDX Chart – I was able to use TOS tool to do so


  792. Here is what I will be looking at for new long positions: PCLN, LOW, BAC and SOA.


  793. Apparently, Gustav didn’t hit the gold producers, either.  Gold down $35.


  794. :
    Research in Motion-RIMM: Expect company to have a strong quarter@OPCO

    After conducting checks, Oppenheimer believes that the company’s Curve is selling well, while they think the company’s Bold is also ramping well. Oppenheimer maintained their Outperform rating.:theflyonthewall.com


  795. Well, my theory was that whatever we do for the next 3 days is the opposite of what happens the next month.  We’ll see how that plays out.


  796. I heard that 80 on the $DXY is LT resistance.  I don’t have that much data on my chart, so I can’t confirm.  But, that would mean we are only 2% from MAJOR LT Resistance.


  797. I know you hate this, so stop reading now Optrader.  But, I do think it is interesting that the VIX broke above its downtrend line at the open.  It went up when the market went way up.  Since I have been looking for a rally that becomes a freefall, that is slightly heartening.

    Also, GOOG has already passed the volume traded for all of Friday.


  798. Still holding POT/RIG with this commodities sell off?


  799. Film, what is this theory (that the next 3 days are the opposite of the rest of the month) based on?


  800. PCLN-1/2 in. Stop at 5MA.


  801. POT/RIG/SPWR Let’s wait until EOD but will probably close those.


  802. It is based on the "before big money sells, they buy a little first to test the market."  I think the big money has to want a big move to make their numbers for the year.  They don’t care if it is up or down, but if you pull up a chart of the SPX or DJIA, you will see we are in a pretty nice bear flag.  Once we break that bear flag, that is going to bring in technical traders in either direction, so I thought that if big money had a direction that they wanted to take the markets over the next 4-8 weeks, we would see that start with an opposite move.


  803. MA having a hard time staying over 245.  V is looking strong, though.


  804. Film – "before big money sells …. buy a little to test market…" – don’t they do that as well to try and lure in retail buyers so they have someone to sell to?


  805. thanks very much for the chart info guys.  will look at these as soon as i get a chance and report back if i find a useful one.

    opt – current examples would be extremely helpful whenever you find the time.  thanks.


  806. Opt  - still buying Sept contracts or a mix?


  807. USO – anyone with a good argument either way?


  808. Opt, what your reasoning for going with PCLN ?


  809. USO – I went long puts on the drop with gustov coming in, figured oil price knew more than the weather guys. Ok, so I bet on the weather, luckily it paid so far.


  810. windywheel – my 2 cents – the chart guidance/discussion over here is awesome.


  811. Airlines – notice they always pop much more than oil drops (AMR +12%, USO -6%). Southwest (LUV) was big winner on last drop.


  812. mck, yes, I agree that could be going on as well.  Trying to scare some shorts into covering and retail peeps into buying, but basically, it is the old Jesse Livermore philosophy.

    PCLN has a very large risk premium that is not priced in.  I would be very wary of holding calls on this thing.  If this case is decided against them, they could drop 30% overnight.  If it is for them, then they probably go up 2%.
    http://www.masshightech.com/stories/2008/08/25/focus1-Can-anything-under-the-sun-be-patented.html
    http://www.economist.com/business/displaystory.cfm?story_id=11332744


  813. I am still going with Sept contracts.
    PCLN-I like the research report this morning from credit suisse. Target at $145 gives plenty of upside. Price is now above 5MA, 5Ma turning up.


  814. sorry, better late than never: 10:00 *U.S. AUGUST ISM MANUFACTURING INDEX FALLS TO 49.9 FROM 50.0


  815. Hey guys, great article for us doom and gloomers.  Looks like we are at a high-water mark in index valuation….

    http://www.bloomberg.com/apps/news?pid=20601087&sid=a6BxAKLBZvII&refer=home


  816. PCLN did bounce off its 400dma in true Mark style.


  817. LOW is $.10 below its 400dma.


  818. FIlm, you are my favorite perma bear :-) What are your favorite shorts here? Thanks.


  819. Film – "mark style" ROFL.  Man I’m just a follower, no leader here.  But yeah PCLN found nice support of late… but looking at a 2 year chart don’t see it supporting before… makes me wonder if the 400 has been more important than I realized for many equities / indexes… Gotta comb thru some LT trenders to see what the 400 has or has not done for them…


  820. I am perma-bear like the arctic is perma-frost, only for another few years.  LOL   And you know, I was a perma-bull until earlier this year.  So, I have a history of being strongly convinced I am right in spite of all evidence to the contrary.

    Ironically, I don’t have a short list yet.  I am planning on staying with a long AAPL, short index strategy for the time being.  But, MA has failed my 245 line again.  COF has gotten quite high, in case you didn’t notice.


  821. I agree on COF, been watching it.


  822. Man, what happened to my beautiful open? I was rich once…


  823. Opt- How about KO and PLCE for short plays?


  824. KO and PLCE-Any fundamental reasons for going short on those?


  825. oil from 105.50 overnight low, to touching 106.50 right before open, now 109.40… so market gives up some as oil retraces intraday… the big sell off began around 110.50 for oil, so right there the market should be back to flat I’d guess… man I wish I could day trade.


  826. RIG-1/3 out


  827. KO has been trending down and did not hold support through the last market move upward. Also a strong dollar is not good for them. PLCE chart is not participating in the rally even after their earnings report on 8/21 pushed the stock up to $42. Looks like it is ready to break down from here to below the 5MA.


  828. KO looks like a gimme to 50.  And PLCE has a nice MACD divergence going on.  Personally, as a parent and someone who grew up in the 70′s.  Hand me down and "recycled" kids clothes are no big deal to me.  The last thing I am going to spend money on is a full wardrobe of cute clothes for my kid.  And if we do turn down into a long recession, PLCE seems like a sure bet to fall.

    This is annoying.  FXI fading and not much rallying on a huge drop in oil.  China would benefit greatly from a drop in oil, so someone doesn’t believe it is real.


  829. mark, if you can day trade how would you play this out ? I was looking at your old post this weekend, you talk about when 8EMA cross 21 EMA, then is a buy signal on a 5min chart am I correct ?


  830. PLCE-I Like the chart a lot here for puts, indeed. Good ones, Jnjr.


  831. PCLN/CTRP – if you like PCLN for up play, you might like CTRP for down play. Caveats: it’s chinese, it’s volatile, thin trading, but it’s rich (PE ~52 vs ~27 for PCLN), and maybe hit ceiling at 52.5 this AM.


  832. bee – with SPX today it was failing the R2 pretty easily (and oil was being bought again)… it would have been more a gamble on oil coming back than straight ma’s (b/c ma’s were pointing up at the open but I thought the gap would have to fade to the R1 at least… i.e. 10 points intraday from R2).  Like I’ve said a billion times, this is why every day’s so different… I love the ma’s when they make sense, but sometimes the market needs to breathe and "everyone" knows it. 

    8 popping thru 21 FROM BELOW would = a POSSIBLE long day trade… from above can help signal a short… right now the 89 on the 5 min nice support for the SPX, and R1 at the same time, but fast ma’s about to cross eachother from above… could see PP test of 87.72… S1 and the 89 gotta break first though.


  833. sorry, "R1 and the 89 gotta…"… not S1.  My bad.


  834. Here is a chart of the dollar index that goes back a ways.  You can see the 80 line as resistance now.
    http://www.raymondjames.com/images/inv_strat/080902_2lg.gif


  835. mark, on 5min chart SPY, it would be nice short @ 10:20 am I right?cause 8 EMA pointing down and price close under it?


  836. bee – no, you’re missing the full picture (i.e. the "feel" part of the market).  the 8/21 are important but the "LT" ma’s (34, and 89) are the most important for trend confirmation etc… the 8 and 21 "looked" like it crossed, but really this is just a flattening of the ST trend (the 8 and 21) and the 34 / 89 still flattish / upward sloping.  R2 was the short in mind, looking for R1 support… after that now is the "muddle thru" period… until other sellers come to the market you don’t do anything (b/c no trend exists really).  If sellers sell it thru the 89 and all ma’s point down (watch for it next 6 min possibly b/c 3 brackets now), then you’re confirmed a short to the PP at least… does that make sense?


  837. mark, and now if 80 hold, you will see that as support and buy calls?


  838. FXI – remember that Chinese energy companies are losing money on every barrel they refine. High crude + controlled retail prices = negative margins. Believe energy makes up about 25% of FXI. Will see if China comes through with the rumored stimulus package. However business in general in China is grinding to a halt due to credit restrictions. In the chemical industry, operating rates are quite low.


  839. bee – nope!  LOL.  Sorry, I don’t just trade just to trade… I need a HUGE reason to go long or short something.  R2 was "easy" in my mind for a short, with R1 being "easy" support… after that I don’t know anything until the market does it… could happen in 5 min could be after lunch.  dunno… will wait patiently until the time comes.  But for day trading purposes only.  REmember, I’m not a leader, just a big follower… if I miss 3 points to make 5-7 intraday (i.e. could have made 8-10 if played perfectly) then so be it… would rather be absolutely sure of the market direction… just personal though.


  840. mark , thanks I got it , that’s why I am wrong I always miss the BIG PICTURE!for day trade seems like its safer to stick with SPY .


  841. bee – there’s the new bracket buyers!  LOL.  yes, the SPY R1 would have been a nice call point LOL.  in futures I’d be marketing in  back around 1295.50 with a tight day trading stop of the 8 ema… looking for 1298-1300 testing…


  842. mark, one more stupid question 3 points you mean 3 tick ? like 130.1/130.11 like that ? or $1 ?


  843. bee – SPY options – man I don’t know.  if you’re looking for reason to day trade you might not want to take on something like I posted at 11:35… I’m looking for a scalp of only like 2-3 points b/c it’s close to luncyh time and this thing could do whatever it wants to.  No conviction int he market IMHO.  It’s usually "safest" to place a trade the first 1.5 and last 1.5 hours of the day b/c the market usually makes bigger decisions then.  But again, every day’s different :(


  844. bee – another great question, don’t know how it translates to SPY’s but in futures from 1295.50 to 1298.50…  don’t know what those values would be in SPY terms…


  845. mark, then each time you need to at least get 40 contracts in order to take advantage of the move.?


  846. mark, opening a future account will allow you to trade coffee, wheat , EMINI all together?


  847. bee – what?  no idea LOL.  don’t think so?  I don’t know what you’re asking.  1 ES contract is about 10 ATM SPY contracts… I think.  Dunno.


  848. futures – yep!  as long as you have the permissions… and the flow…


  849. mark, thanks cause last time when we play RSI , you draw out a example of getting 20 ATM put contracts for SPY. so now when it come to intraday trading , I think you might be grapping 40 contracts to take advantage of the move.


  850. Mark, the market I mean the stock market is not trending so well these days do you agree? what about the coffee ,wheat and currency market ? are they trending better?


  851. bee – ahh!  NOOOOOOOOOOOOOO.  I would play A WHOLE LOT LESS intraday.  b/c I have to limit my risk… when I play a 1-3 day hold I play more b/c I usually have some conviction on the direction… intraday can move really fast and not sure, so when I scalp it’s with fewer contracts.  I.e. I bet big when I feel confident… intraday (and esp at certain times) there’s no confidence in the market so I do smallers sized trades.  If there’s a perfect set up THEN I may up the ante and play big, but I REALLY need to feel good about it.  i.e. not a tight stop, willing to take some vol assuming I can see where it’s going next…

    But dude, frankly, DO NOT day trade the indexes LOL.  It’s only for those most nimble / used to watching this sh*t.  i.e. it’s for someone who can sit in front of the market all day every day and have their trigger on the mouse at all times. 

    Keep swinging…


  852. Digging through the old news headlines for PLCE.  Almost no mentions as it fell like a stone from 30 to 15, now a mere 7 months later and it is up 300%.  Interesting stock, indeed.


  853. GLW = wtf?


  854. Opt,
    LOW – looks like its near resistance. Don’t puts look like a better risk-reward play here?
    BAC – ditto , resistance near 34
    SOA – very illiquid options.

    Correct me if I’m wrong on any of this. I may be missing something here.


  855. mark, thanks! I just wonder how did you first get into trading like to be a trader? did you took a course? read books? learn it from a trader? What is the most difficult thing for a newbie to start becoming a trader?


  856. Market – it’s trending, just in a shorter outlook (intraday, weekly, etc).  You gotta change your timeframe / perception.  ;)

    Hence why swings are best right now… also, if you look at the chart, wouldn’t you say it’s trending downish LT (1 year plus)?

    I don’t know enough about the wheat / coffee / currency markets to have an opinion.  I will say that currency markets are unregulated and frankly completely manipulated by teh central banks of foreign governments… better for hedging IMHO b/c you never know when they’ll flush the money supply etc…


  857. By the way, I will create a new post for tomorrow, only with open trades.


  858. LOW-Agreed. I would not buy calls here, but wait for a pullback. No puts though.
    BAC-I don’t see much resistance here. A pair trade: long BAC-short COF might be interesting here.
    SOA-Agreed, let’s forget about this one.


  859. OP, for BAC do you consider $34 area has a resistance? on daily chart ?


  860. theflyonthewall.com:  Corning-GLW downgraded to Neutral from Buy@DAVA


  861. Yes, there is some resistance at $34.


  862. SVU following SWY move up crossing 5MA


  863. bee – I’m a professional… I do it for a living.  basically came out of college in ’02 with no money and no contacts, had to work my ass off for 6 years teaching msyelf and convincing people to hire me… 6 jobs later… then just watched and learned over time.  No courses, no books, just observation and conversation with others. 

    Most difficult thing for nebie AND retail – most have NO IDEA how the institutional side works.  There’s this constant "THEY" that retail like to blame the world on, but man if you went long AAPL calls and aapl sold off, it’s not something against you… it’s prob a HF going under and needing to liquidate its holdings.  Or it’s a quant fund who gets sh*tty execution by one of their executing brokers they use… or… or… or…

    There’s always a GOOD reason something is bought or sold, so the market IS ALWAYS CORRECT.  Unfort, "we" are not… so if we make money we were lucky IMHO… we don’t have enough money / liquidity to effect the markets… hell in a program trade at work here we’ll work $400mm worth of securities in 3 hours and not move the market at all…

    If you want to learn, go be a clerk running sandwiches for the floor traders at the CBOT or CME or something… You’ll have to "pay your dues" and get made fun of and sh*t, but after a few years you’ll be a junior, then you’ll ‘graduate" to running your own accounts or clients… then you’ll be able to make fun of all the other juniors and have them go get you lunch.  it’s the way the world works (unless you  have money or know someone who can hook you up with a sweet job or you’re ivy league and have a 4.0).  just sayin… I’m cynically unbiased ROFL.


  864. PCLN moving very nicely.


  865. TGT looks like a good put candidate – rally on falling volume and good resistance around 55.


  866. mark, thanks ! "there is no free lunch!" seems really make sense!


  867. ha!  I’ll stop spamming now.  Bee, just realized what I wrote sounded just plain aweful and I’m sorry.  Dont’ mean to be rude at all.  OK back in a couple hours.


  868. op, will you wait until it break 34 before getting in ?


  869. Apple-AAPL to host Back to School event on September 9-Bloomberg
    Apple to host "Let’s Rock" event in San Franciso.


  870. BAC-I have not decided yet.


  871. back on quick sec Bee did you see when the 89 broke what price did?


  872. Weird market, selling off now.


  873. GOOG-bought some calls. 1/2 IN, stop at 5MA.


  874. AAPL-Bought back 1/3 of the calls.


  875. mark- 129.54 is 89EMA, is about 12:20 on 5MIN Chart . am I correct ?


  876. mark, lunch brb.!


  877. Albo -
    Did you follow me on the railroad short? Ninja!


  878. Glad we are not in FCX this time. This one is really crazy.


  879. bee – yep.  I.e. short 92 on futures take 7 points off the table 15 min later… mmmmmmmMMMM!


  880. Well I don’t know about you guys but I just can’t bring myself to buy anything in this market. I don’t think I"ve made a trade in 2 weeks or more. I"m bored stiff !.


  881. opt
    to clarify, with AAPL you bought back short calls or long calls?  i’m assuming short calls.  if so, what strike were you trading?  thanks


  882. AAPL-I am talking about the ST calls in the portfolio. I bought some Sept $170′s for 1/3 of a position.


  883.  Apple-AAPL: September 9 event is in-line with expectations@PIPR
    Piper is seeing more changes to the iPod family earlier than anticipated and remains positive on the story.


  884. Meleko
    I am right there with you on not trading over the last few weeks. This market is a real meat grinder . Maybe today is the shakeout before the breakout.


  885. What’s up with AAPL now?


  886. opt
    sorry, but i’m still confused.  when you say bought back, i’m assuming you sold calls (callers) that you are now buying back.
    but by your later comment this is unclear.  did you buy long calls which you now either sold, or bought more of?
    thanks for the clarification.


  887. Op – AAPL – IMHO, range extension to test the PP intraday… we’ll see if selling pressure really takes her down but that’s just testing…


  888. Windy, we mostly only buy/sell naked options here. We have had a position in AAPL for a while now (bought at $160). We sold 2/3 of it when it went up, and I just bought back 1/3 right now. So we now have 2/3 of a position. It is all updated in the spreadsheet. Does it make sense?


  889. opt,
    that helps, thanks.  i know you do mostly naked, but the words "bought back" are what confused me, as i’ve also seen you sell and buy back calls particularly on AAPL.  now i understand.
    wondering how/if this might afftect AAPL
    http://www.streetinsider.com/Analyst+Comments/Piper+Jaffray+Previews+Research+In+Motion+%28RIMM%29+Q2+Earnings/3954607.html


  890. aapl failing ma’s and testing 170… selling pressure continues


  891. Thanks, Mark. I don’t understand where the selling pressure is coming from, though. All news are good, and we have some nice support here at 50MA. Very surprising.


  892. aapl sure is a head scratcher. Glad I sold my friday calls I bought at the close this morning


  893. Op – agreed, looking for 200 dma test now of 163.7741?  since 50 dma is broken Friday usually means it’s easier to break and looking to test bigger LT ma’s now… we’lls ee.


  894. WOW! AAPL really collapsing.


  895. Maybe my mind is still on vacation, but I don’t understand the action today. Feels like we should be much higher in this drop in oil.


  896. OK, I have to buy some AAPL Leaps here at $166.


  897. Apple-AAPL: Bearish Price Channel Broken to the Downside
    Shares have been in a downtrend since mid-August which appears to be accelerating as the day wears on. Being the number one weighted stock in the NDX 100, the drop is having a magnet pull effect on that index. The lower limit of the bearish price channel, which was at $168.16, was broken to the downside five minutes ago. On the five-minute chart there is a classic bearish waterfall which typically accompanies some form of negative fundamental news. We have seen nothing yet to explain it. Support levels to watch as potential downside objectives are at $159.69, $153.65, $150.63, $146.53. Resistance is at $168.16, $170.


  898. Bee – you still long any of those 130 puts from Friday or did you flatten at 3.20?  3.50 now… but spx has room to fall before getting OS again…


  899. Looks like GOOG is going to turn red as well. Unbelievable.


  900. Film prophecy coming true, major downtrend continuation? DIA,SPY,AAPL, etc – charts all look same, plunge in last 30 mins.


  901. Film, does it mean that the rest of the month will be bullish? LOL


  902. mark, I wanna ask you a stupid Q what do you mean by short 92 , LOL ? is that SPY  ? yeah holding really nice on that trade !!! plus the message from earlier today I don;t think is rude, learn quite much about it !


  903. I wonder how many oil traders were caught on the wrong side of the oil trade over the weekend and now have big margins calls to cover today?


  904. AAPL – I have a feeling it may recover a bit by EOD but the overall trend is bearish. It will probably test the 200ma.


  905. ha!  nw, 92 = 1292.  I drop the 12 off b/c in futures everyone knows what hundreds we’re in… so tech speak is your entry / exit based off the last 2 numbers…


  906. mark, I need to tell you that I sold my apple call this morning at 173 so glad and I close all other position now,will only do SPY trade. the market is really crazy


  907. Not a very nice way to get back to work. Will close a lot of positions if we close like this and try to make sense of this market.


  908. SPY – 130.71 could be the high for this bear rally. Resistance looks strong below it.


  909. Not that it matters too much but: 

    Apple-AAPL: Reiterate Overweight following product event announcement@LEHM
    Lehman expects AAPL to announce new iPods at lower price points with new features on iTunes. The firm believes iPhone continues to be strong.


  910. Film – I actually meant your original (last week) bearish prophecy. Think that included AAPL at the time. Wonder if there was expectation built in for an AAPL story (causing it to be up relatively), and now that there’s news it didn’t meet expectations.