Re Run…run run

Michael Davey here with one trader’s morning coffee. Wake up poster tikes!

I went straight for the protein myself this morning, peeling of freshly dried chunks of caribou-bear drying upside down in my living hole.

Winter is coming and the cable TV has been out here for years. I’m watching reruns of the market live instead. Looks like the bears got a bit of reprieve and now we’re just waiting for Lucy to pull the ball out from CB’s goofy foot yet again.

When does this end? Oh, I don’t know, but it’s better than watching old Rockford File’s for entertainment.

If this Opex week ends up going badly, I’ll know what to do (Option expiration weeks tend to be positive for stocks, but it more than makes up for that when you throw in the negative weeks; which are more extreme in terms of percentage). In the meantime I’m keeping balanced for the most part, having re-shifted neutral again today given the negative internals. The NDX is the leading negative index today (a bearish development). Subsequently I’ve neutralized by adding a modest amount of QID (NDX double-short etf).

Lucy’s got nothing on me.

If I make it sound good, well that’s veneer as much as anything else. I spent the night largely sleepless and getting pummeled by a re-entry short into the Euro (widow and orphan accounts not included).

Egg on my face? You guessed correctly. Nobody’s perfect I suppose.

A bleary-eyed Mole ought is no doubt putting the graphics together which will make sense of it all.

…just as soon as he crawls out of bed.

This entry was posted on Wednesday, November 18th, 2009 at 12:07 pm and is filed under Market Outlook. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

  • elliott_surfs
    Cramer claiming bear market over...guess we did top =p
  • gregn
    This boring action has led me to explore options a little more and I have come to a mind numblingly easy way to consistently profit off of options, only follow chart for the actual option ie .RDQXV (SPY put), go long the option when its above 200 period MA, short it when it's below the 200 period MA. 15 minute bars: http://screencast.com/t/YzZjNjAzMGQt
  • gmak
    How do you determine the exit point to ensure a profit. Entry is easy. Ask any Roach motel. :-)
  • gregn
    Enter long on rise above 200, reverse when it falls below. Go look at any option chart and add a 200 period ma on 15 min chart and you will see that it is pretty much fool proof. Any small loss on false move is b/e or tiny and will be paid for by any moderate winning trade.
  • ClutchShorter
    What charting program are you using?
  • gregn
    Prophet.
  • WTFed
    boring action. lol!
  • ¤ø„¸¸„ø¤º°¨¤ø„¸¸„ø¤º°¨
    ¨°º¤ø„¸ N E W „ø¤º°¨
    ¸„ø¤º°¨ P O S T ``°º¤ø„¸
    ¸„ø¤º°¨¤ø„¸¸„ø¤º°º¤ø„¸
  • raised_by_wolves
    SSH, remember me calling $VIX direction correctly?

    http://screencast.com/t/ZWYwZjJhNTc

    Let's see if I will be right twice in a row:

    http://screencast.com/t/MDQ4NGNkYmIt
  • well, I called for a 36, lets wait
  • roncofooddehydrator
    NEW POST
  • bshah
    Is anyone in AMZN ? Is there any slim chance of that one going down?
  • amzn just wont die lol. I am in dec 125 put quite underwater at the moment. Considering this is opex I am holding back on making adjustments but if this was not opex, I would probably be closing it out and wait to fight it another day.
  • kryxtal
    Gaps on DJIA and Nasdaq are likely to get filled before the end of the day.
  • Me_XMan
    A bad housing number should drop this market 200 points.
    Look at how measily red 38 number is. WTF!
  • gsavli
    market holding, but after COMP, now also RIFIN and financials showing some weakness..
  • watch nasdaq, one down leg missing
  • marcopolo101520
    sp, what is means?
  • drop to 1100-1102 before rise to 1115
  • Nightwind
    Score update: Hawk- 1, Rabbit- 0
  • marcopolo101520
  • Schwerepunkt
    Moved up stops and am now out 1104.25. Made 2.25 points. Watch it keep running. Always a difficult call whether to move them up, lock in profit, or let it ride and risk a break even trade. I'm now thinking it will keep rising. I may go long again.
  • look at gold, wait, I think 1100 is in order
  • Nightwind
    Outside my window, watching a red tail hawk taking down a rabbit. Hellacious fight.
  • WTFed
    Yesterday, driving down Beverly Blvd. at the most ugly L.A. intersection at Vermont, I saw a red tail hawk circling low above the worst traffic snarl, stalking pigeons in the rail line plaza. The pigeons were going bananas. Yes, this happens in L.A.
  • Nightwind

    When I was a kid, I trapped one and trained it. When cockfighting was legal, I couldn't get any takers LOL.
  • like the joke on dog fighting, "what dog is that? its a crocodog"
  • Nightwind
    We have our share of those here too. They love the water and your small pets.
  • where are you?
  • Nightwind
    Louisiana USA
  • raised_by_wolves
    Nightwind, I hope you don't mind my asking; are you young, old, or somewhere in between? Also, are you a man or a woman? Don't worry, I promise I won't hit on you either way. I'm just curious.

    Edit: I just read that you have a wife. That probably answers the gender question.
  • Tronacate
    Holy shit.....a coon-ass.......you eat those crawdaddys?
  • Nightwind
    My wife does,..I don't care for them. To much work for so little
  • Tronacate
    I like 'em.....but like you say....alot of work
  • Tronacate
    California economy gets any worse and people will be eating pigeons........anybody try one?.......kinda taste like quayle?
  • Gold_Gerb
    http://www.squab.com/recipe/kitchen.mv
    there goes my business idea.
  • YUMMY!

    I love pigeons (not in a sexual way mind you, just good friends)
  • pigeons are delicious, whe I was in bordeaux I used to go to a restaurant where they had them from time to time (and their magret en croute with fresh fois gras was divine)

    but those are raised, street pigeons are worse than rats, disease ridden to extreme
  • Tronacate
    Figured they would be good.....light or dark meated?
  • on the lighter side, but I eat them bloody rare
  • Tronacate
    Sounds awesome.......bet the wild ones are darker meat from flying......
  • Nightwind
    Pigeons taste great if you let the Vietnamese prepare them. Taste just like chicken.
  • Tronacate
    Lol........sauteed in viper blood?
  • Schwerepunkt
    Can I put some money on the raptor?
  • Nightwind
    Haven't heard the term "raptor" in years, you must be in Europe....just guessing.
  • Nice!
  • Tronacate
    Damn.....if I wasn't tapped out I'd be shorting the shit out of this little push right now......
  • gregn
    Looks like another bull flag on SPX: http://screencast.com/t/MmM5NjYwYTM
  • Carl V
    I think you might be right gregn; and if this fails (meaning the last pivot low of an hour ago broken down) then we have a new event for bears for sure. A nice short entry.
  • goldpackers
    still in triangle unless break 1103.
  • Missed the pivot getting into CML long.

    Note how LFT and especially CML trading today off their new 2ndary offers
    My [edit] assistant failed to let me know before the open and I had to discover these on the tape a little late in the day.

    Anyway, ah forget it
  • Carl V
    RUT just making lower low of the day
  • defleming
    hanging short here, watching RUT close
  • ...and the fertilizers are leading on the upside!
  • BS rally?
  • Fertilizer were leading when the market topped.
    ...they're not leading overall now though - pretty poorly ranked, but rocking on the day
  • thanks for the info, didn't now and was just making a joke ;-)

    what's your take on this? we seem to be finaly in a distribution mode, how long do you think GS and friends need to unwind their positions to joe the plumber and some greedy (and stupid) hedge funds? in 2007 it must have take the summer and a reasonable drop, now?
  • Is anyone hanging tough short?
    Slowly deteriorating internals here today; would be rather provocative if this goes to a lower low then tomorrow
  • did you call? (I know, lousy joke)
  • Tronacate
    Ya
  • I knew I could count on your Tronc
  • people, calm down, ultil 1096 this is a non event
  • kryxtal
    Yep, most likely another bull flag, should be higher by tomorrow.
  • Nightwind
    I agree SSH, could be setting up a bull flag
  • Schwerepunkt
    Long ES1102, tight stop 1101. Very cautious scalp.
    Edit: moved stop up to 1102.25. Can't lose anything now, hopefully we run for 20-30 minutes.
  • that stop will be taken out
  • Schwerepunkt
    That's ok. I'm scared to death going long, so I will accept the possibility of a tiny loss, but I think this goes at least back to 1105-6 VWAP level, and possibly above 1110. Good risk reward. Just moved stop up to 1102.25. Cant' lose now.
  • lighten your stop 1 point, there is a road to 1115 point soon enough, either that or drop it now 1106
  • if it breaks 1105 to the upside, let it ride
  • Carl V
    If I was you i woyld be already at breakeven at 1102 (ES @ 1103.25 now)
  • strange, gold is falling impulsively

    equities should ...
  • gsavli
    It better go down soon and firmly, so we can watch the match in peace...
  • yudhisthira
    SPX e wave from Monday's high or was that all we get to the upside?

    looks convincing to downside, but I don't trust it.
  • prepare to kiss 1115 in no time

    EDIT it was a cusp, but it turned the other way
  • Gold_Gerb
    holy cow, the donuts are still on the table (SPY 110.70)
  • Gold_Gerb
    SPY 111 - donuts getting eatten up by dippy biggest losers, my fear came true.
  • Jan
    i'd like to place an order for some volume with a side order of fear.
  • Guest
    CC - were you asking about what to look at in the bond market earlier? Remind me tomorrow. Too much to mention now and I am about to head home.
  • marcopolo101520
    nope
  • Trader_Steve
    WTF is this ad I see here of "Register for the Green Card Lottery"?

    What's next, a subliminal flash of "Support Obamacare"?

    Steve
  • Tronacate
    And how many patients have you treated douchebag?
  • either you're outside of the US or the ads are wrong... I'd bet on the first
  • Schwerepunkt
    Green card lottery has long existed. Each country in the world gets so many slots. Usually, there are more applicants than slots.
  • Me_XMan
    Health care bill is good for USA.
  • Tronacate
    You've got that right.......TS has a Limbaugh endorsed gerbil up his rectum.
  • no gerbil jokes please, respect for our new guest goldgerbil

    ROTFLOL

    p.s. goldie, don't get upset, hamster suffered the gerbil jokes before your arrival, so THUMBS UP!
  • Tronacate
    Ah grasshopper......when you can snatch the gold gerbil out of TS's butthole you are ready.........
  • ah! good old master trollcate, you be very wise ;-)

    p.s. gold gerbil, don't be scared, gerbil jokes were aroundbefore you ended up here
  • marcopolo101520
    we break 1106.88 now will go down
  • Eva S
    We would need to break 1102 & close below it to start making a bear case.
  • Me_XMan
    You kidding me? Dipsters will plow in like Biggest Losers contestants on donuts.
  • Me_XMan
    Very interesting news here.
    -------------
    The House Financial Services Committee will take up audit-the-Fed measures tomorrow, with a clash in the works - as an aggressive bill backed by Ron Paul and Alan Grayson is countered by Mel Watt's narrowly pitched amendment, which in part would bar examining interest-rate decisions, and looks to Yves Smith like a torpedo.
  • de3600
    And the economy still needs help. So White House officials are looking at creating a new version of cash for clunkers — this time for home weatherization. It just gets better and better
  • Jan
    for the restless. GWW just dove off a cliff.
  • gregn
    When is it not better to short calls rather than buy puts besides the prospect of infinite loss? In a sideways market like this one, it seems to be far better to short calls when you are on the short side of a stock. I believe in a downtrending market a put would be better than a short call as the vega will increase the price of the call.
  • vision_invisible
    I can't speak to option pricing in detail - even though I've done research on this - but a small move downword can devastate an OTM call option. I can get 20% moves in call option pricing on $30 stocks moving by as little as 3%. Whereas no puts are that sensitive. If someone knows better speak up, thats my observation since I usually short calls.
  • gregn
    I was thinking about that the past couple of days because I typically just buy puts and I don't know how many times I am in the red with the underlying price down several dollars. I was using ToS' thinkback and in every case where I was down with my puts, I would have been up had I shorted calls instead.
  • vision_invisible
    Absolutely. I have been crushed 100% on a lot of my puts just being out by a small amount. On the contrary, even on my losing trades with selling calls I usually breakeven because I banked some coin selling the things.
  • gregn
    Also, theta burn actually makes you money on the short side of options.. I am going to have to make the switch.
  • vision_invisible
    I wrote about this on this board a while ago, see if you can find the caveats. This is a decent book by some pretty down-home practical traders about option selling.

    http://books.google.com/books?id=2bGBY0lUcP8C&printsec=frontcover&dq=options+selling&ei=tjcES-DKKpWayAS3spCyDQ#v=onepage&q=&f=false
  • gregn
    I have seen this book while perusing the shelves at Borders. I will have to pick up a copy. Thank you for the tip!
  • gregn
    You sell before expiry though, correct?
  • vision_invisible
    My puts? If i can get something out of them. If I'm way down I hold them as lottery tickets for the market crash that never comes.

    The calls, I buy to close them often with a 50% profit. If I am down on them (say a $40 COF call and the stock is at $41) I'll let my broker turn it into a short position - that way I take the profit of the sale and can close out the short position after OPEX.
  • Schwerepunkt
    4-pt range for last 2.5 hours. I should have slept through it like SSH.
  • just woke up from a mid afternoon nap

    can anyone say bulish pennant springing to 1122 points? or (iv) of v ending with probable (v)=(iii)?

  • hank30
    Seems right on target. And some more...
  • goldpackers
    May have just finished wave e of a triangle with 1118 spx the target
  • yes, could be 1118, I just eyeballed the mast and then said, what the hell, everyone's waitning 1121 so a small overboard's in order, but 1118 also checks with yesterday's unfinished bullish flag (missing an e at 1080)

    so if two classic TA say short at 1118, and everyone will be with tight stops of 1%...


    MOLE!, they'll give your 1130 (or my 1150) just to make sure no bear remains alive

    either that or (as in july) we wont reach 1118

    so... scale in 1/3 right now, if it falls, a further 1/3 at 1090 etc

    if it rises, scale in another 1/3 at 1130 and leave some for 1150
  • Guest
    I agree - there is no point trying to top tick this. I am sitting on dec 1050's put on in the high 1090's and I have no interest in doing anything for a while. We need to start breaking some supports.
  • WTFed
    I do love a spanking though.
  • goldpackers
    Probably many have done the same so they are on this "we are sorry" campaign.
  • WTFed
    They've already had Michael Moore show up at their door. I think they may be worried about an angry crowd of 20,000.
  • goldpackers
    I'll be one of them. Maybe we can get Rick Santelli to organize it.
  • K.I.M.
    anybody waiting for SPX for short if it breaks trendline again (hourly)
  • Gold_Gerb
    tempting..but the way SPY has been pinned to 111, my fear is the large put holders would take profits rather than face theta burn, causing a snap-back, and serve my head on a platter.
  • goldpackers
    Went to the GS website and sent them a seething e mail about how they are screwing the US taxpayer. Will not help, but I feel better.
  • WTFed
    I heard they made a statement today that they are sorry for their role in the credit crisis. Really.
  • Jan
    AND they had a pretty little skirt on CNBC this morning spouting about their charitable contributions to society. Really.
  • goldpackers
    Saw that.
  • They were infinitely better at PR when they said nothing.
  • Schwerepunkt
    You have now been identified as an enemy of god, an evil-doer, miscreant and rake. Beware. [only half tongue-in-cheek]
  • goldpackers
    Better watch my tax filing closely
  • goldpackers
    Wait, they took it all!
  • Schwerepunkt
    hehe
  • gsavli
    Yea, probably they will also feel better, when they see at least someone recognises their efforts :)
  • goldpackers
    This may be a fourth wave triangle in the spx. In wave d or e and spike out to 1117 to 1120
  • Me_XMan
    Wow.
  • amokta
    only 30-40 pts down on Dow - a slow start to P3 ?
    More seriously, RBS (UK) is down big, which is a more reliable indicator of market sentiment
  • Schwerepunkt
    NYSE TRIN is still solidly bullish (0.56), even though we're down. EUR testing HOD in the next few minutes.
  • gsavli
    Come on, it's time for turn on EUR.USD.
  • Just woke up but will be on the case after breakfast.
  • Gold_Gerb
    what does a vampire have for breakfast? a bloody mary of course!
    ;-)
  • gsavli
    OK, kill me stupid, but it seems today USD carry trade doesn't work in bulls' favor. Just like yesterday it wasn't working for bears...

    Plus, we are probably at turning point at the upper trendline of EUR.USD.
  • Carry'd me out on the stretcher overnight in fact
    ...not really, but cost me some good z's
  • gsavli
    Sure hope, you moved your stop just an inch higher ;)
  • no shit - doh!
  • gregn
    You described the Dow as the 'back of the rollercoaster', correct? Would you say that the Nasdaq is the front and the SP500 is the middle?
  • for the major indices, the NDX tends to be in front; in general yes
  • CorporalCarrot
    More importantly Greg, did you pick up that new Metallica Album yesterday ;-o
  • gregn
    Yes I did pick up Death Magnet yesterday, though I haven't had the chance to listen to it yet. I am going to pop it in now. Thanks again for the suggestion ;D
  • New Metallica album - for real??
  • CorporalCarrot
    I mean the last one, I made comments yesterday about how "the day that never comes" is ironically my least favourite song on it ;) and discovered greg was a fan until black album
  • Tronacate
    Only Metallica song I like is Enter Sandman

    http://www.youtube.com/watch?v=otuCPqrGd0Q
  • Jan
    mine too! i use it for my ringtone.
  • Busy at moment, but would appreciate a slick link for Rockford Files
    ...thx
  • CorporalCarrot
    NEW YORK (Reuters) - California Attorney General Edmund Brown said he has reached a billion-dollar settlement with a major bank over securities fraud charges.

    Brown said in an advisory he will hold a news conference at 1 p.m. eastern time. He did not name the bank.

    The settlement is expected to recoup hundreds of millions of dollars for California investors, the advisory said.

  • derekste
  • Gold_Gerb
    Looking at the SPX for the last few days, IMHO looks like a coiled spring, tighter & tighter.
    1pm would be a perfect time for all heck to break loose.
  • Gold_Gerb
    12:54 - missed it by <that> much.</that>
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