Get ready…

Just cleaning the slate here. I actually managed to sleep all the way through, which is surprising. Anyway, keep on your toes today. The markets and the Dollar seem to pull back a little and Gold, Crude, are dropping. I’m keeping a close eye on the Yen (@6JZ8) as this seems to be the best market indicator today (remember, it’s inversely correlated).

DON’T JUMP IN RIGHT AWAY. If the market manages to stabilize I expect a rally before a big drop. ONLY BUY ON RIPS, otherwise the market makers will have you for lunch today. Keep it together and don’t get emotional – this is OUR day.

UPDATE @ 9:49am: As expected the market makers are having their fun today as the indexes are all pushing up hard now right after gapping below at the open. I can’t make this clear enough: Wait to sell the rip!

This entry was posted on Monday, September 15th, 2008 at 9:27 am and is filed under Intraday Update. 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.

gagelle

This analyst in England on CNBC said a rate cut in the US won't do anything--it's already priced into the market. It may slow the descent a bit, but not by much.
angelo10

Looks like AIG is toast.
Serge aka "The Fork Master"

Dude! How can I be so stupid??! WE STARTED 3 YESTERDAY!
Doh! Now it makes perfect sense!
http://forkoholic.com/images/spxforking091508b.jpg
molecool

I thought that was pretty obvious from my weekend post. We are in a 3, 3, 3 - it'll be a nice slide...
angelo10

Well, from what I hear from the SP pit, no support here anymore. I will watch 1227.00 in the futures as a first level where the bulls need to take things for some kind of stabilization. Otherwise my short term target is 1272.00. It was a good day indeed. Thanks Mole.
molecool

I live to serve :-)

You have friends in the SP pit? Mate - keep us posted please. Input from pit traders is invaluable - these guys are among the few remaining 'real traders' out there.
T.B. Aurelius

Haha..
True that.
The most valuable of all, is in a fast plunging market, when FED starts to guarantee unlimited funds for buying to MM & specialists.
Capitulation time.
angelo10

I do Mole. Perhaps we can help each other out. All i can say is their targets now are as low as 1154.75..I will keep posting if you like here or over slope.
Let me know how I can email you directly.
molecool

Please post any input here - all evil speculators should be able to benefit.

Thanks again.
Serge aka "The Fork Master"

dude, is there a readio available to hear da pits?
angelo10

I think there is something out there. I don't remember the name, maybe traders audio or something like that. But I don't use that as I don't find it valuable for what I do.
C.C. Rider

Thx,CountryFried!Zman
DMS425

tt
molecool

Say what?
ZigZag

$TICK index closed at an all time low today. Probably means an up day tomorrow and an opportunity to reload the shorts on this dead cat bounce.....
molecool

And reload we will - massively ;-)
Serge aka "The Fork Master"

What can I say, people - that's an ugliest looking fork I've ever raised, considering many years of experience on my fork farm - very steep and outside weird
http://forkoholic.com/images/spxforking091508.jpg
Serge aka "The Fork Master"

also looks like ED with apex arount 2pm - Fed decision?
http://forkoholic.com/images/spxforking091508a.jpg
SteveInChicago (spsnomad)

This is great stuff, and it looks like nothing I've ever seen before!
Bartholomy

Yes, the fed decision will lead the dance.

We are now at last support, the fed will not let it crash.
I bet on a rate cut, gold is anticipating it as well.

Look the VIX record of 34 ... woooo
bergs

Serg

Looks like you split the fork between two sets of one's and two's?
Not to offend as I do enjoy your forks
molecool

Speaking of forks: If you get to a fork in the road - take it! -- Yogi Bera
T.B. Aurelius

If market opens gap down tomorrow, and somehow retraces back strong in impulse fashion, I know I will be super cautious.
toad 3,7

It looks like it will gap down, now we have to see if a rate cut causes a retrace...
T.B. Aurelius

There.
Now you can collectively set up your plans.
Everyone is on par.
Moontrader

Hey guys,

Everybody happy, here's my ideas:

http://moontrader.wordpress.com

Basically, the plunge scenario in the next days with a significant bottom either on 9/19 or 9/22 is absolutely valid.

Great trading to everybody.
gammatrader

Agree... I think we're going to have a few days of black candles -- maybe to 1100? -- before a bounce. I think the bounce will be tepid and at an extreme take us back to 1260, but more likely 1200.
Serge aka "The Fork Master"

yea right. We're just starting. Wait til October for 1100
Bounce up to 1240ish by early October
molecool

Extrapolating from the FXI, aren't we? ;-)
toad 3,7

I have way too much cash, appreciate any ideas for puts. I know I'm late, but I think we have some ways to go on the downside now. The questions always is- do you wait for a rip up or just get in tomorrow.....
toad 3,7

I currently have puts on AIG (if I was at my computer today I may have sold) COF, ZION, RTH and calls on the YEN.

Great day guys... wow... I have a lot of research to do for tomorrow.
T.B. Aurelius

Toad37.
Be careful...
One disadvantage of late comers are, that they over magnify reward, and become desensitized to risk.
So please exercise caution, especially if the market gaps down tomorrow.
toad 3,7

That is excellent advice. I will listen to you on this. I bit my trading fingers and wait for an entry that feels right. There was a lot of wisdom in your post, I appreciate it.
molecool

Entries are your top concern before you entering a trade, and are your least concern once you've taken a trade. I know, it's a bit of zen riddle...

Whatever you do, don't chase the market. What you should 'feel right' about is the general direction of the market (of the day, week, month - whatever your trading window is). Then wait for your entry signal and execute. It's not that complicated, really - most people make too much out of it. Of course, the question is whether or not you have a system with an edge that defines your entries and exits. If you don't have that - DO NOT TRADE.
toad 3,7

Zen riddles, my favorite! Please let us know when/if you reload/add to your puts. With this AIG drama right now, it looks like tomorrow we gap down.
molecool

Tomorrow's shopping list (assuming no rate drop):

DRIV, LDSH, CMI, TGI, USG, PFCB, SCHN, CVH, BDC, PEG, KO, WTI, DRYS, EXM, MON, MOS, POT, NUE, FAST, DF, CF, TRA, CMP, MA, DF, FWLT, IOC, FPL, VOD, PC, STR
toad 3,7

Molecool, are you planning on outright shorting these or buying puts. If puts, OTM Septembers? Thanks, and congratulations on some really great calls lately. I would have posted more today but I just got home from a road trip to Vegas this weekend. Looks like I didn't miss much though huh? hehe :)
molecool

Yeah, boring day...
jcoors

Are you hedged against your puts?
molecool

Are we having fun yet?
molecool

BTW, in case the Feds actually lower the interest rates (again, which I doubt): Remember that a decrease in interest rates decreases the value of Call options and increases the value of Put options.

Either way, we win! :-)
gammatrader

You're a smart cookie, but we all know that lowering rates won't affect the put value as much as a pluuuunge into the depths. :-)

Agree with you about the no-rate-cut. If they wanted to piss off the Chinese, holders of over $1 trillion (in my best Dr Evil impression) in treasuries they would've saved Lehman Bros. No point pissing them off now by lowering rates.
molecool

Let's hope we're right - 5 minutes left to change our mind ;-)
gagelle

I have to laugh at this. This analyst on CNBC said that your money is safe in a mutual fund because it provides "broad diversification."
gagelle

Man, wish I could day trade.
SteveInChicago (spsnomad)

I think everyone has their own timeframe. I seldom move in and out of positions in the same day (my day job involves travel.) Find the one that's right for you, and move more quickly when it feels comfortable for you and trade small in those positions until you feel comfortable.

That said, get your popcorn ready for wave 3. If you're holding a lot of positions tomorrow morning moves against you, hang tight... You'll get another whack at it before this is over.

And if they cut in the morning, I'm planning on scaling back in short at 1200, with larger positions at 1220-ish with dry powder until 1260 if necessary to be extremely cautious. I closed out half my position at the close, so I personally feel pretty good either way.
molecool

WRONG - position yourself for the big drop, gagelle.
molecool

What I'm holding right now:

Short: BTT, BGC, BIDU, BWLD, C, CCJ, CME, DECK, GCI, GOOG, ICE, LM, LVS, MBI, NIHD, OI, RIMM, RKH, TXT, UBS, WB, WYNN, XL, XLU, IWM

Long: PAAS, DBS, GIS
lisa

my shorts:

My shorts: FSLR, SOHU, ENER, FSYS, BIDU, RIMM, QCOM, LM, COF, XLF, XHB,PHM, POT, CF
Long: SKF, SDS,
molecool

looks like a very nice list there, Lisa. QCOM wasn't on my radar but is NOW ;-)

I don't like FSYS, unless this is a long position - a lot of strength there.
lisa

With current market condition, FSYS will soon turn bearish.
gagelle

BLK is off its highs. I read that they had a large Lehman position. I was surprised when it opened up today.
SteveInChicago (spsnomad)

Just thinking that conventional wisdom about BLK might be that once things bottom, they can go in and buy a bunch of assets on the cheap. Berkshire Hathaway was up today for the same reasons (although it makes a lot of sense in that respect. I can see Buffett swooping in with his big pile of cash and buying a lot of AIG assets at the impending fire sale while nobody else can get liquidity.)

BLK did finish down today, and it's at the top of a range, so there's a nice, easily defined stop loss.
Balcor

New to all this.. any suggestions for immersing myself in all this stuff so I can learn?
molecool

Keep coming back here. Follow our analysis. Trade real money. Study anything you can get your hands on. Expect to lose but prepare yourself to win. Learn about cognitive biases and how to defeat them. If you can overcome your emotions you will be able to see the markets for what they are - not for what you want them to be.

Don't give up. Only one out of 100 succeed - now that you know that, ask yourself if you are one out of 100.

In any case, you will need to find your own path.
molecool

Triangles breaking right now:

http://screencast.com/t/FabMgbv3Z1L
C.C. Rider

Watching DJI 11,205 resistance and 11,078 support.I think sub 11,000 gets tested today as a warmup for tomorrow.Bernanke is locked in to keeping rates the same no matter what the street wants.It would look panic driven and scare investors more.I think the street then sells off hard on the news to find a short term low probably Wednesday morning.
molecool

Agree with you there. The futures traders all seem to indicate a drop to 1.75 which is wrong IMHO. They know that dropping the rates will not make a difference as the bank spreads have remained the same. Nobody is lending to each other. If the Feds would actually drop the rates it would be a panic move and then trigger the Chinese to sell treasuries.

Either way we win :-)
T.B. Aurelius

Ye Jedi turtle~
Dropping the rate may not make a difference in anything, but it doesn't mean insane rally won't happen either.
When can you ever remember Right was preferred over Wrong consistently in the market?
Besides, all the institutions holding truckload of these cesspool stocks have undeniable need to churn and unload them onto naive public.

Picture this if you would :
"FED has just slashed rate by a whopping 1/2 point!" reads bloomberg headline.
>>>!Pop! indices shoot up sweeping all the stops by shorts, CNBC pumps and pumps, pop pop pop pop pop...
>>>A little bit of yoyo; drop>>pop>>drop>>pop
>>>Major churning, only bag holders change...

At over stretched level, I think it is relatively easy to set this gig up.
And if it is in play, MM will no doubt act out a severe shake out to pile up an inventory.
I reckon the importance of volume watching is a due.
Serge aka "The Fork Master"

Hey Mole, Berk
I was thinking about creating Financial SocNet like for zillion years now. With charts, analysts, subscribtions, maybe add TV like YorbaTV + multilanguage - russia/china franchises etc

you look like 2 decent gals, what do you say if we try to get some venture capitalists using your charm? ;-))
molecool

We are lightyears away from being able to attract VC money. I know that space - have worked in Silicon Valley back in the dotcom days. Perhaps once ES gets a few hundred postings a day, and maybe after we are proven right about the market drop. It's way too premature to even think about ES 2.0 - just getting started here and unless I have 1/2 the traffic of the slope I won't even bother thinking about it.
T.B. Aurelius

Warrior holds his saber, with all his heart pouring into his grip as his will flows toward infinite, has already defeated his enemy.
Juggle many at once, wishing to benefit in all that he can imagine, scatters his power and lost his battle already.
Stay pure not in a sense of mundane, but more in line with "Not distracted."
molecool

Beautiful - couldn't have put it any better. I think we've got a good thing going - and once it's time to make another step forward we'll know.
T.B. Aurelius

Corrupt not! these fine able turtles!!
molecool

Do not worry master - we learned to resist the dark side of the force.
Serge aka "The Fork Master"

What does that mean in English???
berkshire

Grab a quick refresher in Star Wars, and he might make a little more sense!

Skål!
gagelle

molecool, any changes to your position on silver?
Serge aka "The Fork Master"

did Lehman or any counterparty had silver positions?
they may liquidate if they need to raise capital
just a thought
molecool

Things are pretty fluid right now but I still think that $10 is pretty defensible right now. You might want to wait until the market makers are done unloading positions. I myself am waiting for a good time to drop my Gold puts as I don't think it's gonna drop once/if the market tanks.
gagelle

Thanks molecool.
calibear

Wise advice. I unloaded some positions at open, ready to reload. May not add until after tomorrow's announcement.

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