Always Keep An Open Mind

2:50pm EDT: Well, I hate to say this… but I TOLD YOU SO!

Trust me – this was not an easy call to make – the tape looked extremely weak today and without doubt I would have received a lot of ridicule had we dropped through the floor today.

I even went so far as to post a warning over at the Slope – and received much ridicule in return. Based on the vote counts added to the snide remarks it seemed that many over there shared CCRider’s disdain for me personally and my analysis.

Well, as I pointed out in my response (which I tried to keep as friendly as possible but I’m evil after all) – it’s always best to keep an open mind as a trader. Enough said.

BTW, geronimo is kicking ass again today – three out of three – insane….

3:30pm EDT: Okay, careful now – we might see a sell off into the close – the next few minutes will be key. A lot of air between here and VWAP on the ES (997.5). We could also simply test VWAP on the NQ, which was a bit weak today (1613).

3:35pm EDT: Wohaaa! things are moving fast now – we are now at 1613 on the NQ. If it does not hold we could see a nasty drop here. Frankly – I recommend staying in cash as this point – don’t get sucked into this.

This entry was posted on Wednesday, August 5th, 2009 at 2:55 pm and is filed under Interventions, 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.

Tronacate

Anybody see any hiring on the horizon? I can't see any kind of recovery with companies meeting low earnings expectations by cutting all the jobs.
Seems we're rolling down a hill with the snowball getting bigger. What will the market do in a full blown collapse of the dollar?
molecool

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dollar

A little taste of how they do when they run the whole thing:

Billions of Dollars Lost in US Postal Service… Blood in Mail

The United States Postal Service is out with its quarterly filing of earnings, and it is not pretty. In fact it is uglier than a head-on collision. The quarterly report dated today shows a loss of $2.382 billion. That compares to last year’s same quarter loss of $1.105 billion. Revenues were $16.339 billion, down from $17.91 billion a year earlier.

http://247wallst.com/2009/08/05/billions-of-dollars-lost-in-us-postal-service-blood-in-mail/#more-43248
Tronacate

The USPS is a service.....not a business. Their ability to get a greeting card or handwritten letter from one side of America to the other for under a buck is a treat.
The priority shipping box for a flat rate beats the UPS and FED-EX setup hands down. I have had several packages lost by both Fedex and UPS.....never had a problem with the USPS.
Their business is down like everybody elses. The fact that they aren't paying a CEO 40million with jet perks makes me at least have a little sympathy for their plight.
wex

Mole
Good call today. Why do you get into bickering with the guys who disagree with you at SOH. That commentator turned out to be wrong in an obnoxious way and probably paid a price in his account. You're not going to convert position biased trader with nasty remarks (no reason why you would care about him) but you do distract yourself from your mission here and as a byproduct distract the rest of us. Just my opinion. Worth what you pay for it.
amokta

quick question - whats the longest duration one should hold faz or fas (i believe they intrinsically have decay if held too long). if i have 5-10K to play, is it worth using these?
Mr. Burns

IMO, that's not enough funds to play...I trade with 10% of capital per position and have tight stop-loss (4% on a position). These vehicles will prove you wrong in 5 minutes or less.

Unless you have a crystal ball...then go for the OTM options on the 3x ETF
CaptainAnarchy

I try not to hold levered ETFs for more than a week and a half. Both because of the decay, but more because the cycles often turn before then, and I'm mostly a swing trader.
string01

All the 2x and 3x suffer from decay. If you get on the right side of a trade, run with the momentum. If you get on the wrong side of the trade, take the hit and get out as fast as you can.

My biggest loss this year was from holding FAZ too long when I was on the wrong side.

I'm not sure why everyone is so mezmorized by fas/faz the other 3x etfs work the same way, and the bgz/bgu etfs track the spx/indu pretty closely.
fuw

The decay depends on market action (comes from chop-chop) and is not intrinsic. In a market trending strait in one direction the compounding work in your favour. But Direxion suggests that their funds should only be used intraday or over shorter periods of time.
Keirsten

IMO, no. Daytrading vehicles only.
amokta

cheers!
2SWTrading

Hey Mole/Eric,

Geronimo today made a great job, once again, congrats!

Actually I am starting to hate it because sometimes I take a short trade on RL Hourly with good odds and Geronimo comes and says: GO LONG.

And I am like: shit...

I hope here people is a bit less pasdaran than on other blogs and recognize the value in what you do...

cheers,
2zweetiez
Douala

End of day stats http://tinyurl.com/lh3cl3
BigHouse(Aka Mr Vix)

They real key is what the CEO says on the conference call looking forward...Not the results

CSCO
string01

Maybe a leg and grundle pattern here.
TheMacroEconomist

Gonna be holding my long position on Cubes thru the close...CSCO better no disappoint... ;)
AudioTactics

I started to initiate shorts again at 100.75 in SPY but only got a 1/3 off and market came off nicely so I covered at 100.25. Just going for singles and sanity these days! Given the move up from the lows, investors still need to buy.

I still like getting short this market and I think Friday's number could be the catalyst for a more durable down move but for me its all about getting in above here near the 1010 level. For the bulls, hold your nose and buy is getting to be a risky strategy.

And USD bouncing a bit now.
rhae

think I will watch CSCO it has had a good run... every quarter last yeari t has pulled back after earning. Maybe this time it will be different...
bshah

Range bound again ( Hostage situation ) Dow 40 - 50 -ve till 3:58.. SPX - ( -3 ) and then hurreee..
+ve..
Scrillhound

Joining the FX crowd... I've been quietly paper trading it for a while now with good results but finally funded an account. Short EUR/ USD from 1.443..

Closed INTC puts today at a slight loss. I don't think that will be as fast a mover as I hoped and I don't want to burn theta day after day..

Still holding longs.
rhae

I was reading some interesting articles on Behavioral Economics... Main point, don't get over wrapped up in pure TA
dollar

Yeah, you could go blind, should quit watching Cinemax all the time.
m123456

i can't believe the market may actually close in the red. Is that allowed? sorry don't want to jinx anything there's still 11 mins. ps. I'm am going to literally leave the country if we close positive again.

ps I love that SEC is looking into GS and they are up almost 3 bucks. if they go to jail will the stock triple?
string01

Re-established some small short here.
The trend line we broke and retested is the 2-4 line from this 7.8.09 wave up.
I think there's enough POMO on the net now that GS et. al. may sit this one out or even sell it. Let all the POMO leeches get smoked trying to ride their coat tails

Also, $USD is turning no. again
BigHouse(Aka Mr Vix)

Anyone who was short Financial are all but gone now after today.....
Keirsten

So which sectors have they creamed the past two weeks- Bios, financials, some of the tech names... just trying to remember who's next to get the deck cleared so they can then take this thing down.
CaptainAnarchy

Emerging Markets - check
Energy - check minus?
Transportation - Check
Casinos - nope
Solar - Not much
Semiconductors - Not in the past three weeks - appears to be topping on weekly candles
Shipping - Check

I got out of ERY this afternoon. Holding onto some TYP for a few days to see if the flag breaks out on volume. I think I'm going to go for some crap stock daytrades to keep a revolving bit of settled cash for when the break finally hits.
colonel_bleep

Good call on the whip, Mole, & the late selloff here.

BTW, you are one funny 'sum bitch.
rhae

When Uncle Buck started to rise at about 3:00, I became suspicious of a strong close... just keeping an open mind :-)
Keirsten

Chicken- looks like they're battling to hold that support on XLF here.
StainlessSteelChicken

I have the real support at 13.80, 14 is the ol' "round number" support
dollar

Gotta be a substantial give back on this insanity today, no?
Keirsten

They'll pump it to dump it, we don't get to know when the dumping truly begins. All I can say is- anyone who was stuck in AIG on the original slide has got to be second guessing if they should get out now with half a pair of tidy whities left to wear.
CaptainAnarchy

Looking at how the ramp came early and now we're getting a pullback....

I think the POMO is being front-run already. Which may have some perverse effects. Once enough traders buy into this trade, it could become a bit of a self-fulfilling prophesy. Then the fed doesn't even need to kick it off anymore.
dullmind

I was in the shower and missed your post on Slope, but I would NEVER point up CCRider's response. You are the BEST
Mole. Still short, and staying that way. Keep up the good work!
MJSgl

Stopped out for a 35% profit. I'll take it every day.
pricey

Nice job Mole.....My Hero!!!!
dollar

Does anyone have any specifics about that "unwind" in the financials that ZeroHedge was talking about? Looking for an unwind of the inwind: long faz
CaptainAnarchy

Might have something to do with the mysterious 175/75 trade he's been mentioning. I can only assume he's deep inside the hedge world and privy to strategies that are talked about over lunch in lower Manhattan.

The 175/75 refers to the leverage on the long and short positions, but there seems to be a further implication about what the paired trades are which I don't quite get.
molecool

I think it was related to AIG - some covering triggered by calling in some shorts. I think... not sure...
da_bear

WE'RE NOT WORTHY. WE'RE NOT WORTHY.
MJSgl

Mole, so right, man, so right. I've been "dirty" now for about a week and have made killings - just keep buying the dips. It's like clockwork, the rampup job. Anyway, if you can't beat em, join em. And, if the day comes where the rampup job doesnt happen, then I have nice tight stops and no big deal, I lose a bit. But riding that midday rampup is too, too easy right now.

Disclosure: I finally cut bait and sold my way otm SPY puts; now I don't feel so conflicted. However, if black swan happens, i miss out.
mrclam

Don't worry about a black swan, hopefully we'll all know when it happens, and we can get in, if a little late to the party. Trying to time the top can kill you capital wise, especially if you don't have good position management.
MJSgl

Yah, I hear ya. On the first, the "hopefully" is the big if.

On the second, so true -- I started making money when I realized trading is like blackjack (except you can play the house side, too, in trading)...consistency and money-management are the keys. I.e., have your rules, entries, exits, etc. beforehand and stick with 'em (translates to don't think about the cards, just know whether to hit, double, stand, etc. for everything out there), and don't put too much capital into one trade and have stops always (translates to don't bet too much on one hand and have defined rules for progressive increases in betting).
Me_XMan

DIE! DIE! DIE! WHY WON'T IT DIE!!!
CaptainAnarchy

Beneath this mask there is more than flesh. Beneath this mask there is an algorithm, Mr. Creedy, and algos are bulletproof.
molecool

At least you're keeping a cool head...
Guest

Good call Mole - I bought the dip this AM as well... although I don't understand why everyone was dumping on you. Buying the dips has been the thing to do for the past while, and that trend has yet to change. I am as bearish as the rest of us here but ... I like to make money much more than being a perma-bear.
molecool

I pissed off a few people over at the Slope the other day because I was the only one who dared to point out that all public outcry of emotional support due to Tim's dog dying was sanctimonious overkill. As you can imagine they started fuming at the mouth as I wasn't drafting an official condolences letter and instead suggested to put the whole affair in perspective (with what's going on in the rest of the world).

Funny enough - Tim, being a friend of mine, emailed me and told me that he really didn't care as it was a personal thing for him.
BigIslandLife

yes that was a nice debate you had with them all, even got your self called an atheist LOL well you are german so that might be so, but the crying over a dog got out of control and you just put it in perspective. good job as always Mole
DavidDT

hi gang
just got home, lots of sell signals into 3:30PM

P.S> nuh, not getting involved in this casino now
DavidDT

looky-looky - sold off exactly at 3:30 (/NQ)
amgrant

A random walk through what?

http://www.ambgtrading.com/2009/08/random-walk-my.html
thunda72

There's been, like, 4 bull flags on the 5-min SPY today. new one forming....
Onorio

Short EUR/USD @ 1.4430

5 waves up from the LOD, new high, might finished this 5th...im gonna take the risk.
Anna

Joining you on that one O! :)
fa_q

My EW has 1014 SPX as the top but 5th waves can terminate. I have my last 1/4 to short set at 1010 on ES. The move in IYR is just legendary blowoff material. 5 bucks will be coming off of that. I have patient money.
Anna

CC is a jerk, he constantly put people down here as well as you! Glad he's gone, and I really don't have too many negative opinions on people, but he is one that I do have one on.
He is just bitter that you were right and he was wrong, he did the same to me!

Forget him, you did a good job Mole!
Lordted

Hey. lots more fun on Slope Mole really had a go - very entertaining... good on you Moley

Anyone still short from the drop will be sad about now... Hope all got out here...
Anna

I know. That guy (CC) sounds like an old shrew!! heheheh
migueladron

Mole, thanks for the call, and point up to zerohedge as well for researching POMO. Jumped on FAS and up 9 percent today.
dollar

Treasurys declined, pushing the 10-year yield +0.08 to 3.76%, its highest since June 19
BigHouse(Aka Mr Vix)

Its all financial today.....CSCO will be key tonight.Tech weak for the last 2 days..
ropey

Yeah maybe the catalyst for the 1015-1020 level - i have some shorts right at the peak here but may bail before the close, breadth too strong.
Douala

"...without doubt I would have received a lot of ridicule had we dropped through the floor today....vote counts added to the snide remarks it seemed that many over there shared CCRider’s disdain for my personally and my analysis."

Mole......... don't forget...the Great Ones are ALWAYS misunderstood or sneered at. That comes along with the title of being a great [in this case a great trader]!

I say GOOD JOB for sticking your neck out and making that call.
Me_XMan

No no... That's my I told you so. The damn fricking SPX gonna run to 1014 before crapping out.
US$ crapping out. VIX crapping out. TLT crapping out.
InflatorGauge

Anybody here has seen GGC? looks ready for a drop after the squeeze it made, comments?
itsgold

I would trade Geronimo, but i just don't have the funds to do it.

On the other hand, its getting a little too easy trading this tape. Just buy the dips or troughs and wait for elevator up to the next floor.
Mr. Burns

Took some partial profits on FAS...that damn thing can take my head off any minute
shortcover

you've got the better play...my FAZ dropped 5% on me in a heartbeat...
Duuuuuude

Equities climbing while the dollar works lower. Commodities looking weaker as well. I find that correlation curious.
v8muscle

Maybe?

(/ES chart) http://screencast.com/t/dGI1pVpY2
StainlessSteelChicken

The only problem with that chart is that it conflicts with the fundamental truth that stocks go up forever and "now" is always the time to buy.
v8muscle

I apologize for the blasphemy. Never again will I question the omnipotent financial genius Dennis Kneale. I'll now go liquidate my bank accounts, sell all my assets, and buy as many shares of SPY as I can manage
StainlessSteelChicken

Wait until 1020, then buy ;)
StainlessSteelChicken

XLF - $14.33 is the next speed bump per the chart I posted yesterday. The fan at $13.80 is now important support.
http://tinyurl.com/pmb2hw
Keirsten

XLF over the coveted 14 mark
thunda72

Nice.... I've been watching since you mentioned it. up up up

Always Keep An Open Mind

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