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Re-Hedged
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Re-Hedged

by The MoleJanuary 21, 2009

UPDATE 9:49am EST: I just used the little swing below to leg back into my spread. Took a bit of a hit this morning but added to the profits I made yesterday I’m break/even for the past 2 days. Not great but that’s how it goes sometimes – market likes to throw you a curve ball – roll with it and don’t have an ego. I’m going to watch this action for a while and it will take some real downside conviction for me to leg back out. We breached the 917 line on the SPX for a second time now (which is pretty bullish) and I prefer to play it safe until I get a better feel of where we’re heading.

UPDATE 10:32am EST: Sorry for the outage, guys – my hosting company keeps having difficulties. I would move to a different hosting provider, but they all suck in one way or the other and mine is supposed to be one of the best. Might have to upgrade to a co-hosted box soon, but it’s not cheap.

UPDATE 10:55am EST: There is practically no momentum in this market right now – thin tape continues, which makes me a bit nervous. Of course it’s tempting to unwind my hedge here but I won’t right now. Whenever things start looking erratic it’s usually best to take a step back and do nothing. The complete lack of momentum is disconcerting – anything can happen at any time. It’s treacherous out there today, be careful.


About The Author
The Mole
Mole created Evil Speculator amidst the chaos of the financial crisis in early August of 2008. His vision for Evil Speculator is a refuge of reason, hands-on trading knowledge, and inspiration for traders of all ages and stripes. You can follow him and his nefarious schemes at various social media waterholes below.
  • bender_b_rodriguez

    /6j (yen) just spiked up…if it comes down as fast would that be considered a bullish sign as well?

    conversely, if it stays up is that bearish? thanks in advance

  • Paleface

    USD/JPY falling

  • Greenie

    check your numbers ol'evil one….your eyes deceived you or your fingers should be cut off bec they lead you astray

  • JWBlack

    Is the Zero working? My screen shows it stopped at 10:05 EST.

  • MaxPainMan

    yeah, i think this site also went down. maybe related?

  • JWBlack

    OK, thanks.

  • Paleface

    USD/JPY moves with SPX (not always!) so /6j is opposite

  • BigHouse(Aka Mr Vix)

    XLF following out of bed again

  • alphadriven

    I am willing to give a donation to help pay for the server change. Anyone else willing to contribute?

  • TroyMcClureRIP

    Maybe he can work out a cost sharing agreement with 2Sweeties and we can have a 2 for 1.

  • molecool

    Sorry guys – server gets overloaded sometime. Not sure why – have a cache running and all that jazz.

  • http://gemstowear.etsy.com Jan

    I am willing.

  • molecool

    I would prefer to wait until the Zero goes subscription. If that doesn't work out then I might either have to resort to donations or put up ad banners (shudder).

  • molecool

    Not sure what you're saying….

  • BalaB

    Heads. Something is up with WFC.
    The rest of the big guys are up respectably (C, BAC, JPM)
    Perhaps purchasing Wachovia was a bad idea

  • geckoman

    I called this held the April puts for a couple hundred percent now kicking myself for not riding it down even more. yes greedy but happy with decision to close out those puts two days ago.

  • geckoman

    posts below point to Yen..I see a spike just happened.

  • molecool

    I guess it pays to get up late – LOL :-)

  • Enfinity

    Bull crap…you're listening to the ass from Omaha. WFC has huge California exposure and was a very large Alt-A buyer. JPM was not a big player in residential RE, but they are a big player in the commercial space. Commercial loans were originated much better than residential, but the risk profile is different (justifies strict underwriting) and commercial RE lags residential trends. That goes without stating the obvious problem with JPM, they're a CDS exchange.

    JPM is the best of breed, but WFC is crap.

    :)

  • OptionsRMe

    Doing the dance with 800 again. Time to trim the hedges!

    Oprions-R-Me

  • Paleface

    I use 5 min EUR/USD, USD/JPY, XAG/USD, XAU/USD as indicators. All 4 is falling. It's unusual.

  • standard_and_poor

    If we hold 802 we'll see at least 822, I'll add with a close stop, this increase should be fairly quick
    otherwise don't trust it.

  • geckoman

    Excellent intro for your resume :)

  • standard_and_poor

    Oh yeh, place a very close stop.on addl. puts. No cute stuff such as longs or calls unless it's a strict hedge.

  • Dimitry

    yen /doll drops from 90.20 to 87.20 in 30 min. II say crush is imminent

  • http://www.shadestrades.blogspot.com shadestrades

    Mole, I would be willing to pay say $20 a year for the site. I would do the same for SOH too. I realize that might not seem like a lot, but if you get 100 people, that's 2K towards Hosting upgrade. The rest gets you a value meal somewhere.

  • Donna

    LOL!

  • mrktneutrl

    I'd pay 20 per month – heck, just for the people I have met here it'd be worth it.

  • standard_and_poor

    Above all don't get scared out of your puts, if you feel nervous you should be hedged per Mole's
    guidelines. Hang on, the payoff will be worth it.

  • BalaB

    Nothing wrong with making Evil Spec. a pay for play service, especially considering Zero.
    I applaud 2Sweeites for doing so. Makes sense. He (Mole & Berk) have proven an added (exceptional)
    value.

  • molecool

    Did you sign up over at his site?

  • molecool

    I'm having mixed feelings about since we dropped so much again but there is a thing to be said about being delta neutral during whipsaw periods.

  • Sal

    what is 2Sweeties url?

  • Enfinity

    Thanks for reminding me about the jumbo and any doubts about WFC alt-a should stop considering the own golden west.

    As mentioned before, JPM is best of breed…doesn't make the common good for anything long-term though. The BKX has been trading like common holders are going to get virtually wiped out a la AIG/FNM/FRE.

    :)

  • Sal

    Yes I will pay for Zero. Donation or subscription either way he chooses

  • Stretch

    I'd say the same thing. $~30 bucks a month llke the retracement-level.com seems a little high when a lot of us newbies aren't sitting on $25k to day trade with. We have all the fees and other crap to deal with already. I'm certainly learning a lot from the zero and this site but paying hundreds of dollars a year is too much. And the reality is, most Internet sites (not stock market related) which close membership lose their edge shortly thereafter. The constant influx of new mixed with the old is where strength is found.

    A truly nominal fee can work (example metafilter.com) but the nytimes select utterly failed .

  • maya

    Mole
    “I'm having mixed feelings about since we dropped so much again but there is a thing to be said about being delta neutral during whipsaw periods.”
    if we close above 820 are we back to wave 4 or are we for sure in wave 5?

  • BalaB
  • TroyMcClureRIP

    You wouldn't meet many new people once the fee went into place. This is the equivalent timing of Blackrock going public.

  • Victor Berry

    Any guess as to the ultimate bottom of the S&P 500? Using round numbers, 350 seems plausible [i.e., 1550 (100%), 1100 (62%), 950 (50%), and 800 (38%)] … yes/no? If yes, any guess as to when?

  • standard_and_poor

    If we don't get to 822 soon, watch out below!

  • rhae

    Looks to me like they dropped below SPY support and cleaned out the overnight stop lmt orders. My line is 81.03 on SPY and not to concerned for bulls unless breached with avengence

  • http://gemstowear.etsy.com Jan

    I signed up last night.

  • mrktneutrl

    good one. I think mole was planning on doing real time email alerts and what not though.

  • Kurious

    they are walking SPY up on very low volume. frustrating

  • DMS425

    WFC has the most CRE expose to CA. That is their problem! I love your observation. The financials will not hold a rally without the last AAA bank participating (WFC).

    +1

  • DMS425

    Pull WFC's 10Q and read the MA&A and footnotes, it will be in there. Look for level three assets, they are broken down. Look for changes Q over Q and Y over Y, in L3 accounts. Go back a year for these moves you will not find them today they did this last year and in 07'.

  • molecool

    Zero is flat – I usually take that as a whipsaw alert.

  • molecool

    I'm not completely sure yet – let's wait till the end of day. As I said in my prior post – those scenarios are still in play until we breached the bottom of the B wave.

  • molecool

    NEW EVIL DEED.

  • b_rad

    Dear Mr. Deep Pockets,

    As our new Prez said yesterday: “an [awesome website] cannot prosper long when it favors only the prosperous. The success of [this website] has always depended not just on the size of our [bankroll], but on the reach of our prosperity; on our ability to extend opportunity to every willing heart — not out of charity, but because it is the surest route to our common good.”

    :)

  • DMS425

    I like that!

  • rhae

    I f anyone calculates their own numbers, they can be checked for accuracy by stutter points (imo) … I had 82.10,,and next 83.04

  • http://implicittrading.blogspot.com/ BalaB

    nice trade.

    WFC and JPM were by far the most conservative (to be taken with a
    grain of salt) among the lenders during the boom.
    Just goes to show we're screwed.

  • bender_b_rodriguez

    /6j (yen) just spiked up…if it comes down as fast would that be considered a bullish sign as well?

    conversely, if it stays up is that bearish? thanks in advance

  • Paleface

    USD/JPY falling

  • http://implicittrading.blogspot.com/ BalaB

    I'm gonna have to disagree with you there.

    Wells didn't portfolio their Alt-A products only their Jumbo A paper.
    Now, one can make an argument A paper is going to be hit soon but it
    still remains WFC and JPM were more diligent than the others (although
    that doesn't say too much)

    : )

    p.s. As for CRE, I'm not convinced JPm really is holding the bag here. IMO, regionals are on the chopping block.

  • Greenie

    check your numbers ol'evil one….your eyes deceived you or your fingers should be cut off bec they lead you astray

  • JWBlack

    Is the Zero working? My screen shows it stopped at 10:05 EST.

  • MaxPainMan

    yeah, i think this site also went down. maybe related?

  • JWBlack

    OK, thanks.

  • Paleface

    USD/JPY moves with SPX (not always!) so /6j is opposite

  • BigHouse(Aka Mr Vix)

    XLF following out of bed again

  • http://implicittrading.blogspot.com/ BalaB

    of course

  • alphadriven

    I am willing to give a donation to help pay for the server change. Anyone else willing to contribute?

  • TroyMcClureRIP

    Maybe he can work out a cost sharing agreement with 2Sweeties and we can have a 2 for 1.

  • http://evilspeculator.com molecool

    Sorry guys – server gets overloaded sometime. Not sure why – have a cache running and all that jazz.

  • http://evilspeculator.com molecool

    Yes, that was a huge spike – seems some big FX traders decided to roll out of bed.

  • http://gemstowear.etsy.com Jan

    I am willing.

  • http://evilspeculator.com molecool

    I would prefer to wait until the Zero goes subscription. If that doesn't work out then I might either have to resort to donations or put up ad banners (shudder).

  • http://evilspeculator.com molecool

    Not sure what you're saying….

  • http://implicittrading.blogspot.com/ BalaB

    Heads.

    Something is up with WFC.
    The rest of the big guys are up respectably (C, BAC, JPM)
    Perhaps purchasing Wachovia was a bad idea

  • geckoman

    I called this WFC debacle, held the April puts for a couple hundred percent now kicking myself for not riding it down even more. yes greedy but happy with decision to close out those puts two days ago.

  • BigHouse(Aka Mr Vix)

    WE are back to the slow drip down play. Got to love it. Waxing my surf board .Ready to ride another wave down.

    As Oscar says “Don't fall in love with the upside” LOL

  • standard_and_poor

    So far I see this as a simple correction, I will add to shorts at about 824 if we go back up. Good morning everyone, or should I say good mourning (every one seem so somber).

  • geckoman

    posts below point to Yen..I see a spike just happened.

  • http://evilspeculator.com molecool

    I guess it pays to get up late – LOL :-)

  • Enfinity

    Bull crap…you're listening to the ass from Omaha. WFC has huge California exposure and was a very large Alt-A buyer. JPM was not a big player in residential RE, but they are a big player in the commercial space. Commercial loans were originated much better than residential, but the risk profile is different (justifies strict underwriting) and commercial RE lags residential trends. That goes without stating the obvious problem with JPM, they're a CDS exchange.

    JPM is the best of breed, but WFC is crap.

    :)

  • standard_and_poor

    I never claimed to be a hard worker. LOL

  • OptionsRMe

    Doing the dance with 800 again. Time to trim the hedges!

    Oprions-R-Me

  • Paleface

    I use 5 min EUR/USD, USD/JPY, XAG/USD, XAU/USD as indicators. All 4 is falling. It's unusual.

  • standard_and_poor

    If we hold 802 we'll see at least 822, I'll add with a close stop, this increase should be fairly quick
    otherwise don't trust it.

  • geckoman

    Excellent header for your resume :)

  • standard_and_poor

    Oh yeh, place a very close stop.on addl. puts. No cute stuff such as longs or calls unless it's a strict hedge.

  • Dimitry

    yen /doll drops from 90.20 to 87.20 in 30 min. II say crush is imminent

  • http://www.shadestrades.wordpress.com shadestrades

    Mole, I would be willing to pay say $20 a year for the site. I would do the same for SOH too. I realize that might not seem like a lot, but if you get 100 people, that's 2K towards Hosting upgrade. The rest gets you a value meal somewhere.

  • Donna

    LOL!

  • mrktneutrl

    I'd pay 20 per month – heck, just for the people I have met here it'd be worth it.

  • standard_and_poor

    Above all don't get scared out of your puts, if you feel nervous you should be hedged per Mole's
    guidelines. Hang on, the payoff will be worth it.

  • http://implicittrading.blogspot.com/ BalaB

    Nothing wrong with making Evil Spec. a pay for play service, especially considering Zero.
    I applaud 2Sweeites for doing so. Makes sense. He (Mole & Berk) have proven an added (exceptional)
    value.

  • http://evilspeculator.com molecool

    Did you sign up over at his site?

  • http://evilspeculator.com molecool

    I'm having mixed feelings about since we dropped so much again but there is a thing to be said about being delta neutral during whipsaw periods.

  • Sal

    what is 2Sweeties url?

  • Enfinity

    Thanks for reminding me about the jumbo and any doubts about WFC alt-a should stop considering the own golden west.

    As mentioned before, JPM is best of breed…doesn't make the common good for anything long-term though. The BKX has been trading like common holders are going to get virtually wiped out a la AIG/FNM/FRE.

    ps – They also have an $80b heloc portfolio that's rotting.

    :)

  • Sal

    Yes I will pay for Zero. Donation or subscription either way he chooses

  • Stretch

    I'd say the same thing. $~30 bucks a month llke the retracement-level.com seems a little high when a lot of us newbies aren't sitting on $25k to day trade with. We have all the fees and other crap to deal with already. I'm certainly learning a lot from the zero and this site but paying hundreds of dollars a year is too much. And the reality is, most Internet sites (not stock market related) which close membership lose their edge shortly thereafter. The constant influx of new mixed with the old is where strength is found.

    A truly nominal fee can work (example metafilter.com) but the nytimes select utterly failed .

  • maya

    Mole
    “I'm having mixed feelings about since we dropped so much again but there is a thing to be said about being delta neutral during whipsaw periods.”
    if we close above 820 are we back to wave 4 or are we for sure in wave 5?

  • http://implicittrading.blogspot.com/ BalaB
  • TroyMcClureRIP

    You wouldn't meet many new people once the fee went into place. This is the equivalent timing of Blackrock going public.

  • Victor Berry

    Any guess as to the ultimate bottom of the S&P 500? Using round numbers, 350 seems plausible [i.e., 1550 (100%), 1100 (62%), 950 (50%), and 800 (38%)] … yes/no? If yes, any guess as to when?

  • standard_and_poor

    If we don't get to 822 soon, watch out below!

  • rhae

    Looks to me like they dropped below SPY support and cleaned out the overnight stop lmt orders. My line is 81.03 on SPY and not to concerned for bulls unless breached with avengence

  • http://gemstowear.etsy.com Jan

    I signed up last night.

  • mrktneutrl

    good one. I think mole was planning on doing real time email alerts and what not though.

  • Kurious

    they are walking SPY up on very low volume. frustrating

  • DMS425

    WFC has the most CRE expose to CA. That is their problem! I love your observation. The financials will not hold a rally without the last AAA bank participating (WFC).

    +1

  • DMS425

    Pull WFC's 10Q and read the MA&A and footnotes, it will be in there. Look for level three assets, they are broken down. Look for changes Q over Q and Y over Y, in L3 accounts. Go back a year for these moves you will not find them today they did this last year and in 07'.

  • http://evilspeculator.com molecool

    Zero is flat – I usually take that as a whipsaw alert.

  • http://evilspeculator.com molecool

    I'm not completely sure yet – let's wait till the end of day. As I said in my prior post – those scenarios are still in play until we breached the bottom of the B wave.

  • http://evilspeculator.com molecool

    NEW EVIL DEED.

  • Woolly Llama

    Dear Mr. Deep Pockets,

    As our new Prez said yesterday: “an [awesome website] cannot prosper long when it favors only the prosperous. The success of [this website] has always depended not just on the size of our [bankroll], but on the reach of our prosperity; on our ability to extend opportunity to every willing heart — not out of charity, but because it is the surest route to our common good.”

    :)

  • DMS425

    I like that!

  • rhae

    I f anyone calculates their own numbers, they can be checked for accuracy by stutter points (imo) … I had 82.10,,and next 83.04