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Risk Management

by The MoleMay 23, 2009

Fujisan here.

In my last week’s posting, I discussed hedging technique to protect the open positions, but I quickly learned that not many of you used this technique when the market edged up to retest the recent high.  I saw some comments on Wednesday asking what they should be doing with their underwater Qs option spreads.  Well, unfortunately, there is no magic adjustment to turn losses into gains, and that’s why it’s very important to exit the position at the right time.

Without a proper risk management, you could quickly lose your capital, and options could be a highway to hell instead of heaven.

Risk management is always a very important concept when it comes to trading, but it is even more important to option strategies, and that’s what I am going to discuss today.

Loss on Investment

Please take a look at this schedule.  This is a summary of potential losses in Qs June bear put spreads with different strike prices if Qs makes adverse price movements.  As you can see, the further Qs moves away from the entry point, the more the losses expand.

This is the reason why you cannot “buy and hold” directional option spreads (there is a “buy and hold” option strategy with delta neutral position, but that’s not what we are talking about).  You have to have a very tight stop (both price and time stop) and active position management in order to avoid the “exponential” loss situation as illustrated above.  But here is a question.  How often would my stops possibly be hit if I have a very right stop?  Very often.  That’s why I’d rather have “hedging” strategy than a regular “stock loss”.  I will discuss this further.

Risk/Reward Calculation

OK, we now know the importance of a tight stop.  Now, here is another piece of the puzzle.  If you expect to be taken out of the position, as often as 50%, then you’d better have a better risk/reward ratio, right?

You bet you do!

Here is what I do.

I have a very specific entry/exit point, and I calculate the risk/reward (RR) ratio based on that.  If RR ratio is below 300%, I won’t take the trade.  I only take the trade if RR ratio is more than 300%.

This is Qs 34/32 bear put spread P&L graph and these are my trading plans for this time around:

Entry: 34.90
Immediate Target: 32.66~32.24
Stop Loss: 34.18
Time Stop: May 29 (if the position is not in the money, close it by this date).
Risk Reward: $379 (reward)/$72 (risk) = 526%

I normally trade in a much longer term (meaning a few weeks to a month), not in days, but these days, I am trading in a much shorter time span, and this is not what I’m looking for – but what can we do?  The market doesn’t care how I trade.  If I like to trade the way I do, I should probably stay out of this whipsaw market and wait for a major move — there are so much works to be involved and so little money to be made.  I’m sure that many of you share my sentiment.  In the mean time, I should trade small.

Diversification

Now, one more thing that you can do as a part of risk management is to diversify your position.  No, not that kind of diversification (yes, that one too), but diversification through different strike prices and expiration months.  Don’t just marry to one position.

If you have $1,000 budget for Qs directional trade, allocate your capital into different positions.  Don’t just put everything into one bucket.  You can have bear put spreads with different strike prices and expiration months.  Or you can have butterflies and calendars other than bear put spreads.  You don’t need to trade front month options all the time.  Mix up your positions so that you don’t get hurt entirely in case the trade goes against you.

Four Legged Box

Lastly, I like to go over the basic concept of hedging.  Although I discussed this topic last week, I think I should go over this again as this is a very important part of risk management.

Options are very flexible financial instruments and you can recreate any type of “synthetic” stock positions.  For instance, in order to create synthetic long stock position, you simply go long call options and short put options and, voila!  This looks exactly like long stock position.  This position is a combination of long June 85 SPY call and short 85 put options.

In order to create synthetic short stock position, you simply go short call options and long put options.  This has the same P&L curve as short stock position.  This is a combination of long June SPY 90 put and short 85 call options.

Now, if you combine long and short stock positions, what do you get?  It’s a flat position, and you don’t make money in either direction.  This is called “Four Legged Box”.

Now, four legged box in itself is not tradable, but you can leg out into four legs.

If you look at the four legged box matrix above, and take a vertical instead of horizontal combination, you will get a bull call spread with long June 85 call and short 90 call options.

Similarly, if you long 90 put and short 85 put options, that would create a bear put spread.

If you combine a bull call spread and a bear put spread (with the same corresponding month and strike price), that will become a “four legged box”.

Now, how can we use this concept?

Let’s say that you originally entered into June 85/90 bear put spread and you are expecting the market to take a short-term turn.  You still expect the overall trend to be downside and you like to hold on to your position, but you don’t want to lose a profit already made.  What can you do?

Yes, you can leg out June 85/90 bull call spread and make “four legged box” to lock in the profit.  Moreover, you can add on call spreads to ride to the upside as well.

….or, you can make a “three legged box” by adding June 85 call.

Hedging is not just locking in the profits.  This also gives you an opportunity to ride to the other side of the trade and make money in both sides.  I made more money by being stopped out and turned into other side of the trade.

This is such an important concept especially now that we expect whipsaw galore for the coming weeks, and if you don’t want to get in and out of the positions every other day, hedging is the best way to go.

This is really not as complicated as it may sound.  You just have to try it once to see how it goes.  I’m almost certain that you will love it!

Have a wonderful weekend, everyone!

Fujisan

May 23 Update: Squidman brought up a very good question about naked put option adjustment, so I decided to address his question here, as many of you are trading naked options.

His original position was June Qs 33 put options, and he adjusted it with 35 call option.  With this adjustment, he was basically creating a strangle which looks like this.

As you can see, breakeven point is almost outside of one standard deviation and you are running a risk of losing the entire premium in both call and put options in this adjustment.  In other words, you are throwing a good money into a bad trade without no hope of recoupting the cost of the trade.

What if you adjusted Qs 33 put options with 33 call options?  This is a little bit better than strangle but the results are the same.  Moreover, you would have been putting more money into the trade and the cost of the investment doubled whereas the return potential didn’t.

With this adjustment, you would be creating a straddle which looks like this.

If you really like to adjust your position, you would have to recreate 4 legged box by

1. shorting 32 June put option and,
2. adding 32/33 bear call spread

to lock in a loss.  This position has the same P&L effect as closing out the position, but I would say most of the people would be better off just by closing it out instead of messing around with all kinds of adjustments that you are not entirely familiar with.

Trading Rules

If you are still buying naked options, please do yourself a favor and follow these rules:

1. BUY ONLY ITM (in the money) options for the front month.  DO NOT BUY ATM and OTM front month options.  Please be prepared to lose the entire premium if you are trading front month ATM/OTM options.

2. BUY ONLY the back months options at least 60 days before the expiration, if you are trading ATM/OTM options.  Close it out in 30 days to OPX.

Happy memorial holiday!

Fujisan

UPDATE 5:45pm EDT: Mole here. This is a great opportunity to talk about something I meant to convey a while ago. The concept Fujisan describes is actually also known as ‘morphing‘. In effect what she is doing when producing a ‘three legged dog’ is to turn her bear put spread into a something very near to a synthetic long call. Let me explain:

As she described a synthetic stock positions is accomplished by buying a call and selling a put:

|+c| = Synthetic Long Stock
|-p|

Similarly a synthetic short positions is produced by selling a call and buying a put:

|-c| = Synthetic Short Stock
|+p|

Now, I will spare you the ugly details regarding the greeks calculations but the concept you need to remember is that 100 shares of stock plus one option is considered a synthetic option:

|+c| -c = -p = Synthetic Short Put
|-p|

|-c| +c = +p = Synthetic Long Put
|+p|

|+c| +p = +c = Synthetic Long Call
|-p|

|-c| -p = -c = Synthetic Short Call
|+p|

Here I am representing the long or short stock position via their synthetic option equivalents – bear with me here. I actually came up with that visualization myself after watching Ron Ianieri’s video on the concept – he is a great instructior and knows this stuff inside out but I was seeking for a simple mental recipe to execute trades quickly.

So, if you look at those four variations above – all you have to do now is to fill in the missing leg on Fujisan’s four legged box – which is to buy one 85 call, just as she described:

|+c85| +p90 = +c = Synthetic “Long Call”
|-p85|

Now, the acute rat would point out that this is not exactly correct – for a synthetic long call all three strikes need to be the same:

|+c85| +p85 = +c = Synthetic Long Call
|-p85|

Obviously this is technically impossible as you cannot buy/sell a put at the same time – you end up neutral which only leaves you with the call – and hey that would be the idea. A real synthetic call would be produced by being long the stock and long one put. Yes yes – I know it sounds strange but the delta works out perfectly.

In any case, the red scenario is what you want and it’s close enough to a synthetic long call to accomplish your goal. What’s even cooler is that all you had to do was to buy one option instead of having to sell two and then buy one. Your positions is exactly identical and you pay a lot less in commissions.

Cheers!


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.
  • innatedc

    Fuji, in your first example did you mean for your stop loss to be 35.18 instead of 34.18?

  • innatedc

    2nd question- did you learn any of your skills from Van Tharp and his institute?…I ask because I am considering doing his performance course.

  • Peasant

    Awesome post Fuji! thank you. Perfect topic too.

    This week, I was long via calls on several commodity based equities such as FCX, XME, CNX, EOG, etc and I thought I had a decent hedge via SPY puts. This did not work in my favor like I thought it would.

    The bid on several of these stocks dropped by 10+% in the last 2 days even though the dollar continued its decline all week. Maybe the market is anticipating a reversal in the dollar or a pending inflationary bear? Anyway, my calls got crushed and the gain in my spy puts certainly did not offset my losses. I'm seriously considering changing to futures instead of options but i'll have to change brokers in order to accomplish that.

    Different topic, assuming for a moment that 11/21 was the primary wave 1 low in the QQQQ's and the subsequent A wave was from 11/21 to 1/6. Price movement = $6.58. The subsequent C wave was from 3/9 to 5/7. Price movement = $9.71 which is 16 cents shy of 150% of the A wave. Maybe someone has already pointed this out and if so I apologize. I'm way behind on my reading.

    The recent, rapid decline of the dollar and bond markets is really amazing. I did not think that would happen so soon.

  • onorio

    Awsome work Fujisan! As always :-)

    I`m reading the CBOE options tuturials right now, do you know where i could find some more good info about options?

  • http://www.SpeculativeMeasures.com neutrino

    Always love your insight Fujisan. Care to entertain this question?

    I often face a dilemma with credit spreads like the one I’m facing now. That is, do I hold on till exp.

    Anticipating a top, I executed a 16/17 June credit spread on ZION. It moved swiftly in my direction (from $16 to now <$13) and the credit spread looks like a decent bet for expiration. However that means I have to wait 4 weeks to reap the bulk of my profits. In this same time I could also lose my premium if the stock recovers. What to do now?

    I expect the stock will remain in a trading range below $15 till June exp. It could also plummet as I expect ZION will go the way of the Dodo eventually. As I see it I have these options at this point:

    1) I could close the position now taking only 1/3 of the potential premium.

    2) I could just ride it out to exp., risking a move against me.

    3) I could create a "suicide spread" by cutting the long call loose , leaving the short call naked and protecting with a buy-stop (either BTO stock or STC the short call) at $16. I amplify my return if successful but I risk a surprise gap open which is not at all unusual in this market. I'm not suggesting this but confessing I have used this successfully albeit reluctantly for small positions that have moved sufficiently far.

    Is there a third or fourth option to lock in a greater share of the premium at this early stage?

  • standard_and_poor

    Thanks Fuji!

  • standard_and_poor

    NTES is worth watching as longer term hold, 3-12 weeks.

  • rhae

    SPX cycle translation… I wanted to take a good look at the cycles to see where we might be going…. tho market appears topped, cycles are stll in the process of confirmation.

    Really a way to check the trend and currently trendless in the daily timeframe… waiting for Japanese saw blade teeth traslation… next?

    http://screencast.com/t/IjmWReTulPg

  • Autopsias

    I'm with you, am doing CBOE tutorials too… I can't stand seeing these wonderful Fujisan tutorials and can't understand half of it!

    If you have any other good sources of information about options for stupid martians like me, I would appreciate it!

    I'm gonna learn it, even if am happy enough with Futures…

  • http://forkoholic.com Forkoholic

    Gold in ABC up. Elliott Wave Forkology Update
    Sorry to disappoint Gold Bugs waiting for Wave 3 up. I was thinking why I can't fork gold as an impulse from 1999 low. The only logical conclusion – it's NOT AN IMPULSE but an ABC UP. Here I just flipped gold chart and you can see it's an ABC. I'm not saying it can't go up, I'm just saying it's not an impulse. Definitelly not an impulse.

    http://forkoholic.spaces.live.com/blog/cns!233C

  • http://www.aggressivelyuninformed.com nepharis

    <3 fujiposts

    I'm freaking out: http://screencast.com/t/V6aZLRA9N

  • katzo7

    I have read this prediction before nepharis of 300 SPX. I am very concerned. If that is EW3, what will EW5 be, set to zero?

    We will all be standing around 55 gallon cans with fire in them.

    The grandiose destruction of a great country by a banker/representative consortium (jeez, aren't elected officials supposed to prevent this blatant graft from happening?) that rose to prominence from the 15 and 16 centuries, turboed in the 19 and 20 centuries, then made one small mistake, and is on its way to being the biggest debtor nation in the world.

  • onorio

    wave 5 will truncate arround 301 or will not truncate arround 299 :-)

    in either way this market will be torn apart an fall in to pieces…

  • hope238

    Thank you Fujisan for your excellent tutorial.

  • Osso

    yes …thats the tgt. Even 215 SPX…..final wave 5 down.
    Why not..??? the medicine the Govt. is applying is gasoline on fire….so….

  • onorio

    Some people are calling for a wave 5 failure this wednesday at 924, since DOW made a new high related to may 5th.

  • Osso

    H&S pattern in SPX indicating a break of neckline at 875…we go to 825. Very close to the 38.2% retracement: 830. A 50% retracement of 930-667 is somewhere around 798.

  • Osso

    in my case…”half” is waaaaay too optimistic….!!!!

  • Osso

    Fujisan: Tks for these great posts….I will save them…

  • katzo7

    What are you, onorio and osso, doing around now. Why don't you go to a bar and chase some . . . . .

    I just did an analysis and got a very firm target of EW5 bottom at 300 on the weekly. That is, if we have just formed a final EW4 high at 930.17 and it holds firmly. IMO that should hold, but if not a higher EW4 means more data means the EW5 low at 300 comes up. See my triple chart for more visual info.
    Sell the BMW and move into physical gold. LOL

  • ropey

    Fabulous article as always Fujisan, thanks again for your ideas.

  • Squidman

    Fujisan, IMO you are not only an expert trader, but, you are as observant and analytical about your students' strengths and weaknesses as any great master can be. Being able to speak to the level of the audience is THE sign of true intelligence. Thank you greatly.

    Now, I am still not sophisticated enough to employ all your illustrated strategies. I bought straight June 33 Q puts because I accepted the risk/reward of the position on May 14/15. On May 18th (sorry you were sick but you wisely hedged and went to bed) when we breached the prior Thursday high I hedged the puts with half the amount in June 35 calls (half the calls cost roughly my put position). Then on Wednesday at the close I sold all to cut my losses. I know you would not have taken straight puts, but, what would you have advised this stupid man at the time with the available choices? I know I could have hedged my underwater puts with any long (they went eventually to down 50%), but was there a box solution for my predicament? I lost about 15% in total. Looking back, if I had waited another 14 hours I would be even, but, that is immaterial and I do not regret any of my choices now. Just looking for a better “leg” to chew on next time. Thank you again for your diligence and hard work and time.

  • BigIslandLife

    squidman did you get my reply to you from yesterday's thread, Aloha Brah

  • BalaB

    Fuji,

    Thank you for your continued generosity.

  • Squidman

    Just sent you mail. Let me know if you receive or not.

  • BigIslandLife

    yeah just got email copy of post

  • rhae

    Looking for a H&S in the SPY… First let me say, I believe all charts are somewhat subjective. They can be skewed anyway one wants, by parameters, anchor points, box or brick size etc.
    But as long as most of the herd uses out of the box canned parameters, that is where the focus probably is. I am very guilty of screwing with them, either twisting their arm and making them say what I want or just to make them easier to read.

    I made this chart say, the H&S has not completed the right shoulder, yet. My personable preference is to go balls to the wall short… but now I have to use caution. or HEDGE.
    SPY KISS
    http://screencast.com/t/sjOEpkzL

  • MyLifeMyTrade

    Thanks a lot for helpful ideas here Fuji – always love reading what you post.

  • MyLifeMyTrade

    I agree with a lot of people that if we break 875-878 region, then there could be a huge downside.. The comparison of where we are chart-wise to where we were in late Dec- early Jan is also very fair and true. One thing that is not reflected in the charts is sentiment of people.. And clearly the sentiment now is much different from the sentiment late last year and early Jan.. At that point people were very very fearful.. Whereas now there is optimism in the air and all around.. .That is the reason why even if we breach 875, the fall will not be huge…

    In fact, I am on the opinion that we WILL NOT breach 875 in all likelihood.. I have posted some charts on my website. http://www.mylifemytrades.com where I show some charts that show that SPX is undergoing sideways consolidation. As always, please share the love if you like what you see.

  • kiwitrader24

    A trader I like whom they interview occassionally in the mornings on cnbs was talking about this scenerio middle of last week. I couldn't figure where he was getting the 825 from though as noone else was talking that number ATT. Now I know where the thesis came from – that H&S pattern everyone started talking about as the week wound down. Just pointing this out because when they interview these floor traders, they are talking their books and that almost always means the die is cast. FWIW!

  • annamall

    Hey Fuji-san!
    Your intelligence about options never ceases to amaze me. I am a master options trader, and I really have to pay attention to your posts. thanks

    On another note, Once Tuesday comes, we will have one news packed 4 day week. Continuing home sales, Contining jobless claims, Consumer sediment, ect. Should be one interesting week, and now I am off to gym, then to the beach! :-)

    Have a great weekend all!

  • katzo7

    Christopher Walken again (who posted last one?), absolutely nothing to do with market but funny.
    http://www.youtube.com/watch?v=sEH5zmAtLks&feat
    Where is everyone , sleeping in? LOL

  • Royal With Cheese

    Shooting star anyone ??

    http://etfstocks.typepad.com/markets/2009/05/sp

    comments are welcome !!

  • Osso

    on the next pullback in some goldstocks….I am piling up……Living abroad, makes physical gold a difficult goal.

  • LostIllini

    Fujisan as always excellent work, I really appreciate the time and effort you put into your posts (in addition to your other “job” of cleaning up the riff raff aka “Ned”). Have a great weekend!

    Do we get Futures tonight? I'm dying to see if gold drops like a gold brick.

  • katzo7

    GOld is one I cannot figure out. The charts are a real mess.

  • LostIllini

    Yes, but it seems like candlestick charting has been real iffy lately, maybe this time is different.

  • LostIllini

    I always thought that Garmin should shell out the money and make him the voice of their GPS system (or at least an option). I don't need one but having Christopher Walken give driving directions would never get old.

  • Blind_Squirrel
  • annamall

    BS Will futures still start @ 6pm tonight (being US is only one with holiday)? thanks and thanks for the info, as far as shooting star, I like that! :-)

  • Blind_Squirrel

    6PM – 11:30 AM. How's the weather? Over 4″ here, was going to go to Siesta
    on Friday,
    but ended up staying here. Have to get over soon to get my mail and take
    care of a few things.

  • Blind_Squirrel

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

    Global Economy Beyond Event Horizon

  • annamall

    BS, So the futures will trade all day tomorrow too! Awesome..

    Actually finally stopped here last night and so far sunny today , but you know those PM thundershowers can pop up anytime, we had rain for 6 days straight up here. Thanks god for a break. 20 inches this week.

    Sorry about your trip Siesta Key is beautiful!! I am working out again today, stepping up the workouts. Bikini season you know LOL

  • annamall

    Blind S BTW are you long/short market?

  • bergs

    Fujisan

    Enjoy your spicey entre`s to the Evil BBQ menu

    Before I head out to get toasted for my own BBQ tonight I wanted to share this saucy look at the $spx.

    http://screencast.com/t/0rnwpAMb

  • Squidman

    Hey Anna in the bikini at the mall,

    How did you hedge/close your June 33 Q puts last week if you don't mind telling?

  • Squidman

    Someone else (sorry, forgot who to credit) mentioned optionsmonster.com. Apparently they do tuts based on TOS platform.

  • Blind_Squirrel

    Short nervously.

    Katzo and I are still heartbroken that you did not join our circle of trust.
    Bikini Season? Hmmppfff!!! Katzo and I have moved on even though he wanted
    me to contact my friend, Jackie Barron @ WFLA 8 and my contacts @ WTVT 13,
    ABC 17 and CBS 10 to get to the bottom of the picture mystery. Jackie lives
    on Siesta
    (have her on speed dial). As despondent as Katzo is, I told him I could not
    abuse
    my power with the media.

    Have contacts from Ft. Myers to Tampa at networks stations from the
    Environmental
    Work I did in Sarasota. My top draw brought in 5 helicopters, affiliates
    from Ft. Myers to Tampa, Weather Channel, and NBC network truck. Milked
    that story for months.

  • annamall

    Hi Squiddy I have a picture for you :-)
    how cute is this (my asian benga)
    http://www.screencast.com/users/Annamall/folder

    I dumped those quickly last week when the market kept pushing up Monday. I am a bit more simple in my option strategies than Fuji, with the IV so low right now I am doing allot more straight calls puts.
    My other fav is Verticals or Butterflies. (especially @ OPX or earnings)

  • annamall

    LOL you should talk to your friend and we can put that at rest. 😉

    are you short ES NQ?

  • Blind_Squirrel

    Both

  • Fujisan

    Squidman – I just updated my posting by addressing your question. Hope this helps!

  • Fujisan

    Gee, you are so good…

  • Fujisan

    I only read his book, but I'm sure that his workshop would help us all significantly.

  • lilme

    Fuji-san, thank you for your lesson on two items on my list to learn: options and hedging, and your cautions on risk/reward in this challenging environment.

    Also, and this may be stretching it, can I know the name of the painter and the painting? I have peered at it for a long time to find out what the people are doing and if it is Mt. Fuji in the background? A weakness of search engines is that they are verbal, and pictures are hard to find.

    Thank you again for your much appreciated efforts – and Mr. Mole as well.

  • Fujisan

    Thanks. This is HOKUSAI's painting and he has a famous series of “36 scenes of Mt. Fuji (Fujisan)” and I thought that these paintings go well with my screen name. One of my favorites is the painting that I used for my last week's post with a big ocean wave.

  • Blind_Squirrel

    Are you implying that Katzo is holding out
    on his Consigliere???????

    If so I'm going to have to have some people
    put some Lobsta heads at the foot of his bed
    Monday Morning!!!!!

  • Fujisan

    Katzo – where is my theme song this week?

  • katzo7

    I'm working on it and it is a good one.

  • katzo7

    Fujisan,
    I am surprised at you. LOL The Options Queen getting something wrong?
    That wasn't a painting last week THE GREAT WAVE, that was a Ukiyo-e woodblock print!
    OK, next time I am out on the west coast, I will give you 40 lashings with a wet noodle!

  • Squidman

    Adorable pic. Thanks Anna.

  • Squidman

    Thanks for the additional detail Fujisan. I thought my approach was wrong, which is why I just bagged it. I'm done with naked options for a while and will focus on the other strategies you've shown us.

  • http://www.cafes.net poisonfrog

    Yes. They landed the Blizzard contract (makers of World of Warcraft). Big $$ for them.

  • http://www.aggressivelyuninformed.com nepharis

    Best. Idea. EVAR.

  • Count_de_Monee

    Fujisan,

    Thanks once again for your wonderful posts which I will have to print tomorrow at work and study intensely to better understand them.

    Remember folks, it's not a holiday in Europe so the markets here will be open. I'm guessing tomorrow we spend all day in the red here.
    In fact, I've decided to take this week off and just leave my short positions on indefinitely instead of daytrading. I doubt we'll get a much better entry point on the short side anytime soon. So what if we go up another 20-30 SPX points? I'm pretty confident we will be seeing sub 850 sooner than 950.

    Have a good holiday rats and do try to remember what the day is all about.
    Let's hope the present/next generations haven't grown too soft in the west and have the same dedication to defending our way of life.
    Believe me, we're gonna need all the help we can muster.

  • Iguanadon

    Goldman Sachs is running the country… An article to add to the GS mystique…

    http://buffalobeast.com/136/Credibility%20Defau

  • Fujisan

    Katzo, you are right! It's not a “painting”, it's a woodblock print. You are good!

  • lilme

    Thanks, Fuji-san, I thought the last one was a reference to EWT. It is a good symbol for your Fuji-san name.

  • Fujisan

    Nake options are fine, as long as you follow those rules!

  • Fujisan

    Yeah, Lordted also commented that it has a “fib” beauty.

  • molecool

    My neighbor actually has hundreds of those – many of them are tryptics – they are three panel prints. They are all originals – if you ever come to L.A. I will show them to you – you won't believe your eyes.

  • katzo7

    WHen did you say you wanted me to come out mole?

  • Fujisan

    You cannot be serious!! Are they TRUELY originals? Oh Wow! I thought that most of those major Ukiyo-e were owned by museums, not by individuals. It's totally amazing! I'm on my way to LA now.

  • katzo7

    OK, Fujisan asked for a song dedicated to her for her excellent options research. Frm how I look at it, the only option I have experienced is the option to loose all of your money. In keeping with my excellent reputation (Mr. MOMO) I selected this one for her, and for all of mole le cool's fly girls, K and Anna. I know you are all out there right now. And for mole's others I know he keeps hidden in the background. You know who you are. LOL

    One unbelievable song, his best, by a guy who unfortunately didn't live a fully productive life. Dad got in the way.
    Enjoy with full volume.
    http://www.youtube.com/watch?v=GVTN5o9Kgu8
    When i get that feeling……. … i need sexual heeeeeeeeeallliing.

  • HowLow

    Fuji-san great post .Like everybody here always looking for a risk free trade which there is not .I need to paper trade this strategy to play with it .Goal;No-cost trade that benefits from time decay .You may have to use european exerise options or future options .Enter same under lying a call credit spread front month maybe one standard deviation OTM then enter back month call debit spread maybe same strike maybe not your trying to get the bear call to pay for the bull call .Both spreads move in tandem and don't suffer big draw down implied volatility move the same each day the trade is near delta neutral the position is hedge directionally and provides positive theta. I would think it would be best in a sideways to up market . The front month credit spread loseing value each day the later-expiring debit spread also decays but not as much. If the front month goes in the money theta goes against you so you may want to exit it and let the bull call run. Also calls on indexes are slightly underpriced so selling a underpriced call and buying a more underpriced one seem like the way to go if you use puts the implied volatililty on the strike you sell has a lower IV then the one you buy.I'am not a expert spread trader so it's just a idea feel free to critique……Congrats to Helio raceday winner////////

  • katzo7

    URL won't load for me.

  • annamall

    Hi Count, I am in your camp! :-) Great minds think alike. I went short S&P Friday @ 892, added @ 888 and feel rather comfortable about it 😀
    Thanks to all you guys who give those great EW charts, I am getting it!

  • katzo7

    I have a funny story (oh God katzo, not another f**king true story) told to me by the curator of the U. of Wisconsin Museum. Frank Llyod Wright used to deal in Japanese Ukiyo-e woodblock prints. He would go to Japan and pay for the trip by bringing a selection of them back to Madison and selling them off. One year he met someone in Japan who said, come out to my shop in the country and I will sell you lots of woodblock prints cheap. He did and brought them back and sold them to his clients. It was not long before it was determined that they were forgeries and money was demanded back. He decided to throw a huge party and replace the forgeries with “good” ones, but no one came as they expected the “good” ones would also be forgeries. Eventually Wright went bankrupt and the bank held the thousands (I think it was like 4-5000 prints) of prints for collateral. Well, of course, Wright could not come up with the money to get them back, so guess who stepped up with the cash, U. of Wisconsin Art Museum, and bought them all for about $1 each. Thus, one of the major Japanese Ukiyo-e woodblock collections was established in this country in one fell swoop. True story!

  • Count_de_Monee
  • katzo7

    Just sent you an email.

    We should be able to tell whether bear claws are evident or if we get a bull horn up the butt by Tues/Wed.

  • Count_de_Monee

    “Great minds think alike”
    You honor me with those words Anna.

  • annamall

    ahh thank you!

  • katzo7

    Unbelievable find for a Blind Squirrel, the USDEBTCLOCK.

  • annamall

    As always happy to post pictures of my beloved kids!

  • katzo7

    Your pic of the pu**y (never liked that word) cat is a bit out of focus or it is the martini entering my brain cells right now. Notice the sensitivity of this hominid, early but pony-tailed and very sensitive to woman's issues.

    Don't ever let B Squirrel know but I will meet you again at that special spot. I bring the cosmos, you bring yourself. It seems that my twin, I am the Schwarzenegger, he the DeVito, is insanely jealous of my accomplishments.

  • katzo7

    I agree, and I think on the weekly too. Nice to see you doing some of the heavy lifting here. Now, stay away for the girls! ROTFLMAO

  • katzo7

    Yup.

  • annamall

    LOL I was laughing so hard when she (the cat) just sat there with that turban on her head, so my hand was probably jiggling.

    No no we must never tell shhhhhhh..

  • Royal With Cheese

    How on earth can i stay away from the girls ???
    It's like asking a Bear not to short !!!

  • katzo7

    Like my song choice sweetie?

  • katzo7

    Second infraction Royal, one more and you are history.
    You are not allowed to listen to my song choice for mole's fly girls. Knowing you smooth guys (I watched The Sopranos) from Jersey, you will probably tell them you told me to select that one.
    -the MOMO

  • innatedc

    Same here feeling very good about my shorts…..I will be posting another play later on..

  • Royal With Cheese

    Mole should be called Charlie : “Charlie's Angels”

  • Blind_Squirrel
  • molecool

    I added a little section above – please take a look.

  • katzo7

    I try to be a contextualist, that is to take bits and pieces and try to make sense of if it. And this forum is great, the amount of quality leadership, articles found on the net is amazing. Thanks mole for sponsoring this. IMO America is broken and I can point this up with a true story. When my daughter got into the workforce at the age of 16, I was questioning her about her hours as a waitress during the summer. She retorted, “But Dad, I am working as hard as I can, 20 hours per week.” Now get out the violins. I worked six days a week at that age during the summer to save for college. Most boys think playing video games in their rooms all day long constitutes “work.” Look at recent history of the SEC. IMO, housed by spoiled preppy products of higher ed who wouldn't know a scandal if it fell and hit them on the head! That statement should get me into some trouble! Still want a job over there, easy work if you can get it.

    Which leads me to something I think Alphahorn (I think it was Alpha, forgive me if I am wrong) said somewhere, that there was a 33 year supply of McMansions on the market. America has scaled up. And consequently irreparably hurt some of its youth. Will the young be satisfied with living in small apartments instead of what they are accustomed to, that is hot tubs, microwaves, big screen TVs, granite counters, matching stainless steel appliances, dishwashers, security systems, fancy cars, boats, pools? (BUT DAD, I AM TOO BUSY TO CLEAN TO POOL!) What I am developing here directly relates to “reality-based expectations” that is expectations based on real income, not previous life style. But I guess we all new to dream.

    When I was counseling an acquaintance who had just been laid off, I said, “one has to have a back up plan.” She poignantly said, “that job was my back up plan.” I don't mean to be flippant here but competition is now rampant in America, whether for jobs or even for a comfortable retirement. That is what the bankster scandal was all about, see an opportunity (streets paved in gold) take it. No matter what! As we have just been shown, all baby boomers cannot get out of the narrow door at the same time with the goods ($$). It will be interesting to see what is in store for America in the next five to ten years. Hopefully I will still be able to watch it unfold on my big screen TV. ROTFLMAO.

    **When interviewing a Chinese student, he said to me, we Chinese are not smarter than Americans, we just work on our studies 18 hrs. a day.

    I think I just might have pissed off as many as I could here.

  • molecool

    Alright you guys – click right here.

  • katzo7

    Nice find BS. This should be sent to everyone in DC.

  • Iguanadon

    Show off.

    Thanks Mole.

  • Blind_Squirrel

    Trust me, they know!!!!!!!!!!!!

    They are figuring out how to try and stop it.
    Go through site and you will see what I mean.

  • molecool

    Regarding your 16 year old daughter: just tell her to wear a short skirt and she'll double the amount of tips she pulls.

    (j/k) I know how puritan you dam Yanks are.

  • katzo7

    I come from the spartan side of puritanville. LOL

  • trabuco

    shhhhhh…..stop trying to ruin my business….

  • Mastachopchop

    Clearly playing chess.

  • LostIllini

    Yeesh another day another ass kicking for Uncle Buck, makes me think shorting gold wasn't the brightest idea.

  • Blind_Squirrel

    Au Contraire!!!!!!!

    I'm trying to help it grow!!!!!!!!!!!!

  • innatedc

    Ok gang here is a play. CME. It was passed around the board a bit on Friday so I did my due diligence and took a short here at near end of day (I'm actually already up over $3 from entry) but it is still a good one to take a position depending on how much of a gap and/or fade there is on Tues. You will notice on my chart that it has made a double top and on a previous double top CME dropped $50 in 5-6 days. I see the same thing happening (especially with all the bear signs in the market right now) starting next week. My timeline is to Friday, maybe the Mon-Tues next week. Stop is at $299. Watch for the trendline to perhaps provide a stall but I am expecting it to break. When it reaches the line, I will move stop to 288-289 area.

    http://www.screencast.com/users/innatedc/folder

    Will repost tomorrow on your day off…..welcome any feedback of course (especially points, I'm trying to catch up to Katzo)

  • Blind_Squirrel

    Hedgehog

    http://video.yahoo.com/network/100000086?v=5017

    BTW S&P's video he posted last week has added almost 1 million more views!!!!!
    Love that song.

    http://video.yahoo.com/network/100000086?v=5017

  • katzo7

    LOL
    I knew they would/might stick a few blokes with an upgrade. Very timely. Nice call we hope.
    And love competition.
    inna-88 points
    katzo-over 400
    +1 por vous

  • LostIllini

    Morals violation: The Chauffeur by Duran Duran, it has got to be better than watching futes.

    http://www.youtube.com/watch?v=SJ2LsNWsN4U

  • annamall

    Can't find it?

  • annamall

    Nice BS, I would never go that far, BTW I have only 1 litter box, and that's in the garage, I am somewhat obsessive with cleanliness.
    Most cats hang on on my nice piece of property, (I will post a pic so you can see they have the good life) So they have a whole huge preserve to hang on and kill rats and snakes in.
    Snake snails and little chameleon tails LOL

  • katzo7
  • Blind_Squirrel

    Ya know, the one thing that struck me was how clean the place was, they had
    their chairs, almost like it was their playroom.

  • katzo7

    Yup MOVIO.
    +1 LOL

  • annamall

    Freaking aaawwweeesome! Marvin Gaye is the man though, IMHO he did it
    better, but I love this black dude, he's hot.

    Suz-Anna
    Tampa, Florida 33615

  • annamall

    BTW that's a spoof on Nine and a half weeks (one of the best movies ever!)

  • annamall

    Hi Royal, whass up in hot Paris!

  • malusDiaz

    anyone ever see the Sunday night jump? @ Midnight PST?

    On /ES, seen it jump 1-5 points before, big gaping hole. (2-3 times now, so doesn't count for much)

    Hard to catch because it only happens 1 time a week, I'll be looking tonight though.

  • ZigZag

    I'm with you Count…I'm short since May 8th and I will add on any rise.

    http://tinyurl.com/r99snx

  • katzo7

    You liked 9 1/ 2 weeks too? I loved it, wife hated it.

    Wasn't that hot? OMG, I almost lost it right there.

    When was the last time you, well, you know, got something?
    And your mention about condoms, I need to know more, much much more.

  • http://www.pacfreehotwater.com steveo77

    I have been on that Jump, for me its 9PM Hawaii Time.

    It is when the Brits show up, and they love to party, it gets wild.

    But I have noticed a large swing at the start, and then usually reversal from that swing. Watch your volume, it picks up BIG TIME.
    I cant see clear Elliot Waves though, although some FIB seems to work. Let me know if you get more insight, always nice to make a grand on Sunday night…..this screen cap is data from previous Sunday, the hour 21 at bottom is 9PM Hawaii time, notice the 5 point drop and reversal.

    http://screencast.com/t/okLCg8mje5e

  • rhae

    about 80% of my miner list flashed short signals Friday close, including GDX

  • ZigZag

    Thanks Rhae..Went short GDX on Friday.

    http://tinyurl.com/okn54c

  • Osso

    based on…???? tks

  • Osso

    good chart…tks….pullback to 39…for new entry long…???

  • ZigZag

    Hi Osso,

    Yes..Well, that's what I'm betting will happen. Stop is just above Fridays high. :-)

  • katzo7

    rhae,
    Jury is out IMO about GDX.
    http://www.screencast.com/users/katzo7/folders/
    Note the lack of drop of in buying pressure, it could be still headed higher?

  • StockFuturesSurging

    Stomping out those green shoots? interesting…

    shortie got squeezed cover cover cover

    dOW 3000 SOON??? Interesting..
    http://screencast.com/t/gpUqY50pfX

  • StockFuturesSurging

    Stomping out those green shoots? interesting…

    shortie got squeezed cover cover cover

    dOW 3000 SOON??? Interesting..
    http://screencast.com/t/gpUqY50pfX

  • StockFuturesSurging

    Stomping out those green shoots? interesting…

    shortie got squeezed cover cover cover

    fujtures are surging..S&P 500 up 25 points Tuesday http://thestreet.com/t/sopinion/story/kjgpUqY50pfX

  • StockFuturesSurging

    Stomping out those green shoots? interesting…

    shortie got squeezed cover cover cover

    fujtures are surging..S&P 500 up 25 points Tuesday http://thestreet.com/t/sopinion/story/kjgpUqY50pfX

  • StockFuturesSurging

    Stomping out those green shoots? interesting…

    shortie got squeezed cover cover cover

    fujtures are surging..S&P 500 up 25 points Tuesday http://thestreet.com/t/sopinion/story/kjgpUqY50pfX

  • StockFuturesSurging

    Stomping out those green shoots? interesting…

    shortie got squeezed cover cover cover

    dOW 3000 SOON??? Interesting..
    http://screencast.com/t/gpUqY50pfX

  • StockFuturesSurging

    .
    WOW …this is the endhttp://screencast.com/t/gpUqY50pfX

  • Blind_Squirrel

    Troll alert!!!!!!!!!!

  • Fujisan

    Thanks for additional comments, Mole.

  • malusDiaz

    Hey, every time he shows up, futures drops a few points!

    Perfect indicator, let'em keep this account, might be able to market it, heck maybe even sell it back to Ned =D

  • Leon

    Just curious if anyone is following and/or trading the futures tonight. I was pretty surprised to see ES jump up 6 points considering the down close on Friday, but then to see it give up almost all 6 of those points made more sense.

    Normally a late day reversal leads to a continuation in the same direction the next day, correct?

  • Fujisan

    Oh, this is classic. Thanks, Katzo.

  • Fujisan

    Oh, that's funny, and I heard a story like this before, so it must be true!

  • katzo7

    IMO is it true. Museum curators cannot lie. Their job is to evaluate, verify.

  • http://www.nkouts.com nkouts

    If the S&P 500 opens up 25pts on Tuesday, with every rat here as my witness, I will wire you $10k before 10am EST.

  • MyLifeMyTrade

    I was just posting an ad on craigslist.. Towards the end of the posting process, they show two words which we are supposed to type back (safeguard against bots doing automated posts)..

    The two words in this case were “recession” and “hemp”… hmm… got no job…. sit at home and smoke pot !!!!

  • rhae

    sure, I think of it like poker, I know we shouldn't gamble, but it's an odds thing.
    First card dealt…. every night I run my lists thru my scanner to see what pops up… stocks, sectors… GDX an Ace
    2nd card dealt… check my Hurst cycle on GDX, 1-10, it is at 10, extreme over bought, note: Hurst cycles are pickier than my scanner, many times the cycle is in no man's land and generates a 5 or 6, any way GDX an Ace here…. I usually will not take the trade without extremes.
    3rd card… check the daily chart, shooting star near channel top, another Ace
    4th card …Calculated R%S levels… very close to 93.75, a King
    5th card… Has not been Played, that get's played Tuesday
    Hell I might even fold if my set-up does not Hit…

    Katzo is correct,the Fat Lady has to Sing… but not bad odds setting up

    snap of card #1 http://screencast.com/t/xaxYNeat9

  • ZigZag
  • FMTarwater

    North Korea conducts nuke test:
    http://www.bloomberg.com/apps/news?pid=20601087

  • MyLifeMyTrade

    You got it in before me – I was about to say that the 15 point move in ES was because of N Korea doing nuclear test… All it will do is push oil prices up.. The move in ES was a blip – some got screwed.. I view it as a good opportunity to scalp some ES points going long.

  • molecool

    Exactly – that's what I thought. You even visualized in a similar fashion – cool deal :-)

  • buyemsellem2000

    If that shot of roundup last week doesn't kill those green shoots don't worry because agent orange is coming.

  • standard_and_poor

    I'd wait to buy on new high, tuesday morning may be weak for general market.
    Good luck.

  • molecool

    Completely meaningless – don't even worry about that. Let's wait until Tuesday early morning to get a more valid reading.

  • standard_and_poor

    Dear Mr. Katzo, my assistant and I here at C.S.U.A.K. were quite impressed with your knowledge of Japanese woodblocks.

    We both had a discomforting thought that perhaps we had misjudged you and perhaps
    had wrongly relegated you down to the category of the common back alley rabies infected scum sucking rat .

    Your last comments sent ours misgiving to a screeching halt!
    http://www.screencast.com/t/7XZq4ePv

    signed Standard_And_Poor Chairman of Chinese Students United Against Katzo – C.S.U.A.K.

    (no offense to anyone except Katzo)

  • Royal With Cheese

    Too hot for you to handle darling !!! 😉

  • katzo7

    THIS CAME ACROSS MY DESK-Letter #1
    Dear Mr. Standard and Poor,
    We hare at Standard ad Poor, a hidden subsidairy of Global Sacks (of cash) have recently discovered that you are using a copyrighted name and symbol for your moniker on an EVIL site. We are asking you to cease and desist in using this name immediately or we will have no option other than to file charges in court! We have many lawyers in shark-skinned suits that are on retainer and that we would like to keep busy. Now, I can see your posting was 2 hrs. ago so your being up might have something to do with your usage of our name. Sleep deprival can cause people to do strange things. And let us warn you, usual charges judges find for this infraction are $1000. That is $1000 per usage. That should scare the Haines briefs off of you!
    The Real Standard and Poor
    http://www.youtube.com/watch?v=Ba7QvrreqU4 (in our opinion, you are the deer)
    THIS CAME ACROSS MY DESK-Letter #2
    Dear S&P,
    As an educational institute, we take pride in representing and defending a multicultural attitude towards the learning environment. Hater organizations are no-nos. We choose to bring to our campus only those who think likewise. False, derogatory, and erroneous statements will not be tolerated. They are abhorrent in our opinion. It has come to our attention that you are a card carrying member of CSUAK (Katzo represents perhaps the best form of multi-culturalist and has recently become named a desi-an Indian honor), an organization “at odds” with our esteemed values. Part of your organization's charter seems to be the hating of sushi and wasabi (???), and you use a broken Chinese fortune cookie as your symbol. Therefore, your invitation to our campus has been rescinded.
    Signed,
    MITJACOFADOEC
    Mass Institute of Tech. Japanese and Chinese Organization for the Anti-Defamation of Eastern Cultures
    http://www.youtube.com/watch?v=2OACTnO6qks&feat
    For retribution, you have to find, identify each of the individuals in this vid and get their signatures.
    Now go to bed!

  • katzo7

    As a short term play there may be a few down points to be had.

  • bankownedbyamerica1

    disclaimer: I was hired to post this
    “The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent

    and anticipates that economic conditions are likely to warrant exceptionally low levels of

    the federal funds rate for an extended period”
    http://doiop.com/stockmarketshort >>> dow 3000 or 13000?

  • bankownedbyamerica1

    “The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent
    and anticipates that economic conditions are likely to warrant exceptionally low levels of
    the federal funds rate for an extended period”
    http://doiop.com/stockmarketshort >>> dow 3000 or 13000?

    interesting …Facebook wroth $40 billion? Twitter Worth $15 billion?

  • bankownedbyamerica1

    “The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent
    and anticipates that economic conditions are likely to warrant exceptionally low levels of
    the federal funds rate for an extended period”
    http://doiop.com/stockmarketshort >>> dow 3000 or 13000?

    interesting …Facebook wroth $40 billion? Twitter Worth $15 billion?

  • bankownedbyamerica1

    While none of the parties desire a North Korea with nuclear weapons, … South Korean newspapers have warned that North Korea's nuclear arsenal could …
    În Cache – Pagini similare
    2006 North Korean nuclear test – Wikipedia, the free encyclopedia
    If the North Korean nuclear test is less than even a kiloton in yield, it would be a historically small inaugural nuclear test. …
    – În Cache – Pagini similare

    interesting …Facebook wroth $40 billion? Twitter Worth $15 billion?

  • bankownedbyamerica1

    Futures surging…

    North Korea Nuclear Test Good For Stock Market? interesting….

    While none of the parties desire a North Korea with nuclear weapons, … South Korean newspapers have warned that North Korea's nuclear arsenal could …
    În Cache – Pagini similare
    2006 North Korean nuclear test – Wikipedia, the free encyclopedia
    If the North Korean nuclear test is less than even a kiloton in yield, it would be a historically small inaugural nuclear test. …
    – În Cache – Pagini similare
    When I was counseling an acquaintance who had just been laid off, I said, “one has to have a back up plan.” She poignantly said, “that job was my back up plan.” I don't mean to be flippant here but competition is now rampant in America, whether for jobs or even for a comfortable retirement. That is what the bankster scandal was all about, see an opportunity (streets paved in gold) take it. No matter what! As we have

  • katzo7

    HE'S BACK (ned).

  • Mastachopchop

    Thanks Fujisan. This is awesome.

  • katzo7

    IMO still could go either way. I am positioned short. Hoping pressure from both the Weekly and the 60 will bring Daily down. Awaiting a potential break of EW count Daily. Oscillator a bit too high for me in Weekly, not clean Weekly. But note the relative oscillator sizes in the 60, up and down moves. Did up move run out of stream?
    Ignore the spelling errors in center panel, screen grabbed too early.

    http://www.screencast.com/users/katzo7/folders/

  • LostIllini

    Breathe Katzo….Breathe…. Go walk the dog and pet the wife or vice versa, enjoy your Holiday and to any vets who may be lurking here… “Thank You”.

    You are correct, even if your link doesn't work, the weekly is in fact bullish we have to go up this summer before we dump. Short Term is down the fed has to scare the living bejesus out of everybody to get them to buy there snake oil, this depends on them selling deflation. Who knows they may even be right. Deflation equals tanked equities (this is a reflation/inflation bear market rally), lower gold, stronger dollar and ta da! less risk aversion which can only be good for T-bills. (and guess who has lots and lots of T-bills).

  • LostIllini

    To all the gold miner bears out there…..

    http://www.youtube.com/watch?v=KC9OeOG9pnQ

  • C.C. Rider

    Anyone care to guess how this plays out for equities? Hint: Commodities will take this bear rally further than most expect if the dollar goes back to 72. Dollar looks to increase it's rate of descent next week.

    http://stockcharts.com/charts/gallery.html?$USD
    http://stockcharts.com/charts/gallery.html?$CRX
    http://stockcharts.com/charts/gallery.html?$SPX

  • annamall

    LMOL 😀

  • annamall

    Morning all, I see Ned has been spinning his web of crap whilst I was getting my beauty sleep. He should be gone, if I missed anything please let me know. God he's so boring! 😀

    Looks like the futures came right back to where they were before they open yesterday. Mole as usual called that one!
    I am getting a little itchy for tomorrow already. :-)

  • annamall

    Mole as usual you were right on checking out this a.m.'s futures looks like we are right back were we were @ 6pmEST yesterday. +!

  • annamall

    I got BS. Feels good to nuke first thing in a.m. 😀

  • annamall

    LMOL I just saw this! 😉

  • annamall

    Heads up for those watching Index futures just went RED!! I believe they close @ 11:30am and open back up @ 6pm

  • katzo7

    No to dog.
    Yes to wife.
    Wish it was the other way around! ROTFLMAO
    Just kidding.
    I think I mentioned this before but they just did a poll. About 90% of men polled stated that best state for man was unmarried.
    90% of women polled said best state for women was married. What does that say?
    Sorry about link, had trouble with it this morn. Surprisingly I checked it right after and it worked.
    http://www.screencast.com/users/katzo7/folders/

  • katzo7

    Need someone to scratch your back?

  • annamall

    😀 You would have to have a very long arm.

  • annamall

    Ok I was sitting here enjoying my cappuccino, and for the first time had a chance to listen to “HOUSE OF CARDS” on CNBC. It really amazes me that we have gone through this financial crisis, and when you hear how greedy People were and Wall Street, ect. that people actually don't realize that we are NOT GOING TO GET OUT OF THIS in just a year + some time.

    We have a long long way to go and will retest and probably break those lows of March sometime in the not so far future.

  • annamall

    BTW Hats off to all the Veterans, we thank you for your service. My Dad being one of them!

  • katzo7

    I have some frequent flier miles. LOL

  • Iguanadon

    They've been flipping all over the place due to the North Korean nuclear test I believe S&P futures were up about 6 pts and then dropped to -6 in a matter of minutes. Then stabalized in the flat area. See what tomorrow holds for us.

  • innatedc

    Ta, Ta…as self appointed IA (internal affairs) of the MOMO department, that my friend, is a violation…please come by internal affairs for punishment…..

  • annamall

    Wow you think that would really spook people, it spooks me!! We will see tomorrow you're right Ig.

  • annamall

    Thanks Inna! :-) someone has to keep the Morals officer in check.

  • rhae

    think I will just concentrate on good set-ups and forget everything else…. DUG seems to be setting up nicely. hmmm, GDX short / DUG long they both are getting over cooked on opposite sides. (daily)

  • rhae

    You may be correct… I was looking at the Forex futures charts of major currencies. No doubt the dollar has been pounded lately… And the others getting over heated short term. I agree that the dollar may see 72 or even lower. But, short term I would not underestimate the GREED of Forex traders.

  • standard_and_poor

    gOOD oNE, I almost believed it.

    ________________________________

  • Peasant

    I've becomed obsessed with the dollar. I even googled long-term daily chart of the dollar and found this gem (albeit a few months old). Notice how often 80 has attracted buyers:

    http://4.bp.blogspot.com/_H2DePAZe2gA/STfwl4CDp

    Here is a weekly chart of the US dollar going back to 7/2001:
    http://content.screencast.com/users/peasant/fol

    and a daily chart of the corrective wave which started in March 2008.
    http://content.screencast.com/users/peasant/fol

    Looking at both of those charts, are we still in the corrective wave from March 2008? There is an abc correction from March 08 to March 09 and then an ABC correction from March till now. If the dollar does catch a bid at 80 then I expect oil, gold, and stocks to tank in the short-term but then who wants to buy the dollar knowing that our own govt is trying to devalue it?
    Does the last couple of weeks in the bond and currency markets indicate that China and other foreign central banks are dumping their treasuries? Are nations converting their dollar reserves to euro and yen?

  • Peasant

    I've becomed obsessed with the dollar. I even googled long-term daily chart of the dollar and found this gem (albeit a few months old). Notice how often 80 has attracted buyers:

    http://4.bp.blogspot.com/_H2DePAZe2gA/STfwl4CDp

    Here is a weekly chart of the US dollar going back to 7/2001:
    http://content.screencast.com/users/peasant/fol

    and a daily chart of the corrective wave which started in March 2008.
    http://content.screencast.com/users/peasant/fol

    Looking at both of those charts, are we still in the corrective wave from March 2008? There is an abc correction from March 08 to March 09 and then an ABC correction from March till now. If the dollar does catch a bid at 80 then I expect oil, gold, and stocks to tank in the short-term but then who wants to buy the dollar knowing that our own govt is trying to devalue it?
    Does the last couple of weeks in the bond and currency markets indicate that China and other foreign central banks are dumping their treasuries? Are nations converting their dollar reserves to euro and yen?

    sorry – i didn't mean to post this twice.

  • katzo7

    Sorry Inna and Anna,
    I honestly thought I was replying to B Squirrel who has invited me down to FL to go to Siesta Beach. Now if you cannot trust the MOMO, who can you trust. Sorry!

    B Squirrel, you there? Remember to back up my statement good ol' buddy. Remember when I covered for you? The bottle of scotch is on its way.

  • katzo7

    Excellent Peasant.

  • lilme

    This is what concerns me about shorting this market (Doug Kass):

    http://www.thestreet.com/story/10504723/1/kass-

    Also a hedge fund manager at Between the Hedges (he is bullish) has spoken of the same problem, fund managers having to get on the rally train late.

    I have been watching for an increase in volume since January and have not seen it which made me suspect this rally, but I cannot 'ignore' the price increases totally….what I am saying is that I know the rally is 'suspect' due to lack of volume but we may see more, based on anecdotes like this.

    Feedback appreciated.

  • Peasant

    Thanks katzo. I've been expecting a reversal to the upside for the dollar forever now and my trading account has suffered greatly. I even went long commodity names last week and got burned again while the dollar continued to fall. It seems if I hold a position more than 2 days, it turns into a loser.

    I went to Home Depot over the weekend and the place was packed (DFW metroplex). So much so there were no shopping carts to be found!!! I keep thinking is it really as bad as everyone and everything indicate or…

  • standard_and_poor

    Morning sweetness I'm sending you a monster lobsta to protect you against katzo, or you can just boil it (and katzo if he shows
    up). Have a great holiday!
    http://www.youtube.com/watch?v=IoamPkU6c1E

  • annamall

    Morning sweetie, glad to see they let the monsta lobsta go! :-)

  • Fujisan

    USD/JPY Chart update. It looks like a=c pattern complete (it's off by $0.04) and ready to turn.

    http://content.screencast.com/users/Fuji-san/fo

  • kinihepu

    One thing that was brought to my attention is that our trade deficit has plummeted. Because consumers aren't spending dollars aren't flowing out of the country. What fueled this last bull market was the cycle of those dollars flowing back to the US and into treasuries. It's the deal that we've cut with the rest of the world. They gave us our money back and we gave them pieces of paper (of suspect value of course).

    They are no longer buying treasuries because they don't have to. While that might not be the complete cause, it can't be ignored.

  • katzo7

    Are you sure katzo really exists? Have you ever seen him?

  • standard_and_poor

    It just so happens that C.S.U.A.K. has video proof. With their kind permission:
    http://www.youtube.com/watch?v=x7PwsNe-FZU.

     

    ________________________________

  • Blind_Squirrel

    I know nothing!!!

    I see nothing!!!

  • http://anomalousmaterial.blogspot.com CastorTroy

    No matter how you see it, the SPX 875 area is a key technical level, a multiday support and also the neckline of a potential double top with target 830. I guess we will get a clue very soon whether we will breach that level…

    http://tinyurl.com/r4waxr

  • Peasant

    Kass was net short just a few weeks ago. Everyone wants to be the contrarian to the contrarian. The hedge fund managers don't know any better than anyone else.

  • molecool

    It's also been bouncing against its 2.0 BB for a few days now – usually there is a turn nearby once you see a BB touch and then a slow down.

  • KidDisco

    Memo
    From : Bull Rapist
    To : Bulls
    Subject : FYI
    Message : http://www.nytimes.com/2009/05/25/business/econ

  • katzo7

    Just a littl' too late. Katzo the phantom offered the guy $50 for that lobsta and it is now salad;. Sorry Anna. I got lobsta, he got vodker! LOL

  • katzo7

    I you are anything like the Blind Squirrel, I am afraid to open the above youtube.

  • katzo7

    You see nothing! Did you see that Marvin Gaye cover by Sarah Conner? I bet you saw that! I bet you saw that more than once. Now I had to because in my new capacity as chief MOMO (morals monitor), I had to determine if it was acceptable or not. Need to pause now, and come back and look at it with a fresh mind again. Decision still TBD.

  • katzo7

    I take my MOMO role seriously and when in office, run it like a gulag. Even if I am wrong, I am right.

  • onorio

    all set for P3!

  • Iguanadon

    Another way to look at it is that Home Depot was swamped because fewer people took holiday trips and they're looking for less expensive things to do around the homesteads. No longer upgrading by buying bigger homes, instead dressing up the ones they know they'll be in for years to come.

    Just another angle to think about.

  • AntG624

    Fuji, excuse my ignorance, but if we're unable to trade currencies would you recommend simply going long $USD? Or maybe Long UUP & Short FXY?

  • Osso

    Wednesday May 27th. the 2nd. most bullish day of the month.

  • onorio

    and why is that?

  • Osso

    month statistics.

  • katzo7

    This has been a picture perfect New England day. Cut down two trees that fell over with a chain saw (macho man) and back will suffer for a few days.
    http://www.youtube.com/watch?v=AO43p2Wqc08&feat

    There has been a lot of gym locker room horsing around yesterday and today and I can blame it all on Anna, S&P, Blind Squirrel, and Inna our new member who should know better (LOL). I, for one, did not get dragged down in the muck and mire, but continued to turn out research charts of quantity and quality. Much discussion has occurred about the dollar today so I thought I'd take a look. Actually, I have reached no conclusions on the longer time frames (week, month) but this caught my eye, the 60.
    I used UUP.
    http://www.screencast.com/users/katzo7/folders/
    Note the MACD/stochs turning and the almost perfect proportions of the EW pattern. IMO day and week were more inconclusive.
    So in conclusion, cut out the horsing around or you will get a rat-tail snap from my towel. And actually open up a chart. ROTFLMAO.

    MAcho Man–http://www.youtube.com/watch?v=s2ar1OB1LSQ
    Get three coffins ready!

  • C C Rider

    Dollar woes. Weekly trendline break and weekly ADX reading about to move over 20 indicating strong directional move, in this case down.

    http://content.screencast.com/users/texana44/fo

  • http://forkoholic.com Forkoholic

    risk management or Rice management?
    Those people on that pic
    looks to me they just planting rice ;-))

  • tahertrader

    Nice charts Fujisan – how about the proshares ultrashort yen YCS (or short the ultra yen YCL)?

  • katzo7

    And Iguan, how much did they spend? That is the key, a walk around with a shopping cart is not telling, a cart full of items is.

  • standard_and_poor

    *&*%*#*%! Once again I have been left speechless unlike you. 
     

    ________________________________

  • standard_and_poor

    You're not even afraid of 200 lb. monsta lobstas, how could a little video harm you.. 
     

    ________________________________

  • C C Rider

    McHugh is calling for a big move tomorrow based on a small change in the McClellan Osc. on Friday. Wonder which way it's going?

  • molecool

    ¤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„¸

  • KidDisco

    Memo
    From : Bull Rapist
    To : Bulls
    Subject : FYI
    Message : http://www.nytimes.com/2009/05/25/business/econ

  • katzo7

    Just a littl' too late. Katzo the phantom offered the guy $50 for that lobsta and it is now salad;. Sorry Anna. I got lobsta, he got vodker! LOL

  • katzo7

    If you are anything like the Blind Squirrel, I am afraid to open the above youtube.

    Post Script-oh it wasn't that bad S&P. I especially like the part about the gazelles in the wadi. Very touching. The prancing. The mothers watching out for the baby. Eating tall waving savannah grass. Sweeeet. See Anna, I am so sensitive!

  • katzo7

    You see nothing! Did you see that Marvin Gaye cover by Sarah Conner? I bet you saw that! I bet you saw that more than once. Now I had to because in my new capacity as chief MOMO (morals monitor), I had to determine if it was acceptable or not. Need to pause now, and come back and look at it with a fresh mind again. Decision still TBD.

  • katzo7

    I take my MOMO role seriously and when in office, run it like a gulag. Even if I am wrong, I am right.

  • Onorio

    all set for P3!

  • Iguanadon

    Another way to look at it is that Home Depot was swamped because fewer people took holiday trips and they're looking for less expensive things to do around the homesteads. No longer upgrading by buying bigger homes, instead dressing up the ones they know they'll be in for years to come.

    Just another angle to think about.

  • AntG624

    Fuji, excuse my ignorance, but if we're unable to trade currencies would you recommend simply going long $USD? Or maybe Long UUP & Short FXY?

  • Osso

    Wednesday May 27th. the 2nd. most bullish day of the month.

  • Onorio

    and why is that?

  • Osso

    month statistics.

  • katzo7

    This has been a picture perfect New England day. Cut down two trees that fell over with a chain saw (macho man) and back will suffer for a few days.
    http://www.youtube.com/watch?v=AO43p2Wqc08&feat

    There has been a lot of gym locker room horsing around yesterday and today and I can blame it all on Anna, S&P, Blind Squirrel, and Inna our new member who should know better (LOL). I, for one, did not get dragged down in the muck and mire, but continued to turn out research charts of quantity and quality. Much discussion has occurred about the dollar today so I thought I'd take a look. Actually, I have reached no conclusions on the longer time frames (week, month) but this caught my eye, the 60.
    I used UUP.
    http://www.screencast.com/users/katzo7/folders/
    Note the MACD/stochs turning and the almost perfect proportions of the EW pattern. IMO day and week were more inconclusive.
    So in conclusion, cut out the horsing around or you will get a rat-tail snap from my towel. And actually open up a chart. ROTFLMAO.

    Macho Man–http://www.youtube.com/watch?v=s2ar1OB1LSQ WON'T LOAD SO COPY THIS AND PASTE IT.
    Get three coffins ready!

  • C C Rider

    Dollar woes. Weekly trendline break and weekly ADX reading about to move over 20 indicating strong directional move, in this case down.

    http://content.screencast.com/users/texana44/fo

  • http://forkoholic.spaces.live.com/ Forkoholic

    risk management or Rice management?
    Those people on that pic
    looks to me they just planting rice ;-))

  • tahertrader

    Nice charts Fujisan – how about the proshares ultrashort yen YCS (or short the ultra yen YCL)?

  • katzo7

    And Iguan, how much did they spend? That is the key, a walk around with a shopping cart is not telling, a cart full of items is.

  • standard_and_poor

    *&*%*#*%! Once again I have been left speechless unlike you. 
     

    ________________________________

  • standard_and_poor

    You're not even afraid of 200 lb. monsta lobstas, how could a little video harm you.. 
     

    ________________________________

  • C C Rider

    McHugh is calling for a big move tomorrow based on a small change in the McClellan Osc. on Friday. Wonder which way it's going?

  • http://evilspeculator.com molecool

    ¤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„¸