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Sub Zero Monday Rub Down
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Sub Zero Monday Rub Down

by The MoleAugust 17, 2009

For a POMO day today’s tape was extremely weak – especially into the close:

We basically stayed below the zero mark all day. I expected an EOD spike due to today’s $7 Billion POMO auction but we didn’t get as much as a whimper. So, after much internal deliberation and consultation of my tea leafs I decided to say ‘fuck it’ and bought a healthy chunk of my March puts for about a 30% premium over last Friday’s closing prices. Yes, there’s a 50/50 chance I’ll take it up the ass for a week or two if we bust higher from here but the odds at this point are not looking so hot. Plus I also know how to hedge myself in the futures if I see the ‘old trading patterns’ we’ve come to enjoy in the past few weeks re-emerge.

Program Trading Update:

geronimo/ES: -2.5

This trade was actually the reason why I was waiting to bulk up on puts today – but it also was the reason that I took a big risk and loaded up into the close (which is something I rarely do – I always buy the rips). Looking at the underlying geronimo pattern it seemed to me the bulltards tried to bang the tape higher but were incapable of doing so. Not a good sign – but again, it could have been just a ruse – perhaps we rip higher from here – I’m giving this 50/50 as we have not breached any major support lines yet.

Alright, I’m actually worn out – will chime in later.

4:50pm EDT: Prechter bonus clip:


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 the usual social media waterholes.
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  • http://trading-to-win.com/ DavidDT

    starting 4:18 and pay close attention at 5:10
    http://www.youtube.com/watch?v=1e7UldMNO2M

  • mmTesla

    Closed hedge for a -2.5 /ES pts oh well, Puts did great today!!!!

  • Keirsten

    SPY support at 98.40, EOD close 98.54. A gap fill remains at 98.08.

  • TonyMontana

    Keirsten,

    I was finally able to exit my OIH puts for a profit (albeit a small one) earlier this morning 🙂

    Now, I'm just learning TA here, so I need some reassurance of a possible Island Reversal Formation I'm seeing on the SPY/SPX, what do you think?

  • standard_and_poor

    This tune is for all my hillbilly friends in London:
    http://www.youtube.com/watch?v=0bm6QMQLRu4

  • Keirsten

    I'm so glad to hear that Tony! You're patience worked well, as I know you were probably nervous about that trade. Very glad to hear that! 🙂

    I mentioned early this morning to Iggy about that pattern – I don't think SPY can seriously qualify for an island reversal pattern here. It's true there remains a very tiny gap, but it's so small (.09) I wouldn't bet the farm on it here. I think the unfilled gap we left this morning, with little attempt to fill, is more telling and more assuring for the bearish view, even short term. Also, we've had 4 EOD closes near the low of the day and/or sell-offs in six days- and two of those days were POMO auctions. ( I should check on that to be sure, but I think that's correct.) That was unheard of even a week ago.

  • Keirsten

    Nice! That led me over to Celluloid Heroes.

  • Vardoger

    What do you think Keirsten, high in or September?

  • http://zstock7.com/ zstock

    Monday is an awful way to spend 1/7th of your life.

  • TonyMontana

    Thanks for your input Kirstein, as I wasn't totally sure about the island reversal pattern.

    I do hope that we get a little more downside here, as I still have some ERY shares and some FAS Aug 65 puts that I decided to hold overnight hoping to a retracement to the 960 level on the SPX.

  • Vardoger

    Is anyone else having trouble viewing ISEE data?

  • Keirsten

    That's still on my radar, Var. If they started the party early, the charts will lead us. I haven't looked at the weekly charts after today, but they might have a story to tell. There is so much close support on the dailies that could easily stop things in their tracks and create a bounce to that 1050 target, that I can't ignore it. Failures at the 50 would be a signal to me things probably won't get as high as considered. My original take was the first week in September, target 1050-ish and then a slide. I'm more than happy to adjust that target though. 🙂

    Our little XOM has played out well, hasn't it? mwahahahaha.

  • http://partiallystapled.com/ gxti

    Damn… no EOD show rally means no entry for puts! Right now my only position is 200 shares short on FTR; currently up $44 from an entry of 7.05. Still happy about my SPY gamble not turning out disastrous, but I don't think I'm going to do that again anytime soon.

  • Keirsten

    Sounds about right, Tony. I had 96.11 on the SPY as a potential downside target.

    A good look at an island reversal is the daily chart on RIMM that shows a gap down in Feb '09 and a gap up in April '09. It's a really beauty. FSLR just had an island reversal not too long ago- another good example of that pattern just to give you something to visualize. You'll see how both gaps share a good portion of the same space.

  • Vardoger

    Grrrr… nice job adding some march's bro. I don't like that 88% bulls number at all.

  • bist

    This is opex week. The drop today screws a lot of call holders above 1000. Max option pain on spy is 98. So I'm expecting to see a lot of sideways consolidation the rest of this week to work off any remaining overbought conditions.

  • http://www.portfoliotilt.com PortfolioTilt

    Well this market is due for some solid profit taking after the move. This is healthy, the real question is how much further can it go in the short term. The big move has already been made 1015-970, so the question is if 950 is major support, I am not going short in the choppiness to try and catch the last bit of this. The island top on the NASDAQ is ominous though and should have bearish implications in the short term as prices correct http://bit.ly/jULh5

  • ropey

    Interesting situation – on the daily SPY – we're right on top of the large spike from 23rd July – up vol there was 265mill, we put in a 230ish down day today. That's really the only thing stopping this from falling to the 96 level so in a bit of a quandry with regards to OI support and this…..if tomorrow is another heavy vol down day then i may have to bail on st hedges to the long side…could be a fairly rapid dump to that level but looks like reasonable support there.
    The pivots also support a nice run back to the 50ma around this level…..going to be an interesting week for sure..

  • ropey

    closed at 98.31 or ami missing something? lol

  • ropey

    lester now posting on SOH *sigh* he won't give up

  • http://thetickerstreet.blogspot.com/ TickerStreet
  • Keirsten

    Stop laughing at me! LOL Yes, doh… 98.31. I wonder just how reliable the rest of my feeds were today. Oy. I might as well be trading via delayed Bloomberg quotes or something at this point.

  • http://www.mylifemytrade.com MyLifeMyTrade

    I saw that too… and he went 15% long Spy Sep calls at close… He might get lucky with them though.

  • http://www.mylifemytrade.com MyLifeMyTrade

    I like your avatar

  • amokta

    some continuity errors?

  • http://www.mylifemytrade.com MyLifeMyTrade

    Mole what strike price puts are these – the March ones?

    Also, what is your max pain point i.e. when you bail out on these? Thankx

  • http://www.mylifemytrade.com MyLifeMyTrade

    Also, why SPY and not QQQQ or IWM?

  • Vardoger

    Anyone else shorting /yg tomorrow?

  • Vardoger

    What's that, $40 bucks?

  • innatedc

    One thing that did happen that I noticed was if the last 30 min volume bar on a POMO day was smaller than the preceding 30 min bar then the ramp would begin the next morning…..perhaps a way the boyz keep us on our toes….

  • http://trading-to-win.com/ DavidDT

    “I trade for bread, not for excitement”

  • marketmaker

    “Right now, we find ourselves in the middle of August. It’s one of the worst times to analyze the market. Why? Because everyone who matters is on vacation right now. Seriously.

    As a banker, I’d schedule meetings year round except for the last two weeks of August. It was a sacred time. Nobody was in town. Not the money managers, not the hedge fund managers, not the analysts, not the bankers.

    Everyone was on holiday. Some in the Hamptons… some in Europe.

    The only people on Wall Street this time of year are junior traders and junior bankers.

    If you don’t believe me, just look at trading volumes. They always fall off at the end of August. That’s why it’s important not to give too much weight to market action right now.

    I’m a big believer and follower of market action. That’s why I’m studying the markets every day.

    I’m still studying the markets. However, I’m not about to make any earth shattering changes to my positions this week or next. I’m, not going to discover a major change in market sentiment… not this time of the year. Not the last two weeks of August.

    We’ll discover the real direction of the market in early September. That’s when all the traders and money managers are back at their desks. That’s when the market shows its true colors.”

    ~Brian Mikes, editor of Dynamic Wealth Report(free to subscribe to)

  • Anonymous

    Today, they try to screw holder’s of call options with strikes above 1000, tomorrow, they screw with holder’s of put options with strikes below 979. Can’t see much happening this week besides sideways action. I’m also hoping for a move up, and then take mole’s advice and enter into March puts. Some stocks that I am considering shorting down to the bone:
    XLF
    C
    BAC
    FSLR
    MS
    USO and some others. Will post some charts when I find time.

  • BovineStew

    what happened to your hair?

  • SpeedSkt1

    With a close outside of the upper bollinger band, shouldn't we watch out for a potential VIX buy signal here? Surprised no one has mentioned it.

  • ScubaSteve

    Some liquidity problems on IWM puts perhaps.

  • http://www.mylifemytrade.com MyLifeMyTrade

    Meeting a market maker next week – always been very curious to meet one. He is a good friend of mine.. never knew he became a MM… I will share interesting findings (if any)

  • fa_q

    I worked on the Street for years. That's bullshit and a complete wive's tale. We dropped 250 points last summer. It's one of the many myths that have worked their way into “fact”. The day before Labor Day weekend…yes. The big boys may not schedule meetings or whatever crap he's slinging, but they damn know every position and what it's doing.

    This is humorous for two reasons: One, it insinuates the big boys just leave for a couple weeks and then pick up their spreadsheets when they get back to see what's going on. Their isn't a major player on the Street for ANY bank that has a true vacation. Second, it's hilarious that articles like this come out on down days. When it's going up…everyone's a genius and preparing for the new bull market. Down day? Ah, no worries, everyone is on vacation.

    The amazing part of BS like this is how many people believe it.

  • mrclam

    If it's outside the upper band, then we need:
    a: close back under the upper band
    b: close deeper back into the upper band than a

    no? isn't that a sell setup and not a buy?

  • mrclam

    he's playing it small 😉

  • grednfer

    So if you …..
    Think the dollar will rise
    And commodities will fall
    And equity prices will fall.

    You may want to short the Brazilian Index….EWZ
    It may look like one of those slope charts, but it looks like a clean short with good downside.

    Check out my fan, man.

    http://askins.mortgagexsites.com/xSites/Mortgag

  • SpeedSkt1

    With the VIX closing above its upper bollinger band, I believe it's a potential buy setup for the SPX and a sell setup for the VIX.

  • mrclam

    oh okay, yeah. you said buy signal on the vix up there, so i got confused 🙂 anyways, its just step 1, we should wait for step 2 first i think…

  • marketmaker

    Hey, sorry man.

    I was just trying to contribute. It was the best I could do, as I'm really not very good at technical analysis.

    But I do appreciate the response. This guy said last week that NOW was a good time to buy real estate. That left me scratching my head.

    Thanks fa_q! I am going to take this opportunity to cancel my subscription to their free newsletter.

    Less noise!!

  • Keirsten

    Now there's something to keep an eye on Inna! I like it!

  • Keirsten

    It caught on fire when I was frying all of that bacon this morning. I loaned you the fire extinguisher last night, remember?

    (Going back to finish my nap now. I stayed up all night like a little kid on Christmas Eve. I'm easily amused lately.)

  • steveo77

    2 Perspective on ES chart, and dare I say Head and Shoulders. PS I never threw the H&S under the bus. The notion is that just because it failed did not mean it was invalid, it did accurately measure emotion/sentiment, however, HBB just the blew the shit out of it to take the bears money.

    Also in my next post, I have about 16 annotated charts….not just tickers Mole….full on charts.
    They also have multiple reasons to short them.

    http://oahutrading.blogspot.com/2009/08/es-pers

  • BovineStew

    apparently, I dropped the ball. have a nice nap and grow that hair back.

  • fa_q

    No, no, no – I didn't mean any of that. First I wasn't taking a shot at you. it's just one of those nails on a chalkboard type of things that pop up. Yeah, now is a good time to buy real estate…if you hate money.

    I woldnt cancel it if it's free…just understand you're getting what you pay for 🙂

  • http://www.mylifemytrade.com MyLifeMyTrade

    careful shorting financials – they might have more upside remaining in them.

  • steveo77

    Short Tickers:
    AOD, BBT, BCS, BLL, COH, CY, DTG, GFA, NILE,PFF, RGR, SEOAY,WAG, WAT
    Long Ticker:
    VIX

    Appreciate anyone who has additional knowledge or tech analysis on these to comment. These all have multiple reasons to short them. I am not looking at MACD or RSI, just patterns, candles, and Fibs…and yes “Fundamentals”

    There are 3 Boatloads of Charts, a veritable Flotilla O' Charts with these tickers, annotated and Fib'd, no lie, how much more leechier can it get.

    2 Perspective on ES chart, and dare I say Head and Shoulders. PS I never threw the H&S under the bus. The notion is that just because it failed did not mean it was invalid, it did accurately measure emotion/sentiment, however, HBB just the blew the shit out of it to take the bears money.

    Also in my next post, I have about 16 annotated charts….not just tickers Mole….full on charts.
    They also have multiple reasons to short them.

    http://oahutrading.blogspot.com/2009/08/boatloa

  • jamesmarkii
  • innatedc

    He's right…that's why I think the big slide ain't happening yet….

  • wex

    Unless you are a very large trader, it doesn't make any difference about who's trading your order has no impact and the points gained or lost are just that. When the 1000 contract players are involved then perhaps liquidity becomes a factor. As you said even if they are quiet the big traders are aware of the market's moves. They usually keep positions towards the low end while on vacation or long weekends.

  • Iguanadon

    Daneric has some good stuff, as usual. Recap of today as well as a big picture post.

    http://danericselliottwaves.blogspot.com/

  • http://www.genxantihero.blogspot.com LostIllini

    Just a thought for the Uber bears…

    With the way CNBC was hyping the selloff this morning anything less than a 5% down day today was a disappointment. Sorry guys big gap down and flat all day just really doesn't do it for me. 101.80 is big time resistance and I think the bulls are just reloading their rocketships to blast through it. Please note chart below (made last week still relevant)

    http://www.screencast.com/users/lostillini/fold

    Also the upward sloping channel spy is parked in goes all the way down to 91, wake me up when that level gets violated.

    This is usually an easy money week but I am sitting this one out. It SHOULD go down damnit but I smell a Bear-B-Que…. better safe than sorry.

    (2) vents today…. http://www.genxantihero.blogspot.com

  • http://www.genxantihero.blogspot.com LostIllini

    Damn Disquis!!!!! Oh welll…..

    Just a thought for the Uber bears…

    With the way CNBC was hyping the selloff this morning anything less than a 5% down day today was a disappointment. Sorry guys big gap down and flat all day just really doesn't do it for me. 101.80 is big time resistance and I think the bulls are just reloading their rocketships to blast through it. Please note chart below (made last week still relevant)

    http://www.screencast.com/users/lostillini/fold

    Also the upward sloping channel spy is parked in goes all the way down to 91, wake me up when that level gets violated.

    This is usually an easy money week but I am sitting this one out. It SHOULD go down damnit but I smell a Bear-B-Que…. better safe than sorry.

    (2) vents today…. http://www.genxantihero.blogspot.com

  • http://www.genxantihero.blogspot.com LostIllini

    Just a thought for the Uber bears…

    With the way CNBC was hyping the selloff this morning anything less than a 5% down day today was a disappointment. Sorry guys big gap down and flat all day just really doesn't do it for me. 101.80 is big time resistance and I think the bulls are just reloading their rocketships to blast through it. Please note chart below (made last week still relevant)

    http://www.screencast.com/users/lostillini/fold

    Also the upward sloping channel spy is parked in goes all the way down to 91, wake me up when that level gets violated.

    This is usually an easy money week but I am sitting this one out. It SHOULD go down damnit but I smell a Bear-B-Que…. better safe than sorry.

    (2) vents today…. http://www.genxantihero.blogspot.com

  • http://www.genxantihero.blogspot.com LostIllini

    ust a thought for the Uber bears…

    With the way CNBC was hyping the selloff this morning anything less than a 5% down day today was a disappointment. Sorry guys big gap down and flat all day just really doesn't do it for me. 101.80 is big time resistance and I think the bulls are just reloading their rocketships to blast through it. Please note chart below (made last week still relevant)

    Also the upward sloping channel spy is parked in goes all the way down to 91, wake me up when that level gets violated.

    This is usually an easy money week but I am sitting this one out. It SHOULD go down damnit but I smell a Bear-B-Que…. better safe than sorry.

    (2) vents today….

  • http://www.mylifemytrade.com MyLifeMyTrade

    Key levels for ES in the globex session:

    982.5 –> we stayed below this value ever since the market opened at 9:30am (except for a brief moment)
    985/988 –> last week's swing lows

    A move above 988 would do serious damage to the near term bear case IMO.

    IMO, we will see a grind to the upside for remainder of the week.. with a possible move down next week stopping at 950 or so.

  • http://www.mylifemytrade.com MyLifeMyTrade

    Interesting choice of candle colors – yellow and blue – or may be I just turned color blind 2 mins ago

  • http://tradingperspective.blogspot.com perspective

    spx should put on the 1100 coat at some point this fall –

    this weakness shouldn't extend too much further.

  • de3600

    lmao to funny great points so true

  • http://twojackstrading.blogspot.com TwoJacks

    this initial selloff shouldn't last past wednesday or thursday, then we bounce. bears need to apply the pressure during this selloff otherwise new highs are in order.

  • horace_kent

    “Vanguard cuts access to stock funds as investors react to rally”

    No shit……….

    http://www.bloomberg.com/apps/news?pid=20603037

  • http://trading-to-win.com/ DavidDT
  • roncofooddehydrator

    Just a couple observations:

    We haven't had 3 down days on the SPX in a row since June 15-17. The third down day was basically a doji, the close was only 3 points lower than the open.

    In the 114 or so trading days since the March low, we've had 3 down days in a row three times. One of those times it extended to 4 down days in a row.

  • rhae

    mine ok, green / red… maybe it's your video driver, lol
    Talk about interesting colors, I don't use Ameritrade Stategy Desk much… but you can link your candlesticks to an indicator and select the color,,, such as stochastics,,, the higher it goes the greener the sticks, and the lower, the redder… you can set it up any way you want… Thought that was kinda kool.

  • jamesmarkii

    solid observation: Asia isnt looking too well at all and i am clueless as to how tomorrow will go as are most of you.
    1. gap and crap
    2. crap crap, crap+ eod melt up leading into a + wed and sideways into OPEX
    3. selloff 1st thing
    ???
    4. gap and backtest 985, 988, 992

  • rhae

    USD range 93 — 96, I suppose that is possible… I never know. But, I am starting to see a problem with Uncle Bucky going forward. I suppose loss of Faith is as good as word as any.
    but, Capital Inflow may be more precise… Will we get the flight to a safer currency this time?
    Maybe not, to many BRIC country trading springing up. Those are countires trading each other's bonds to settle debt/credit. Leaving Uncle Bucky out of the game. I just am not so sure, it really might be different this time….

  • zenith191

    USD is skewing my view so I was looking at $SPX:$GOLD and see it hitting up into weekly 50ma which it has always been rejected at since the start of this crisis in Q3 07 …

  • jamesmarkii

    with the SPX at 666.79 we got 89$ on the USD, imagine the SPX at 350, 400, 450,
    $93-96 should be a lead pipe cinch.

  • Fujisan

    Greetings from Japan.

    I don't know why I decided to visit Japan at this time of the year – this is almost the worst time to visit as long as the weather goes….. it's been extremely humid and I feel like I'm living in a sauna all day long (I don't need to go visit Hot Yoga studio any more….)

    Just wanted to make a quick comment on a typical OPX week price movement.

    1. Tuesday is a trend reversal day,
    2. Wednesday is the most bullish day of the week.
    3. Thurs & Fri typically goes sideways, and
    4. Monday after OPX makes an intermediate low, and
    5. Tuesday trend reversal.

    Good luck to you all!

  • http://www.facebook.com/screasy v8muscle

    I think we'll be down early on tomorrow and then we will reverse in the afternoon. I'll be adding longs every 7 /ES points or so

  • http://www.facebook.com/screasy v8muscle

    I'm going to take mostly QQQQ, XLF, and IWM puts I think. I dont really like SPY options that much

  • http://www.facebook.com/screasy v8muscle

    i hope he does, I'm long septembers lol

  • TheMacroEconomist

    Yes and the more down Friday is, the more down the Monday after OPX tends to be.

    Never read a good explanation as to why. But I suspect it may be due to more of the huge put option hedges going into the money, sticking writers and market makers with unwanted long positions over the OPX weekend that they then look to unload.

    I'm fascinated with seasonality though it's a quant edge, never a guarantee.

  • rhae

    Amazing TA, sometimes I see something that seems a miracle, but maybe just blackbox manipulation? For blue blood chart watchers. This morning on the SPY about 11:00 came a spurious big spike, I thought. So I ran a fib on it, hi/low anchor. Then the fib extention anchor at precisley ( pre-slice-ly) .50…. just 3 clicks, nothing else… look how it panned out.
    SPY 30m http://screencast.com/t/JvBr6SpCSom

  • TheMacroEconomist

    Watch PPI and Building Permits at 8:29. (Housing Starts estimate is a lot more error prone than Building Permits.)

    Consensus seems to be -0.3% on the PPI with +0.1% on the Core PPI.
    If both numbers make positive then maybe commodities firm and pick the market up.

    Looks like ES peaked at 983.5 at 10:20PM, now back to 979.

  • http://kkmoney.blogspot.com kkmoney

    Mole, what do you think of CERN as a short? Too strong? http://screencast.com/t/r88Wdw5E

  • rhae

    Japan brings back wonderful memories, what area are you visiting? I have traveled much of it, while in the Serivce in the olden days… That was when the yen was 360 to a dollar, you figure when… 🙂

  • steveo77

    Short list link, sorted by TOS easy to borrow, p/E, and earnings date

    http://screencast.com/t/ss8U74eTYI

    permanent link on my site, along with downloadable Excel format, and txt file for ease of importing into a Watchlist.

    http://oahutrading.blogspot.com/

  • steveo77

    Thanks Fujisan, are you North, South, or Steam Bath (Tokyo)?

    I love the Fugu, Unagi, Uni, little white fish, and of course Toro! Enjoy.

    I also like slamming a credit spread for a 100% gain in a week….thanks to your help.

    My relatives are in Kanagawa and Kumamoto…I want to get back to visit.

  • CaptainAnarchy

    Short idea – any of the High-Yield Corporate Bond ETFs.

    Case in point, PHB. Looking at daily and weekly candles, the best description I can come up with is “takes the stairs up and the elevator shaft down”. I doubt we'll see a repeat of October's credit mayhem, but still some good potential.

    I'm expecting it to drop a bit more and then rally to a right shoulder off that neckline near 16.25. Then who knows?

  • springheel_jack

    JNK looks like a good short. Tim did a chart on that the other day at SOH.

  • shortcover

    Check out PFF. That is a preferred stock ETF. The dividend is big, but it falls fast when the momo starts to go. I tried to play it on the long side down in the teens and got shook out in the spring…it ended up being a double from those prices and have a double digit yield. I expect if we sell off again this will test those lows…

  • shortcover

    Check out PFF. That is a preferred stock ETF. The dividend is big, but it falls fast when the momo starts to go. I tried to play it on the long side down in the teens and got shook out in the spring…it ended up being a double from those prices and have a double digit yield. I expect if we sell off again this will test those lows…

  • annamall

    Morning all, I am glad I sold almost all my puts yesterday and am basically long, to me yesterday looked like nothing more than a correction, there was no volume to it, and it was orderly. Pretty much opened and closed same spot which to me, doesn't confirm a trend change. I know there are here that won't like that, well I trade what I see not what I want (and I love Bear tapes)

    We may even fill that gap from yesterday this week. G/L to all and have a great trading day! 🙂

  • http://www.thevolatilitysoma.blogspot.com GS751

    I have a friend that trades CDO's he is prettying interesting to talk too.

  • PRSGuitars

    Fuji's 'calendar' of sorts seems like it might play out — we need a small wave lower to finish up the C wave, but Kemal and others are looking for 960-970 before a wave 4 correction (and then a 5 down to 930-950 to finish this corrective…)

    I too am happy to be hedged as Anna just said. I'll close the puts above 995 (my short puts as a hedge against good 20% entries in Sep SPY puts from 1007ish+) and keep the aforementioned 'good' puts…

    am in major need of traderfeed (Dr. Brett) binge session to refresh for the weeks ahead. I want to lightly trade OpEx week to develop practice as well as keep my head in the game, albeit at a MUCH smaller sizing (single /es until I'm really back in the game).

    Hoping to really hit next week hard — willing to accept small victory in the drop for the time being, but also planning on scouting ahead ASAP for Mole's call to *BEGIN* the March-ish put bonanza. I think I'll scale 10% of allocated trade size for every 10 /es from here on up, 1000 – 1100. I figure that way I won't take the big money, but I'll make sure I'm along for the ride so i don't over-size and get spooked out in november or something.

    Good luck everyone — will have things settled in the trading psych dept soon and hope to be a contributing member again soon (but will settle for skill development week and as I said, slow-lane trading… maybe even some basic SPY shares just for simple, no-leverage trading basics nonsense).

    I often say, what would one week or month of focused training do for your career? If we can afford it — and at the moment, I'm not quite able to take more than a week — but what would we be able to achieve? It's easy then to say, why not take two hours a week to specifically work on trading goals… and constantly be improving?

    Just morning thoughts. Let's see these 830 numbers and the open and THEN I'll see if I'm trading or passing out for a few hours to check in on the PM session… Good trading, all!

  • onorio

    Carefull A. EUR/USD i leading this market and EUR doesn`t look me so bullish…seems like (iii) of 3 is about to start.

    I close my yesterday EOD calls for +5 and reloaded puts.

  • annamall

    I am out of EUR as well, staying on the sidelines for now there O.

  • http://www.mylifemytrade.com MyLifeMyTrade

    I love it when the MMs use some stupid news to drive the tape down by 4 to 5 points and then whip it back up again… Again, the bear case weakens if we ES closes above 988 on a 30 min candle… And if it closes above 992 on 30 min candle, then it is toast…. Just my 2 cents.

  • Iguanadon

    I am STILL amazed by the headlines…. UNEXPECTEDLY??? Why on earth would home building even be going on at all right now???

    I know, I know… don't let it get to me… but it's just mind boggling.

    “Housing Starts, Building Permits in U.S. Unexpectedly Declined Last Month”

  • http://trading-to-win.com/ DavidDT

    QQQQ 39.10 38% retr ofW3 ( SPY 99.40)

    there is good data, there is bad data and there is statistic

  • http://tradingperspective.blogspot.com perspective

    this is another comparison of the 86-87' momentum launch – probably the closest parallel w/data that i can find. as you can see – weakness should continue to be bought and we can assume that this “correction” will serve as the rallies midpoint.

    tradingperspective.blogspot.com

  • http://www.mylifemytrade.com MyLifeMyTrade

    key ES levels for today are 982.5, 988 and 992 – http://www.mylifemytrade.com

  • annamall

    Hi MyLife
    I agree! We shall see how it plays out today. 🙂

  • Vardoger

    DEFLATION here. How long until everyone realizes they are on the wrong trade?

    Shorting /yg

  • fuw

    The dollar index has broken out of its bull flag on the 15min, which support more downside in stocks today.

  • TheMacroEconomist

    “If you want to buy 1000 contracts, sometimes it's better to sell 100 first.”

    To which I add: if someone else sells the 100 instead of you, so much the better. 🙂

  • http://trading-to-win.com/ DavidDT

    “they” know it for a long time, but Abby does not want you to know about it – “Abbies” will be out of work then

  • TheMacroEconomist

    Those PPI numbers -0.9% overall and -0.1% Core (vs. -0.3% and +0.1% expected) should ignite the dollar's booster rocket, we'll see.

  • annamall

    As USD seems to be breaking out, I will pick up some SPY puts on this little bounce higher at the open. Probably Sept 97's

  • http://trading-to-win.com/ DavidDT

    very sad to be old – I forgot – who wanted to short USD at 78?

    speaking of “SPY Sep97p” – we might get some jumpy/sideways action today/tomorrow – you might have to trade around…JMHO

  • http://trading-to-win.com/ DavidDT

    W3 hit downside target yesterday, W4 38% today
    gl

  • fuw

    Yeah, we'll see. Right now the USD is dropping, but this might just be a retest of the upper bull flag line (at ~79.2)

  • TheMacroEconomist

    TA has been working really well the past 2 weeks, Elliott Wave and D-Wave.

    Keep fingers crossed. 😉

  • Iguanadon

    Back into TZA with a half position at 16.42

  • http://trading-to-win.com/ DavidDT

    temporary disappearance of HFT

  • http://www.mylifemytrade.com MyLifeMyTrade

    closed my overnight positions in Aug AAPL, RIMM, GS & FSLR calls

  • eunsuh

    the eur/usd must drop below 1.403, and continue south for this reversal to get some legs. Breaking 140 is key!

  • http://trading-to-win.com/ DavidDT

    wake me up when movie starts

  • thelefteyeguy

    come back at 3:30 est then…

    nothing to see…carry on…

  • mrclam

    Won't see deflation kick in in a real way until you have another black swan event or something causing dollar deleveraging again.

  • TheMacroEconomist

    A key data point is that ES traded as high as 986.2 overnight – 988 on the SPX. Could be that was the wave 4 high and we swing down.

    Attm I'm at a loss to figure out the day structure – best guess is VWAP oscillation here at the open.

  • fuw

    I agree, and would like to see a breach of 79.6 in the dollar index as a final confirmation. This lines up pretty well with your 1.40 level in the euro/usd.

  • Joe8888

    Update on GS 60 MIN ,,,H&S Top..

    Maybe what happens here, could give us a clue,what to expect from the markets ..short term..

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

    .

  • rhae

    SPY 30m needs to hold this strong support zone for bulls… I think it will… last I looked the stochastic 60m was below 0, would ya say that that is oversold in that timeframe…
    http://screencast.com/t/o93scAGRU

  • standard_and_poor

    Morning rats.
    Closed out most longs last night near close(will update in weekend report).
    Currently about 10% long.

    Will not enter any shorts yet – would prefer a late entry in this kind of market.

  • http://trading-to-win.com/ DavidDT

    just a gut feel – I think market will drift lower without violating yesterday's lows and the will got to my W4 targets (I am no fool to trade W4 – most chaotic wave of 'em all )
    QQQQ 39.10 38% retr ofW3 ( SPY 99.40)

    “nothing to see…carry on…” – I always recall “Naked Guns”

  • Vardoger

    In a real way?

    Falling Demand? Falling Prices? Debt Defaults? Bankruptcies? Layoffs and Wage Reductions? Falling Demand…

    I appreciate your opinion, I kind of feel the other way though. We need the opposite of a black swan event to really consider inflation or stabilization. Gov't spending isn't enough considering the mass amount of consumer debt and the insane growth rates we achieved during the last fifteen years. No demand IMO

  • 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„¸

  • http://alphahorn.blogspot.com/ alphahorn

    sweet i bot some F aug 7 calls at the close for scalp hedge, only up 53.2% thus far

  • mrclam

    Sorry, I should have been more specific. Shorting /YG is not necessarily the best way to play the deflation trade. For example, look at march. Gold hit its highs with a much stronger dollar than we have today. In other words, I guess what I'm saying is that you can't really trade the fundamentals in this, at risk of being wrong for a long, long time, and eating a significant drawdown. i agree with you that we are going to see deflation sooner than we will see inflation, but in a trading environment you can't let that color your trades.

  • CaptainAnarchy

    Interesting. I'm looking at the chart and considering how the perferred/common arbitrage unwind back in the fall might have impacted this ETF. I'm going to have to read the prospectus and play with the charts.

    Thanks!

  • CaptainAnarchy

    Interesting. I'm looking at the chart and considering how the perferred/common arbitrage unwind back in the fall might have impacted this ETF. I'm going to have to read the prospectus and play with the charts.

    Thanks!