Today:
Was awesome.
AND?
It was just one of those days (and weeks) where longs and shorts just seem to be working. Some of this is luck and some of it skill - but I just love when the volatility starts to increase... The cracks are starting to reveal themselves.
So, Anything Interesting?
A lot, again:
GS got murdered. I participated in only $1 of its death, but it was slashed by 3+% or almost $5 today. GS has been a market leader for some time now, leading the XLF rally since November 2012. This weakness is quite telling. After breaking that $147, next MAJOR support is in the $130 range. It has been forming a huge pennant on the weekly chart, and the bottom side of that pennant is where is see its next MAJOR support level - in the low $100's. This is huge for the bear case, and a major crack.
EUR/USD continued its slow slide down. This one has been weak for some time now, and cannot manage even the smallest of bounces. This scares me a bit, for I think it is due to bounce some time soon. Only time will tell. The contrarian in me says it will bounce - and also when you compare the US FED policy to the EURO central banks, the US FED is much, much more aggressive with monetary easing. So, while technically speaking, the chart looks lower to me, fundamentally, I think we go up. Final answer? I have no idea. WAG? EUR/USD drops over the summer, maybe testing the mid to low 1.20's, and then bounces back toward the 1.30+ level.
IYT - very weak today, giving up 1.6%. Another market leader is showing big time weakness and now looks to be very toppy. There is a lot of underside support in the 102-107 range - wide range, I know - so I don't really have a nice target here. It is just noteworthy that it was THAT weak today, weaker than the SPY.
XLF - continues to look very toppy like the rest of this list. $17.75 is my first target here, and if selling really accelerates, I am looking for that $16.50 area (10% correction).
SPY - breaking below that $152.90 area would be huge - that is what I am watching for my first SPY target (The SPY was rebalanced last Friday, so this number should be closer to $152.5 or so). My second target is $148, and third $142.
THOUGHTS?
Yeah, some thoughts are that the market appears to be quite toppy here. This is a little abnormal that it is coming about one month before its typical pullback. Remember that tops are a process, and that this jerking up and down choppy price movement can easily continue for days or weeks. I am relatively confident that we are going to correct by at least 5-10% over the next few months.
TRADES TODAY?
Positions Closed:
VXX +2.1%, TVIX -1%, DDD 4.3%, APOL 4.5%, GS 0.67%. Another 10% gainer of a day for me. Huge.
Open positions:
FDX long from $97.29, EDU short from $17.17, LNG short from $22 (ugh), SPXU from $29.30 and BX short from $19.32.
Awesome day again today. Incredible last 5 trading days now. I feel at my best in this type of trading environment. Longs are ripping, shorts are working - it is beautiful. FDX is a bounce play, it could very well go lower, but my opinion is that it is oversold. I am looking for $98-100 on this swing. EDU is more of a fundamental long term play, I just don't believe in the product/service, and I think it will fall. My PT is $10. LNG will (or should) drop during the summer. I will continue to hold into April and May. My position is mid sized, and when it appears to be topping, I will add to this short. My PT is $18-20 by mid/end summer. BX PT1 is about my entry, $19.38 - but I think it will fall a bit further. To be honest, I'll probably just exit this one at B/E.
Tomorrow:
The market will probably remain choppy to slightly heavy biased. The NYMO is slightly low at -18, but has a LONG ways to go before it receives an 'oversold' name tag. The news from Europe will control our destiny, so stay quick and nimble. The sells can easily end in 1-2% flush or distribution days, and those days can easily be followed by 1-2% sharp rallies. Stay smart and very disciplined with stops. Until this topping pattern plays out, I will continue to buy stocks on dips, and sell short the rips.
Thursday, March 21, 2013
Tuesday, March 19, 2013
Selling? Volume? SOOO Happy to See You!!
WAIT, WHERE HAVE YOU BEEN?
Sorry, I ran into a unforeseen busy period in my life. Everything is fine, thanks for asking. Just busy running here and there, business stuff, family stuff, friend stuff, etc etc.
MEH. SO, FRIDAY, MONDAY, TODAY?
I am in love. These days were awesome, not only because I am short and made out like a bandit, but because it is so nice to see some volume in the market. We had some huge volume days, some buying and selling, rapid covering, surprise news, etc. This was awesome. This is why I trade. I love that the bears came back to life. The market is most healthy when the bull/bear quarrel exists.
ANYTHING INTERESTING?
Lots and lots.
IYT: Has shown a small bit of weakness, but the pullback looks muted, very mild. Extremely strong sector.
XLF: Appears to be very toppy here. The news from Cyprus is certainly not helping, nor is the GS weakness. Realistic target is in the 17.70 to 18 range. Looks WAY too strong to pull back much more than that.
SPY: Series of lower lows and lower highs over the last 4 trading days. This is a welcome sight. If the selling continues, look for a bounce around 152.6 or so (that is where the SPX will fill its gap - obvious).
EUR/USD: The beating continues. This is in a slow trend down. A test of the 1.265 area seems all but certain. Over the summer, I expect this to break that low, and test the 1.20 level. There needs to be a mini-bounce soon... maybe this week or the next is my guess.
TRADES MADE:
I have made several trades in the last few days (most were today though)
Sold VXX for +2.75%, TVIX for 2.5%, 20% of my SPXU for .5% loss, and I lost 50% on some SPY puts (153's and 155's) from last week, and gained about 70% on some others (155's and 156's). (Thank you Cyprus!).
Open: BAC long (12.70), HES long (69.50), EDU short (16.64), BX short (19.32), LNG short (22.04), SPXU 29.30)
YES!! I killed it the last few days, and my account has made new highs. I am SO pumped we had a brief sell off. I can at least feel comfortable going with a few longs again... I generally perform terribly in long slow trends up or down... LNG (my position is -11% or so) is a bit concerning, but I will wait to see how it does in April. Everything else is more than acceptable.
TOMORROW:
It should be fun with the FED and all. News from Europe will continue to drive this market - the FED reaction could go either way, so stay nimble and small. Remember, the initial reaction to the FED announcement is USUALLY the correct one. I am expecting a choppy sell off into the SPY 152-153 range this week. I expect that weakness to get bought up for one last push up before summer time. My desire is to transition from mostly short to slightly long during this week - that is the plan - but we all know the market will do what it wants to do... rarely do I correctly predict something like this.
We will see!
Thursday, March 14, 2013
More of the Same... OR, Maybe Not?
Today:
Same. Read old posts. All the same. Can you sense my lack of interest in this market? The market is very 'frothy' feeling, many small cap names continue to break out of pretty much minimal volume. XLF/IYT were the leaders today, up 0.65%/0.75%. The EUR/USD made a complete red to green reversal today, but is not in range of breaking out. The market opened up, traded in a small range, and then again melted up at the end of day... See? More of the same. Volume was very weak all day.
Anything Interesting?
YES! GS and JPM were asked to reevaluate their capital planning after hours today, both are down about 2% in after market trading. This is big news, and could crack things lower tomorrow.
ON THE OTHER HAND-
USB, AXP, RF, BAC and C all announced HUGE stock buybacks in after hours to combat the bearish news above. Only BAC is really impacted here, up a huge 4% in after market trading.
My Trades:
Pretty much none worth mentioning. They were all scalps for pocket change, a couple up and a couple down. I am short right now, and was this whole week, so some small damage has been done to my account over the last 3-4 days -but I almost bought a large position of JPM right before the close today because that chart is just so bullish. This JPM play was going to be my hedge. I didn't take it. And for that, I am thankful. So, even though the day finished red on paper for me, I am thrilled I didn't take JPM. That would have shaken my confidence.
Tomorrow:
Surprise! I am expecting weakness either Friday or Monday and am willing to hold the path short. GS and JPM are both huge names in the financial sector, and 2% down is no joke. On top of that, we are over extended again, hitting up against the upper Bollinger Bands. Maybe this news will be the catalyst to at least take a small breather away from this relentless bull.
Take care!
Same. Read old posts. All the same. Can you sense my lack of interest in this market? The market is very 'frothy' feeling, many small cap names continue to break out of pretty much minimal volume. XLF/IYT were the leaders today, up 0.65%/0.75%. The EUR/USD made a complete red to green reversal today, but is not in range of breaking out. The market opened up, traded in a small range, and then again melted up at the end of day... See? More of the same. Volume was very weak all day.
Anything Interesting?
YES! GS and JPM were asked to reevaluate their capital planning after hours today, both are down about 2% in after market trading. This is big news, and could crack things lower tomorrow.
ON THE OTHER HAND-
USB, AXP, RF, BAC and C all announced HUGE stock buybacks in after hours to combat the bearish news above. Only BAC is really impacted here, up a huge 4% in after market trading.
My Trades:
Pretty much none worth mentioning. They were all scalps for pocket change, a couple up and a couple down. I am short right now, and was this whole week, so some small damage has been done to my account over the last 3-4 days -but I almost bought a large position of JPM right before the close today because that chart is just so bullish. This JPM play was going to be my hedge. I didn't take it. And for that, I am thankful. So, even though the day finished red on paper for me, I am thrilled I didn't take JPM. That would have shaken my confidence.
Tomorrow:
Surprise! I am expecting weakness either Friday or Monday and am willing to hold the path short. GS and JPM are both huge names in the financial sector, and 2% down is no joke. On top of that, we are over extended again, hitting up against the upper Bollinger Bands. Maybe this news will be the catalyst to at least take a small breather away from this relentless bull.
Take care!
Wednesday, March 13, 2013
Lame Action... I Want to be Entertained!
TODAY:
Very boring again. SPX range was 9 points... but it was just kind of a melt up all day. This morning had potential, but the low volume push up, that is 2013 trading, took over again.
SURPRISES:
IYT was the big surprise, finishing UP 1.5%... That is HUGE. Many view the transports as a leading indicator, and that indicator is trending up and showing no signs of slowing. This is VERY bullish.
XLF ended up 0.3%, another healthy move up. GS was battling red and green and ended flat.
EUR/USD was weak sauce all day long, down as much as 0.85%, and down about 0.55% as I write this. In a normal market (and it is clear this is not a normal market) - a rule of thumb is that the EUR/USD loosely mirrors the US indices. If EUR is down .5%, expect the SPX to be down roughly .5%. Well, there has been a complete decoupling of this relationship. EUR has gone from 1.37 to 1.29, a 6-7% decline, while the SPX has gone up 3+% over the last 6 weeks. Weird.
The DJIA finished green for the 9th straight day. It has been 12 years since that last happened. Wow.
My Trades:
Minimal. I only added a few SPY puts to my already short-biased positions.
WHAT TO EXPECT:
Who knows. This is OPEX week and anything can happen. I am expecting a fair amount of chop, and we will probably go neither up or down until Monday. The DOW broke its 12 year streak of not allowing more than 8 straight green days. 9 straight days have now finished positive - and 11 out of the last 12. This is just weird. Volume is gone. Europe does not really matter. I should be long enjoying this melt, but call me a fool, I just can't participate... It is my Achilles heel; my weakness (slowly trending up or down markets). I remain lightly committed, in mainly shorts. I will trade heavy again (long or short) when I see a small pullback, a well defined topping pattern, or a nice base from which we can jump to new highs.
Good day ladies (?) and gentlemen.
Very boring again. SPX range was 9 points... but it was just kind of a melt up all day. This morning had potential, but the low volume push up, that is 2013 trading, took over again.
SURPRISES:
IYT was the big surprise, finishing UP 1.5%... That is HUGE. Many view the transports as a leading indicator, and that indicator is trending up and showing no signs of slowing. This is VERY bullish.
XLF ended up 0.3%, another healthy move up. GS was battling red and green and ended flat.
EUR/USD was weak sauce all day long, down as much as 0.85%, and down about 0.55% as I write this. In a normal market (and it is clear this is not a normal market) - a rule of thumb is that the EUR/USD loosely mirrors the US indices. If EUR is down .5%, expect the SPX to be down roughly .5%. Well, there has been a complete decoupling of this relationship. EUR has gone from 1.37 to 1.29, a 6-7% decline, while the SPX has gone up 3+% over the last 6 weeks. Weird.
The DJIA finished green for the 9th straight day. It has been 12 years since that last happened. Wow.
My Trades:
Minimal. I only added a few SPY puts to my already short-biased positions.
WHAT TO EXPECT:
Who knows. This is OPEX week and anything can happen. I am expecting a fair amount of chop, and we will probably go neither up or down until Monday. The DOW broke its 12 year streak of not allowing more than 8 straight green days. 9 straight days have now finished positive - and 11 out of the last 12. This is just weird. Volume is gone. Europe does not really matter. I should be long enjoying this melt, but call me a fool, I just can't participate... It is my Achilles heel; my weakness (slowly trending up or down markets). I remain lightly committed, in mainly shorts. I will trade heavy again (long or short) when I see a small pullback, a well defined topping pattern, or a nice base from which we can jump to new highs.
Good day ladies (?) and gentlemen.
Intraday Update
UPDATE:
Because today is so incredibly boring. Ugh.
What are you seeing:
Well, the indices are flat, if DIA closes green, that would be unprecedented. 9 days straight green would be a new record that is 12+ years old. Asian markets are down, most other major markets are relatively flat.
Bullish things:
IYT - extremely bullish, up over 1% (!)
GS - its green.
TLT - its red.
Bearish things:
EUR/USD got slammed this morning, this is usually very bearish. Was down 0.85% this am, recovering a bit now.
Volume? Maybe? Its very low and weak. This is a ghost market.
SO, now what:
Who knows... you can make a case either way here. But whatever is going on is extremely boring. I can understand traders not wanting to short this market, but I don't really understand traders buying this market. So, I am lightly committed to the short side.
Interesting note: From the desk of Ryan Detrick: "The percentage of bears in the Investors Intelligence poll declines to 18.8%. It's the first time below 20 since May 2011, and dips below 20 marked market tops in 2010 and 2011.... 'Be aware.'"
Because today is so incredibly boring. Ugh.
What are you seeing:
Well, the indices are flat, if DIA closes green, that would be unprecedented. 9 days straight green would be a new record that is 12+ years old. Asian markets are down, most other major markets are relatively flat.
Bullish things:
IYT - extremely bullish, up over 1% (!)
GS - its green.
TLT - its red.
Bearish things:
EUR/USD got slammed this morning, this is usually very bearish. Was down 0.85% this am, recovering a bit now.
Volume? Maybe? Its very low and weak. This is a ghost market.
SO, now what:
Who knows... you can make a case either way here. But whatever is going on is extremely boring. I can understand traders not wanting to short this market, but I don't really understand traders buying this market. So, I am lightly committed to the short side.
Interesting note: From the desk of Ryan Detrick: "The percentage of bears in the Investors Intelligence poll declines to 18.8%. It's the first time below 20 since May 2011, and dips below 20 marked market tops in 2010 and 2011.... 'Be aware.'"
Tuesday, March 12, 2013
Hallelujah!!! I'm BACK
WE SOLD OFF!!!! Ah! I knew it had to come, and it feels great.
TODAY:
We opened relatively flat, and then once again moved up and made new highs on the SPY. We then sold off (what! red?) nicely to a low of what I projected, -8 points on the SPX. The SPY then rallied to cut its losses in half. The DIA closed green which is amazing, that is 8 (!) straight green closes for the Dow Jones. The EUR/USD was flat most of the day. TLT finished up a very significant 0.7%. The IYT and XLF finished lower by 0.3% and 0.5% respectively.
AND YOUR TRADES?
Today was awesome. I almost completely recovered my stupid positions that I will readily admit were unintelligent:
Closed Trades:
SPY puts 153 (Friday expiry) closed at a loss of 50% (medium position)
SPY puts 155 (Friday expiry) closed at gain of 50% (large position)
Open Positions:
LNG (short), SPXU, TVIX. BX (short), and VXX.
I made up for the vast majority of my losses, and am again near my account highs for the year. Yes, I was gambling and Yes, I was stupid, but I knew the odds were in my favor, and I followed a gameplan... we just can't keep melting up. Well, I guess we can, but not without at least showing a little bit of intraday weakness.
WHAT DO I EXPECT NEAR TERM:
The DIA closed positive for the 8th straight day, which is ridiculously incredible. This has happened 5 times in the last 12 years, in every situation, the DOW was red the following day. Under this premise, and seeing the strength in bonds (via TLT), I held my SPXU. I am expecting some weakness tomorrow, but not a large amount. I will be trading lightly for the remainder of the week to honor the stock gods for showing me mercy today... but for real, I just want to get my head on straight for next week. I had an incredible start to this year, and I want to make sure I am ready for the upcoming sell off. This sell off has occurred every April for 3 years now. Will this year be different? I think not.
TODAY:
We opened relatively flat, and then once again moved up and made new highs on the SPY. We then sold off (what! red?) nicely to a low of what I projected, -8 points on the SPX. The SPY then rallied to cut its losses in half. The DIA closed green which is amazing, that is 8 (!) straight green closes for the Dow Jones. The EUR/USD was flat most of the day. TLT finished up a very significant 0.7%. The IYT and XLF finished lower by 0.3% and 0.5% respectively.
AND YOUR TRADES?
Today was awesome. I almost completely recovered my stupid positions that I will readily admit were unintelligent:
Closed Trades:
SPY puts 153 (Friday expiry) closed at a loss of 50% (medium position)
SPY puts 155 (Friday expiry) closed at gain of 50% (large position)
Open Positions:
LNG (short), SPXU, TVIX. BX (short), and VXX.
I made up for the vast majority of my losses, and am again near my account highs for the year. Yes, I was gambling and Yes, I was stupid, but I knew the odds were in my favor, and I followed a gameplan... we just can't keep melting up. Well, I guess we can, but not without at least showing a little bit of intraday weakness.
WHAT DO I EXPECT NEAR TERM:
The DIA closed positive for the 8th straight day, which is ridiculously incredible. This has happened 5 times in the last 12 years, in every situation, the DOW was red the following day. Under this premise, and seeing the strength in bonds (via TLT), I held my SPXU. I am expecting some weakness tomorrow, but not a large amount. I will be trading lightly for the remainder of the week to honor the stock gods for showing me mercy today... but for real, I just want to get my head on straight for next week. I had an incredible start to this year, and I want to make sure I am ready for the upcoming sell off. This sell off has occurred every April for 3 years now. Will this year be different? I think not.
Monday, March 11, 2013
Throttled
TODAY:
I was throttled today. SPY was up for the 7th straight day. I am giving back major gains from January and February. I am not happy, but you have to deal with what the market gives you. Mr. Market is not happy with me it seems.
WHAT HAPPENED?
Today? Just a resumption of the melt up - led by the XLF up 0.8%. volatility (VXX) was murdered, down 4+%. Complacency is vogue, no doubt. TLT was green pretty much all day which was interesting. The EUR/USD bounced .4%, but not even close to breaking out. A fairly boring gradual move up 0.4% on the SPY
SO?
Well, its not the end of the world - but if this continues, I will be in danger of some serious losses on my hands. Today I got even more short, and doubled some SPY puts... Can we be up for 8 straight days? I'm still betting no - but I have been wrong for what seems like an eternity LOL (not really LOL though).
TRADES TODAY:
Closed: DNN for 1.5%, CLNE for scratch, GLUU for scratch, CJES for 1%, NFLX for 2%.
OPEN: very large position of SPY puts, heavy SPXU from 29.35 (down 3%), LNG from 22.04 (down 6% OUCH!), VXX (down 5% OUCH!), TVIX (down 7% OUCH), BX (down 3%)... wow. Things are getting close to out of hand. The volatility play are fine with me, and I have plenty of $ to average down. LNG doesn't bother me either. SPXU and SPY puts are very concerning, number one priority will be to sell at least 1/2 my SPY puts tomorrow, hopefully, for some green.
NOW WHAT!?
I have averaged down to the 10th power it seems, the story is the same. IF (a HUGE IF) we get a 0.5% sell-off, I will cover most of the above with losses. An 8 point drop, as small as that sounds, would do wonders for my account. A roughly 12-15 point drop, not even 1% would make all of the damage to my account go away. Hmmph.
Take care everyone.
Saturday, March 9, 2013
SPY Study
Since the 2008-2009 market crash, we have experienced a bull run that has lasted 4 glorious years. I enjoyed most of the ride up - with exception of the summers of 2010, 11 and 12. This is NOT to say I have been 100% bullish and have made money hand over fist during this epic run. 2008-2009 were awesome years for me, 2010 was very good, 2011 was decent, 2012 was sub par. My rationale in 2008/2009 was to go with the flow, and I was lightly invested, but of those investments, they were 100% short. In 2009 I started 'carpet bombing' the market, buying several small positions to the long side. Distressed banks, transports, miners, etc etc. I remember buying so much DRYS, it was stupidly my largest holding at one point. It paid off, but that was highly unintelligent. In 2010 it was still fairly obvious to me to not fight the FED and to go with the flow, my bias was still largely long. My bullish feeling dwindled a bit in 2011, and a bit more in 2012. This year, I have turned slightly bearish on the market - and there are a number of reasons for that:
1. 4 years of a bull run, aided by the FED or not, is toward the longer side of a market rally.
2. This late 2012/early 2013 run has felt very euphoric - take a look at names like MTG, PRIM, UNXL, PAMT, PENX, GTN... and the list goes on and on. Huge buying, some of these small cap names are up 50-500%! These are small/mid cap stocks, not penny names.
3. More and more media outlets are bullish, giving outlandish projections of SPX 2000, or DOW 20,000. Remember what happened to AAPL when analysts released their infamous $1000 price targets?
4. More and more 'common buyers' of stock are talking about the market, at least to me.
5. Several indices are close, or above all time highs.
6. VIX is at or near the lows of 2006/2007 - roughly speaking.
With everyone bullish, the bull run extended, fear completely gone, etc etc, I am getting more and more nervous - and excited.
Another reason is the chart below:
We have had 4 or 5 major 'runs' within this giant bull move.
LEG ONE: SPY 66.75 to 121.48 (!), an unbelievable 81% increase, or 54.73 point jump, lasting about 13-14 months.
LEG TWO: 100.60 to 137.18, a 36% increase, or 36.56 point run, spanning roughly 10 months.
LEG THREE: 107.43 to 142.21, a 32% increase, or 34.78 point advance, this time lasting about 6 months.
LEG FOUR: 127.14 to 148.11, a 16.5% increase, or a 20.97 point gain, enduring 3 months.
LEG FIVE: 134.70 to 155.65, 15.5% gain, or a 20.95 point run. This is still going, but has gone on for almost 4 months now.
another way to look at this is that LEG 4 and LEG 5 should be combined, we will call that LEG FOUR/FIVE:
LEG FOUR/FIVE: 127.14 to 155.65, a 22% increase or 28.51 points - lasting 9 months.
Either way you look at it , 4 or 5 'legs', the moves have become less and less powerful, and the length of each run has more or less been reduced:
% GAIN: 81% --> 36% --> 32% --> 16% --> 15% or 81% --> 36% --> 32% --> 22%
POINTS GAINED: 55 --> 37 --> 35 --> 21 --> 21 or 55 --> 37 --> 35 --> 29
DURATION: 14 months --> 10 months --> 6 months --> 3 months --> 4 months
or
14 months --> 10 months --> 6 months --> 9 months.
CONCLUSION: There is mounting evidence that this bull run is at least slowing down. I would be very surprised to see it last more than one year from now, and would NOT be surprised at all if the market TOP is in the 155-160 SPY range (give me 2-3% leeway here). I expect this summer and possibly late spring to be quite weak. Top calling is a fool's game and is nearly impossible, the trend is clearly up, don't fight the FED, tops are a process, etc, etc, etc ... So that is not my point here. My point is to start considering the short side, at least reduce some long exposure. The bull run will end. I try not to be a market timer - so I will gladly slowly accumulate shorts.
Three posts in one day!!! Whoo boy!
1. 4 years of a bull run, aided by the FED or not, is toward the longer side of a market rally.
2. This late 2012/early 2013 run has felt very euphoric - take a look at names like MTG, PRIM, UNXL, PAMT, PENX, GTN... and the list goes on and on. Huge buying, some of these small cap names are up 50-500%! These are small/mid cap stocks, not penny names.
3. More and more media outlets are bullish, giving outlandish projections of SPX 2000, or DOW 20,000. Remember what happened to AAPL when analysts released their infamous $1000 price targets?
4. More and more 'common buyers' of stock are talking about the market, at least to me.
5. Several indices are close, or above all time highs.
6. VIX is at or near the lows of 2006/2007 - roughly speaking.
With everyone bullish, the bull run extended, fear completely gone, etc etc, I am getting more and more nervous - and excited.
Another reason is the chart below:
We have had 4 or 5 major 'runs' within this giant bull move.
LEG ONE: SPY 66.75 to 121.48 (!), an unbelievable 81% increase, or 54.73 point jump, lasting about 13-14 months.
LEG TWO: 100.60 to 137.18, a 36% increase, or 36.56 point run, spanning roughly 10 months.
LEG THREE: 107.43 to 142.21, a 32% increase, or 34.78 point advance, this time lasting about 6 months.
LEG FOUR: 127.14 to 148.11, a 16.5% increase, or a 20.97 point gain, enduring 3 months.
LEG FIVE: 134.70 to 155.65, 15.5% gain, or a 20.95 point run. This is still going, but has gone on for almost 4 months now.
another way to look at this is that LEG 4 and LEG 5 should be combined, we will call that LEG FOUR/FIVE:
LEG FOUR/FIVE: 127.14 to 155.65, a 22% increase or 28.51 points - lasting 9 months.
Either way you look at it , 4 or 5 'legs', the moves have become less and less powerful, and the length of each run has more or less been reduced:
% GAIN: 81% --> 36% --> 32% --> 16% --> 15% or 81% --> 36% --> 32% --> 22%
POINTS GAINED: 55 --> 37 --> 35 --> 21 --> 21 or 55 --> 37 --> 35 --> 29
DURATION: 14 months --> 10 months --> 6 months --> 3 months --> 4 months
or
14 months --> 10 months --> 6 months --> 9 months.
CONCLUSION: There is mounting evidence that this bull run is at least slowing down. I would be very surprised to see it last more than one year from now, and would NOT be surprised at all if the market TOP is in the 155-160 SPY range (give me 2-3% leeway here). I expect this summer and possibly late spring to be quite weak. Top calling is a fool's game and is nearly impossible, the trend is clearly up, don't fight the FED, tops are a process, etc, etc, etc ... So that is not my point here. My point is to start considering the short side, at least reduce some long exposure. The bull run will end. I try not to be a market timer - so I will gladly slowly accumulate shorts.
Three posts in one day!!! Whoo boy!
WRAPPING UP THE WEEK
WHAT HAPPENED:
This was a weird week for me. I knew after breaking SPY 153 that it was a clear rejection of the lows of the previous week. I moved slightly bullish after seeing that, and I incorrectly expected a brief pullback to exit my shorts and enter longs. The market gave me no chance to do this, so I doubled, tripled, even quadrupled down on most, if not all of my short positions, and averaged up (or down i.e. SPXU, VXX).
So, in sum, I correctly called the bullish move (but way underestimated its power) and remained stubbornly short, moving more and more chips to the center of the table.
SO... HOW DID YOU DO?:
I did well, especially considering I was 98% short the whole week. Here are my closed trades:
GS total of 1% gains (short) - large
BX .7% gains (short) - small
DDD 2.6% (short) - small
SKUL 1% (short) - small
BLOX 0.1% (short) - small
SPY puts 4% (long) - small
NOW 0.05% (short) -small
SPY calls 8% (long) - small
MTG 5.9% (short) - small/medium
FRAN 0.8% (short) - small
INTC 0.5% (short) - medium
VXX 1.1% (long) - medium
EBAY 0.05% (short) - small
EDU 1.5% (short) - small
The week's total closed positions are +27%... my open positions are down a collective 12%.
HAPPY/SAD?
Umm, I am not happy that I correctly called the market, and was too late to join, and then underestimated its strength. It is like knowing where the train is going, and knowing when it will arrive, but figuring that it will wait for me - and then after I miss it, is blows by every stop to make my destination in record time/persistence! This is my fault for trying to time the market, rather than just play what one sees. I am happy that I had a profitable week playing the 'wrong side' of the market. The real answer really depends on Monday - if we get a 5-10 point pullback, I would be thrilled, and can exit at least half of my shorts - SPXU and SPY puts will likely be for a loss, while TVIX and VXX would then likely be flat or green. LNG, CJES, BX and maybe volatility are longer term plays, and I am willing to hold and average up my shorts into the late spring.
Until Monday, enjoy your weekend!
This was a weird week for me. I knew after breaking SPY 153 that it was a clear rejection of the lows of the previous week. I moved slightly bullish after seeing that, and I incorrectly expected a brief pullback to exit my shorts and enter longs. The market gave me no chance to do this, so I doubled, tripled, even quadrupled down on most, if not all of my short positions, and averaged up (or down i.e. SPXU, VXX).
So, in sum, I correctly called the bullish move (but way underestimated its power) and remained stubbornly short, moving more and more chips to the center of the table.
SO... HOW DID YOU DO?:
I did well, especially considering I was 98% short the whole week. Here are my closed trades:
GS total of 1% gains (short) - large
BX .7% gains (short) - small
DDD 2.6% (short) - small
SKUL 1% (short) - small
BLOX 0.1% (short) - small
SPY puts 4% (long) - small
NOW 0.05% (short) -small
SPY calls 8% (long) - small
MTG 5.9% (short) - small/medium
FRAN 0.8% (short) - small
INTC 0.5% (short) - medium
VXX 1.1% (long) - medium
EBAY 0.05% (short) - small
EDU 1.5% (short) - small
The week's total closed positions are +27%... my open positions are down a collective 12%.
HAPPY/SAD?
Umm, I am not happy that I correctly called the market, and was too late to join, and then underestimated its strength. It is like knowing where the train is going, and knowing when it will arrive, but figuring that it will wait for me - and then after I miss it, is blows by every stop to make my destination in record time/persistence! This is my fault for trying to time the market, rather than just play what one sees. I am happy that I had a profitable week playing the 'wrong side' of the market. The real answer really depends on Monday - if we get a 5-10 point pullback, I would be thrilled, and can exit at least half of my shorts - SPXU and SPY puts will likely be for a loss, while TVIX and VXX would then likely be flat or green. LNG, CJES, BX and maybe volatility are longer term plays, and I am willing to hold and average up my shorts into the late spring.
Until Monday, enjoy your weekend!
Friday, March 8, 2013
6 Consecutive Green SPY Days
Welp, we just experienced six straight green candles on the SPY... I know the odds are very favorable for a red day to follow six green days from my trading experience - its like it is engrained into my zombie trading brain. I've always remembered that number 'six', because it is the devil's number. On top of this devil's number of green days, the next trading day is also a Monday (as all but one in 2013 have been red). So, I thought I would try to back up my devil's number theory with some research, so that I can sleep soundly this weekend with my heavy short SPY position in tow. I thought it was interesting:
Looking back in recent SPY history (2 years), here are the three instances I found - from most recent to oldest:
1. January 17-25, 2013, we moved from a low of 147.43 to a high of 150.25, which is where we closed. We advanced 3% in 6 trading days. The seventh day was red with a low of 149.51, and a close of 150.07. At the lowest, we traded 0.5% lower than the 6th day's close. The next few days were relatively flat, followed by more buying, peaking at 153.28 before significantly selling off.
2. December 5-12, 2012, we traded from a low of 140.37 to a high of 144.55. We ended the 12th at 143.31. Bottom to top gain was roughly 3% in those 6 days. The following trading day was red, with a low of 142.27, and a close at 142.63. At the lowest, we traded 0.7% lower than the previous close. The next day was also red, followed by significant 3% surge up, proceeded by a larger 4.5% pullback.
3. August 3-10, 2012, here we migrated from 139.49 to 140.89, with a 6th day close at 140.84. It was a 1.1% move in 6 days. I really didn't want to include this in the study, because August trading is so worthless and weak, but I digress. The seventh day was red with a low of 140.04, or 0.6% lower than the previous day. It closed at 140.77. The next days/weeks we turned sideways, and then higher.
AVERAGE of the above vs current 6 day streak:
-6 day advance: 2.4% ave. vs 3.5% in our current run
MOAR AVERAGES:
-Average % from the previous day close to the seventh day's low: 0.6%
-Average points from the previous day close to the seventh day's low: 0.86 SPY points
-Average closing % of the day from previous day: 0.22% lower
-Average closing points of the day from previous day: 0.31 SPY points
So, what does this tell me?
I am expecting a red Monday. We closed today near the highs at 155.44. A 0.6% pullback from there would be 154.50. The exit range for my shorts will be in the 154.35 - 154.65 range. I expect some upward turning after this, and then a bigger selloff.
Hope this helps!
-Kevin
Looking back in recent SPY history (2 years), here are the three instances I found - from most recent to oldest:
1. January 17-25, 2013, we moved from a low of 147.43 to a high of 150.25, which is where we closed. We advanced 3% in 6 trading days. The seventh day was red with a low of 149.51, and a close of 150.07. At the lowest, we traded 0.5% lower than the 6th day's close. The next few days were relatively flat, followed by more buying, peaking at 153.28 before significantly selling off.
2. December 5-12, 2012, we traded from a low of 140.37 to a high of 144.55. We ended the 12th at 143.31. Bottom to top gain was roughly 3% in those 6 days. The following trading day was red, with a low of 142.27, and a close at 142.63. At the lowest, we traded 0.7% lower than the previous close. The next day was also red, followed by significant 3% surge up, proceeded by a larger 4.5% pullback.
3. August 3-10, 2012, here we migrated from 139.49 to 140.89, with a 6th day close at 140.84. It was a 1.1% move in 6 days. I really didn't want to include this in the study, because August trading is so worthless and weak, but I digress. The seventh day was red with a low of 140.04, or 0.6% lower than the previous day. It closed at 140.77. The next days/weeks we turned sideways, and then higher.
AVERAGE of the above vs current 6 day streak:
-6 day advance: 2.4% ave. vs 3.5% in our current run
MOAR AVERAGES:
-Average % from the previous day close to the seventh day's low: 0.6%
-Average points from the previous day close to the seventh day's low: 0.86 SPY points
-Average closing % of the day from previous day: 0.22% lower
-Average closing points of the day from previous day: 0.31 SPY points
So, what does this tell me?
I am expecting a red Monday. We closed today near the highs at 155.44. A 0.6% pullback from there would be 154.50. The exit range for my shorts will be in the 154.35 - 154.65 range. I expect some upward turning after this, and then a bigger selloff.
Hope this helps!
-Kevin
MOAR UPSIDE!
TODAY: Wow, even more upside! This is getting to be hilarious. The market gapped up nicely today on some news from Euroland as well as the job report here. The EUR/USD was healthy green, and then crashed down as much as 1.1% around midday. The gap up went red quickly, but the dip buyers once again came in and bought the market back to its highs.
ANYTHING INTERESTING?: Several things:
Bullish things: IYT was once again very strong. XLF finished healthy green. The market jumped off the lows and dips were bought. Bonds were down a significant amount, TLT finished down 1%.
Bearish things: EUR/USD was again hammered. GS was hit hard, down 2.4% on the stress test results. SPY has been up 6 days in a row and up 3.4% in those days - at least a small pullback should happen soon. End of day selling was on heavy volume. Every Monday of 2013 but this week's Monday have been red.
I am very bearish right here.
AND TODAY'S TRADES?
Oh, yes, I did trade today - and it went well:
CLOSED TRADES:
GS +0.66% on a large position, INTC +0.5%, mid sized position - so these positions went from down a collective 5% or so, to plus 1%. I will take it, a very nice Friday.
OPEN TRADES:
NFLX, small from $184.55 short, TVIX long small from $4.18, BX short from $19.25 ave, VXX long from 21.97 ave, CJES short from 22.89, LNG short from 21.85, and SPXU long from 29.4. I am also in SPY puts going into Monday... heavily short.
I really like the NFLX, volatility long, and SPXU/spy puts here. The others are longer term plays.
WHAT TO EXPECT MONDAY?
Red, I expect a nice red Monday, at least down 0.5% at some point.
WHAT NOW?
Enjoy a whiskey, sit and relax, it was another great week.
ANYTHING INTERESTING?: Several things:
Bullish things: IYT was once again very strong. XLF finished healthy green. The market jumped off the lows and dips were bought. Bonds were down a significant amount, TLT finished down 1%.
Bearish things: EUR/USD was again hammered. GS was hit hard, down 2.4% on the stress test results. SPY has been up 6 days in a row and up 3.4% in those days - at least a small pullback should happen soon. End of day selling was on heavy volume. Every Monday of 2013 but this week's Monday have been red.
I am very bearish right here.
AND TODAY'S TRADES?
Oh, yes, I did trade today - and it went well:
CLOSED TRADES:
GS +0.66% on a large position, INTC +0.5%, mid sized position - so these positions went from down a collective 5% or so, to plus 1%. I will take it, a very nice Friday.
OPEN TRADES:
NFLX, small from $184.55 short, TVIX long small from $4.18, BX short from $19.25 ave, VXX long from 21.97 ave, CJES short from 22.89, LNG short from 21.85, and SPXU long from 29.4. I am also in SPY puts going into Monday... heavily short.
I really like the NFLX, volatility long, and SPXU/spy puts here. The others are longer term plays.
WHAT TO EXPECT MONDAY?
Red, I expect a nice red Monday, at least down 0.5% at some point.
WHAT NOW?
Enjoy a whiskey, sit and relax, it was another great week.
Thursday, March 7, 2013
Positioned to win BIG, or lose BIG
TODAY:
I can pretty much write a repeat of yesterday's post. It was again, very boring. SPY never went red today, and the SPX range was a whopping 4 points. Despite threatening to break out on top of this current break out, SPY $155 held. We have now experienced two back to back 'inside days'.
ANYTHING INTERESTING?
A few things, actually:
On the bullish side, the XLF was very strong, up 0.8%, the EUR/USD was very strong as well, up over 1% (right at fib entrancement levels, mind you). All indices again closed green, up about 0.25% or so. Volatility also took another slap, VXX finished down 2%. GS again ended off the highs, but still up by a very healthy 1.6%.
Bearish: The IYT was down 0.8% earlier in the day before recovering somewhat. The rising wedge pattern noted in the SPY below typically resolves to the downside - a first target would be $153. We have also had 2 straight closes outside of the upper Bollinger band, which historically speaking, is followed by a moderate decline within the next 1-2 weeks. We have also had 5 straight green days on the SPY.
TODAY'S TRADES:
Closed Trades:
SKUL +1%, BLOX scratch, DDD +2.6%, MTG +5.8%, BX +0.6% = total of 10%, very nice.
Open Trades:
SPXU -2.9% from $29.90 ave, BX flat from $19.04 short, CJES +.25% from $22.90 short, VXX -1% from $22.1 ave, INTC -1.4% from 20.60 ave short, GS -1.9% from 153.62 ave short, LNG -1.9% from 21.85 ave short. About 9% loss on paper.
Ugh, I am doing well with my positions, but I really, really need a red SPY day. Just one red close. The SPY has been up 3% in 5 trading days, green every single day. I am loaded up fairly heavily short... a few are long term (1-3 month holds - like LNG and CJES), but about half of them, I'd like to get out soon (like SPXU). If I could cut those losses in half, I'd consider that a win - after all, my closed trades are +30% this month. A 5-10% loss would not be the end of the world.
GAMEPLAN:
I will hold my short positions until we see a mini sell-off. If we do not see that by Monday, I will likely cover half of my shorts (namely SPXU, INTC, and GS). This has been a tough market, as we are climbing the wall of worry. More and more headlines are talking about the all time highs, and DOW 20,000, so the contrarian in me wants to be even more short - but I am trying to be patient.
Til tomorrow, take care.
-Kevin
I can pretty much write a repeat of yesterday's post. It was again, very boring. SPY never went red today, and the SPX range was a whopping 4 points. Despite threatening to break out on top of this current break out, SPY $155 held. We have now experienced two back to back 'inside days'.
ANYTHING INTERESTING?
A few things, actually:
On the bullish side, the XLF was very strong, up 0.8%, the EUR/USD was very strong as well, up over 1% (right at fib entrancement levels, mind you). All indices again closed green, up about 0.25% or so. Volatility also took another slap, VXX finished down 2%. GS again ended off the highs, but still up by a very healthy 1.6%.
Bearish: The IYT was down 0.8% earlier in the day before recovering somewhat. The rising wedge pattern noted in the SPY below typically resolves to the downside - a first target would be $153. We have also had 2 straight closes outside of the upper Bollinger band, which historically speaking, is followed by a moderate decline within the next 1-2 weeks. We have also had 5 straight green days on the SPY.
TODAY'S TRADES:
Closed Trades:
SKUL +1%, BLOX scratch, DDD +2.6%, MTG +5.8%, BX +0.6% = total of 10%, very nice.
Open Trades:
SPXU -2.9% from $29.90 ave, BX flat from $19.04 short, CJES +.25% from $22.90 short, VXX -1% from $22.1 ave, INTC -1.4% from 20.60 ave short, GS -1.9% from 153.62 ave short, LNG -1.9% from 21.85 ave short. About 9% loss on paper.
Ugh, I am doing well with my positions, but I really, really need a red SPY day. Just one red close. The SPY has been up 3% in 5 trading days, green every single day. I am loaded up fairly heavily short... a few are long term (1-3 month holds - like LNG and CJES), but about half of them, I'd like to get out soon (like SPXU). If I could cut those losses in half, I'd consider that a win - after all, my closed trades are +30% this month. A 5-10% loss would not be the end of the world.
GAMEPLAN:
I will hold my short positions until we see a mini sell-off. If we do not see that by Monday, I will likely cover half of my shorts (namely SPXU, INTC, and GS). This has been a tough market, as we are climbing the wall of worry. More and more headlines are talking about the all time highs, and DOW 20,000, so the contrarian in me wants to be even more short - but I am trying to be patient.
Til tomorrow, take care.
-Kevin
Wednesday, March 6, 2013
MEH. Boring.
TODAY: Well, today was... boring. Some call a day like today inside day or a DOJI... you can call it whatever you'd like: consolidation, topping, building... whatever. It was boring. SPY appeared to want to break out again around 3 PM, but to no avail. We ended the day under VWAP, but a ways off the lows.
ANYTHING INTERESTING? Yes, the DAX finished way off the highs, but still green - almost 1% from its peak early in the day. The EUR/USD was also weak again today, finishing under 1.30. Today was the lowest reading there since August! The IYT finished red by 0.4%, and the XLF finished green by 0.6%.
HOW DID TODAY GO? Not bad. But not great. I feel like I am stuck in a rut. Here were my completed trades:
Trades Closed:
NOW scratch, NUGT +3.25% (sold WAY too early, left 8% (!) on the table), JBLU +0.5%, SPY puts +3%, VXX +0.5% INTC
Trades Open:
SPXU (-3% from entry), INTC (-1%), GS (-1.5%), MTG (-4.5%), LNG (-2%), and BLOX (-1.5%).
To review these positions: With today's action in the EUR, I will give 1-2 more days for SPXU before selling at a loss. I still like the INTC short, I am willing to hold it and short it if it continues to advance. GS - with all the market strength has not violated its series of lower highs, I still like it short. MTG - The offering via GS is tonight, it will be interesting to see what happens with MTG on the open - it has been incredibly strong with a huge RSI. LNG I am willing to hold until late spring or even summer when it typically pulls back largely (PT1 is 18, PT2 is about 16). BLOX is just a fun play, I will cover on any weakness in the morning.
AND TOMORROW: I am expecting a bit of weakness in the next few days. With the IYT and EUR so weak, I really need the XLF to follow suit, and I will feel much more comfortable with my shorts if it does... If we get a mini pullback, I will be getting long to ride the wave up in March. Any gap open tomorrow will be shorted as long as the EUR stays this weak.
ANYTHING INTERESTING? Yes, the DAX finished way off the highs, but still green - almost 1% from its peak early in the day. The EUR/USD was also weak again today, finishing under 1.30. Today was the lowest reading there since August! The IYT finished red by 0.4%, and the XLF finished green by 0.6%.
HOW DID TODAY GO? Not bad. But not great. I feel like I am stuck in a rut. Here were my completed trades:
Trades Closed:
NOW scratch, NUGT +3.25% (sold WAY too early, left 8% (!) on the table), JBLU +0.5%, SPY puts +3%, VXX +0.5% INTC
Trades Open:
SPXU (-3% from entry), INTC (-1%), GS (-1.5%), MTG (-4.5%), LNG (-2%), and BLOX (-1.5%).
To review these positions: With today's action in the EUR, I will give 1-2 more days for SPXU before selling at a loss. I still like the INTC short, I am willing to hold it and short it if it continues to advance. GS - with all the market strength has not violated its series of lower highs, I still like it short. MTG - The offering via GS is tonight, it will be interesting to see what happens with MTG on the open - it has been incredibly strong with a huge RSI. LNG I am willing to hold until late spring or even summer when it typically pulls back largely (PT1 is 18, PT2 is about 16). BLOX is just a fun play, I will cover on any weakness in the morning.
AND TOMORROW: I am expecting a bit of weakness in the next few days. With the IYT and EUR so weak, I really need the XLF to follow suit, and I will feel much more comfortable with my shorts if it does... If we get a mini pullback, I will be getting long to ride the wave up in March. Any gap open tomorrow will be shorted as long as the EUR stays this weak.
Runaway DAX
WHERE ARE WE?: The DAX continues its run, up 1% today. The SPY has followed, although in a muted way. What is amazing is that the EUR/USD has stayed flat, not bouncing in the least. As a review, we have gone from short term oversold last week, to short term overbought this week - we have advanced 60+ ES_F points off the lows in just one week. We have rallied 15% in 4 month from mid-November. These are crazy numbers.
RALLY TIME? We might be experiencing that last bit of euphoric buying that is seen before tops (not calling a top mind you, just stating that this activity is a bit abnormal). It is interesting to note how last week, many bears were out, saying "this is it, this is where we drop 5%...". This week has changed - all headlines have changed to: "All Time Highs", "A New Bull Market", and "Next Stop, DOW 15k"... The majority of media has turned quite bullish, sucking low end retail into the market. I will participate, but only lightly.
TODAY: With the DAX as strong as it is, expect a green close today, I will not be looking to fade this gap. I will still short individual names, and will focus on buying stocks off the dip - names like MPC.
Good luck today folks, check out my spreadsheet if you would like, ask questions to me in the chat, or in the comments section. Take care!
RALLY TIME? We might be experiencing that last bit of euphoric buying that is seen before tops (not calling a top mind you, just stating that this activity is a bit abnormal). It is interesting to note how last week, many bears were out, saying "this is it, this is where we drop 5%...". This week has changed - all headlines have changed to: "All Time Highs", "A New Bull Market", and "Next Stop, DOW 15k"... The majority of media has turned quite bullish, sucking low end retail into the market. I will participate, but only lightly.
TODAY: With the DAX as strong as it is, expect a green close today, I will not be looking to fade this gap. I will still short individual names, and will focus on buying stocks off the dip - names like MPC.
Good luck today folks, check out my spreadsheet if you would like, ask questions to me in the chat, or in the comments section. Take care!
Tuesday, March 5, 2013
BREAK OUT
TODAY: Well, SPY gapped above 153 and never looked back - news out of Europe fueled the fire for this rally - this on the backs of shorts covering. This move was based on solid, even strong, volume.
IYT once again was strong, as well as XLF. Well honestly... everything was fairly strong today. It was interesting to note that GS, one of the market leaders IMO, was up almost 2%, but ended up only 0.5%. This relative weakness is interesting - but I feel that is me SEARCHING for a reason to be short - clearly, this was an extremely bullish day.
TRADES: today was a decent day, although my SPXU took a beating.
Trades closed: SPY calls +8%, MTG plus 0.75% FRAN +0.8%, and EBAY for scratch.
These gains helped me fight the paper losses below:
Open Trades: SPXU (-3% now), MTG (very small, but is now down 10% AH), INTC (-0.5%), GS (-0.7%), LNG (-1%) and VXX (-3%).
Again, I am not really worried about any of these trades except SPXU, if we dip tomorrow, I'll likely sell for a 1-2% loss. MTG is a very small long term play - INTC will pull back, because that is what it does - GS looks heavy -LNG was relatively weak today considering the market - and VXX will be added to as we approach summer.
THOUGHTS: The market today was strong, and I believe the low was established last week. We will likely continue our slow drift up into the April - May time frame. A lot of people are targeting 1570 on the SPX... so that will likely not happen, either much higher than that is a good target, or this move will fail before we hit 1550-60.
GAMEPLAN: I will continue to play long and short scalps, with minimal heavy swing trades. I will error to the bullish side, and focus on lightly selling rips, and more heavily buying the dips.
IYT once again was strong, as well as XLF. Well honestly... everything was fairly strong today. It was interesting to note that GS, one of the market leaders IMO, was up almost 2%, but ended up only 0.5%. This relative weakness is interesting - but I feel that is me SEARCHING for a reason to be short - clearly, this was an extremely bullish day.
TRADES: today was a decent day, although my SPXU took a beating.
Trades closed: SPY calls +8%, MTG plus 0.75% FRAN +0.8%, and EBAY for scratch.
These gains helped me fight the paper losses below:
Open Trades: SPXU (-3% now), MTG (very small, but is now down 10% AH), INTC (-0.5%), GS (-0.7%), LNG (-1%) and VXX (-3%).
Again, I am not really worried about any of these trades except SPXU, if we dip tomorrow, I'll likely sell for a 1-2% loss. MTG is a very small long term play - INTC will pull back, because that is what it does - GS looks heavy -LNG was relatively weak today considering the market - and VXX will be added to as we approach summer.
THOUGHTS: The market today was strong, and I believe the low was established last week. We will likely continue our slow drift up into the April - May time frame. A lot of people are targeting 1570 on the SPX... so that will likely not happen, either much higher than that is a good target, or this move will fail before we hit 1550-60.
GAMEPLAN: I will continue to play long and short scalps, with minimal heavy swing trades. I will error to the bullish side, and focus on lightly selling rips, and more heavily buying the dips.
Euroland Explody
Earlier this morning, PMIs came out for much of Euroland, and they were weak across the board. Just like in the US - when you receive weak economic numbers, the general thought is monetary easing ----> bullish. This is a weird world we live in, and the markets have changed, as they always do. Mass easing is the new answer to economic woes, and 'currency wars' is the immediate result. What will be the End Result? Many think something very bearish... I am not certain. I'll write a post more in depth on this topic in the future.
For today, the DAX is up 1.6% as we speak, although the EUR/USD is barely green and unable to bounce - yet. ES_F looks to gap up by about 3-4 points. Most bonds are down slightly. The SPY looks like it will open above 153 and possibly run.
Unfortunately, I am short going into today, and I will look for opportunities to go long throughout the trading day.
For the time being, like I said yesterday, the 'risk on' trade seems to be here for a little longer. It appears we might be making our last gasp or run before the typical April - May top.
Good luck today everyone!
Monday, March 4, 2013
Crazy
SLAPPED: Well, I will readily admit that I thought around 12:30 PM ET, that we were ready to roll over on the SPY... Then the dip buyers came in again (2013 theme) and lifted the market back up, almost a 1% move off the lows. A punch to the face!!! Not really though.
TRADES MADE: Today's closed trades were all profitable - another great day (but I am holding a few that are now underwater) :
Closed: VXX for 0.5%, EDU for 1.5%, LNG for 1%, EBAY for 1% GS for .4%, BTU for 1% - a 5% gainer of a day! not bad.
But:
Open: SPXU ($30.54) down 1%, EBAY ($54.83) down about 1%, VXX ($23.11) -0.25%, LNG ($20.31) -1%, INTC scratch, GS ($150.75) down 1%.
I am perfectly happy with carrying all of these positions over night, even for a few days... the most concerning thing for the bearish community today is the transport sector, IYT. Up over 1% today and made new ALL TIME highs.
The EUR/USD actually came back and went green at the end of our trading day. Bonds were down, equities were up, and VXX got hammered, down 5.25% (!).
A CHANGE IN TREND: This was the first green Monday of 2013. Will "Turnaround Tuesdays" return?
WHAT DO I EXPECT: If the IYT and XLF stays as strong as they have been, good luck bears. We are not going down anytime soon. SPY is very close to the break out point at 153. So, caution goes to the bears, and 'risk on' if that number breaks tomorrow. Today's activity has pushed me from the slightly bearish camp, to the slightly bullish camp. I will continue trading lightly. Not like this really matters, as this was the theme for 2012, but volume today was pretty low. UP days = low volume, Down days = large volume, that theme continues on.
MISTAKE: Yes, I made a mistake today - and I am not happy about it. I have a position in SPXU and my goal was a 1% gain. When we started selling off, and IWM was looking rough around noon today - I got greedy and looked for more - I actually moved UP my sell order from $30.95 to $31.10. This simple move cost me a nice 1% gain. On top of that, I chose not to sell my position flat, or even for a small loss. I let it ride, ride all the way down so now it is 1% underwater. This was a fools move, and I fess up that I made it.
BAWS TRADER: <---- FOOL. :(
Til Manana, take care!
Good morning and welcome to your trading week! All US markets are pointing to a slightly lower open this morning, ES_F is down about 2-3 points as I write this. Going into the weekend I was confident in a red Monday, so I am short which hopefully makes for a good green day for me.
Like I have mentioned before, every Monday in 2013 has closed red. An interesting note is an analog associating March 2012 with March 2013. March 2012 opened on a green candle, and then sold off rather hard for a few days, ending down about 2.5%. Will the same happen here? As you know, I think that is more likely than more upside.
Historically speaking, March is a green month - the calm before the usual volatility after tax day going into the summer months.
Market evaluation:
SPY is pointing to a slightly red open, -.20 points or so. Neutral. A move above 153 would be bullish, a move below 150 would be bearish.
Bonds are roughly flat to slightly lower. Neutral
EUR/USD is weak again, and wrestling with that 'mental' number of 1.30. Bearish
I plan on entering all my trades today in the chat box in the right margin of this blog. I will also enter specifics on entry/exits on my trading spreadsheet the reader can access at the top of this site.
Participate if you would like! Or comment below.
Good luck today traders!
Like I have mentioned before, every Monday in 2013 has closed red. An interesting note is an analog associating March 2012 with March 2013. March 2012 opened on a green candle, and then sold off rather hard for a few days, ending down about 2.5%. Will the same happen here? As you know, I think that is more likely than more upside.
Historically speaking, March is a green month - the calm before the usual volatility after tax day going into the summer months.
Market evaluation:
SPY is pointing to a slightly red open, -.20 points or so. Neutral. A move above 153 would be bullish, a move below 150 would be bearish.
Bonds are roughly flat to slightly lower. Neutral
EUR/USD is weak again, and wrestling with that 'mental' number of 1.30. Bearish
I plan on entering all my trades today in the chat box in the right margin of this blog. I will also enter specifics on entry/exits on my trading spreadsheet the reader can access at the top of this site.
Participate if you would like! Or comment below.
Good luck today traders!
Sunday, March 3, 2013
Obvious Head and Shoulder Pattern, or is it?
The above chart shows what it seems everyone is talking about. The Q's (ETF representing the Nasdaq) are showing a beautiful head and shoulders pattern. We clearly have a head, two shoulders, and a well established neckline around the 60 zone. IF the neckline is reached and IF it is broken (two HUGE ifs), a very reasonable target would be 50.
So, should we make a play to short the Q's? The answer should be a screaming 'yes'! But I say: 'maybe'. My problem or reluctance with the above is AAPL. AAPL is a major component of the Nasdaq, roughly 12% of it. AAPL has lost much of its luster, and is down roughly 38% from its high of $700 in only 5 months. Gone are the days of $1000 AAPL price targets, and now it seems every analyst is now trashing AAPL, saying the company is the new Microsoft . I am anything but a momo trader, and I hate to jump on the train once it has already left the station... why short AAPL here, isn't a 38% slide enough?
Now, I could easily get into a long term analysis on AAPL, both technically and fundamentally, but I will not do that here - Don't have the time, nor energy. My main point, as more of a contrarian trader, is that a bounce is due soon. Sure, it could easily hit 400 before 500, and the technical charts appear to agree with this view - but if AAPL comes out with some big announcement, like say, something about the fabled Apple TV, or some major network agreement... then look out. AAPL could easily bounce and bounce big.
On the other side of the coin, GOOG, AMZN (and even LNKD & NFLX with their far lesser market cap) are quite extended, and could easily pullback, and pullback big. This at least partly offsets my argument with AAPL.
So, what am I saying? I believe that the Q's, along with the general US markets, are looking a bit suspect right now and at least a brief pullback COULD be coming, and coming soon - maybe this week. I just don't think the Q's are the best play simply because AAPL has already been so beaten up. Shorting the SPY will, in my opinion, offer a very similar reward with less risk.
Til tomorrow, take care folks!
Saturday, March 2, 2013
Weekend Market Review
I wanted to review my thoughts on the last week, and give a few ideas on where we might be going by showing you what I look at to determine possible market direction. I like to keep my trading style simple, and this includes the indicators that I use.
My favorite indices/indicators/exchanges/ETFs to watch are SPY, the finnies (IWM, RUT XLF and GS), VXX or VIX, IYT, EUR/USD, NYMO, TLT and DAX.
When I look at a chart of the SPY, it appears rather 'toppy' to me, it reminds me of a much more concise version - yet just as dramatic - of the top that we saw in the SPY back in September-October of 2012. The dramatic moves down and up are very much like what you would see in a bearish environment. Volume on distribution days has been very strong, while the same can't be said on the ramps. The FED is obviously pushing this market when it wants to, so any selloff would be minimal. The short term pattern on the SPY is somewhat bearish to neutral, in my opinion. A break below this past week's lows will confirm this topping pattern, and my downside target would be roughly 146. As a side note, many are calling for a potential inverse head and shoulder pattern on the SPY... I doubt it will play out, but it is something to watch.
The EUR/USD is the biggest bear case here. It has been stuck in a clear down trend for sometime now, and on Friday, it broke below the 1.30 barrier (this is more a mental big round number that anything else, no real support - think DOW 14,0000). Next major support is around the 1.22 mark, and any big move above 1.32 (and especially 1.37) would be bullish. For us to see the 1.22 and below area will take several significant events, as well as plenty of time, this will not happen over night. EUR/USD is THEE chart to watch. I believe forex rules all. EUR is bearish, which is bullish for USD. Strong USD clearly means lower equities.
The finnies are all very short term suspect looking, similar to the SPY. They all had a nice move up 2 weeks ago, and have made lower highs since. The sector has been the major driving force in late 2012-2013 dictating market movement upwards. Short term - I am somewhat bearish here as well. GS has been the market leader for some time, if it break... look out below.
IYT (transport index) is the strong one here, and looks very bullish. Other than a fair amount of volatility, I don't see too much, if anything, to be bearish about here. Many believe the IYT is a leading index, I personally don't like it as much as the others above, but its movement is still significant. This is clearly bullish.
VXX or volatility bottomed two weeks ago and has made higher lows since. Yesterday, the VXX stayed green all day long, so even on an up day, some market fear still exists. This again, is slightly bearish.
TLT - for the most part, bonds up = equities down, and vice versa. Bonds have been slightly elevated the last few days... I don't think the bond market means nearly as much as it did in years past. The FED has made it a priority buying long term bonds to lower interest rates so that the housing sector could recover (extremely basic explanation). The end result is that bonds have been the most manipulated asset class and are not nearly as reliable of an indicator as the others listed above. This activity is still slightly bearish, but the caveat needs to be noted.
DAX is the market leader in Euroland. A week or two ago, it looked ready to break down... but never did. It is either in a long term topping pattern or in a long term consolidation zone. I am neutral here.
And finally, the McClellan Oscillator (NYMO) which is back to a neutral reading. I don't really care too much about this indicator until it hits one of the extreme zones, +/-60 points or so.
With all of the above, I lean slightly bearish into Monday. All Mondays in 2013 have been red on the SPY. I am holding long SPXU, PAMT and BTU, short GS, CJES, LNG and EBAY. I am about 30% committed, 80% of which is short.
Take care crazy kids!
-Kevin
My favorite indices/indicators/exchanges/ETFs to watch are SPY, the finnies (IWM, RUT XLF and GS), VXX or VIX, IYT, EUR/USD, NYMO, TLT and DAX.
When I look at a chart of the SPY, it appears rather 'toppy' to me, it reminds me of a much more concise version - yet just as dramatic - of the top that we saw in the SPY back in September-October of 2012. The dramatic moves down and up are very much like what you would see in a bearish environment. Volume on distribution days has been very strong, while the same can't be said on the ramps. The FED is obviously pushing this market when it wants to, so any selloff would be minimal. The short term pattern on the SPY is somewhat bearish to neutral, in my opinion. A break below this past week's lows will confirm this topping pattern, and my downside target would be roughly 146. As a side note, many are calling for a potential inverse head and shoulder pattern on the SPY... I doubt it will play out, but it is something to watch.
The EUR/USD is the biggest bear case here. It has been stuck in a clear down trend for sometime now, and on Friday, it broke below the 1.30 barrier (this is more a mental big round number that anything else, no real support - think DOW 14,0000). Next major support is around the 1.22 mark, and any big move above 1.32 (and especially 1.37) would be bullish. For us to see the 1.22 and below area will take several significant events, as well as plenty of time, this will not happen over night. EUR/USD is THEE chart to watch. I believe forex rules all. EUR is bearish, which is bullish for USD. Strong USD clearly means lower equities.
The finnies are all very short term suspect looking, similar to the SPY. They all had a nice move up 2 weeks ago, and have made lower highs since. The sector has been the major driving force in late 2012-2013 dictating market movement upwards. Short term - I am somewhat bearish here as well. GS has been the market leader for some time, if it break... look out below.
IYT (transport index) is the strong one here, and looks very bullish. Other than a fair amount of volatility, I don't see too much, if anything, to be bearish about here. Many believe the IYT is a leading index, I personally don't like it as much as the others above, but its movement is still significant. This is clearly bullish.
VXX or volatility bottomed two weeks ago and has made higher lows since. Yesterday, the VXX stayed green all day long, so even on an up day, some market fear still exists. This again, is slightly bearish.
TLT - for the most part, bonds up = equities down, and vice versa. Bonds have been slightly elevated the last few days... I don't think the bond market means nearly as much as it did in years past. The FED has made it a priority buying long term bonds to lower interest rates so that the housing sector could recover (extremely basic explanation). The end result is that bonds have been the most manipulated asset class and are not nearly as reliable of an indicator as the others listed above. This activity is still slightly bearish, but the caveat needs to be noted.
DAX is the market leader in Euroland. A week or two ago, it looked ready to break down... but never did. It is either in a long term topping pattern or in a long term consolidation zone. I am neutral here.
And finally, the McClellan Oscillator (NYMO) which is back to a neutral reading. I don't really care too much about this indicator until it hits one of the extreme zones, +/-60 points or so.
With all of the above, I lean slightly bearish into Monday. All Mondays in 2013 have been red on the SPY. I am holding long SPXU, PAMT and BTU, short GS, CJES, LNG and EBAY. I am about 30% committed, 80% of which is short.
Take care crazy kids!
-Kevin
Friday, March 1, 2013
I capped off this week with an amazing +22% in gains made on my plays - no, this doesn't mean I made 22% on my account you crazy cats, it simply means my stock picks from entry to exit were net +22% gains. This is very high and not normal. Whats more is that 100% of my trades were green, this is another anomaly. Probably will never happen again, but I'll take it!
My weekly goal is 10%. Today was my first day I started writing this blog so I am just getting used to entering my trades here. Next week I should be much better and faster listing stock: entries, sizing (as a % of portfolio), targets, etc. I plan on entering every entry/exit within 1-2 minutes of execution. Please let me know in the comments section if you have any questions.
Top gainer for the second week in a row was LNG, with 5.6% made to the short side, and almost 2% on the bull side. I love playing this name.
My overall goal is to give my market perspective and expectation to start the day, before 9:30am ET, list trade entries and exits throughout the day via Google spreadsheet, and to provide a market recap after hours. I am excited to do this, to meet new people and to share my ideas.
-Kevin
My weekly goal is 10%. Today was my first day I started writing this blog so I am just getting used to entering my trades here. Next week I should be much better and faster listing stock: entries, sizing (as a % of portfolio), targets, etc. I plan on entering every entry/exit within 1-2 minutes of execution. Please let me know in the comments section if you have any questions.
Top gainer for the second week in a row was LNG, with 5.6% made to the short side, and almost 2% on the bull side. I love playing this name.
My overall goal is to give my market perspective and expectation to start the day, before 9:30am ET, list trade entries and exits throughout the day via Google spreadsheet, and to provide a market recap after hours. I am excited to do this, to meet new people and to share my ideas.
-Kevin
Alright, so today ended fairly well. My trades were all positive:
CJES +.5%, BX +.5%, GS +1%, LNG +.5%, SPXU plus 1.3%, EBAY +1%
I am swinging another SPXU position over the weekend because I believe we will drop, and all Mondays in 2013 have been red. I have also re-shorted LNG, GS and EBAY. My only longs are BTU PAMT.
March is off to a great start with my trades being up almost 5%. Me likey.
OK - have a great weekend. Take care
-Kevin
CJES +.5%, BX +.5%, GS +1%, LNG +.5%, SPXU plus 1.3%, EBAY +1%
I am swinging another SPXU position over the weekend because I believe we will drop, and all Mondays in 2013 have been red. I have also re-shorted LNG, GS and EBAY. My only longs are BTU PAMT.
March is off to a great start with my trades being up almost 5%. Me likey.
OK - have a great weekend. Take care
-Kevin
Oh, by the way, when I write these entries, expect decent grammar and spelling, but I am typing this very quick and quite candidly.
While at my desk, I mainly care about SPY, XLF (and RUT, IWM), IYT and TLT. I also like to watch generically what is happening in currencies, with EUR/USD having the most meaningful impact, IMO.
While at my desk, I mainly care about SPY, XLF (and RUT, IWM), IYT and TLT. I also like to watch generically what is happening in currencies, with EUR/USD having the most meaningful impact, IMO.
The SPY gapped down this morning like expected, where I covered almost all of my shorts for profit. Then, some decent to very good economic news was released spiking the SPY almost filling the gap... SPY is now fading.... technical pattern is winning at this point.
My thoughts are that this is somewhat confirming the topping pattern in the SPY that has taken 2 weeks to form... more to come.
-Kevin
PMI was released and was worse than expected, 54.3 vs 55.8... the market did not really respond, it just held its losses... this tells me that the Sequester is the only news that really matters here. So, we are in a news driven market today and probably Monday. The pattern on the SPY is somewhat bearish and toppy IMO, but this news can easily push the market higher, or lower.
When in a news driven train trading environment, remove your bias, for anything can happen... This is when I trade small and take profits quickly... A few 0.5% or 1% gains really do add up.
-Kevin
When in a news driven train trading environment, remove your bias, for anything can happen... This is when I trade small and take profits quickly... A few 0.5% or 1% gains really do add up.
-Kevin
Alright, today we are looking to gap down... I just sold a large position pre-market of SPXU for a 1% gain that I was holding and adding to for the last 48 hours.
What do I expect today? Not really sure... The EUR/USD is down again, about 0.5%, and I'm sure there will be news about the sequester garbage we keep hearing about... on top of that we have PMI. If PMI misses, I expect us to drop.
I am bearish on this market and I believe we are topping out. Of course, topping out does not mean a new bear market, just that we can fall 5% or so. My target is SPX 1460 give or take. But I am flexible and willing to change that as the news rolls in.
-Kevin
What do I expect today? Not really sure... The EUR/USD is down again, about 0.5%, and I'm sure there will be news about the sequester garbage we keep hearing about... on top of that we have PMI. If PMI misses, I expect us to drop.
I am bearish on this market and I believe we are topping out. Of course, topping out does not mean a new bear market, just that we can fall 5% or so. My target is SPX 1460 give or take. But I am flexible and willing to change that as the news rolls in.
-Kevin
Hello...
First blog entry ever!!! WOOOO!!!
I will write in more detail later about me and my history... The purpose of this blog will be mainly for me, to track my thoughts/reactions/anger/joy with every market turn. I hope to make a few entries per day giving general thoughts on the market. I will also throw out all my trade ideas (including entries and exits) starting on March 4th on a Google spreadsheet. This spreadsheet link can be found at the top of the blog. I'm not really sure where this is going... could be a 2 month experiment, and could turn into a paid for subscription service (LOL).
My specialty is scalp day trading, or light 1-2 day swings. I will hold some positions ( usually SPY related) for a few days or even weeks (UPRO, SPXU, SPY calls and puts). Most of my trading is very simple and easy to follow.
Enjoy the ride? maybe, we will see...
-Kevin
First blog entry ever!!! WOOOO!!!
I will write in more detail later about me and my history... The purpose of this blog will be mainly for me, to track my thoughts/reactions/anger/joy with every market turn. I hope to make a few entries per day giving general thoughts on the market. I will also throw out all my trade ideas (including entries and exits) starting on March 4th on a Google spreadsheet. This spreadsheet link can be found at the top of the blog. I'm not really sure where this is going... could be a 2 month experiment, and could turn into a paid for subscription service (LOL).
My specialty is scalp day trading, or light 1-2 day swings. I will hold some positions ( usually SPY related) for a few days or even weeks (UPRO, SPXU, SPY calls and puts). Most of my trading is very simple and easy to follow.
Enjoy the ride? maybe, we will see...
-Kevin
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