Stock market tips and experiences

[MEMMEZZ]

Originally Posted by Vanity

French Downgrade news should trump the Central Banks headline

What a shorter! Love the aggressive attitude. You dont think the french downgrade is already somewhat priced in? It shouldnt be a total surprise.

By the way what trading platform do you use? How do you track intra-day volume so closely?
Im on streetsmart edge.

[slamako]

Hi All,

Just curious, did anybody jump into AMR today? It seems very low and has potential upside in the MT/LT

Using the other airlines that are now post Chapter 11, it seems like, if you have the time, be a good opportunity to jump in.

[mact3333]

a bullish conviction bar today(we finish strong in upper 1/4 of bar) means were headed to 1300...1220-50 theory doesnt look likely now due to ECB/FED/CHINA money printing scheme...but thats ok...we just need a trend doesnt matter which way really.

Positioned long metals this am...money printing means metals should show strength...todays close very important...if we close strong which I suspect we will, I can no longer be bearish for the ST/IT...LT I am very bearish.

[Dr. G]

Damnit, I let the tehcnical talk in this thread scare me off yesterday and I pulled out of some oil holdings... today could have been a goood day.

[Vanity]

Originally Posted by Dr. G

Damnit, I let the tehcnical talk in this thread scare me off yesterday and I pulled out of some oil holdings... today could have been a goood day.

You and everyone else. Hedge funds pulled out 30% of their stock holdings before today's mega rally. They must be jumping out of windows in NY.

[Dr. G]

Originally Posted by Vanity

You and everyone else. Hedge funds pulled out 30% of their stock holdings before today's mega rally. They must be jumping out of windows in NY.

30% damn! I'm gonna stick to my age old strategy of just waiiiiiiiiiiiiiiiiiting everything out.

I had been holding those positions I sold yesterday for about 2 years, no idea why I made such a quick decision yesterday to unload.

[schoy]

Took a small position in FAZ yesterday, felt vindicated with the bank downgrades, and then today happens. At this point, I wonder if I should just ride it out or bail. I suppose I'll just let it sit LT.

[NYCGP]

Originally Posted by Vanity

You and everyone else. Hedge funds pulled out 30% of their stock holdings before today's mega rally. They must be jumping out of windows in NY.

[BayMoWe335]

Originally Posted by schoy

Took a small position in FAZ yesterday, felt vindicated with the bank downgrades, and then today happens. At this point, I wonder if I should just ride it out or bail. I suppose I'll just let it sit LT.

Careful holding 3X leverage funds for any more than a trade. These funds are dangerous for long term investors because when they go down hard, it's much harder to dig out of the hole. A 3X leverage ETF will not outperform an unleveraged ETF with extreme volatility (Like now). Reason being? If you are down 50%, you have to make 100% to get back to even.

Moral of the story: Don't become a shareholder of a 3X leveraged fund. If you are wrong, take your medicine because you'll be down 50% before you know it. You might ask yourself why a 3X leveraged fund won't always outperform and non-leveraged fund. If you don't know the answer, you need to get out or fully understand it before trading them anymore.

[BayMoWe335]

Originally Posted by Dr. G

30% damn! I'm gonna stick to my age old strategy of just waiiiiiiiiiiiiiiiiiting everything out.

I had been holding those positions I sold yesterday for about 2 years, no idea why I made such a quick decision yesterday to unload.

You were scared and panicked. Never panic...it's only money and nothing lasts forever, especially in this market. Don't like it? Wait a day..(see today).

I have reversed and become a bear, but not with the conviction that I will short this market. I've been selling my winners on the up days to raise cash. I'd rather just watch with now 75% cash and 25% value stocks I can hold for a while. CSCO is turning out to be a good call (I was buying all the way down to 13.50) and you might even warm up to financials if you can take some short to intermediate term pain and dollar cost average.

I recommend XLF or IXG. IXG is a global financial ETF and only has about 10-15% European exposure. It is down 58% over 5 years while XLF is down 65%. I realize that doesn't sound good, but you have to think financials will stabilize somewhat in the next 5 years when the housing market recovers.

[graider]

market bounced today. is this a real rally or fake one?

[Vanity]

Originally Posted by graider

market bounced today. is this a real rally or fake one?

Good sir, we had 150 M Volume come in at the end of the trading day. We've had one of the biggest volume supports for this entire month. What Central Banks did today, fundamentally, had nothing to help Europe's Debt Crisis. It only helped bankers get cheaper debt, to dig them out of more debt. And the stocks rallied on China Bank lowering reserves by 0.5%? That's only an injection of $58 Billion into the Chinese Economy. That news came out first, and caused the big initial rally. Really? I'm lost. That's a scratch. The trade deficit is bigger than that.

Technically and Fundamentally speaking, that should have been a huge short as it implied China was struggling desperately for growth. And sure enough, Chinese PMI came out at 49.0, proving the truth. Question is, is Media going to realize the Central Banks did nothing much today when S&P hits 1280? Will Euro Crisis hit headlines hard again? Wouldn't be the first week of ample good news followed by another week of "record lows". I'll wait till this one out.

So right now, my entire theory is smashed up and I was blinded today in a short position. I'm waiting it out. At the very least, I can hope for a huge rally on S&P to 1400 and then short this thing when it crashes in January, cause that piece of my puzzle is still good, for now. Unless ECB comes in.

[BigDog]

Originally Posted by graider

market bounced today. is this a real rally or fake one?

lets just say not much conviction....

for what its worth... since the beginning of November changes in the bid/ask of ES futs have increased drastically.... volume not so much....

just to give you a quick idea.... on May 6, 2010.... (flash crash) we had a total of 62798 changes in the bid/ash spread on ES from 8:00am to 3:15pm chicago time....


on Nov 29, 2011 we had 198610 changes in the bid/ask spread on ES from 8:00am to 3:15pm....

with a significant spread between # of cars executed on the two days.....


just some food for thought....

[BigDog]

also to make things a bit more interesting... on Nov 9, 2011.... when we were right in the midst of Greece/Italy being the main headlines....

we had a total of 271323 changes in the bid/ask spread on ES.... with much greater volume than what we saw today....

[Vanity]

Originally Posted by schoy

Took a small position in FAZ yesterday, felt vindicated with the bank downgrades, and then today happens. At this point, I wonder if I should just ride it out or bail. I suppose I'll just let it sit LT.

You have to be aware of the "compounding interest error". What it means is NOT necessarily that you'd be losing money 100% of the time if you left it in and rode with it. All that it says is that interest compounds greater than what the index's arithmetic is: addition.

Say you bought in at index level: 12,000 on DJI. FAZ worth, just making it up, $100 dollars. All it means is that if the Index falls or goes up and repeats this cycle, the next time the DJI is a 12,000 will NOT mean that FAZ is still at $100 (because of the nature of how it compounds 3x daily). So they could work BOTH ways for you. On the one hand, if you think the index is going to definitely go below 12,000 then FAZ will probably hit above $100 on the way down.

But it could also not. Personally? I've ridden out 2x ETFs before for about a week and it's worked out for ME. Under the market circumstances at THAT time. It all depends on how you want to work this.

Most negative ETFs, if you had them in holding, were losing considerable money each week, each month, and each quarter, up until the crash of 2008. Where they returned upwards of around 38% on average. So, up to you. Work it out yourself and do some more reading.

[MEMMEZZ]

Originally Posted by Vanity

You have to be aware of the "compounding interest error". What it means is NOT necessarily that you'd be losing money 100% of the time if you left it in and rode with it. All that it says is that interest compounds greater than what the index's arithmetic is: addition.

Say you bought in at index level: 12,000 on DJI. FAZ worth, just making it up, $100 dollars. All it means is that if the Index falls or goes up and repeats this cycle, the next time the DJI is a 12,000 will NOT mean that FAZ is still at $100 (because of the nature of how it compounds 3x daily). So they could work BOTH ways for you. On the one hand, if you think the index is going to definitely go below 12,000 then FAZ will probably hit above $100 on the way down.

But it could also not. Personally? I've ridden out 2x ETFs before for about a week and it's worked out for ME. Under the market circumstances at THAT time. It all depends on how you want to work this.

Most negative ETFs, if you had them in holding, were losing considerable money each week, each month, and each quarter, up until the crash of 2008. Where they returned upwards of around 38% on average. So, up to you. Work it out yourself and do some more reading.

So just as an example, given what happened yesterday, how long are you willing to ride out something like TZA, assuming you entered the position earlier in the week?

[Vanity]

Originally Posted by MEMMEZZ

So just as an example, given what happened yesterday, how long are you willing to ride out something like TZA, assuming you entered the position earlier in the week?

It depends at what price you got it at. If you look at the chart for TZA, for most of it's life it's never been at the $28 dollar price tag it is at now. SPX is sitting at 1240-1250. Unless you think the market is going to 1300 or 1400, there's a good likelyhood that the ETF is going to return again to the price you got it at, especially in this bear market.

But that doesn't mean there havent been people who have held them and taken a -50% loss or greater, and it doesnt take long to do that. It depends on how large your holding is and how much you can stomach. Personally, I am exited out of everything right now and waiting till market resolution on Dec. 8th/9th. Those are trend setting days.

[ejheverest]

Trading in the Zone- is a must read for anyone who wants to learn how to trade objectively in any market.

MEMMEZZ-have an exit strategy before entering every position.

I am still all cash, waiting for my indicators to cross before I enter any positions.
RIG-is still on my watchlist, currently at 42$, recently dropped 10% after they announced a public offering of senior notes to free up more cash.

[Vanity]

So as we tread through December, let's decide whether or not the Santa Rally has finished or whether the sleigh still has inertia.

Evidence of a crash in January:
- retesting October lows did not complete this month. They are postponed to the next now.
- after 2008, bonuses on Wallstreet are paid out in restricted stocks. As to maximize the upside potential of these stocks in the next Three years when they are open to selling by the fund managers, the beneficiaries (Wallstreet) is going to want to see a market crash before the bonuses are released. Stocks are desired to go as low as possible here.
- China manufacturing slowing down and this is putting export strains on its economy. Considering how China is the worlds largest buyer of debt, who do you think is going to cough-up the extra money needed to pay the bills when China begins to have less and less money to buy up debt and fund the US bond markets??
- US is going to rely heavily on China and it's bond markets in January as the debt ceiling raised in August (to $15.195 trillion) is, after December's government bills, at $15.045 Trillion. How much time did the debt ceiling raise buy the US? About 3 months it seems. They are $149 Billion away from defaulting again, and will need to raise that ceiling yet again. Monthyl US debt deficits are on the magnitude of $110 billion. This will happen in January, no getting around the math. More political theatrics here, especially as the campaign elections heat up in early 2012. US downgrade likely to happen here.

As for the fiscal integration happening here in EU on Thursday to Friday in the summit meeting, expect the austerity measures and mild recession to get both heavier and deeper. This means fiscal targets, as outlined right now for the EZ countries that need bailouts will NOT be met and will have to be revised. In truth, we will need more money than what we are projecting right now. $1 trillion EFSF fund is a joke. ECB is unlikely to backstop the Eurobond because such a proposition is a minimum 2 year ordeal and minimum $2 trillion dollar commitment (by today's projections, never mind tomorrow's).

Just food for thought to watch out for in January. USD index is sitting near its 50 day moving average of 77.64. If it heads to the downside of 77.64, from 78.63 right now, markets will go up. But watch the USD index as it marches towards 80 line near the end of Dec or early Jan. That is a crucial short signal.

[Javi335]

Originally Posted by Vanity

Considering how China is the worlds largest buyer of debt, who do you think is going to cough-up the extra money needed to pay the bills when China begins to have less and less money to buy up debt and fund the US bond markets??

oh no prob sir, the FED will print some money, and then loan it to China for buy US debt

[Javi335]

^^

Originally Posted by Vanity

Why would you do that? S&P had said they were going to be downgrading 87 banks across 15 countries. After hours they released the list, and it was so foreseeable that BAC was going to be hit. And they just got downgraded.

i dont talk about that

is as easy as it should not be allowed an economy where the global debt is 10
times bigger than the money that really exits

but what can you expect from a system where fractional reserve, cds and the fed exist, designed to make impossible to get self financed

this is not real economy, this is some kind of gambling casino mixed with star wars, star trek and dungeons & dragons

i mean ...

[Vanity]

Originally Posted by Javi335

^^



i dont talk about that

is as easy as it should not be allowed an economy where the global debt is 10
times bigger than the money that really exits

but what can you expect from a system where fractional reserve, cds and the fed exist, designed to make impossible to get self financed

this is not real economy, this is some kind of gambling casino mixed with star wars, star trek and dungeons & dragons

i mean ...

Agree with you here +1