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2014-04-05 10:09 AM
in reply to: Left Brain

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Subject: RE: Stock Market
I sure hope that Monday the Nasdaq recovers as I have some calls and I didn't see what was happening with the market until after it closed. Like Tony, I like using options. Unfortunately, yesterday I was unexpectedly pulled into meetings and didn't take my smart phone. My calls dropped about 30%. And I have much more than 1k riding with the calls. Tony, I like your discipline with limiting your risk to 1K. I may take a similar approach as I see equities getting riskier as the market continues to run higher. I've been thinking for some time that the market is due for a correction...ther are some seriously overvalued stocks out there (TSLA, FB, lately these hydrogen stocks). but everytime the market goes down it seems to recover. The trend is up and I know about trends. Trends do reverse though and when this one does it won't be pretty. The market can fall much faster than it goes up.


2014-04-07 10:07 AM
in reply to: rayd

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Subject: RE: Stock Market
2014 Q1 earnings start tomorrow. Total earnings for S&P 500 companies are expected to be down 3.3% from Q1 2013. This is down from early Jan when earnings were expected to be +2.1% for Q1. Maybe its time.
2014-04-07 10:34 AM
in reply to: rayd

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Subject: RE: Stock Market

Originally posted by rayd I sure hope that Monday the Nasdaq recovers as I have some calls and I didn't see what was happening with the market until after it closed. Like Tony, I like using options. Unfortunately, yesterday I was unexpectedly pulled into meetings and didn't take my smart phone. My calls dropped about 30%. And I have much more than 1k riding with the calls. Tony, I like your discipline with limiting your risk to 1K. I may take a similar approach as I see equities getting riskier as the market continues to run higher. I've been thinking for some time that the market is due for a correction...ther are some seriously overvalued stocks out there (TSLA, FB, lately these hydrogen stocks). but everytime the market goes down it seems to recover. The trend is up and I know about trends. Trends do reverse though and when this one does it won't be pretty. The market can fall much faster than it goes up.

I'm with you on the trend.  I've spent many years losing a lot of money trying to trade on trend reversals.  I finally decided that if I can't beat em I better join em and it's worked out very well.

I'm pessimistic overall on the market, but I still buy calls to bet with the trend.  I won't switch to Put's until the trend is solidly reversed.

As I've mentioned I exclusively trade QQQ because I feel it's easier to understand and master one ETF than try to track a bunch of equities.  The plus of having weekly options with high liquidity (very tight bid/ask spreads) makes it a lot cheaper as well.  I also buy options with a minimum delta of .8 to minimize theta.  

I watch the 200, 50, & 20 EMA for trend guidance.  The 200 gives me the long term trend, but I primarily use the 50/20 for my near term trend guidance.  With today on the QQQ the 20 day EMA has just touched the 50 day EMA so a near term reversal could be at foot, but it could also signal a bounce back towards the upward trend.

My "money signal" is the Stochastic Momentum Index (SMI) for QQQ.  It has been very reliable for me in signaling moves back towards the trend.  Currently it's not signalling a reversal so I'll sit back and watch.  If the trend breaks through then I'll wait for a short signal on the SMI to buy into the downward trend.  In general I stay on the sidelines until the 20 EMA has clearly established a trend away from the 50 EMA.

I simply buy $1k worth of ITM calls or puts for the following week with a delta around .8 or better (usually 2 or 3 contracts) when the SMI is signalling a switch back towards the trend.  Then I just let it ride for the whole week.  If it's flat, I don't really lose much, if it completely tanks then I'm out $1k, but when it goes up I often get a double or better.  It's not too complicated, but it's been working really well for me.  

Here's my setup I watch.  I don't put a lot of weight in the MACD and Bollinger Bands, but I like to have them for overall picture.

http://i148.photobucket.com/albums/s19/XDHusker/QQQ_zps96f90eb0.png

 

2014-04-07 10:54 AM
in reply to: tuwood

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Subject: RE: Stock Market
Those 20 / 50 day crossovers can sometimes be decent signals.
2014-04-07 4:20 PM
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Subject: RE: Stock Market

Originally posted by gr33n 2014 Q1 earnings start tomorrow. Total earnings for S&P 500 companies are expected to be down 3.3% from Q1 2013. This is down from early Jan when earnings were expected to be +2.1% for Q1. Maybe its time.

 

vine.co/v/MbzEjDdY2OB

 

 

 



Edited by Left Brain 2014-04-07 4:21 PM
2014-04-08 10:09 PM
in reply to: tuwood

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Subject: RE: Stock Market
Thanks for sharing the info. I may try a similar strategy. While I've not done well with my options lately there are times when I've made a lot of money...fast! On days when I am home I will spend a few hours watching a few stocks. There are some that are very wide swings and I've gotten on the right side where I have made 50% or better in a matter of minutes. Sometimes I wish I was home more because when I can watch whats going on I tend to time things better. Anyway, lost on my QQQ. I sold them today and while possibly the market might see green again tomorrow I just don't feel it. Too many high flyers have been selling off. I'm sitting on the sidelines for a while.


2014-04-09 10:13 AM
in reply to: rayd

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Subject: RE: Stock Market

Originally posted by rayd Thanks for sharing the info. I may try a similar strategy. While I've not done well with my options lately there are times when I've made a lot of money...fast! On days when I am home I will spend a few hours watching a few stocks. There are some that are very wide swings and I've gotten on the right side where I have made 50% or better in a matter of minutes. Sometimes I wish I was home more because when I can watch whats going on I tend to time things better. Anyway, lost on my QQQ. I sold them today and while possibly the market might see green again tomorrow I just don't feel it. Too many high flyers have been selling off. I'm sitting on the sidelines for a while.

I absolutely suck at selling.  I can say with almost 100% certainly I always sell way too early on winners and bail out of losers at the exact bottom where they rebound the second I click sell.  I should almost sell a service I'm so propheticly bad.  haha

I also struggle to separate my emotion from trading, so my "buy and hold" of weekly options worked out to be a nice compromise for me.  I enter a trade expecting a swing one way or another for the week, and that's it.  If it goes the way I predicted then great, if it doesn't then my losses are capped and relatively small.  I just ride it, no matter what so there's no emotion involved at all, and I don't even have to watch it.  I just put in a sell to close at the close on Friday.   I've had several that went way against me through mid week and recovered for huge gains the last couple days of the week.  I've also had ones nosedive on Friday, but the huge gainers far outnumber the capped losers.

In full disclosure, I've been buying calls in a very long upward trend, so it's been pretty easy the last couple years.  It's been a VERY good couple of years though.    
When the market gets flat or choppy, this strategy won't be quite as good, but with such a low Theta even a dead flat market costs me very little.

2014-04-10 9:20 PM
in reply to: tuwood

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Subject: RE: Stock Market
Originally posted by tuwood

Originally posted by rayd Thanks for sharing the info. I may try a similar strategy. While I've not done well with my options lately there are times when I've made a lot of money...fast! On days when I am home I will spend a few hours watching a few stocks. There are some that are very wide swings and I've gotten on the right side where I have made 50% or better in a matter of minutes. Sometimes I wish I was home more because when I can watch whats going on I tend to time things better. Anyway, lost on my QQQ. I sold them today and while possibly the market might see green again tomorrow I just don't feel it. Too many high flyers have been selling off. I'm sitting on the sidelines for a while.

I absolutely suck at selling.  I can say with almost 100% certainly I always sell way too early on winners and bail out of losers at the exact bottom where they rebound the second I click sell.  I should almost sell a service I'm so propheticly bad.  haha

I also struggle to separate my emotion from trading, so my "buy and hold" of weekly options worked out to be a nice compromise for me.  I enter a trade expecting a swing one way or another for the week, and that's it.  If it goes the way I predicted then great, if it doesn't then my losses are capped and relatively small.  I just ride it, no matter what so there's no emotion involved at all, and I don't even have to watch it.  I just put in a sell to close at the close on Friday.   I've had several that went way against me through mid week and recovered for huge gains the last couple days of the week.  I've also had ones nosedive on Friday, but the huge gainers far outnumber the capped losers.

In full disclosure, I've been buying calls in a very long upward trend, so it's been pretty easy the last couple years.  It's been a VERY good couple of years though.    
When the market gets flat or choppy, this strategy won't be quite as good, but with such a low Theta even a dead flat market costs me very little.




it's really hard to remove emotion from trading. especially when you made the wrong call! Nobody wants to admit they were wrong. I really thing we're in for a reversal. I made a quick trade with QQQ today. Gained just over 10 percent in about an hour. If I would;t have been so quick to pull the trigger I could have maybe made closer to 20. But you know what they say about pigs and hogs...
2014-06-25 8:56 AM
in reply to: rayd

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Subject: RE: Stock Market

More potential signs of a correction coming.

U.S. growth contracted 2.9% in first quarter
Biggest decline in GDP during an economic expansion since 1956

I thought this quote from the article was interesting about healthcare spending estimates vs. reality:
The government originally assumed that the introduction of Obamacare would boost health-care spending in the first three months of the year. Yet health-related spending actually fell by $6.4 billion instead of rising by $39.9 billion as previously estimated

Wonder what other ACA estimates they were wrong about?  (sorry, wrong thread)

Thought this was fairly balanced opinion piece talking about profits compared to GDP historically and their effects on the stock market.
http://www.beginnertriathlete.com/discussion/forums/thread-post.asp?action=reply&replyto=4979958

 

As I've mentioned, the fed pumping has been a huge contributor  to the run up.  If it stops and they do not require the banks to buy back their bonds then corporate profits are the only thing left to drive the market up.  Therefore with the Fed slowing down pumping and corporate profitability falling there's not much upside left in this market.  It could stagnate, but a correction would seem more likely.

If the fed starts requiring banks to buy their QE bonds back then things could get really bumpy 

I'm still watching the 20 and 50 day moving averages and across the board they're in a strong upward trend.  So, no downward changes signaled yet in the market for me, but I am watching.

2014-07-04 11:16 AM
in reply to: tuwood

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Subject: RE: Stock Market

Originally posted by tuwood

More potential signs of a correction coming...

Meanwhile the S&P 500 set another record yesterday, and by my calculation is up 12% since this thread started.

Like a broken clock that is right twice a day, anyone who continuously predicts a correction will eventually be correct. The bigger question is how much do they leave on the table while waiting.

 

2014-07-04 8:54 PM
in reply to: the bear

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Originally posted by the bear

Originally posted by tuwood

More potential signs of a correction coming...

Meanwhile the S&P 500 set another record yesterday, and by my calculation is up 12% since this thread started.

Like a broken clock that is right twice a day, anyone who continuously predicts a correction will eventually be correct. The bigger question is how much do they leave on the table while waiting.

 

Does ANYBODY think the Dems are not going to keep the market propped up through the next election?  If so, send me your money.  I'll throw it in for 3%. LOL

Still, I thought I'd be lucky to get 7% this year but stayed all in anyway figuring next year would make up for it.......sitting at 12% gain already.  Silly.

If you have missed the last 5 years..... I'm sorry. 

Oh...yes.....correction coming soon.....run for your life!!!   Hell, at this point it could lose 50% and if you've been in you are still a big winner.  The only people predicting correction at this point are those who have missed out.



2014-07-07 9:24 AM
in reply to: the bear

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Originally posted by the bear

Originally posted by tuwood

More potential signs of a correction coming...

Meanwhile the S&P 500 set another record yesterday, and by my calculation is up 12% since this thread started.

Like a broken clock that is right twice a day, anyone who continuously predicts a correction will eventually be correct. The bigger question is how much do they leave on the table while waiting.

I'm actually making a killing this year.  The up trend has been so consistent and predictable I have been averaging double digit gains almost every week all year.  The difference is, I have virtually zero downside risk if/when the market makes a shift because I'm completely out of the market every Friday at weekly expiration locking in my gains.  I risk less than 2% of my portfolio on any weekly trade so even if I lose 100% of my weekly investment it's a nominal loss.

I have no clue when the market is going to correct, so I'm going to ride it with everyone else until it stops, but the difference is I understand that it is going to stop, so I trade accordingly and minimize my risks to the downside.

Remember, you haven'[t gained anything until you sell it.  You can go up 100% this year, but if you lose it all next year and never cash out you haven't gained anything.

As I've said many times before, I have zero confidence in buy and hold investing because you will have all time highs like now, but based on past experience in 1, 2, 3, or 5 years it will quite likely be at 50% of what it is today.  Then in another seven or eight years after that it will be back to where it is today netting a gain of zero over many years.

If you bought in to the S&P in 1999 and go until the record highs today you'd be up a total of 30%, which over 15 years is 2% per year and you were negative all the way up until mid 2013.  Same thing for 2007, you would have been horribly negative up until 2013 and even now at record highs it's up a total of 20% or 2.9% per year.

2014-07-07 9:37 AM
in reply to: Left Brain

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Subject: RE: Stock Market

Originally posted by Left Brain

Originally posted by the bear

Originally posted by tuwood

More potential signs of a correction coming...

Meanwhile the S&P 500 set another record yesterday, and by my calculation is up 12% since this thread started.

Like a broken clock that is right twice a day, anyone who continuously predicts a correction will eventually be correct. The bigger question is how much do they leave on the table while waiting.

 

Does ANYBODY think the Dems are not going to keep the market propped up through the next election?  If so, send me your money.  I'll throw it in for 3%. LOL

Still, I thought I'd be lucky to get 7% this year but stayed all in anyway figuring next year would make up for it.......sitting at 12% gain already.  Silly.

If you have missed the last 5 years..... I'm sorry. 

Oh...yes.....correction coming soon.....run for your life!!!   Hell, at this point it could lose 50% and if you've been in you are still a big winner.  The only people predicting correction at this point are those who have missed out.

They're going to try and keep the market propped up, but there's only so much they can do.  Their main tool of dropping interest rates is pretty much exhausted, so if something happens to drive it down it's going to likely go down.

The only way you're still up if it loses 50% is if you invested all of your money at the very bottom, which I can almost guarantee none of you did.  All the money you had in the market in 1999 is up less than 2% per year and all the money you had in the market in 2007 is up just under 3% per year.  It's only the money that you put in after the crash in 2009 that's up "big".

You're trying to put me into a box of buy and hold investors. If I were a buy and hold investor, then yes you'd be correct I would have missed out, but I'm not in any way.  I'm a short term swing trader because I recognize that markets are unpredictable, manipulated, and rigged so regular folks are not able to get decent long term sustained returns.
When I see everyone fiddling on the roof at market highs, it's deja vu all over again just like it was in 2000 and 2007.  Even a turkey can fly in a stiff wind, so it doesn't really matter what you do in today's market it will go up and work.  The problem is, people just sit and ride the highs until they become lows again and never capitalize on the gains.  You will absolutely never time it right and buy at the lows and sell at the highs, so if you'd sold last year and missed out on a 12% gain it would really suck.  However, if there was a 50% loss next year then you were a genius by selling last year.

2014-07-10 4:11 AM
in reply to: tuwood

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Subject: RE: Stock Market
Anyone selling yet ? I went short some yesterday (SDS) looking for 7%-10% drop from the recent highs between now and Oct.
2014-07-10 8:34 AM
in reply to: gr33n

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Subject: RE: Stock Market
Not actively, only whatever my hedge fund and F-Squared holdings are doing, which account for <7% of my portfolio. I increased my REIT holdings a bit last quarter too by reducing large cap growth. I don't trade individual stocks except in my play account, but that is all in cash right now as I am too busy.

Today looks like a rough day, thanks Europe :-) US jobs numbers and latest unemployment filings numbers are solid, so maybe a short lived negative bump.
2014-07-10 8:52 AM
in reply to: ejshowers

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Subject: RE: Stock Market
Reits should do ok, or at least less bad looking ahead. Decent yield and pressure on rates should allow them kind of safe harbour status.

Pressure is definately coming out of the EU banking sector this week. Spreads widening along with a couple of new issues being pulled as 'conditions not suitable'. Especially southern europe. I think flow wise a few of the Asian sov wealth guys are saying you know I've done pretty well so far I think I'll just take my money and check back again in a few months time.

A couple tech levels to watch are 1944 and 1926 on the S&P. Below 1926 will get pretty ugly pretty fast.


2014-07-10 9:17 AM
in reply to: ejshowers

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Subject: RE: Stock Market
Originally posted by ejshowers

Not actively, only whatever my hedge fund and F-Squared holdings are doing, which account for <7% of my portfolio. I increased my REIT holdings a bit last quarter too by reducing large cap growth. I don't trade individual stocks except in my play account, but that is all in cash right now as I am too busy.

Today looks like a rough day, thanks Europe :-) US jobs numbers and latest unemployment filings numbers are solid, so maybe a short lived negative bump.

you really believe the job numbers? Or another way of looking at it, you think the US is creating good paying jobs. Smoke and mirrors! I'm mostly cash other than long term calls on miners (gold, silver and copper) and holding phsical gold and silver. Which is working out pretty well to this point. In hindsight I wish I would have moved more money to the miners. I still might...still alot of upside in my opinion. Today is ugly and I won't be nuying equitities again until I see at least a 10% drop. Maybe today is the start of the much needed correction.
2014-07-10 10:09 AM
in reply to: rayd

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Subject: RE: Stock Market

Originally posted by rayd
Originally posted by ejshowers Not actively, only whatever my hedge fund and F-Squared holdings are doing, which account for <7% of my portfolio. I increased my REIT holdings a bit last quarter too by reducing large cap growth. I don't trade individual stocks except in my play account, but that is all in cash right now as I am too busy. Today looks like a rough day, thanks Europe :-) US jobs numbers and latest unemployment filings numbers are solid, so maybe a short lived negative bump.
you really believe the job numbers? Or another way of looking at it, you think the US is creating good paying jobs. Smoke and mirrors! I'm mostly cash other than long term calls on miners (gold, silver and copper) and holding phsical gold and silver. Which is working out pretty well to this point. In hindsight I wish I would have moved more money to the miners. I still might...still alot of upside in my opinion. Today is ugly and I won't be nuying equitities again until I see at least a 10% drop. Maybe today is the start of the much needed correction.

I saw this chart a while back comparing the "real" unemployment rate to the BLS numbers.  The real unemployment rate hasn't changed since the collapse and is around 11%.  (graph from http://www.zerohedge.com/news/2013-12-06/real-us-unemployment-rate-115)
The government keeps removing people from the workforce to make the numbers look like they're getting better.

Even this doesn't take into account underemployed where somebody who used to make $40k is now working for minimum wage.

2014-07-10 10:19 AM
in reply to: tuwood

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Subject: RE: Stock Market
Originally posted by tuwood

Originally posted by rayd
Originally posted by ejshowers Not actively, only whatever my hedge fund and F-Squared holdings are doing, which account for <7% of my portfolio. I increased my REIT holdings a bit last quarter too by reducing large cap growth. I don't trade individual stocks except in my play account, but that is all in cash right now as I am too busy. Today looks like a rough day, thanks Europe :-) US jobs numbers and latest unemployment filings numbers are solid, so maybe a short lived negative bump.
you really believe the job numbers? Or another way of looking at it, you think the US is creating good paying jobs. Smoke and mirrors! I'm mostly cash other than long term calls on miners (gold, silver and copper) and holding phsical gold and silver. Which is working out pretty well to this point. In hindsight I wish I would have moved more money to the miners. I still might...still alot of upside in my opinion. Today is ugly and I won't be nuying equitities again until I see at least a 10% drop. Maybe today is the start of the much needed correction.

I saw this chart a while back comparing the "real" unemployment rate to the BLS numbers.  The real unemployment rate hasn't changed since the collapse and is around 11%.  (graph from http://www.zerohedge.com/news/2013-12-06/real-us-unemployment-rate-115)
The government keeps removing people from the workforce to make the numbers look like they're getting better.

Even this doesn't take into account underemployed where somebody who used to make $40k is now working for minimum wage.




Thanks for posting the chart. I had seen something similar but I'm too lazy to find it and post. Sad thing is most people read the headlines and believe what they are getting fed. CPI is another good example. Anyone that buys groceries knows inflation is much higher than 1-2%. Last week I paid $9.00 for 5-apples! Of course, a lot of people buy processed carp which has not been hit as hard with inflation. Anyway, I think we have a false sense of how the economy is doing as the Fed continues to keep interest rates low and create money from thin air. It's not as pretty as big brother wants us to believe.
2014-07-10 10:23 AM
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Uh.....dude.....BOTH the reported and the implied are roughly the same as they were just before the collapse....which means we are back where we were.  I'm not a defender of Obama or any politician or administration, but you'd have to be crazy to not think the economy is stronger, in all aspects, then it was after the collapse.

ETA - nevermind....I put my glasses on. I couldn't read the dates on the bottom line and thought the graph started with the collapse. LOL



Edited by Left Brain 2014-07-10 10:24 AM
2014-07-10 10:26 AM
in reply to: Left Brain

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Originally posted by Left Brain

Uh.....dude.....BOTH the reported and the implied are roughly the same as they were just before the collapse....which means we are back where we were.  I'm not a defender of Obama or any politician or administration, but you'd have to be crazy to not think the economy is stronger, in all aspects, then it was after the collapse.

ETA - nevermind....I put my glasses on. I couldn't read the dates on the bottom line and thought the graph started with the collapse. LOL

lol, i was gonna say.  



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