Morning Audibles 3.12.10 - Jumping the Shark

SPX is about to Jump the Shark (1150), Right? All I can say is "Heyyyyyyyyyy....that's cool"!


Moments like this send traders straight back to the drawing board... It's a time that you really must evaluate your fundamental strategy... Is your overall outlook basically BULLISH, or BEARISH? If you're on the "wrong side" of the shark, you're bound to look temporarily foolish, but the REAL question is, "Can you endure?", and "How much pain will enduring cost you in the process?"... People on the other side of the shark will start playing mind games with you... I'm sure by tomorrow, or next week, you're going to be hearing all about the Fed, liquidity, recovery, jobs, stocks GUF, DOW 36,000...

Oh that reminds me... The DOW... Even if the SPX crosses 1150, there's still a little matter of the DOW breaking to new highs... It seems to be lagging behind a little here... EW actually 'prefers' to use the DJIA as its metric... I thought I'd take a look at the DJIA over the past dozen or so years to get a 'feel' for this... Here's what I came up with...


The chart is not fully annotated (but sometimes pictures are better than words)... What I see is a trendline which goes all the way back to the 2000 highs... (Note that in 2000, the DOW made it's high in January, while the S&P made its high in March - The monthly "closing high" in the DOW was from December '99, as was the December closing high in '09 slightly higher than January)... There were other curious little things... Notice the pattern of the AVERAGE TRUE RANGE... Basically, in the 90's, the LEVEL line of when people started to 'get nervous' with stocks was during the LTCM crisis in 1998... There was a period of 34 months where this nervousness remained elevated extending all the way through the 2000, but then also through an almost successful backtest of those highs... Of course when the index failed to break through when REALITY final sunk in that the debacle WASN'T OVER, stocks plunged, and didn't recover until 5 months AFTER the eventual 2002 lows were reached, then re-tested in 2003... Once can see we are approaching the same types of timescales (and levels) as we speak...

I'm not making the case that stocks will plunge here... In fact, if you use the "months" indicator as a key, you may want to think of 34 months (which is a FIBO number)... If that's the case, where is your starting point? Is it October '07 (the market TOP)? Is it August '07 (the "Cramer Rant" - when the Fed started getting nervous and cutting rates)?... I don't know... Anyway, the point I'm making is that even if we break a little higher here, based on evidence, I don't feel that a lot of MASSIVE FOLLOW-THRU may ensue... In fact, we may just "churn" here... There are, in fact, some gaps to fill on the downside (SPX wise)... 1132, 1122, 1116, even 1076... The LONGER TERM trendlines (and candles), seem to suggest that this line in the sand isn't something that we just visit, dismiss, and go melting up or down from there... In fact, it's just the opposite... It seems MORE to suggest that we may stay exactly HERE  (I'll say within a 75 point SPX range) for a bit longer...

Meanwhile, I'll put up another chart that I harvested yesterday... If the US Government & the Fed think they have this problem licked by printing money, perhaps they can use this time to THINK AGAIN...


To me, that chart is a tell tale sign that the current rally (from the March '09 lows), will eventually go the way of this rally...

KABOOM!




197 comments:

Karen said...

too good, cv, too good!

Prashant said...

And while you sleep, EURJPY almost touching its month's highs.

mcHAPPY said...

Dollar and Yen are getting killed lately. Discussion over. RISK ON, DGDF.

call me ahab said...

hey man-

Fonzi looks good on those water skis- shorts and a leather jacket- lmao

was he eaten in that episode- I don't remember

I-Man- thanks for the Rancid link previous post- good stuff there

call me ahab said...

mcHappy-

imagination land wins!

http://www.southparkstudios.com/clips/163661/?searchterm=imagination+land

CV said...

@ben

Let's see if it gets to your aforementioned 1158 target today...

A reversal there would be sweet...

CV said...

It's very hard for me to see how the indices here can just blow by the REPO 105 story that broke yesterday and act as if nothing happened (instead - apparently focusing on RETAIL SALES)...

The only conclusion?

First of all, retail sales? Pfffft! Basically all that says is that ANY excuse, ANY at all is can be used to try to fool the public into thinking things have changed, and to allow Lloyd to unload stocks onto Johnny...

My 'personal' indicators are UP... That is... All the 'tools' that I know are e-mailing me, and telling me that the "Dow is up 450 since you said that the market was starting to break down technically"...

The global idiot bubble is alive and well, folks...

But the REPO 105 story...

I mean, how can they just BURY that... This is ENRON on the NYFED & government complicity level...

I'm not amazed by much anymore, but SURELY, the hits keep on coming!

Tools who want to own stocks... Be my guest!

Karen said...

cv/ben, that's a happy thot.. i forgot about that in my spxguf mindset..
morning!

Karen said...

Andy has 1154 earmarked.. and charts of bidu and F if you can stomach them..

CV said...

@karen

Did you read any of those REPO 105 articles?

They're all over the place... ZH, Denninger, Even Huffington Post...

I mean, I realize that KD & Tyler have their hair on fire about a lot of things, but this ain't no joke...

This EASILY becomes mainstream... and when the public catches on, it's going to be difficult to spin this one...

More confirmations of what most people have suspected all along...

mcHAPPY said...

CV

mcHAPPY is tired of poking holes in bulls arguments because, well, it is just so easy.

With that said, the retail sales ia a crock. Much like all other stats they are computed to err on the bull (pun intended) side. Nothing mentioned about companies/competition gone bankrupt and nothing mentioned about closed stores.

AmenRa said...

mcHAPPY

That's why same store sales are higher...there are fewer stores.

CV said...

@karen

Andy may be exactly right on that one (1154)...

The first high print of the day suggests to me that the action today could be typical of what we've seen the past 10 days in a row...

HFT's hammer the thing higher in the Johnny hour, followed by "computer-computer" algo trading all day long... Then, in the last Johnny Hour... PPT gets in for the final ramp & distribution...

It points to 1154 at the moment...

I'm not sure I'd want to be holding "longs" going into this weekend (despite the Happy Monday phenomenon)... If this Repo 105 story gets a life... Well, I don't know what to say...

I'm sort of expecting an ELEVATOR CITY move down to 1116 to happen at any time when nobody is expecting it...

McFearless said...

c,

yes, 1158 would be nice, we'll see.

Here is sentiment from AAII this week:

March 11: 45.29% Bulls 29.41% Neutral 25.29% Bears

Last week bulls were at 35.86%, and neutral just above 37% so the rally is doing its job converting people back to bulls.

That is the highest amount of bulls since 1/14 and lowest number of bears since 12/31. Note yesterday that Citi was the majority of volume, this is what I was trying to get at with my sentiment post about the banks the other day.

In general I think a lot of retail reads the blogs, and you can tell when they comment. My personal conclusion, retail is bullish much more now than perhaps at any time during the bear market rally. All I keep reading are calls for how much higher we are going to go yet the DOW hasn't even closed above it's peak in Jan. Is this all built on some of the sub-indexes hitting new highs I wonder? No?, the "bullish" internals? If so, perhaps a look back at 2007 and early 2008 would be advised.

I also note that the advice o' the day seems to be "follow the trend" because that's so "easy" and the belief that the economy can be engineered seems very popular again recently.

Hope everyone has a good day

Karen said...

CV, just catching the repo thing now.. interesting because yesterday, i thot to myself.. this market is all leverage again; but how can that be? and then, this morning, texted a friend that unless a big shoe drops, this market is going up to 1200..

CV said...

@mcHappy

or not to mention that people DO HAVE MONEY TO SPEND because they don't pay their mortgages or credit card bills anymore...

McFearless said...

Karen,

In some brands I wear a size 13 shoe, I just threw them on the floor....hard.

Does that count?

call me ahab said...

re the repo article-

I read that yesterday- and I guess my thought is-

so what? Nobody in any position of authority cares-

and as I said the banks are on a very very long leash w/ no choke collar-

when in fact they should be wearing a shock collar

Karen said...

good trick, ben! i've got some big (price-wise) shoes, too.. i'm reluctant to slam them to the floor though, laughing.

CV said...

@ben

Look at the DOW chart I published in this THREAD...

To me, that would suggest that since 2000, there is a "creeping trendline" that has acted as a line in the sand...

The only time OVER that for the Dow was in the late bubble period from summer '06 on thru the collapse...

We're only REACHING those levels now... It is apparent that it was difficult to get through those levels both in 2001, AND in the entire 2004-2005 period (even when things 'seemed' fundamentally better)...

What I'm saying, is that while a downturn may start at any time... Getting thru those levels doesn't seem too easy...

Basically, I see limited upside (unless an absolute FANTASY idea of valuations takes root)... If that happens, literally, ANYTHING could happen... At that point, I'd just walk away, because as ridiculous as it is now, it would be utterly farcical at that point in time...

Karen said...

LB will love this, but everyone should read it! Shorting US Treasuries is a Sucker's Bet

funny, too, that the term "sucker" is running thru everyone's head with half a brain to explain what is going on right now..

Karen said...

another stock to watch.. NILE.. PE 66, wonder how many diamonds they will sell this quarter.. altho it is wedding season.. i know one couple whose wedding is put off till the fall..

mcHAPPY said...

@Ben

mcHAPPY is a 15 and has been dropping his shoes off the roof of his house for some time - to obvious little effect, of course.

Karen said...

oh, come to think of it... those diamonds were bot over the holidays, and last fall.. could be a couple of quarters for NILE.

mcHAPPY said...

A follow up to the Repo 105. mcHAPPY hopes it does not take the rest of this year for this to come to light on the market.

http://market-ticker.denninger.net/archives/2072-What-The-Lehman-Report-Proves-Financial-Insolvency.html

Karen said...

i guess the disconnect between wall st and main st just showed up in consumer sentiment.. ?

call me ahab said...

Jesse's take

NY Fed Implicated in the Accounting Fraud at Lehman

" . . .let's see if Chris Dodd puts the Consumer Protection section of the financial reform legislation under the control of a private organization,the Fed, which is owned by the institutions it is supposed to be regulating, and which is now implicated in the failure and fraud that helped to trigger the recent financial crisis."

I-Man said...

I-Man is just going to keep quiet today and keep bumping Lauryn Hill in the ipod...

Reversal or bust.

I-Man said...

Ok, got a little tease of a reversal here, so I'll amend that to:

Close below 1137 or bust.

call me ahab said...

"See where Congress passed a two billion dollar bill to relieve bankers' mistakes. You can always count on us helping those who have lost part of their fortune, but our whole history records nary a case where the loan was for the man who had absolutely nothing. Our theory is to help only those who can get along, even if they don't get a loan." - Will Rogers - 1932

so true Will- so true

72bat said...

somebody say something...
comment on bucky and the market indices being in lock step down today?

Karen said...

using uup.. 23.41 is the line that needs to hold..best if it just holds here at 23.45..

Karen said...

ha! bat, your post wasn't up when i posted..

Leftback said...

Go Bucky Go. (I am short silver).

Leftback said...

You would think that some degree of profit taking is inevitable after all the ramping that has gone on this week in banks, turds, retail...

Karen said...

I <3 BR and his latest post.
Accounting Fraud, Short Sellers & the SEC

CV said...

All I can say at the moment is that if this were back in July (like when the S&P broke above 956)... This would have soared like an eagle across the board on HIGH VOLUME...

Where are we now? Below the Jump line...

While the market could go up and post higher numbers, I'd say that it needs to either pause, or even retrace a few lower levels before it does...

This could just end up being a limbo period... Consolidate until bank earnings are reported in early April... Try to use a positive jobs number for March (reported on April 2)... IPad release April 3rd... blah, blah, blah...

The banks try and offload some common equity to to global idiot bubble... S&P goes marginally higher... Then that's the end of anymore upside...

This thing will simply die of exhaustion...

CV said...

@karen

I liked BR's "words" as well... But as I said to him D-I-R-E-C-T-L-Y last summer...

Being long equities, and "profiting" on that side of the trade means that you're being an ENABLER of all the "whore" activity" you chastise...

But I hope you enjoy the boat it bought you (as well as the champagne to imbibe at the cocktail parties you attend in the Hamptons)...

"Marxism is great... If you're Karl Marx"

CV said...

The first ones to raid the Winter Palace get all the loot...

Then they can tell the starving masses all about the need to "work for the common good"...

Anonymous said...

@CV
"This thing will simply die of exhaustion..."

The question is WHEN?

Seems it's been dying for some time now. A slow climb up but grinding slower and slower without much volume. That's why last week I said we might not hit 1150 this week. Missed it by that much... lol But, some trend indicators are still pointing up and that hasn't changed... yet

@ I-man,
thx for the comments on the yen yesterday. Sorry I didn't reply sooner... I have limited time to blog lately. On the yen short trade, I don't think Jappy will raise rates so that would hurt the yen in the long run?

I'm still trying to learn this currency trade stuff so correct me if I'm wrong. Oh, I'd probably trade YCS for a swing trade, many weeks or months even... maybe

QQQQ

Karen said...

gld and uup down together.. that is something!

Leftback said...

YCS will be a good trade, but not yet.

QE began in March 2009. Fed MBS purchases end March 2010.

Party on Liquidity Lane is almost over.

Leftback said...

Every day this week is weirder than the one before.

We are totally decoupled from the usual carry trade - EUR:JPY up today.

call me ahab said...

"Faber, however, is confident we won't "see 666 on the S&P 500 ever again." He says "if we go down by 10-20% on the S&P 500, our money printer Ben Bernanke will flood the market, weakening the dollar," and thereby driving up stock prices." Tech Ticker

some truth to that obviously- assuming BB's hands aren't tied up somehow

call me ahab said...

. . .and if you think about it- since the QE genie is out of the bottle-

that will be a "go to" remedy for every little ailment-

unless by doing so- BB is punished somehow by the market-

hasn't happened yet

CV said...

@QQQQ

I don't know when... Please don't regard my statement here as sounding irritated or arrogant... but...

Would somebody please, FOR ONCE, take a look at the charts that I post, the comments I write, and try and gain a perspective from that?

LOOK AT THE DOW CHART!

Look at that trendline from the year 2000... That is a MONTHLY chart (so each of those sticks represents a MONTH (not a tick, not a min., not 10 minutes, not 30 or 60, not DAILY, not WEEKLY)...

A FRIGGIN' MONTH!

Look at how many MONTHS (after 2000), it bounced up along that trendline after March 2000 before it finally gave up... I counted something like 17... (That's MONTHS, not minutes)...

Even after the eventual drop, and rise back up, it hovered JUST UNDER that area for almost the entire 2004-2006...

Then there was a "bubble top" from 2006-2008... It utterly collapsed under that level, and we're only now just arriving back at it... It failed on it's first attempt (in January)...

What I'm ATTEMPTING to say is this... Getting OVER that line is going to be tough... And under the present conditions (with the ONLY economic activity either funded by the US government to sustain activity (which borrows from future generations of taxpayers to do so, or through complete frenzied & bubble activity, or through outright balance sheet fraud, and funded by free money from the FED), well, you KNOW what it will take to exist OVER that line...

So to me... The only question remains how long do we just want to BASICALLY STAY here before we give it up?

It seems like it took 17 months after 2000... We're at 18 months right now (but the month isn't over)...

Sometimes FIBO numbers are good to use... 34 months was an indicator that I used to compare the 2001 decline back to the LTCM crisis...

We're 29 months from the October '07 highs right now (but we're 31 months from where the Fed started "cutting rates" in the first signs of acknowledgement of the crisis...

This could be over now, or it could be over in 5 months...

It would seem to me that there is a way to trade this... BASICALLY, I don't mind being short here because I can "identify" the rubicon that I think needs to be crossed...

If this is due to last several attempts before ultimate failure, the activity will be BELOW that line, not above... So I don't mind playing the small sliver of a "trading range" under where we're talking about...

I'd probably say that exists between 1116 - 1158 on the S&P (because of the chart gaps)...

OR

as low as 1076, or maybe even down at 1044 itself...

I'm not scared to be a bear here...

CV said...

@ahab (11:41)

yeah... like in handcuffs!

call me ahab said...

CV-

I can live with that

Leftback said...

A nice double bottom for BUCKY.

Gold headed south, let the CLAVADISTA begin..?

Karen said...

CV, as far as the chart goes.. it is too big for my screen but i know what you are saying.. and thank you for saying it.. i agree so i don't say anything.

Leftback said...

The Lehman news would be a surprise if we didn't already know they were criminals. Of course there is never just one cockroach, right, Lloyd?

72bat said...

karen -
try hitting "ctrl" & "-" together to reduce image size, that is unless your looking at it on your i-phone

CV said...

@72bat

or your "Dick Tracy" watch... :-)

CV said...

My main boredom is simply that we spent so much time and energy getting here...

OK great... SPX, RUT, COMP, WLSH all at higher highs than January...

So fucking what? Same thing happened in 2000... In March...

That didn't end so well as I recall...

But contrary to what people remember... The market broke hard in March, but attempted to rally back for some time thereafter...

All I care about are two things:

- Establish a HIGH POINT (if we're not there already - I don't think it's too much higher percentage point wise)...

- If that's the case, then go back and do some backtesting... Hey, 1044 is fine with me if that's what it wants to do...

Let it bounce back and forth between here and there until the friggin elections pass and Wall St. collects their bonuses for all I care...

Just GET OUT of this monotony of algos trading free money between themselves to put the shinola on the s*** that is the US economy (& falsely 'perceived' value of assets)...

call me ahab said...

gotta roll-

will check in later in the PM-

adios amigos

Karen said...

bat, thank you, i feel officially stupid now.. forgot about "View"

Leftback said...

Y'all got your TLT calls yesterday before the auction like I suggested ???

I-Man said...

"The storyteller makes no choice.
Soon you will not hear his voice.
His job is to shed light, and not
to master."

CV said...

@LB

I didn't do it this time...

I was going to wait until a couple minutes before 1PM... Then, obviously someone started front running it about 30-40 minutes early...

That IRRITATED me... The March 91 calls were 8 cents to 11 BID/ASK early in the day, but by the time 1PM rolled around they were up to like 14...

Quick spike to 20 cents, and then settled back...

I wished I'd have bought the 10 cents, but I was hoping they'd take it down real low just before... Instead, they front ran it...

Grrr...

Leftback said...

No worries. We'll keep those calls coming.. LB knows CV enjoys a 4-BAGGER as much as the next trader.

We must say we are delighted with the way the FLATTENER has developed - more or less as we predicted it would.

Lord Blankfiend said...

Yes, we front ran it. It's who we are.

Anonymous said...

@CV
Agree with ya, and agree with your charts, sorry if it seemed I was dogg'n ya... I wasn't. I guess what I was saying about the trend up is from what I see. One chart I use for longer term trending is this chart...

http://stockcharts.com/h-sc/ui?s=$SPX&p=W&yr=3&mn=0&dy=0&id=p83015860142

... 21MA weekly crossover 21EMA, so that's why I said some trends are still pointing up. Both lines are going up, it's printed in my head!

QQQQ

CV said...

You know?

Who knows what could happen here?

My latest brainstorm is that now that the SPX has taken out 1150 (doesn't seem to have been too excited over that number now does it)?

Well hell, why not tank the market on some absolutely horrific news out of the blue...

- Europe/Greece/whatever you want to invent...
- Many MOMOS may panic and sell into EOQ because they want their books to show something decent...
- But you could "tank" it all the way back to a support at 1044, then come in the first of April with a rally on a positive jobs number, and banks could, you know, falsify their accounting some more... Run it straight back up, and YOU KNOW, take out 1153 to the upside (say 1158), on, YOU KNOW BTE earnings from the fucking Bon Ton Stores...

Play this game for a couple of months...

karen said...

Just so you know and rest assured: Goldman Sachs Never Used Repo 105 Transactions -Spokesman 12:52 PM ET 3/12/10 | Dow Jones

Lord Blankfiend said...

Fuckin' A-Right. We used Repo 106.

Leftback said...

Chinese Bank Problems?

CV said...

@qqqq

That's fine, but that's ALSO a perfect example why I think TECHNICAL TRADING isn't the "be all end all"...

Technicals are fine, but you also have to pay attention to common sense...

The sort of crossover that you illustrate has worked well traditionally in what?

Answer: Functioning markets

THIS ISN'T A FUNCTIONING MARKET...

The computers may think so (so the charade can continue), but it only can really continue to a point (until a real THINKING person enters into the picture and says "fellas we'd better turn these things off here")...

That's going to happen at some point... And I think we're very close to that point (if not TIME WISE, level wise)...

A couple of failed attempts to push higher or break out, and EVERYONE will turn their computers off...

Neither the algos, the ppt, Bernanke, or anyone will prepared for that...

Hell, they already think they've got the problem solved...

CV said...

@karen

So nice to know they're doing "God's work"...

CV said...

@LB

Perhaps you read this comment from me yesterday - or perhaps you didn't so I'll copy it here...

---

If you're as bored as I am with this tape, and find yourself, as I do, trawling around the internet looking for gems... Here's one (response to an article written expressing concerns about the China bubble)...

Response:

"Last night, I had my quarterly dinner with the Men's Club, a group of left-leaning individuals, mostly Marxist professors. They provide me insight that I simply can't find on mainstream media. Anyways, the now retired professor Sam Noumoff and I discussed the topic of a Chinese bubble. Sam told me flat out that "even if there is a bubble, they will deal with it quickly. China saw what happened to Japan, and they don't want to end up like them."

---

So there you have it people... In China, even if there is a bubble, they will deal with it quickly...


---

That's it LB... "They'll deal with it quickly"... Go back to buying stocks!

Leftback said...

That was from Leo who is one of my least favorite InvestTools. Another pension fund guy. Save us all...

Karen, are those... um... yours?

Lord Blankfiend said...

"The computers may think so (so the charade can continue), but it only can really continue to a point (until a real THINKING person enters into the picture and says "fellas we'd better turn these things off here")..."

That's when I move the switch from BLOW to SUCK.

CV said...

@LB

I know right! Leo (buy Solar stocks) the Pollock...

72 bat said...

@ Lord Blankfiend
"Fuckin' A-Right. We used Repo 106."

the hell you say. everybody knows what you bloodsuckers use, repo men

CV said...

Actually I don't know what he is... No offense to anyone there... delete it...

except to say that Leo IS a tool...

He's a "tool"lock

karen said...

Steven Roach was basically saying the same thing.. i think i posted it yesterday..

"Once again, the China skeptics are out in force. Tales of asset bubbles—property and credit— and/or an imminent banking crisis are making the rounds. These fears are overblown."

I also quite remember SR jumping on the bull train before the trap door opened and the market collapsed.

McFearless said...

I agree with everything Faber said in the Tech Ticker interview, but where I differ is that I only agree on what he thinks happens AFTER deflation has run its course. His fundamental argument revolves around Federal Reserve control, I think it has been well established what I think about their control, or lack thereof.

That was the first time I ever saw Mish on an interview, never heard the guy speak before.

I do agree with his (Faber) thoughts on regulation, my job is becoming nearly impossible to do the right way because of regulation, I could give so many expamles. New rules in MA might just take the cake.

Meanwhile, as ahab has been saying for a few days, the banks are on an extremely long leash, I'd argue they don't even have a leash. Point is, regulation is everywhere but where it is needed most.

On another note, is this a topping indicator?

http://www.greendiary.com/entry/world-s-largest-free-standing-playing-cards-house-made-using-218792-cards/

Throwing my shoes on the ground again....why isn't this working?

CV said...

@Lord Blankfein

Hit the Switch Lloyd!

McFearless said...

And if none of you know what expamles are....that's also part of new regulation.

:)

CV said...

@karen

Oh no! They GOT TO HIM! (SR)

CV said...

@McF

It's the other way around... It's the banks who have everyone else on a leash, not the other way around...

Damn Mannwich indicator still isn't working... He's only in Duluth (so that probably doesn't count)...

Let's send him out of the country... Or up in the g**damn space shuttle!

CV said...

@McF

"House of Cards" (made out to resemble a gambling casino)...

A more appropriate metaphor I could never conjure...

McFearless said...

C,

I thought the same thing when I saw it. Oh how fitting it is that the largest house of cards ever was just built.

then I thought, I wonder if I throw an Amex card on top of it if I could bring the whole thing down....

Leftback said...

SR not a trader. If Rosie goes long, the market will crash massively LOL.
It's fine to read economists but the market is what it is.

Computers.

CV said...

@LB

You know, you've got me thinking about the dollar...

Back last September-October, when all of us were starting to talk about a dollar turn around... I remember I had the CALL OPTIONS on UUP on the screen just about every day...

I bought some, ben bought some (we were both early)... But I remember on the thing...

The VOLUME WAS THRU the roof... And what I'd remember seeing being bought were the

- DECEMBER 23's
- & the MARCH '10 24's & 26's

Tons of them all at those strikes and for those months...

They held back December 23's until the last minute (so they'd expire worthless)... There was a spike up to 23.20 the morning of OPEX Friday in December (which I amount to the final "short covering" of whoever held that price down so as to collect on the worthless puts written)...

They could be doing that with 24's here... 26's are already toast at this moment...

But what I'm saying is that March UUP might just get pinned down for another week here...

Just saying...

McFearless said...

C,

I got killed on one of those early $26 UUP calls, I also made one great trade in those. After that I only traded the ITM calls on that thing.

Anonymous said...

CV

"Technicals are fine, but you also have to pay attention to common sense..."

Yeh, I practice safe trading in my 401k, I know I pulled out to early and went all in PTRAX this run-up, but my small pile of money is somewhat safer from those big drawdowns. Frik'n wells fargo was sending tons of mail trying to explain why it best to just dollar cost average on the market... that's just bull$..t! If most did that, they'd still be down from the 08 collapse, and IMO down more later on.

In my trading acct, I try to trade looking at weekly and monthly charts/info, and try to look over the day to day stuff. Grab a buck here and there... up or down.

I really respect yours and everyones insights posted here.

QQQQ

CV said...

@qqqq

The more I watch these markets... THE LESS I TRADE...

Ironically, I think they're sowing the seeds for a HIGH VOLATILITY breakout to occur again...

These HFT moves and quants have all but frozen out traders...

The only way to get things moving again will be with a pretty healthy correction...

You know you've reached the end of the line when it's not melting up anymore... Today it SHOULD HAVE melted up... It didn't... That's OMINOUS...

Strategy meeting in the basement this weekend...

Leftback said...

Preservation of Capital. First. The rest is gravy.

CV said...

@ben

I was SO LUCKY to get out of those... I was all ready to take a TOTAL LOSS (and I was in pretty good)...

Then, there was one miracle day in the beginning of November when the UUP just spiked crazy in a matter of minutes...

It was BAIL CITY for CV... I even made some beer money in the end off of it...

McFearless said...

I've never put what I call my "retirement plan" money in a stock before, never once.

I-Man said...

"Out of the hills of Zion comes Jah lightning and thunder."

McFearless said...

C,

those 26's, the second time around I got some at a nickel (can you say lucky) and sold at ten cents. Of course as is so often the case after the fact I was crying I had not put more on the trade.

The trades with the dollar since the low just below 74.50 have been my best one's lately. I had caught the entire move down from 20-below 15 in silver as well but I just gave some of that back recently by getting back into the trade a little too early.

Those remain my favorite two trades.

Leftback said...

The short squeeze in C appears to be over.

McF: LB had the kitchen sink from the 401K sunk into stocks, IGs and high yield in January-March at 6% divi yields, 15% HY, and 2% on the 10y T-note, but not for long. Once we saw SPX 1000 we started scrubbing the stocks and buying Ts. Early but safe.

LB loves to compare 10y yields (3.70%) with the SPX divi yield (1.9%). Ignore the noise and pay attention to the FUNDIES.

Leftback said...

MAGIC MONDAY was absent this week. If CHINA tightens over the weekend, then the MAGIC will be MISSING IN ACTION once more.

LB will spend the weekend contemplating KAREN'S SEXY FEET...

CV said...

@McF

This consolidation process in the dollar, while long in duration, hasn't surprised me in the least...

If anybody has been listening to me here, I've been saying it all along... I even put up a EURO thread a few weekends ago which expressed that I thought the Euro would retrace a little (perhaps to the mid 137's, or even as high as 139)... That thread is still plain to see...

It involves TIME... UUP, to me, could still even go down to the 23.20 - 23.30 level and it wouldn't alter my opinion on what I think will be dollar strength over the next couple of months...

There are a lot of "oddball" asset price occurrences during this dollar consolidation phase... & there is still, perhaps, a week of it to go...

I think the ONE TRADE will be on again when it finishes...

March is fiscal year end in Japan as well, so after this month ends, what were some restrained trades might be back on boil...

DL said...

CVF @ 1:48

"Today it SHOULD HAVE melted up... It didn't... That's OMINOUS..."

*************************
Hey, the market's entitled to a rest now and then. No 7%+ correction just yet.

Anonymous said...

Last night's TBP post" Open Thread - Market Rally" there was a comment by someone "NolansDad"- @9:13pm. That guy wrote "Plan to sell C premarket at $4.22" and go short .

That's a very good call.

McFearless said...

LB,

My view remains that 1k isn't at all going to seem early in the fullness of time. Just smart.

But hey, I may be the only super bear left.

That's what I have in the SEP, govies.

DL said...

I'm a little unsure as to how the market will react if Pelosi/Reid manage to get this healthcare fiasco passed in the next 10 days or so. I lean towards the view that it could give us a 4-5% correction.

CV said...

@anon (2:08)

On WEDNESDAY, CV posted this comment on this blog...

http://traders-anonymous.blogspot.com/2010/03/morning-audibles-31010-what-hell-is-fib.html?showComment=1268234477416#c9163070727222552186

So I was a day early, and they extended it 5 pennies higher the next day...

Leftback said...

They would love to have the Dow finish +0.5 pts so it is 11 days in a row. Or is it 12? On no volume it could go up +1 pt a day forever.

Leftback said...

But sooner or later the robots wanna take profits.

CV said...

@DL

I'm taking the OTHER SIDE of ANY long action above 1154 at the moment...

This is classic... Train the Johnny's to expect an UP Monday, and lower the hammer...

You want to sit calmly on 1154 over the weekend with Repo 105 hitting the airwaves?

Be my guest...

McFearless said...

C,

"This consolidation process in the dollar"

fwiw, I'm still favor the impulsive dollar count....it's just a fourth wave we are in. According to EWI the fifth waves in the currencies and commodities will often extend but I dont' think the fifth will be all that long or will top out that much higher than the top of 3 this time. Just my best guess. Just think how it would get everyone freaked out that the dollar and stocks were moving down together to correct some of this first wave up in the dollar, I can hear it now,

"the correlation is broken!!!!"

This is going to be a hard market to trade this year if there isn't a P3, really hard. Of course, it's not supposed to be easy, otherwise there'd be no money to be made.

McFearless said...

What is repo 105, I missed all of that.

CV said...

@LB (2:15)

One of the rumors I've been hearing is that they either WANTED to, or NEEDED to unload some of the Citi shares...

There was actually a bid for them...

There was some large fund that had been underexposed, forever, in that section and needed to add something like that to balance their account mandate...

I know that sounds pretty stupid, because who would want THAT? But there are large funds which have requirements... Not just Joe Retail trader...

Anyway, that's a rumor I heard, don't know if there's any truth to it...

So, all in all, with algos trading back and forth, and a $3 midget like Citi going up 30% in a matter of days, you have the perfect cocktail for synthetic volume and a market that tacks on fractions of a percentage point for days on end...

The fact that it all happened up near 1150 is a distraction to keep the long "chumps" in the game...

McFearless said...

The passing of the healthcare bill, whichever form we are calling THE healthcare bill is the ultimate in a topping indicator for social mood.

That doesn't mean it will start a Primary Wave 3 down, because no event will, but it says so much about social mood.

CV said...

@ben

Repo 105... You gotta be kidding me that you missed that!!!!!!!!!

It's all over everything... KD, ZH... Even made it to HuffPo...

Seems that Dick Fuld was cooking the books ENRON style, (with help from Jamie, Timmy, & all the rest)...

CV said...

@ben

I'm not a "waver" like you are... But to me the dollar could do a RUNNING 3 (if my terminology is correct)...

mcHAPPY said...

@Ben

Repo 105 courtesy one KD

http://market-ticker.denninger.net/archives/2070-EXPLOSIVE-Lehman-Where-Are-The-Cops.html

http://market-ticker.denninger.net/archives/2072-What-The-Lehman-Report-Proves-Financial-Insolvency.html

DL said...

CV @ 2:16

I the SPX were to drop below 1140 today, I actually would place a bet on an "up" Monday. But if we close above 1150, the risk/reward for Monday is not particularly favorable.

DL said...

McFearless @2:24

If it passes, it'll say more about Pelosi's skill as an "arm twister" than it will about the social mood of the country at large.

CV said...

@ben (2:24)
Keep handing out the parachutes, right?

Even if someone forgot to tell you they weren't packed!

Leftback said...

Karen has LB completely "De-FEETED" today.

Anonymous said...

silly question but can you short a short ETF?

QQQQ

McFearless said...

C,

I have spent all week counting waves if I wasn't in a meeting, ignoring everything else, trying to readjust where we are exactly. The only other blog I've gone to besides yours was Dan's. I'll read about it, but in the end, repo 10 whatever doesn't mean jack shit. Thanks for the links McHappy. love the one, "where are the cops"....buying Citi of course.....

re: dollar, I'd have to force it to say it's still in a third here. I don't think I can make that count.

Also, if what you put in your 2:23 is what is actually happening then my sentiment post the other day is truly relevant. Does anyone really believe after a large degree bear market (when truly over) there would still be mandates to get exposed to financials, or any other sector for that matter.

CV said...

@DL

FWIW - I'm not predicting ANYTHING at this juncture...

Nay a meltdown Monday, or a meltup Monday...

If you read my dollar comments before (and my WEEKEND Euro comments from a few weeks ago), you'll know that this is the move I've been anticipating in currencies...

It feels to me now, at this point, that something is try to pin the dollar down through opex next week (I don't want to get into what contract expires exactly when because we're coming towards end of quarter here)...

It is for that reason, that I thinks markets are in limbo right now and behaving oddly and out of synch...

Upside on equities is limited for now... I'd rather be "short" than "long"... & if it does creep up (only because it can)... I'll probably put some more cash to work on the other side of that idea...

CV said...

@qqqq (2:35)

Answer: YES

But it's hard to find the shares to borrow...

DL said...

Anon @ 2:35

I ditto CV's comment. But most brokers won't let you do it.

I will say, however, that back in 2007 I did it several times without any problem.

My broker won't let me do it now, however.

DL said...

"...something is try to pin the dollar down through opex next week..."

There's a lot going on with the Euro, and with GBP... it'll take a lot of "someones" to pin the dollar one way or another.

Leftback said...

JPY is the key.

If JPY rallies here, then Mr Market is going in the crapper. BUCKY will follow along with the yen, and STERLING and EUR are going to take a bath.

CV said...

Here... for anyone... Here's the link to my Weekend comments about the Euro a few weeks back (Feb 27)...

http://traders-anonymous.blogspot.com/2010_02_21_archive.html

Excerpt:

"It should be as clear as day (in looking at the FXE chart) what I expect the Euro to do and more importantly WHEN I expect it to do it by. After that, it's a matter of looking for the NEXT POSSIBLE gravity point. Using FIBONACCI levels (from the high of FXE @151.27), it has already taken out the lesser FIBOS to the downside. the current two levels in question are:

.09 = 137.65 (which has already been taken out, but hasn't been backtested)
.1457 = 129.22 (which has yet to be reached, often DOES when a previous level is taken out)"

---

Today FXE hit 137.46 (so it's hard to imagine it won't visit 137.65 today, or perhaps Monday)...

I know how tough it is for you people to do two mouse clicks to go back and read old posts, so I'm helping you out here :-)

DL said...

LB @ 2:44

Could you explain the reason for the strength in JPY/USD since April of 2009...?

I'm not sure I fully understand it.

McFearless said...

I tried to short a short ETF here the other day and was told no by the desk so same issues on my end.

Anonymous said...

CV thx,

hmmm, more ways to trade... probably just stick to what I know... LOL

Reminds me of when I was younger and getting pretty good at playing billiards. Was doing fairly well. One day this guy showed me how to use advanced english on the cue ball. My game went to crap for a very long time. Sometimes it's best to KISS! Never really learned to master it.

QQQQ

DL said...

McFearless @ 2:49

My guess is that it's a big moneymaker, especially with FAZ. So naturally, only the well-connected can do it.

CV said...

@DL

Japan has its fiscal year end on March 31st of each year...

Many macro moves will have an April 1st bias for that reason...

McFearless said...

DL,

I'll defer to LB as I'm sure he has a more complex answer.

The dollar thesis is that the dollar goes up as credits based in dollars deflate. People sell whatever they can to get dollars, Mauldin had charts recently that helped illustrate this is happening. Since April 2009 could debts in JPY deflated faster than dollars due to our QE, etc. so relative outperformance then in the currency?

Does it have to be much more complex? Everything is credit based....

CV said...

@anon

Sounds like me with BOWLING...

I just throw a straight ball and try to hit the head pin...

Anonymous said...

RE: short a short ETF

All thx

QQQQ

McFearless said...

DL,

Yes that's probably right, dude laughed at me on the phone when I told him what I wanted to do.

CV said...

@McF

Just show me how to use "pattern matcher" so my account can just FIRE OFF THE TRADE when I'm not around...

How's that? :-)

DL said...

McFearless @ 2:53,

O.K., maybe so.

Whatever explanation one comes up with also has to explain the strength in JPY/USD from July 2007 to January 2009.

Leftback said...

DL: Not sure but here goes:

1) USD took over as funding currency for AUD:CAD for a while.

2) This version of Japanese govt is less likely to print wildly. Japanese demographics favor gradual liquidation of assets so it may be a slow repatriation of JPY.

There are so many JPY bears. On the next deleveraging cycle we may get to 80 as another year's worth of carry unwinds.

Eventually I see the JPY being completely destroyed unless they finally break up the banks and write down the books, in which case I would be a massive investor in the Nikkei. I still think Japan can be a good trade during reflations.

Leftback said...

I meant for AUD, CAD, NZD, etc...

McFearless said...

DL,

I'll still defer to LB on that subject but I do think the deflation has a lot to do with it.

On another topic, one bad thing about the last two years, any day where the dow moves less than 100 pts now seems sooooo boring.

Anonymous said...

Mad Hedge Fund Trader... FWIW

scroll down about 1/2 way, item #2

http://blog.madhedgefundtrader.com/2010/03/09/the-mad-hedge-fund-tradermonday.aspx

QQQQ

DL said...

All I know is that I'm going to stay away from JPY/USD. However, I often have opinions on AUD/USD and USD/CAD that turn out to be right (and even sometimes EUR/USD).

CV said...

It wouldn't take much more down action (just about 17 points) into the close to end up with a "shooting star" candle on the DOW today...

Leftback said...

I like JPY here - b/c AUD and NZD are about to blow up and that is a huge FX trade and a strong supporter of carry trade financed speculation.

If their housing markets pop (and they will) or China tightens, then Mrs Watanabe is in deep doo-doo and the unwind as always will be quite spectacular.

Kathy Lien's site mentions this trade.

CV said...

@qqqq

it's called "offloading your book"

Sure the NEWS will be fantastic... "Census jobs add 300,000 to March payroll" yada yada...

Remember, GASOLINE sales get tossed into the mix as well... So "stop the press", people are putting gas in their cars and driving somewhere because they're not snowed in anymore...

That's when Lloyd sells his long book to Johnny (who doesn't realize equity markets are already priced to BETTER THAN PERFECTION)...

Leftback said...

madhedgefundtrader = TOOL

Leftback said...

IF : "Census jobs add 300,000 to March payroll" yada yada...

BUCKY to the MOON, miners, oil and materials stocks slaughtered.

CV said...

@qqqq

The stock market is going to go to Pluto because we're all going to be getting rich by getting into our cars and driving around town counting people...

CV said...

@LB (3:18)

x2

DL said...

Someone else who likes JPY/USD:


http://thetechnicaltakedotcom.blogspot.com/2010/03/usdjpy-it-isnt-correlated.html

CV said...

Somebody flipped a switch at 3:15 and decided they didn't want to hold longs into the weekend...

Anybody else listening?

DL said...

CV,

Pluto is no longer a planet, right?

How about uranus?

Leftback said...

Japan in the 1990s. Note the long grinding top in 1993...

http://1.bp.blogspot.com/_V7Pddp58Py0/SpFh9f4kQII/AAAAAAAACYM/Yw1xm1cqTsA/s1600-h/nikk+93.png

(from Garyscommonsense.com)

Anonymous said...

I googled short the yen or something like that and found his blog...

I just found some of the statements striking like... "Those who managed to catch my recommendation to short the yen at ¥88.40 on Thursday bagged an instant profit of ¥2. This is a trade that could go on for the next year"

does he mean short the yen for a year?

CV, yeh, that census employment is just plain BS.

QQQQ

CV said...

@DL

I didn't state whether or not Pluto was a planet... Simply offered it as a vacation destination...

Maybe we can ship madhedgefundtrader there... Are you volunteering to fly him there? :-)

DL said...

LB @ 3:24

Interesting, but somewhat different issue from the currency.

CV said...

@qqqq

He's a regular author over at Zero Hedge... So I can "avoid" his articles there if I want instead of NOT going to his site...

CV said...

@LB

The only "grinding top" I'd be interested in would be karens...

Leftback said...

Something that caught my eye, those who were buying miners know they bottomed in November 2008. Well, now they have rolled over:

http://www.ritholtz.com/blog/2010/03/king-report-why-gold-is-declining/comment-page-1/#comment-260766

Anonymous said...

Speaking of vacation...

@karen

Anything of interest happening in OC or San Diego area this weekend? Wife and I are driving down there for the weekend to get away from the bay area for a bit. (I) Wanted to take a day fishing trip but not sure she'd go for it.

QQQQ

CV said...

@qqqq

Better do it quick before Obama bans "sport fishing"

I'm not kidding... That's on the agenda...

DL said...

The SPX/gold ratio has stayed in a pretty narrow range over the last 11 months.

McFearless said...

C,

You still doing brackets for the blog? (BBall)

DL said...

CV,

Yeah, either tax it or ban it.

Leftback said...

Not that the week has been tedious, but C, surely you can do something with this, buddy?

http://sports.yahoo.com/soccer/blog/sow_experts/post/Cristiano-Ronaldo-wants-to-meet-topless-model-s?urn=sow,227342

McFearless said...

C,

You have to be kidding, sport fishing is on the agenda?

No way....

Tyler said...

A little end of the week encouragement for the market: Everythings gone green ... German riot police, please pay attention, as some elements will soon come in handy.

DL said...

LB @ 3:38

Are those real?

CV said...

@ben

Yeah, I posted a signup for it the other day (but so far only myself & I-Man have registered...

here it is:

Yahoo (Fantasy NCAA Tournament)

GROUP ID# 26140
password" p3isamyth

Leftback said...

C, BAC and WAMU all selling off hard as the ETF TRD is hit hard ....

Wonder if one of them is insolvent?
Oh wait, WAMU is. Was. Whatever.

Profit taking - or someone knows something.

Leftback said...

TRD - an ETF that represents a basket of turds.

McFearless said...

C,
I will be in for sure, but will wait until Sunday night to enroll most likely. This is a big time of year for me, the Big Dance is my favorite sporting event.

CV said...

@ben

Not really... But in a way they were TRYING to sneak it in before they got called on it...

http://www.nytimes.com/gwire/2010/03/11/11greenwire-obama-admin-jumps-to-squelch-rumors-of-us-fish-65275.html

McFearless said...

Wow, another thing I missed, I love to fish, WTF?

Anonymous said...

Ban sport fishing??

Why do peeps that don't fish want to ban fishing?

Why do peeps that don't hunt want to ban hunting?

Why do peeps drive to oil picket lines?

Why do treehuggers live in wooden studded houses?

Why do... oh nevermind

QQQQ

CV said...

@LB

After losing to WIGAN, you "Liverpoolers" evidently need to do something to keep yourselves inflated... :-)

Hey, she works for me!

CV said...

@qqqq

Why is the sixth sick sheik's sixth sheep sick?

(say that 5 times real fast)...

DL said...

Surely we'll get a couple of down days next week.

karen said...

Q, somehow i missed the fact you were in the Bay area.. what about an overnight trip on Catalina Island? That's something I've been dying to do.. It will be gloriously sunny this weekend, but perhaps on the cooler side.. Monday is supposed to be 70s again. I'll keep thinking in the meantime..

If you don't want to come this far south, Santa Barbara is so lovely.. I'll keep thinking...

Leftback said...

WIGAN and LILLE. If we don't beat PORTSMOUTH, it's all over.

Anonymous said...

sixth sick sheik's sixth sheep sick
sixth sick sheik's sixth sheep sick
sixth sick sheik's sixth sheep sick
sixth sick sheik's sixth sheep sick
sixth sick sheik's sixth sheep sick

and?

LOL

QQQQ

CV said...

@bob

Nobody could have EVER, EVER, 'whined' any worse than "The Great CNBC Sucks" during the Fantasy Football League...

I was the 'commish' of that... My God... It was a whole Bible full of whining!

Anonymous said...

CV

Didn't catch that but he did have a gift.

bob

Leftback said...

Next auction of significance March 23rd -the 2y. Just can't see hedging here. Next week more likely. Room for 30y yields to fall to 4.50%.

CV said...

@bob

He didn't whine about it on the blogs...

It was all in the League "comment" section...

Ben will confirm this for me... I felt like I was the homeroom teacher for ROMPER ROOM...

AmenRa said...

1150 mucho gusto. Ahora GTFO!!

McFearless said...

Bob,

C is right, nobody will never top what I saw in our FF league last year. No way.

karen said...

S&P Revise GMAC Mortgage Outlook For Rankings To Negative
3:57 PM ET | Dow Jones

Anonymous said...

LB

Thanks again for the real world bond trader perspective. I've learned a ton about the how and why following your comments.

bob

karen said...

AR, a re-cap on why you are so excited, please?

Leftback said...

Karen, this was an incredibly dull week but you have beautiful toes.

AmenRa said...

Karen

I'm just dying to hear the MSM explain why the S&P couldn't close above 1150.

AmenRa said...

y practicando mi espaƱol...

DL said...

Karen,

Cool shoes. And feet.

Larry Kudblow said...

THE DOW WAS UP. That's all you need to know....

TRICKLE DOWN ECONOMICS, my friend.

CV said...

If it's true that those are your toes, I concur with lefty...

CV has to take off for awhile... I'll have an NCAA Tournament post up for this weekend for you sports fans...

Just noticing that the last 6 daily VIX candles looked an awful lot like the 1/11 - 1/19 candles on the same...

Not sure if it means anything just yet...

AMEN can probably make some sense out of it!

I'll see you all later on...CV

Anonymous said...

Thx Karen,

Great Idea!

Actually we live in the north bay area but I work in Reno now a few days each week, and sometimes other sites in CA, AZ, NV and HI. I'm tired of the snow and cold and she's tired of the rains so we're getting away for a bit. I completely forgot about Catalina Island and pretty sure she'd like that. It's her weekend :)

Thx again

QQQQ

CV said...

@Amen

A new closing WEEKLY HIGH number on 3lb tho right?

AmenRa said...

CV

Yes. But it doesn't change the reversal price until the 3rd new high.

72bat said...

aah - the fabulous tan of which we have heard and only imagined

McFearless said...

"I'm just dying to hear the MSM explain why the S&P couldn't close above 1150."

Ra, It was technical.

hahahahaha

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