Trading thoughts, ideas, tips, musings, and pontifications. . .not necessarily in that order.
What a wonderful Monday 
The profits were made early in the session. It was kaching city with EDZ DUG SMN….I love it when a plan comes together. Took a long lunch, had a few, just like the big boys, and came back in time to short some more.
Not as aggressive though. I did pick up EDZ again and also some SDS, but odds go with a turnaround Tuesday. So I’m gonna watch the futures and see how the world is doing. Either way it’s gonna take a lot for this to be a bad week for me. :LOL:
…if the markets can make a move this week. Manipulated or not, the news and reports last week were mostly good. But, the markets didn’t move much. Sure there was a decent range each day so that both bulls and bears could make, or lose, money…. But each day ended pretty much where they started…as did the week….an entire week of dojis….indecision.
Again we had fairly good earnings with lousy revenues. Soon the cost cutting will be over and true earnings will show up…..or should I say down? Data coming out this week will be highlighted on Tuesday with ISM Manufacturing Index, on Wednesday we have the latest FOMC minutes, and the big shabang on Friday with the monthly Employment Report when we find out our new unemployment rate….all before going into a holiday weekend.
With many kids going back to school this week I wonder if volume picks up some, along with volatility? I am positioned short for the open, but at the moment futures and oil are up and the dollar down….not conducive for a short position. We’ll see what the morning brings. 
So, you say you’re not trading the junk stocks like AIG C FRE FNM? So where is all that money coming from? Brett Steenbarger at TraderFeed has a very interesting observation. Of course, all of his observations are interesting. The Recent Concentration of Volume in Financial Stocks: Co-ordinated Capital Infusion?
Here’s a couple related blog entries at Zero Hedge: Five Financial Stocks Dominating Market Volume and AIG bubble:Irrational Exuberance.
Trying to get a lot of reading in this weekend 
Just look at the charts….I’ve got the S&P 500 here, but any index will do. Every day closed at about the same place as the day before. It was a week of nothing….a bunch of dojis. Are we taking a rest before making the big move up or just a topping process to roll over?
S&P Aug 28, 2009
Near the close I went short again: EDZ DUG SMN XLF puts and IWM puts. I’m hoping for some bad news over the weekend. Eight out of 10 taking the short overnite position. I’m gonna have a great weekend…no matter how Monday shows up. Enjoy the weekend and have fun
The bears couldn’t do it! The bulls couldn’t do it! So they’re all a bunch of wussies! There was no selling energy today, but with all the good news the bulls couldn’t get it together either. And volume has been decreasing each day this week….and why should it increase tomorrow, a Friday in late summer and a holiday weekend next week?
The markets went down big and recovered even bigger, but all said and done we closed near even. If BA and AIG hadn’t made any announcements, it would definitely been a down day. And isn’t it something that almost half the entire trading volume is trades in AIG FRE FNM and C? Since they are all government owned, is the government manipulating us? You bet. 
Why else would these junk stocks be up 100-300%? Wasn’t there a news conference recently when our President said, “Let me be perfectly clear, there will not be another down stock market day in my term.” [joke intended!]
Today was a very good day….all the short positions taken at the close yesterday were cashed out with great profits this morning. The big winner was IWM puts, DUG and SMN. EDZ and TZA were good, but not as great. 
And as I’ve been doing the last couple weeks, at the close I went short again via: DUG SMN DXD. Sure it hasn’t worked every day, but 7 out of 9 ain’t bad.
Friday morning we have Personal Income and Spending reports. Any guesses? Let’s hope it is not manipulated.
Except for yesterday morning, I’ve been pretty lucky playing the short side during this sideways correction. The Dow has been up all 3 days this week and has moved up a whopping 38 points or 0.004%. Each morning we jump up and every afternoon we move down. This is getting a little boring.
And like every afternoon I position myself for “the” down move. This evening though it is a little more aggresive and diverse. I bought some IWM puts, the usual EDZ and TZA, and the spiced it up with SMN, the basic maretials 2x short ETF, and DUG, the 2x short oil & gas ETF.
And like every evening, futures are down already, but something always comes up to bring them to unchanged or positive by morning. Asian markets have started to the downside also. We’ll wait until morning to see what the world thinks of the markets.
Then Trader’s Almanac has a little blurb for Friday: “August’s next to last trading day, S&P up only once in last 12 years.” Shows you that most traders are on vacation, or just don’t give a shit
So be careful out there….Happy Trading.
I was well on my way to rake in all the profits from a falling market until……about 2AM Tuesday morning, the WSJ leaked out that the Prez was going to re-nominate Bernanke. Oh boy, did the markets ever love that. The futures had a steady up move until mid-morning when the bulls got tired. The bad part was that I wasn’t going to be around this morning so I placed some “hail mary” stops in case things got bad. Bang, bang, bang, those damn bulls popped every one. By the time I got to my office I had no positions open. Ugh!
And as usual, when your stops get hit the market reverses and goes your way. I just sat and watched for a while, but eventually went back into BGZ which did well in the afternoon and actually sold half the position in the afterhours. So I have a small position for the overnight. The overnight sessions have been pretty wild…last week they were very nice to me, but this week I’m paying the piper.
Just look at those index charts. Don’t they look toppy to you? I’m still looking for that correction….a little one and a big one.
…can’t trust that day, as the Mamas & Papas sang. The markets were still hungover from that Friday drunk of housing magic and Benny cheerleading. But eventually the buzz wore off and it looks like it may be a couple days before we can party again. The bulls were happy happy this morning, but got tired real fast and started falling over by afternoon.
Of course me sitting in 3x short ETFs made for an uncomfortable morning. Sure I nickeled and dimed myself going for some longs like ERX and TNA, while still holding ERY and TZA, but I made some realized profits while still enduring unrealized losses. Near the close I added BGZ to the mix.
So far the futures are agreeing with my prognosis of some downward momentum, but 11 hours is a long time. Let’s see what the rest of the world thinks.
Yesterday, I wrote a diatribe on the supposedly optimistic housing number. Then today I see in the Wall Street Journal this little article: Fewer Delinquent Mortgage Borrowers Are Catching Up.
Because borrowers are less willing or able to catch up on payments, foreclosures are likely to remain a big problem. Barclays Capital projects the number of foreclosed homes for sale will peak at 1.15 million in mid-2010, up from an estimated 688,000 as of July 1.
That’s not a housing boom. Is it?
The risk of a double-dip recession is rising
There are also now two reasons why there is a rising risk of a double-dip W-shaped recession. For a start, there are risks associated with exit strategies from the massive monetary and fiscal easing: policymakers are damned if they do and damned if they don’t. If they take large fiscal deficits seriously and raise taxes, cut spending and mop up excess liquidity soon, they would undermine recovery and tip the economy back into stag-deflation (recession and deflation).
Nouriel Roubini mixes it up again in the Financial Times. Can’t say that I disagree.
So I’ve been web browsing looking for all the info on our new housing boom, but having difficulty finding it. Sure, existing home sales were up 7.2%, but the inventory of unsold homes rose by 7.3%, as many homes, actually a bit more homes, came on the market than were sold. Oh, and the median price of a home nationwide is 15.1% lower this year than last. That’s not a sign of a housing boom. Is it?
There was also the news from the Mortgage Bankers Association that the mortgage-delinquency rate rose to 9.24% as of the end of the second quarter! Yes, a new record. The combined rate of mortgages either delinquent or already in foreclosure rose to a record 13.16% of all outstanding mortgages. That’s not a sign of a housing boom. Is it?
Remember when the talk of all this economic crisis was caused by sub-prime mortgages? And it was all because banks were turning all the adjustable-rate mortgages into a higher interest rate? Well, prime fixed-rate mortgages now account for one-third of all foreclosures….one in every three foreclosures is a prime-mortgage, one taken out by a person with a job and high credit score. Just goes to show you that all this unemployment still has not hit us yet. We’re still surviving on unemployment insurance, savings, and help from the family. But all of those resources are dwindling. We can see that by the continuing claims report each week as it gets “better.” Better because the number is going down….worse because that means that insurance is running out, people are dropping off the rolls and still not finding jobs! Their survival income is evaporating.
Here’s an idea….if the government would set fire to my entire neighborhood allotment, there would be a need for 250 new homes, 250 new living room outfits, about 1,000 new bedroom sets, 250 new kitchens, clothes, furniture, appliances, etc, etc, etc. Wouldn’t our economy really go gangbusters then? Just think if they did that all over the country! Just what are we missing with this idea? Isn’t this the same idea as Cash for Clunkers?
I believe we haven’t seen the worst of this yet. Sure the banks, financial institutions and car industries have been taken care of, just look at the profits, raises and bonuses doled out. But Main Street USA still has storm clouds forming. And as you get your exercise today and you walk through your neighborhood, count the houses you walk by. One out of every 8 homes you walk by is either delinquent by more than 90 days or already in foreclosure. That’s not a sign of a housing boom. Is it?
I stretched my luck just a bit too much. I was pummeled by the time I got up Friday morning. And since I was already in a bunch of hurt, I just went fishing (and a little bit of drinking, hic). Sure I was still positive for the week, but I was struck on how illogical it was for the market to go up. Existing home sales went up because a bunch of foreclosed homes were selling for under $100K and speculators could by them up for cash or 1st time buyers buying for some government money….the cash for 1st down payment program.
What else was crazy? Penny stocks, yes those pink sheet securities, have had their volume go up by 60 times what was trading at the March lows. And 25% of the entire stock market volume is in government stocks: C AIG BAC FNM FRE. Except for BAC, which may have some value to it, these are junk stocks.
Speaking of junk financial institutions, Guaranty Bank Is 81st to Fail ….read about the latest four banks to fail, as Friday’s are now FDIC Failure Fridays as bank failures are announced Friday afternoon after the market closes. Guaranty is the 10th largest bank failure in U.S. history.
Back to the markets….If you look at any chart of any index you’ll see that they have traveled pretty far from their 200 day moving average. And it seems that they like to hang around the 200 plus or minus a few percentage points. 
Here’s the S&P 500, click on the image to get a bigger one. We’ve had 2 breakouts from resistance levels in the last 5 weeks and we closed on Friday about 17% above the 200ma. My thinking that it is scared of heights and will need to get closer to its ground before bouncing up again. Now it won’t have to fall that much because as you can see, the 200ma is moving up…and even if the indexes come down a bit, the moving average will continue to move up. They don’t have to meet, just get a bit closer.
Finally, all you rich folk better close those Swiss bank accounts.
American citizens, who bank in Switzerland with UBS, have been given until September 23 to reveal their assets prior to facing possible criminal charges including jail time.
I’d ask for payment in chocolates and watches. 
Yes! The overnight short positions worked yet again on the 4th try. And again, for maximum profits I had to close the positions in the premarket or very soon after market open. So why mess with a good thing? I’m gonna try for 5 out of 5.
I again went short the market via TZA, but I also am trying to short oil via ERY, the 3x energy bear ETF. What the hell, it’s been a good week, why not go for it?
My web hosting service has told me they are migrating my website, but “don’t worry” nothing will change….famous last words. So I’m keeping it short so I can test out the new digs. I hope there are no problems…and thanks for visiting.
| DJIA | 10564.38 | |||||||
| NASDAQ | 2340.68 | |||||||
| S&P 500 | 1140.44 | |||||||
| ^RUT | 669.63 | |||||||
| QID | 17.84 | |||||||
| QQQQ | 46.79 | |||||||
| QLD | 61.78 | |||||||
| UYM | 34.36 | |||||||
| URE | 7.52 | |||||||
| UYG | 6.24 | |||||||
| SSO | 40.04 | |||||||
| XLK | 22.53 | |||||||
| XLF | 15.30 | |||||||
| FAS | 84.84 | |||||||
| FAZ | 15.54 | |||||||
| SKF | 21.03 | |||||||
| JPM | 42.42 | |||||||
| DRYS | 5.95 | |||||||
| HPQ | 51.88 | |||||||
