Tuesday’s Trading
The futures are up a few points as I write this Monday night. If they hold up until Tuesday morning, watch for a bullish island reversal pattern on the SPY daily chart.
If the market can rally, I believe it will be a technical bounce off of an oversold condition. It’s hard to imagine a scenario where the economic fundamentals would be worse than what we have now.
October 6th, 2008 at 11:50 pm
Australia Cuts Rate 1 Percentage Point, More Than Forecast; Currency Falls
Today’s reduction was double the half-point forecast by 16 of 21 economists surveyed by Bloomberg News. Five predicted a quarter- point reduction.
October 7th, 2008 at 12:00 am
any dip within the next week and early on next week i will be looking to buy some apple… as i suspected Release Date: Not Confirmed 10/20/2008
After Close and am positive it will beat earnings.
October 7th, 2008 at 12:05 am
I would like to hear how the day traders played Monday’s action. Did anyone stay short over the weekend (Out side of futures contracts)?
Did most of you start short positions at the market open or during the premarket?
Did many switch to a long position in the last hour?
I am trying to gauge what is a reasonable expectation for a full time trader.
I stayed in cash as my job just doesn’t afford me enough oppurtunity to watch a market that could star in a Sci-Fi flick.
Thanks
October 7th, 2008 at 12:10 am
Should my wife see my last entry, I am not looking to switch careers.
I was just looking for some enlightenment.
October 7th, 2008 at 12:11 am
newbie,
I shorted individual issues last week and held my positions over the weekend because the patterns were intact. I covered all of them today (one about $1 too early
)
I went long at the first SPY pullback to 104.5. It was very early, but then I did not expect such a collapse from that point (I honestly thought there would be a more sustainable bounce). I guess that is what a lack of short sellers covering can do.
Anyways, when things enter uncharted waters like today where support becomes very murky, I buy calls in which a 40 - 50% loss would equal my stop price-wise. It didn’t even get near my stop and I closed well into the green. Actually, option pricing today was so crazy that I was in the green by the time SPY rallied to $103 - a full $1.50 less on SPY when I bought my calls!
October 7th, 2008 at 12:23 am
i went long in GE at 11am. wasn’t affected as much as the rest of the market and ended up with profit. I will watch tomorrow closely and the rest of the week and might sell before earnings or at least put a stop (they’re oct 10 premarket
and i will be in school)
October 7th, 2008 at 12:56 am
Zen,
Thanks for the details. Were you playing current month out of the money calls? I wasn’t watching when the first bounce occurred, but visions of a remake kept me from pulling the trigger at 3 pm. I then saw Towelie’s “SPX is going waaaay up” comment, DOH!!
October 7th, 2008 at 5:39 am
Europe. Up, then down. Panic is cooling down, but short-covering is minimal.
All cash.
October 7th, 2008 at 7:32 am
Bill Gross telling the Fed & govt again what to do next:
“We are to the point of fearing fear itself,” Bill Gross, manager of the world’s biggest bond fund at Newport Beach, California-based Pacific Investment Management Co., wrote in a note to clients. “The Federal Reserve must now act as a clearing house” for banks and “must also take another bold step: outright purchases of commercial paper.”
http://www.bloomberg.com/apps/news?pid=20601103&sid=aFJQcVQOpvL4&refer=us
Too bad, Bill Gross is not into stocks. He will not fix the incoming earnings reports.
October 7th, 2008 at 7:36 am
Pimco is running the US now. Well done, America.
October 7th, 2008 at 7:41 am
newbie;
I rarely hold overnight, though I have a few times lately. On Monday I traded DIG/DUG, SSO/SDS, ICE. I couldn’t handle more than that with what I thought was going to be volatile action - which turned out to not be that volatile, but extended and big moves. Yum.
When there’s a gap, I go to the 15 minute chart. I note the MACD direction, then the stochastic within the MACD. I follow the stochastic that is moving up - if the MACD is moving down, my expectation is that this will not be an extended move, but a short one. At the same time, I check the 1 minute to ensure it agrees with direction.
That process kept me in SSO during the first part of the morning, then I switched to SDS and kept riding it up. In the afternoon, I got a buy on the 1/5 minute with SSO. The MACD 15 minute was lazily moving up so I never got out. The 5 minute had cycled down but the 15 minute was still positive (MACD histogram positive). At the same time, I was still in SDS.
While these two twins were hacking it out, I was scalping both of them. They were unusually good scalps based upon short-term high momentum. Also, during this time, ICE began moving up and around 1PM I got a buy on it. I waited until the MACD trendline crossed the zero line and bought. I got out around 2:30. I could have gotten in for another trade but with the market action I decided against it.
Then, around 3:00 I got out of SDS based upon a 5 minute stochastic and MACD cross, I still had my SSO. I left my SSO in until about 3:50.
For DIG/DUG, I use RENKO charts. However, I do the same thing with respect to entry/exit - a higher time frame needs to confirm a lower time frame signal to eliminate whipsaws and invalid entries. With these, I simply follow the MACD. Couldn’t be simpler.
If you haven’t tried RENKO, I would recommend those charts for stress-free trading.
October 7th, 2008 at 7:48 am
P.S.
While the activity I described sounds hectic, it was not. I had plenty of time on my hands. Actually, it was less active than ranging and yo-yo days where it’s all scalps.
The procedure I use for gaps is actually the same I use for regular trading, it’s just that gaps are tricky and I start off with a higher time frame rather than lower. Works 99% of the time. But verifying with the 1 minute keeps me out of trouble.
October 7th, 2008 at 8:15 am
George - thanks. Appreciate the explanation. And thanks for asking Newbie.
October 7th, 2008 at 8:51 am
For the chartists, does the candle printed on S&P look like a bottom candle? How about the pattern. I tried drawing lines but I can’t tell where to start from.
Thanks
October 7th, 2008 at 9:02 am
Dblwyo;
Was it you who gave me the tip about using tabs with the time frames?
Whomever it was, that has made my trading much simpler.
Mana from heaven.
Thanks
October 7th, 2008 at 9:06 am
Dat be me. Glad it worked out. Still waiting for you to adopt the war room suggestion
! With your profits put up two 48″ monitors with multiple windows and tabs - think of yourself in War Games.
Checking back to mention the Fed is buying CP !
If that doesn’t trigger a bounce stock up on food and ammo.
October 7th, 2008 at 9:10 am
hi everyone,
any thoughts on today’s action. Futures were up huge overnight, but not so much now. Most everyone dropped hard last night.
October 7th, 2008 at 9:27 am
George
from what i heard NOT a bottom candle
October 7th, 2008 at 9:27 am
Has anyone ever had a business and had to meet a payroll?
I have. My brother and I ran an electronics business both retail and commercial. We would get loans for big projects to buy equipment and pay employees until such time we got paid for the job from the customer.
During seasonal activity, such as Christmas holidays, we would get loans to stock up on those items and in general increase all of the inventory. At the end of the season, if everything went well, we would pay the loans back within weeks or a couple of months. We would have sales to reduce inventory and get prepared for the next season.
There were rough economic times when we could not get adequate loans to meet project and seasonal requirements. Then there were times when the loans we got had high interest rates. These were usually short-lived, but these conditions reduced our profits considerably.
Imagine not being able to get adequate loans to run a business for years. It doesn’t work. You go out of business.
This is similar to not getting a paycheck. And the reason I believe something needs to be done to provide financial institutions capital to keep business running. Each of us is biased about the bail-out due to our environmental conditions, past experience, current financial situation, etc.
Sure, some businesses are not run properly. There are greedy cheaters and gouging. Piecemeal, that doesn’t hurt the overall economy.
But the bottom line is, if farmers, businesses, cities, states, individuals, and all other sectors of society can’t get the funds needed to survive AT THE SAME TIME, we face a calamity beyond our wildest dreams.
October 7th, 2008 at 9:28 am
Thanks Average guy
October 7th, 2008 at 9:29 am
The Fed’s announcement on commercial paper at 9am triggered a huge amount of buying volume in the futures. The volume during those 5 minutes was higher than almost all the 5-minute bars during regular hours yesterday. So, it looks impressive so far.
October 7th, 2008 at 9:31 am
George,
Most people have no idea what commercial paper is and how crucial it is. The CP market has to be unfrozen by any means necessary.
Matt
October 7th, 2008 at 9:34 am
closed my GE from 20 to 22.25 right now. $100 after commission. not bad.
October 7th, 2008 at 9:35 am
sold CEF for 5%
October 7th, 2008 at 9:38 am
and am trying regret not to get to me because GE is flying again lol.
October 7th, 2008 at 9:38 am
George - thanks. Understood it but hadn’t heard it put so clearly. Where were you when the technowonks were scaring and confusing everybody about LIBOR ? Scale up your story to GM, GE and the rest and you have a collapsed economy.
It’s possible that this would make a good excerpt in one of my posts if you wouldn’t mind. No promises/threats - have to see how it plays out but..
October 7th, 2008 at 9:41 am
Matt,
where do you think this recent news by the FED will make it’s biggest impact? The financials? SPY? Just wondering where you are going to take a position if you do.
October 7th, 2008 at 9:41 am
Dblwyo;
Sure, not problem. If it help folks understand, go for it!
October 7th, 2008 at 9:46 am
Dblwyo;
I could have written that better - lol. I was writing it quickly and didn’t complete some thoughts.
October 7th, 2008 at 9:56 am
hehe i didn;t let greed and regret take me over and GE fell back down..
what’s in play today? (i know everything is lol)
October 7th, 2008 at 10:17 am
George - if you want to re-craft it some I’d be happy to have it. If you’ve looked at my blog you’ll notice I often softclip and compress a wide range of reading excerpts and that’s how I’d planned to use your summary.
BtW - has anybody noticed (ahem) that the SPX recovered yesterday to the 1055 Fib limit of 61.8% and has dropped back down to it. If this doesn’t hold….ouch. Not very encouraging in any case.
October 7th, 2008 at 10:24 am
Charlie, my take to your question…
If it is done properly (doubts, doubts…) then it should be a temporary fix. Businesses will profit because without credit all is in vain - George has given a telling description. But it will not increase profitability etc. To me this is a desperate, defensive move.
Banks do neither make money when they do not lend or when the govt does their lending. But they should increase their business activities (from 0) if some of the counterparty risks can be mitigated by involving central banks. All these measures do not increase the solvency of the banking systems, they prevent an uncontrolled meltdown. I hope we can get back to controlled deleveraging now.
As long as we do not see painful measures to increase transparency and accountability the global financial systems keeps heading towards Iceland. If govts insist on oversteering and not regulating the system from the sidelines maybe we hit an iceberg on the way…
October 7th, 2008 at 10:31 am
George,
Thanks for the details your on trading. It is nice to see that your methodical style serves you well in this type of market. This seems like a fairly low risk method, do you take fairly large positions on these trades (percentage of total capital per trade)?
Thanks also for the buisness loans explaination.
October 7th, 2008 at 10:46 am
Yerk,
thanks for your thoughts. I think for this market to really get itself out of the gutter, the credit markets have to unfreeze, otherwise.. as George puts it, there is no way for normal businesses to function.
October 7th, 2008 at 10:51 am
newbie,
sorry for the slow response….
I vary between OTM, ATM, or ITM calls usually depending on market movement, how far away expiration is, etc.
Yesterday I bought Oct OTM calls and will only hold them a few days because the time decay clock is ticking pretty hard right now. I went with those though b/c they were cheaper per call and I am doing this trade over several accounts. Some are smaller accounts and I want to be able to have move inventory so to speak to manage with (just my style).
I went with Oct. because in a volatile move you are going to get more bang for the buck. Nov. calls won’t move as much and the time decay will start up soon. But I only plan to hold for a few days at most so that’s not that big a deal. Options are a very quick trading style for me… you are in a run against time decay and max pain either way.
October 7th, 2008 at 10:57 am
TED spread easing up. Down from 3.91 just before the late-day rally yesterday to 3.4 about 20 minutes ago.
October 7th, 2008 at 11:02 am
Here’s where I’ve been tracking it:
http://www.bloomberg.com/apps/cbuilder?ticker1=.TEDSP:IND
You’ll need to click on the 1d tab to see intraday action.
October 7th, 2008 at 11:03 am
Thanks Jungle, you got me in. Went 25% Long ETF Europe. 75% cash.
3 mth treasuries easing up.
Just a gamble.
October 7th, 2008 at 11:14 am
if dow breaks below MA (i have 36) and 15 min interval. i’m scared
October 7th, 2008 at 11:14 am
Larry,
Not to inadvertently mislead anyone, I’m still a bear. Just trying to catch a (perhaps very) short term rally and then go short for wave 5 down. But, short entry will, as always, depend on how things look at the time.
October 7th, 2008 at 11:17 am
hey we are still in wave 3…
October 7th, 2008 at 11:21 am
newbie;
When I first began, I read that each trade should be the same amount to equal out the money management aspects - win/loss ratio, etc.
That may be true under equal trading conditions, but not in reality because each trade is different. Yesterday, for example, when the market took such a dive, the risk was much lower so I “backed up the truck”. Today, the risk may be higher due to the market deciding which direction to take, so I may trade with less funds. When BBT went down to $18, I didn’t buy 500 shares - more like 5,000. Low(er) risk. Today, I may only buy 500 shares - if at all.
Part of that decision has to do with the setup. If many time frames have bottomed or positive, I know that is a lower risk and I will buy more than normal. Again, I am not concerned with win or loss dollars, but the percentage of successful wins. Now, it could be argued that if you don’t do the same each time, then the losses may be greater than the wins. Well, that’s true in Vegas when you have to place a bet before they spin the wheel, but we have the advantage with our indicators. We don’t know what’s actually going to happen, but buddy, the *probablility* is HIGHLY in our favor - that’s all we need.
My overall take on it is, it doesn’t matter. Heck of a statement, but if I am following a plan, my win/loss ratio *percentage* is still the same. That’s what I am after. I’ll make the decision as to the probability of success. Others will differ in opinion. This has worked for me throughout the years.
When I first began seriously trading, I would go 100% each trade. That was daily swing trading. I did well with that type of trading and didn’t have to watch the stock all day long. I’m actually more profitable now with day-trading. Not because I’m using more funds but because I’m making more profitable trades and I don’t have to wait days or weeks to get a final outcome.
The frequency makes a big difference. Vegas doesn’t scalp their victims in one roll of the die, they nibble it out of them. That, plus they have the ever-so-slight advantage, so they make millions from those quarter slot machines and table games. Trading is different because WE have the advantage.
Oh, the reason I can write this rocket is because I am in SDS which is in a nice lazy move up. I got in on the 1 minute while the 5 minute was already positive. I didn’t buy as much as yesterday, but I don’t care. I want a successful trade.
Hope this helps. I’m wierd, I know.
October 7th, 2008 at 11:26 am
Yerk,
Sorry, I was referring to a subwave of wave 3. All these counts…
October 7th, 2008 at 11:28 am
I think the indu has a chance of breaking out later in the day. say to 10,000?
October 7th, 2008 at 11:33 am
anyone see it or is it just me?
http://i33.tinypic.com/2ldd943.gif
October 7th, 2008 at 11:37 am
K;
What does that pattern mean?
October 7th, 2008 at 11:40 am
Jungle, same same here.
October 7th, 2008 at 11:42 am
George from what i’ve seen a few times if it breaks out it doesn;t last long. most likely breaks down later.
for it to be a real triangle pattern i think the bottom part has to be flat? or at least close to it.
am betting on a breakout of the downturn here maybe dow will recover for a few mins so i can make a DDM trade my goal now is get in 45.74 but we shall see. i think from the action am seeing it might just break down to another triple digit loss. enough of my nonsense
October 7th, 2008 at 11:44 am
seems like it really might be a breakdown. stoch is overbought and macd is turning down on the 15 min chart.
October 7th, 2008 at 11:46 am
Craig
Do you spot a 5 MIN rectangle trading zone forming on the SPY intraday? Can’t see any clear divergence, and really feel we float around until Bernacke speaks, so may be a scalpable area.
October 7th, 2008 at 11:46 am
hmm 5 min turning positive on DDM george!! rescue me…Bail me out!
October 7th, 2008 at 11:47 am
eli. when is bernanke’s talk? i might wait with my trade
October 7th, 2008 at 11:48 am
ah i see 1:15PM sorry for the spam.
October 7th, 2008 at 11:50 am
K;
Thanks. I’m going to read up on triangles again. Matt had a link to one.
October 7th, 2008 at 11:55 am
For what it’s worth the ROC turned down on the 15min SPX chart. It called the uptick yesterday very well by starting a positive divergence in the morning and running up most of the day. The 5min is oscillating around 0. That might be a worthy heads up.
October 7th, 2008 at 11:56 am
here george. yea my triangle is nothing that i’ve found out there to be official but i see it now that it broke out of my triangle and NOT MA. I expect a breakdown but always this market fools you.
http://stockcharts.com/school/doku.php?id=chart_school:chart_analysis:chart_patterns
October 7th, 2008 at 11:57 am
Dblwyo. it is worth a lot to me. based on that i executed my GE trade with more confidence yesterday
October 7th, 2008 at 12:00 pm
Thanks K
October 7th, 2008 at 12:06 pm
Hasn’t Bernanke had a knack for tanking the market?
October 7th, 2008 at 12:10 pm
I got a small scalp out of SSO, but seems like more weakness is ahead. Don’t see any catalysts for the market until Ben speaks.
October 7th, 2008 at 12:12 pm
ohoh ddm picking up steam? hasn;t closed inside the triangle since breaking out lol
October 7th, 2008 at 12:14 pm
i still don;t trust it tho too many things negative at the moment. any of you have advice on buying pre-bernanke positions?
October 7th, 2008 at 12:15 pm
K - explain that sometime. You using ROC now ? Think you guys are doing better off my poking around than I am. Given my longer-term preferences went cash last week when my own analysis and charts said the downtrend was intact. Looking for the bill bounce and got a crash instead. Sad - been waiting for four years for the last week and was out of the market (:
October 7th, 2008 at 12:18 pm
SPY’s intra-day chart off of yesterday’s low is still in a bull-flag pattern. If SPY falls below $104.25, then I would give up on it.
October 7th, 2008 at 12:19 pm
George,
are you watching ICE? Do you think it is finished it’s down move and ready to move higher?
October 7th, 2008 at 12:20 pm
The text of Bernanke’s speech may be released to the press before he begins.
October 7th, 2008 at 12:25 pm
Dblwyo. 2 things were aligned at 10:53AM yesterday… you will see them circled in the chart below. and the stoch was oversold.
today i sold just because i had dreams last night of GE going to $35 and it might but I didn;t want to dream about GE lol.
now understand here stocks are a gamble in this market and the way it turned more sour yesterday i could have lost instead of made $ but it worked my way.. without further adieu…
http://i34.tinypic.com/168fkig.jpg
October 7th, 2008 at 12:28 pm
hmm.. I guess ICE wasn’t done yet and it looks like SPY just lost the $104.25 level. Bull flag dead?
October 7th, 2008 at 12:30 pm
bull flag dead until bernanke says 1% interest rate.
October 7th, 2008 at 12:32 pm
or just rescued?
October 7th, 2008 at 12:32 pm
Let’s see if Bernanke can help us with the pattern. Need to recapture the lower trend line.
TED spread was still promising today. Time will tell…
http://stockcharts.com/h-sc/ui?s=SSO&p=5&yr=0&mn=0&dy=2&id=p86814864554
October 7th, 2008 at 12:36 pm
i am so tempted to get in but NO i will keep my $100 gain for the day and stay away.
October 7th, 2008 at 12:40 pm
that triangle i drew earlier has broken DOWN. hey bernanke give us a black Tuesday PorFavor
October 7th, 2008 at 12:41 pm
Charlie;
ICE isn’t done yet. Its risk is getting lower, for sure. Watch the 15 minute for oversold condition. Remember the 15 minute is slower. Then use the 1 and 5 minute to get in if it starts changing direction. If the stochastic on the 15 minute starts turning up, we’ve got something
I also wouldn’t depend upon the general market direction to ruffle its feathers. It may, but it often trades it on its own merits.
Our wish is that ICE goes down enough so it is sufficiently oversold on most time frames to lower risk.
Then wait for the next move up.
October 7th, 2008 at 12:44 pm
The market seems to be giving the thumbs down to the EU finance ministers.
October 7th, 2008 at 12:48 pm
matt is there a video you are watching?
October 7th, 2008 at 12:51 pm
Notice the SDS 15 minute how the MACD was above the zero line, moving down, but the stochastic was cycling back up again. They appear to contradict each other, but as long as the MACD is above the zero line, it is innocent until proven guilty. The only thing that can bring it down is the stochastic.
Little ol’ stochastic… rules all.
October 7th, 2008 at 12:54 pm
you buying on it george?
October 7th, 2008 at 12:58 pm
K; ? buying ICE?
October 7th, 2008 at 1:01 pm
There should be quite a few buyers from this morning’s spike waiting for Ben to further their cause…
October 7th, 2008 at 1:03 pm
yes ICE or SDS. i am thinking short term DDM hmm
October 7th, 2008 at 1:03 pm
I’m in it, waiting for it to clear 5 minute 9MA if it doesn’t Im out..
But, yes. Don’t expect the moon, just hope for it.
October 7th, 2008 at 1:04 pm
You can get a buck or two then sell half or get out and wait for 1 minute to cycle.
October 7th, 2008 at 1:06 pm
Watch the 5 minute MACD, it needs to go positive.
October 7th, 2008 at 1:07 pm
BTW a 1 minute cycle in a good trend = a stochastic dip, not down to 20 line.
October 7th, 2008 at 1:07 pm
BBT Finally woke up!
October 7th, 2008 at 1:08 pm
http://stockcharts.com/h-sc/ui?s=SSO&p=10&yr=0&mn=0&dy=2&id=p79901701467&a=152751141&listNum=3&listNum=3
Chart already broke down in lower time frames. At time I marked this up, the 62 Fib was holding. We’ll see.
October 7th, 2008 at 1:11 pm
Decision time soon on ICE. 1 minute sto may cycle here. 5 minute looks good, with MACD going positive. Another sell point for a scalp, or can continue and get out on 5 minute exit.
October 7th, 2008 at 1:11 pm
Same goes for SSO.
October 7th, 2008 at 1:13 pm
SSO 5 minute MACD has not gone positive but stochastic is at 50 and moving up.
October 7th, 2008 at 1:15 pm
At this point on SSO for a scalp, I would get out it 1 minute turns over and goes to 80 line.
October 7th, 2008 at 1:18 pm
ICE still good, on 5 minute chart coming up to 36MA resistance.
October 7th, 2008 at 1:18 pm
Hard to do this and trade. LOL. I got bushed on SSO but 5 minute looks okay.
October 7th, 2008 at 1:19 pm
15 minute on ICE looks good, sto turned up, MACD positive
October 7th, 2008 at 1:20 pm
ICE hitting 36MA resistance.
October 7th, 2008 at 1:21 pm
See how ICE doesn’t move with the market some times?
October 7th, 2008 at 1:21 pm
Decistion time on ICE. to get out
October 7th, 2008 at 1:21 pm
Bernanke shifts toward rate cut given worse economic outlook
October 7th, 2008 at 1:22 pm
I keep forgetting to paste link ugh
http://www.marketwatch.com/news/story/bernanke-shifts-toward-rate-cut/story.aspx?guid={389A77F3-4F76-415E-94FB-B8854E770956}&dist=msr_1
October 7th, 2008 at 1:22 pm
Can get back in later
October 7th, 2008 at 1:23 pm
Benny boy talking on tele is really good for my portfolio.
October 7th, 2008 at 1:24 pm
why do i keep messing up. lol. i start out good then i go buy DDM at $40 when everything tells me not to. GRRRRROWL
October 7th, 2008 at 1:26 pm
K;
It was good for a scalp when you suggested it. Then the fed news hit.
October 7th, 2008 at 1:28 pm
wtf is benny boy saying. lol i don;t know where to watch
October 7th, 2008 at 1:28 pm
George Somehow must have not hit cancel because am sure i canceled the order. oh well. sell time. take $50 loss
October 7th, 2008 at 1:30 pm
Isn’t there anybody to walk up the stage to the lectern and drag Benny boy down?
October 7th, 2008 at 1:32 pm
Dressguard is he that unable to just jump off of it?
October 7th, 2008 at 1:34 pm
maybe good time to get into DDM once ROC hits 0 and MACD is positive in 1 min charts.? Don;t count on me for this prediction everything else is saying screw Super Benny.
October 7th, 2008 at 1:36 pm
Da Boyz going to run it down again to hit the upside hard(?).
As long as that 5, 15, and 30 minute stochastic on SDS is moving up…
October 7th, 2008 at 1:42 pm
now all we need is jim cramer in a tinfoil hat and history
October 7th, 2008 at 1:46 pm
Getting ready to hit a double top on SDS on 30 and 60 minute.
October 7th, 2008 at 1:46 pm
Damn.. wife dragged me out to lunch and missed the boat on ICE
October 7th, 2008 at 1:53 pm
It’ll be back today.
October 7th, 2008 at 1:53 pm
Is this meltdown take 2? Seems like the market could be in for another very bad day. Will they call this Black October?
October 7th, 2008 at 1:54 pm
I have to apologize. Actually Benny boy was keeping up the markets.
October 7th, 2008 at 1:54 pm
Time to watch SSO for move up.
October 7th, 2008 at 1:59 pm
george SSO and DDM don;t want to move up. UGH
October 7th, 2008 at 2:03 pm
if i could just see ddm 44 one more time just to kiss it GOODBYE
October 7th, 2008 at 2:07 pm
SDS overbought on all time frames.
October 7th, 2008 at 2:09 pm
K;
You’ll see it. Today most likely.
October 7th, 2008 at 2:10 pm
Did Bernake lower rates or just threaten to?
October 7th, 2008 at 2:12 pm
SDS may take another run at that double top.
October 7th, 2008 at 2:12 pm
Seems like SSO might be moving up like you said George.
October 7th, 2008 at 2:16 pm
Yep. SDS tried to make that run and got slapped down like a step child.
October 7th, 2008 at 2:17 pm
It still may try it again.
October 7th, 2008 at 2:18 pm
If it doesn’t make it, hang on to your ICE holds.
October 7th, 2008 at 2:20 pm
I gotta quit, as K says, spamming. Sorry. Didn’t realize I was doing so much.
October 7th, 2008 at 2:21 pm
Just one more:
Charlie;
Hope you got some ICE.
October 7th, 2008 at 2:24 pm
George,
Nice call on the SDS double top. The UK banking bailout news hit at the same time and added fuel to the fire.
Matt
October 7th, 2008 at 2:25 pm
Not sure how to play this, but there is a wide variance between the ETFs for the Russ 2000. IWM (long) and TWM (Short). Way off the mark between them precentage wise today. TWM up 5.5%, IWM down 3.4%
Anyone suggest a way?
October 7th, 2008 at 2:31 pm
gosh darnit george i’m ready to kiss DDM haha
nice call
October 7th, 2008 at 2:32 pm
ameritrade stream is LAGGGGINGGG ugh, just when it is getting spicey
October 7th, 2008 at 2:32 pm
eli;
I get that sometimes with other pairs. Doesn’t happen often, but enought to do a monkey wrench job. I just go with the one with the strength and not let the other distract me.
October 7th, 2008 at 2:39 pm
wwwwwaaait really? lol
Official says pension funds are down $2 trillion
http://news.yahoo.com/s/ap/20081007/ap_on_bi_ge/meltdown_retirement
October 7th, 2008 at 2:41 pm
K;
I hope you do more than kiss it… It has .50c to get to that point, still plenty of time remaining today. The DOW got a double bottom on the 60 minute to mirror the inverse double top. Every time frame below that is positive so hang in there.
October 7th, 2008 at 2:42 pm
K;
DDM is hitting some 5 minute 36MA resistance right now.
October 7th, 2008 at 2:45 pm
Matt, do you remember a few weeks ago when my application showed the wrong percentages for the DOW? Something similar just happened now: it shows S&P -90.3%.
I tell you this application knows more than we do.
October 7th, 2008 at 2:46 pm
wow george things are reversing again ? or am i just seeing things like dressguard? haha
October 7th, 2008 at 2:48 pm
Prediction: we close out the INDU at 9550
October 7th, 2008 at 2:53 pm
Hey George,
no luck for me today at all. Was on a conference call and missed the 2:15 entry for ICE. Maybe it will dip again enough for me to buy again?
October 7th, 2008 at 2:55 pm
BTW.. haven’t been watching, but solars are getting crushed again since there are fears that there will now be oversupply given that incentives are likely to disappear due to bad economic conditions.
Dry bullk shippers are also in the crapper since global demand will slow the need for goods to be shipped.
October 7th, 2008 at 2:58 pm
Charlie;
It certainly will. Over and over again. Just try to scalp for a $1 - $2. Don’t expect a moon shot unless the higher charts indicate that. ICE is good to get on the 1 minute and when the MACD histogram prints above the zero line, get a trade.
But it will make fantastic moves at times and you’ll know because every second it will go up .50 or a dollar. Just keeps printing green.
A few weeks ago, it gapped up $28!
October 7th, 2008 at 3:02 pm
I remember several years ago I traded only ICE. I made a living off of it for about 2 months. About the time it was going up to the $100-180 mark. Like catching an AAPL at the right place. Momentum trends, big counter-trends, and scalps.
October 7th, 2008 at 3:05 pm
If SSO 5 minute Stochastic and MACD turns up here, it will be a positive divergence on both of those indicators.
October 7th, 2008 at 3:06 pm
anyone know if “Cramer favorite stocks” r weaker then most
FSLR looks low enough to play
October 7th, 2008 at 3:06 pm
There are more new 52-week lows on the NYSE today than there were at the March bottom. This market just keeps on crashing, and crashing, and crashing some more.
October 7th, 2008 at 3:07 pm
don;t see it happenig today george. we didn;t crash 800 for people to rush in and buy.
but just my view. still trying to unload my DDM mistake.
October 7th, 2008 at 3:09 pm
SDS is doing the same thing it did yesterday. Now trying for that double top again.
October 7th, 2008 at 3:22 pm
For scalping an uptrend like SDS is in today, I just buy a stochastic dip on the 1 or 5 minute, as long as the 15 minute is positive or price is above the 5 minute 36MA.
I read somewhere that when you do this, you’re only wrong once - the last one that doesn’t make it up.
Nice.
October 7th, 2008 at 3:23 pm
Five more days like this and I will get the Call of the Year 2008 award.
October 7th, 2008 at 3:24 pm
this is another day when greed has taken me over. YOINKS
October 7th, 2008 at 3:25 pm
35 more mins and I get the “Call of the day award”
October 7th, 2008 at 3:25 pm
Dressguard,
Maybe your software was trying to tell you that the S&P would soon have a 9 handle.
Matt
October 7th, 2008 at 3:29 pm
if fed cuts rate tomorrow or tonight… markets will jump and so will gold… right ? HMM nice
October 7th, 2008 at 3:31 pm
From Wall Street to Main Street… Credit Frozen
http://econompicdata.blogspot.com/2008/10/from-wall-street-to-main-street-credit.html
October 7th, 2008 at 3:34 pm
Dressguard;
I’ll personally pin the gold star on your chest.
October 7th, 2008 at 3:38 pm
…and yet another SSO, SDS, ICE scalp.
Charlie, that’s why the last candle on ICE turned red. hehe But I’ll be back in.
This isn’t immoral, is it?
October 7th, 2008 at 3:43 pm
I missed out on the two biggies AGAIN today… SKF and QID. I gotta do better.
Bummer. SKF up $17, QID up $5.40. And I’m pecking at chicken feed. Except for my small core SDS. which I’m ready to get out of.
October 7th, 2008 at 3:44 pm
George - make sure he’s dressed first
October 7th, 2008 at 3:47 pm
who will stick my pin 13 minutes from now? will it be red?
October 7th, 2008 at 3:49 pm
Phew i escaped your pin sticking.
October 7th, 2008 at 3:50 pm
Okay, tomorrow, total concentration on high-five figures.
Poor Bernake.
October 7th, 2008 at 3:51 pm
low volume down day looks like the work of “Cramers army”
October 7th, 2008 at 3:52 pm
Charlie;
Is ICE a hoot, or what? What a rebel. You gotta love a face like that.
October 7th, 2008 at 3:54 pm
WOW, I stopped trading (3:50) and BBT rockets 3 bucks up.
October 7th, 2008 at 3:55 pm
anybody going home with a long tonight?
October 7th, 2008 at 3:55 pm
eli;
I’m tempted on SSO, but I won’t.
October 7th, 2008 at 3:57 pm
That SPX 1,000 is quite a number to possibly play off, especially being down 4 days in a row.
October 7th, 2008 at 3:59 pm
So much for the 1,000 mark
October 7th, 2008 at 3:59 pm
DDM for me. sorta got no choice
October 7th, 2008 at 4:00 pm
Am right now in Germany. Same media coverage and tone like we have seen about half a year ago in the US. Shit is hitting the fan in Europe.
October 7th, 2008 at 4:00 pm
I did okay on my DIG/DUG pair today. Nothing like SKF though.
Lesson learned.
October 7th, 2008 at 4:06 pm
$100 realized gain in GE $200+ Unrealized losses in DDM let’s go lower interest rates. i want a bounce and to be out of the market FOREVER!
October 7th, 2008 at 4:06 pm
Charlie,
I’m not a commercial paper (CP) expert, so I don’t know what effects the Fed’s new program will have. However, if it ensures that my local grocery store will be able to get financing to keep buying food from farmers, then I will consider it a great success.
CP looks like a seller’s market now since money is so scarce. So even if the grocery store can continue to get loans, it is likely that they will be paying a higher interest rate. Companies that need CP and get cut off will suffer and die. Those that still have access to CP will have their profit margins squeezed.
This is not a recipe for a new bull market, as you may have guessed.
Matt
October 7th, 2008 at 4:10 pm
http://bigpicture.typepad.com/comments/2008/10/new-stock-marke.html
cheered me up a bit lol
October 7th, 2008 at 4:11 pm
K,
I listen to CNBC while I watch my charts. Today, they had a reporter in Paris, I think, and they said that Europe’s finance ministers were fiddling while Europe burned. Our market didn’t like that, and it often reacts strongly to events in Europe. The EU is a larger economy than the USA, and John Claude Trichet’s interest rate decisions at the ECB often create large waves here. ECB announcements are listed on the Bloomberg calendar, and during times like these, it is important to be aware of what’s going on in Europe. Fortunately, we have Dressguard in Germany to alert us to important events.
Matt
October 7th, 2008 at 4:11 pm
K;
Don’t give up!
October 7th, 2008 at 4:15 pm
George,
Your breakaway gap on SDS that you pointed out yesterday morning is still running. Nice call.
Matt
October 7th, 2008 at 4:24 pm
I forgot dressguard was in Germany! lol
I don;t give up george. instead of sell in panic i will try and hold on until fed pumps the markets or hopefully we have some good earnings today.
October 7th, 2008 at 4:28 pm
Lots of folks think that businesses and farmers have a big stash of money in a safe ready to take out to expand and buy things when needed.
Fact is, they survive month-to-month, or whatever, just like us private individuals. Certainly, oil companies, Wal-Mart, Microsoft, and others have tons of cash reserves. Even they need to draw from those funds eventually during business cycles. If they need more than their reserves, they have to borrow.
So, the notion that a chain grocery store has enough reserves to expand isn’t true. Think about a downturn in the economy where we buy less food. That affects them greatly because they only get a 3-5% mark-up on food items. So, their cash reserves can and will be depleted quickly, especially if they are in the midst of expansion. And we want expansion to give folks jobs.
A Korean couple in a small town where I live couldn’t get a $25,000 loan for their dry cleaning business during the beginning of the ’90s due to the economy. Finally, they found some backing amoungst the town folks. Today, they not only paid all of them back, but they now have a thriving business and employee several members of the community.
The mom-and-pop entreprenures in our country live their lives and run their business like we do as individual families - finance those big-ticket items. Farmers and cattle ranchers are continually borrowing to finance their next crops. Without loans (witness the 80’s where thousands of farms went bankrupt) they will lose their farms.
I don’t want farmers to go out of business.
October 7th, 2008 at 4:29 pm
Matt;
Thanks. I didn’t think the reversal today would last because the 15 minute was so powerful on SDS but one never knows.
October 7th, 2008 at 4:44 pm
Alcoa kicked off earnings season. Profit falls 52%.
http://biz.yahoo.com/ap/081007/earns_alcoa.html?.v=3
October 7th, 2008 at 5:07 pm
i was gonna be stupid and buy it. Argh,
October 7th, 2008 at 5:17 pm
K,
If you still own DDM you did.
October 7th, 2008 at 5:17 pm
I think this one has been the first major disaster this earnings season - with special greetings from Germany
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aGHs7Wy.prhE
SAP slid as much as 4.14 euros to 24.70 euros, adding to a 16 percent drop yesterday, the most in more than nine years. The company reported a “very sudden and unexpected drop in business activity” amid the global financial crisis.
Have a look at the yearly chart - Ticker SAP…
October 7th, 2008 at 5:22 pm
Re: SAP’s “very sudden and unexpected drop in business activity”
I expect that we will be hearing many more phrases like that during earnings season. As George outlined above, when the commercial paper market freezes, quite a lot of business can be expected to grind to halt.
October 7th, 2008 at 5:33 pm
newbie yes i am screwed i know.
I will try not to let it get to me.
October 7th, 2008 at 5:39 pm
K,
Do you have a stop loss plan?
October 7th, 2008 at 5:46 pm
i put it during the day but i try not to put it at Open
so No. i got a sell limit if it gaps up
October 7th, 2008 at 5:48 pm
Matt,
I agree, parrots will not be an endangered species this quarter. I think that after the first few disappointments the market will have this priced in and be immune to further “me toos” This and the appearence of progress on the CP front may setup a lower limit for the market sometime in the next week or two. What do you think?
October 7th, 2008 at 5:49 pm
newbie i hardly thought we would have 2 awful days as MacD and stoch was turning but i got the deadly seen called GREED…
October 7th, 2008 at 5:52 pm
Another credit flag: IB just raised the margin limits from 25% to 30%.
October 7th, 2008 at 5:56 pm
Dressguard,
Another few days like this and your call will make you look like a bull.
October 7th, 2008 at 6:04 pm
SAP issued a ban of recruitment. I have never heard something similar of SAP. Speaks for itself.
@Yerk: Where are you in Germany?
October 7th, 2008 at 6:27 pm
@Dressguard, Frankfurt. Did you see Volkswagen (VOW.F) today? Stock went intraday from 300 to 450 and back to 280. Casino royale.
@Newbie: I like the idea! But first, down at least 10%…
October 7th, 2008 at 6:28 pm
… and yet, I’m still receiving credit card invitations from Capital One and others.
October 7th, 2008 at 6:36 pm
hey george.. i just mail back the empty envelopes
help the post office.
October 7th, 2008 at 6:37 pm
@Yerk: I am in Stuttgart right now. From next week on in Bern/Switzerland till the rest of the month and then in Munich for a week. After that maybe home again to Dubai. I owned VW about 8 years ago. Look at the chart. I was watching it today and it’s just jaw dropping. Second short squeeze in a week’s time. Bloomberg has it covered today:
http://www.bloomberg.com/apps/news?pid=20601213&sid=aM.TGIiIhuxU&refer=home
October 7th, 2008 at 6:38 pm
K;
DDM peaked around $90. It is down to ~$42. Cut in half. It had a gap down on the 6th that will be filled at some time. I don’t think it is unreasonable to at least expect a bounce, possibly up to the $49 area in the near future.
If it was me? I’d hold on and play the underlying to balance it out. If I couldn’t do that, I’d keep it.
If you can’t do that, then wait for another bounce up intraday and sell to get out.
October 7th, 2008 at 6:38 pm
K;
How’d you know I did that?
October 7th, 2008 at 6:44 pm
In general,which stocks will rebound the sharpest in a market rally from a deeply oversol condition. High RS stocks that have held above recent lows or ones that have had the sharpest declines?
October 7th, 2008 at 6:52 pm
thanks George. i had it back in july for $61
sold $59
yea i knew you did that because we seem to think alike in some aspects
October 7th, 2008 at 7:01 pm
HOLY CRAP I GOT 58 envelopes
http://i38.tinypic.com/2ngzrpz.jpg
time to get my revenge on them.!!! the economy is saved guys!. i wonder if i should include anything inside each one
October 7th, 2008 at 7:04 pm
Yerk,
Another 10% in one or two weeks seems quite possible, even likely .
October 7th, 2008 at 7:13 pm
Devil’s Advocate here:
“Total seasonally adjusted consumer debt dropped by $7.9 billion, or a 3.7% annual rate, in August to $2.58 trillion. This was the first decline since January 1998.”
Where’s this money coming from to pay off this debt? This doesn’t say who it was, only that it happened. Hmmm. I think it is people not buying cars and other items and paying on credit cards. This doesn’t say they paid cards off, just down.
October 7th, 2008 at 7:18 pm
@Dressguard. Will leave for Hamburg tom, so that’s the opposite direction. Thanks for the Bloomberg-link. I wanted to buy puts when the stock went above 400 but volatility was insane. If I’d bought, with average vola on the stock the puts would still have been in the red way below 200…
@Duke: The harder they fall, the steeper they bounce is the rule. Do not go long healthcare during the bounce
October 7th, 2008 at 7:42 pm
George, these 8 bln have been writen-off by the banks - now that’s devilish
October 7th, 2008 at 8:20 pm
George,
You’re right; the big plunge in consumer credit wasn’t people paying down debt, but a gigantic contraction in the issue of new credit.
Tony Crescenzi says it was the biggest plunge since record keeping began in 1943.
Also, they were saying on CNBC today that you need to have a very high credit score to get an auto loan these days.
Matt
October 7th, 2008 at 8:36 pm
well if you saw bloomberg’s new headling.
U.S. Stocks Tumble; S&P, Dow Average Post Worst Annual Retreat Since 1937
we webt from 2004, 2001, 1987, 1937, 1929, 1 AD?
October 7th, 2008 at 9:42 pm
live debate tracking
http://www.intrade.com/jsp/intrade/intradeTV/
October 7th, 2008 at 9:53 pm
THE thing that held up consumer spending these last five years is the Housing ATM. In addition to the shrinkage of consumer credit it is equally important to note that MEW has shrunk to basically zero:
http://calculatedrisk.blogspot.com/2008/10/impact-of-less-equity-withdrawal-on.html
In the last three quarters the ONLY positive has been exports which is shrinking rapidly; cf the Baltic Dry Index as an indicator of freight flows.
Crossing the tipping point.
October 7th, 2008 at 11:07 pm
2nd cruel thought for the evening. Today just blew thru the 62% Fib line and is now touching and into the resistance area between 940-1000 (FusionIQ’s area is 960-1000 but what’s a few points among friends ?).
Just to amuse myself I looked back to ‘94 and did a Fib grid from the ‘94 bottom ~ 453 to the Oct07 top. We’re AT the 50% line. Next down is the “new new” 62% around 870.