[8:30am ET] Yesterday, and on the weekend, I asked the question,
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Good morning.
FSLR – Price Target Raised from $130 to $150 @ Citigroup. Hold.
…
waiting to see how it is spun in the media.
http://tinyurl.com/cvsc3d “The reason that bullion’s decline has been so puzzling: One would have thought that the yellow metal would have risen in the wake of the obviously inflationary implications of the banking bailouts that are being undertaken globally. ( Read Peter Brimelow’s April 20 column.) But, far from rising, gold has fallen over the last couple of months. There no doubt are many causes of gold’s decline, many of which have been widely noted among the gold trading community. But relatively few commentators have focused on the role that sentiment played in the decline. I find that curious, because sentiment… Read more »
Not in any hurry to do anything 2nd. Bought SRS and TBT last week, watched them both tank, sold em and then watched them recover this week and then some.
This volatility is killing me.
Happy to trade on Bill’s TOG. just question of timing.
Interesting how little coverage Senator Waxman’s carbon tax efforts are getting. Wish I could get a handle on the true costs in average family terms in publications other than farm commodity related. BUT Farmers are sure worried now about about the impact on food commods and production….IE: http://www.farmfutures.com/ME2/dirmod.asp?sid=CD26… “According to the Agriculture Department, any agricultural operation of more than 25 dairy cows, 50 beef cattle, 200 hogs or 500 acres of corn would be subject to emission fees that could run into thousands of dollars and is expected to impact more than 90% of the livestock industry.” ……………………………………………. Also, I… Read more »
“There is an awful lot of hate out there for leveraged ETFs. Microcap Speculator identified the Direxion 3X ETFs as “Wealth Destroyers.” Jim Cramer called the Ultrashort Financials ProShares (SKF) the “ETF of mass banking destruction.”
Some have called for banning these ETFs, but why bother? They don’t hide the fact that they’re the financial equivalent of crystal meth, and traders who abuse them are destined to go broke sooner or later.”
http://tinyurl.com/cj8rhg
I think we understand the dangers of 3x now. Thanks Si02. I’m a near-reformed addict.
Pelosi talks of wide ranging investigation, simon johnson gets air time on tech ticker and talks of addressing financials systemically today.
short-term tactical change in plan by the movers and shakers?
pre-market is responding appropriately.
I’m relying on TBT to be a treasury short. Does it mean we’ve got to wait for the day yields skyrocket and we jump on board? *placing hand in the air* – I solemnly swear that I will never play a 3X ETF again. They hurt too much and I risk getting the can for 90 days. Fortunately the 2X financial ETF’s in Canada have a lot less volatility in them then their US counterparts. Still, find myself going long with hard assets. Will avoid energy (maybe the one US coal miner with Australian assets) until we hear of inventory… Read more »
Since many of you brought up TA on underlying, i went and looked at $RIFIN, the index the 3x inverse financials trades upon. Question 1. Do specialists realize more and more people seek out inverse h&s and now know when/where to kill the move. I cannot tell you how many Inverse h&s have confirmed a breakout, but only to fail at the 1st level of resistance and tank afterwards. Looking at the charts alone is not recommended. But if i were trading in a vacuum I would guess that if RIFIN cannot hold the 50 day ema, it is going… Read more »
Bill and community , an awsome thanks. I had a Sell Limit floating in my account for $9.1. Logged in this morning to see a sell for $10.03, OUCH!!!. Sweet. A few specific skills learned directly from this forumn are coming through here. I tend to BUY and HOLD now, set what I feel is a comftable SELL LIMIT. Observing the prices and just relaxing when i get a -50% loss on a purchase. TCK really took us for a ride and payed off by holding on. I will BUY again. I really want to see WGW do something now.… Read more »
I’m really delighted that so many have been fortunate to sell TCK after being presented with today’s market opportunity. The complete 2008 TCK price collapse is due almost entirely to a bad management decision last yeat to spend $14 Billion for the Fording Coal Trust. They must have bought into the myth spread during last year’s US election campaign – that there was such a thing as “clean coal”! Sorry, but there is no such thing as clean coal and the future for the dirty kind remains as bleak as the steel industry it feeds – at least for the… Read more »
http://tinyurl.com/d66z3l
All cash. no position
It figures that these Swiss Gnomes would start mucking around in the space just as I got interested in them again (eg. Devry – DV).
http://www.streetinsider.com/New+Coverage/Educatio…
WSJ reported: The Obama administration plans to create a new military command to coordinate the defense of Pentagon computer networks and improve U.S. offensive capabilities in cyberwarfare. The initiative will reshape the military’s efforts to protect its networks from attacks by hackers, especially those from countries such as China and Russia. The new command will be unveiled within the next few weeks, Pentagon officials said. Is it any wonder? http://online.wsj.com/article/SB124027491029837401… If hackers can break into a $300 billion ultra-secret defense project, is there anything the US govt can do right? When the President says he’s outraged by a few traders… Read more »
HA!
this looks like the BACK DOOR promise software that compromised the US Defense. This was almost 5 years ago.
the last administration was warned of the HOLE in our defense software and Ted Kennedy received a letter and he ignored it. The Bush administration said NO
Obama is making changes but he has alot of cleaning up to do.
I have documentation for this and prefer not to publish it but someday I just might do it.
I have a large box of stuff that will blow your mind. Kaimu might be the one to expose it.
VB
Listen VB, just because Kaimu is laid up does not give you rights to his trademark “HA!” or use of ALL CAPS to make a point. Just want to retain his a priori rights in this august forum.
Next you’ll be trying to pull off something like “IT ALL WORKS UNTIL OUR BEST THINKING ELIMINATE US FED”
🙂
Corner Stone,
Sorry to offend you, just trying to contribute to the blog and I do have real factual documentation to support my point. It was only a compliment to Kaimu and I did not mean to infringe on his “trademark” in any way. 🙂
)&^(&
vb
VB- Not to jump in here, but I’m sure CS was only being sarcastic. I can’t tell you the amount of times I’ve thought of something I thought was funny only not to post it. That’s the problem with non-facial communication. The “pitch” is lost.
It’s getting late and I’m just a big old softy and didn’t want you to worry about it.
Best,
MB
And here’s another fine example of lack of security:
http://news.bbc.co.uk/2/hi/technology/8010729.stm
fwiw…
I’m sure you’ve noticed the absurd volatility in companies after they announce earnings. Oftentimes I’ve found that a company’s option volatility index will decrease significantly after earnings are announced (which is normal) only to see the stock have a HUGE swing during the course of the day. I noticed this with BBBY, HOG, BBY, WFC, and so many others. The similar characteristic amongst all of them that I could find was that they were either heavily shorted/heavily beaten down or that they were trading at very low estimated p/e’s. Typically, they opened low and finished much higher but sometimes they… Read more »
TOF, it does not work very well. First you have to be pretty good with your call, second IV goes up before earnings and deflates, so option price goes down. So even though prediction is right, stock also moves to ur direction, OTM option prices may not move much, unless stock makes a really big gap up/down in your direction.
Shiva, Sorry about this. I realized I wrote a confusing post. I’m referring to doing a straddle almost immediately after it opens AFTER earnings are released. The reason is the premium comes out of the options yet the volatility in the stock doesn’t seem to go away, especially in those highly liquid and shorted stocks. I think both NE and FCX meet those requirements. I was dead set on doing this after BBBY opened after earnings and had I done that the calls would have gone up 5-fold while the puts would have gone down 80%; the net change of… Read more »
TOF, You would probably have to papertrade it for one or two results (aapl on thursday might be a good pick). First 1/2 hour from market open since options are thinly traded in that hour, ask/bids are not that good. It all depends how much +/- stock closes from the open. Might be worth trying with a few contracts.
yeah, i agree it should be paper traded. i’ve tried it out for BBBY, MOS, and HOG and they all worked like a gem. I’m sure there are some duds, but i think it’s best to pick the most volatile and liquid companies you can find.
TOF- “I’m sure you’ve noticed the absurd volatility in companies after they announce earnings.” Yes! That was exactly the trade I put on today with COF. I also felt they were going to report a loss. But really, it was based more on the dumb initial reactions I’ve seen AH. Take a look at COF’s tape today. Your trade is based on the same principle, yet seems safer than mine.
I found today’s discourse an especially good read. Thanks all!
Thanks for passing this on Bill. Could be a weakening of oil stocks over the summer. Less driving, more sweltering, back to the ’50’s! Getting my bicycles tuned for the short runs as we speak.
To provide a good example of longer term decay, here are the prices of FAS and FAZ from inception to April 21: Financial Bear 3x Shares (FAZ) Day Date Open High Low Close Volume === =========== ========== ========== ========== ========== =========== Thu 06-Nov-2008 60.2200 71.4100 60.2200 71.4100 14460 Tue 21-Apr-2009 13.2300 13.2600 9.1300 9.1500 350686656 (Loss of 85% since inception open) Financial Bull 3x Shares (FAS) Day Date Open High Low Close Volume === =========== ========== ========== ========== ========== =========== Thu 06-Nov-2008 55.5000 55.5000 48.6800 49.1500 10313 Tue 21-Apr-2009 5.6800 7.8300 5.6000 7.8120 496271296 (Loss of 86% since inception open)… Read more »
I agree completely. I have no way of knowing, but I suspect there are readers who have bought and held the ultras. I’ve held a few myself for periods far longer than a day, and paid the price. In retrospect, those of us who played QID/SKF/SDS/DXD/SMN/DUG/FXP during 2007-mid 2008 were lucky to have gotten out when we did. More recently, I made the decision to cut my holding periods to 1-2 days, which is pretty much a necessity for the 3x ETFs. On the other hand, the ultras are xlnt trading vehicles, and apart from options it’s difficult to replicate… Read more »
There’s a few things I’ve learned about these 2X, 3X ETFS. 1) They can work for day trading if there’s lots of volatility and you’re “in the groove”, but they are nerve-racking (and do your TA on the underlying index, not the ETF), 2) You’re a gambler if you hold them overnight, EXCEPT 3) when the world seems at an end, with no future for anything ever going up again, short the inverse ones (e.g. FXP, FAZ, BGZ, TZA, etc) and hold on! I found the regulatory questions posed in Bill’s post, http://caracommunity.com/content/caras-commentary-… to be very important; especially now that… Read more »
Covered my COF short @ 13.24 for a nice $ return on a larger than usual trade for me. Only play here for me was on earnings report.
And one cannot afford to be naive under present market conditions… If you own gold, you are in a war. You are under assault. You had better figure this out early. There is a full-scale war against you. The politicians and central bankers who are conducting this war against you are determined to see that you lose money on your investment. The reason why you are under assault is because you have demonstrated by your purchase of gold or a gold-related investment that you do not trust the monetary policies of your nation’s central bank. If you are an American,… Read more »
From the article: “At some point, the number of investors who figure out that they had better buy gold is going to go from less than 1% of the public to 5%. When that happens, the supply of gold will not increase, and the price of gold will skyrocket. If as many as 10% of the investing public tries to put 10% of their assets in gold, I suspect the price of gold would go to $10,000 an ounce. The gold market is so marginal in the overall commodities market that the attempted 10% of investors to increase their holdings… Read more »
“If as many as 10% of the investing public tries to put 10% of their assets in gold, I suspect the price of gold would go to $10,000 an ounce.” The problem with this statements is that it assumes that “10% of the public” is indifferent to the price of gold and that they would be investing 10% of their assets in gold. If I buy 10% of my assets in gold at $1000 and then it rises to $10,000 it now comprises 90% of my portfolio (remaining portfolio held constant). Right now, I am not so sure that gold… Read more »
I have been saying for about a year now that goldbugs are at war with every government in the world. Gold used to be the canary in the mine, but with are form of government (lie, spin, omit, confuse, cheat, steal, and betray) we are now at war with honesty. Gold use to be able to tell our leaders that you might be having some problems with your currency when gold spiked, but not now! The only play in this market is either to trade prices(Bill’s strategy) or buy gold for safty. I’m not that good at trading prices so… Read more »
Well said !!!
And it is true, a lot has been well, said!