Dr Faustus's Account Talk

[crhuss]

Hi Dan, I don't know if you read Griffin's commentary on the first page of the TSPtalk home page, but I try to keep an eye on it from time to time. Griffin currently suggests that we have reached the bottom and the long term trend is up. Please take a look at it and let me know what you think about what he had to say. Interesting reading. Thanks.

Craig

 

[DrFaustus]

Hi Dan, I don't know if you read Griffin's commentary on the first page of the TSPtalk home page, but I try to keep an eye on it from time to time. Griffin currently suggests that we have reached the bottom and the long term trend is up. Please take a look at it and let me know what you think about what he had to say. Interesting reading. Thanks.

Craig

I tend to agree, but I am not about to get in this market until I see the prices actually come up. EVERY time I have tried to guess where the bottom is in order to get in on the first day of an uptrend, I have paid for it. I am finally getting the lesson hammered into my hard head -- do NOT try to guess where the bottom is. Just when you think the markets can't sink any further, down they go.

Today is a good example. The charts show that the C and S funds are levelling out, an indication that we've hit bottom. But ... look at what happened yesterday and look at the futures this morning. It's an abyss, my friends, and the markets are sliding down into it.

So my advice is to be patient ... wait until we actually see an uptrend develop before getting in. So what if we miss out on 1 or 2 percent of a long term upswing. I'd rather do that than get caught on the wrong end of a 10% slide.

Dan

 

[crhuss]

Thanks Dan!! You make me laugh!!:laugh: And I really agree with you. Being patient IS the important thing here. It seems other folks manage to make the right moves at the right time. Ebb was uncanny in being able to call the moves right back in 2007. Now, not so much. But if he stages a comeback, I will join up with his pay-for-view again. I don't think anybody really can 'time' the moves now cause the market is sooo weird. But we keep trying.
So anyway, thanks again for a good laugh this morning. Still in 100%G. Have a great day!!

Craig

 

[kaitlinsnana]

I was in the right places today for the first time in recent memory and will run like a scalded dog at cob tomorrow. Today was one of the strangest of days, expected the market to take a dive when oil stayed above $100, and it rallied instead. Go figure.

This is my third week of retirement, and I'm lovin' it. It's like time slows. Seems more like three months and the post office feels like a distant memory, another life almost. People told me I'd have the "working dreams" and I did last night. I was the only soul working in the entire post office. No one showed up, the customers were hostile, a nightmare.

Retirement is GOOOOOOOOOD!

Gail

 

[crhuss]

Hey Kaitlinsnana, Good for you!!! It only gets better...and the nightmares about work will fade.

 

[DrFaustus]

Hey Gail ... since you're rubbing it in ... can you work my right shoulder blade a little? There's a spot there that I can't reach.

 

[DrFaustus]

I've been wondering if these recent huge market moves are due to programmed trading. Can anyone confirm or deny that?

 

[Uptrend]

You bet it is going on! These programs kick in based on the difference in the futures market compared to the stock market. It is best explained this way:

"Buy programs occur when the futures market is over-valued relative to the stock market and consists of the index futures being sold and the stocks in the index being bought. Sell programs, the opposite case, occur when the futures market is under-valued relative to the stock market and consists of the index futures being bought and the stocks in the index being sold. Over-valued and under-valued conditions arise because trading in the futures and equities markets occurs independently. The key to determining these over or under-valued conditions is the arithmetic difference between the futures and the spot index (which is known as the premium)."

http://www.indexarb.com/

Based on the premium, this site will tell you for free when to buy or short. Now isn't that cool!

 

[Steadygain]

Excellent question Dan.

Thanks a million for your response Uptrend - very informative.

 

[mojo]

Yes thanks Uptrend, nice link too.

 

[lindalyc]

Thanks for the link, too, Uptrend.
I am a bit slow understanding after reading the site:

1. it tells, for S&P500, sell at -2.27, and buy at 3.73. then in Guidelines, it says sell at <-1.04, buy at >2.56. which to follow?

2. then, where do I find out today (2/21/08) premium? do I have to look at "the diference of futures and the spot index" myself?

any pointer is much appreciated.

 

[kaitlinsnana]

Now that's what I like about you Dr. F. You ask the right questions, so I'll scratch your ole hairy back and you'll help me stay above the poverty line. ok?

Gail

 

[DrFaustus]

http://www.indexarb.com/

Based on the premium, this site will tell you for free when to buy or short. Now isn't that cool!

Now that is a Cool site! Thanks, UpTrend!

I guess I'm a little slow ... Can someone walk me through a more concrete example? Like take today, for instance ... how do I use that info to determine whether to buy, sell or hold the C fund?

 

[airlift]

Good question Dr. Faustus. I too am ready to learn how. Thanks all!

 

[crhuss]

I looked at the Web page....read through it and tried to understand. I'm wondering if this old retired brain to too far gone to figure it out!!:embarrest::worried:

 

[DrFaustus]

Ok ... today's market move in the final half-hour makes abosutely NO sense to whatsoever. What happened?

 

[Birchtree]

Ambac is being tilled.

 

[CountryBoy]

Ok ... today's market move in the final half-hour makes abosutely NO sense to whatsoever. What happened?

CNBC reported about a possible AMBAC bailout at about the time the markets went straight up. CNBC said the bailout could happen on Monday or Tuesday. Lines of credit etc, to save it's AAA rating.

CB

 

[Birchtree]

Country Boy,

Who the Allah is Michelle Osama? Even when I self imposed myself to the closet for fifteen years as a Vietnam Veteran I remained proud of my country. Go McCain.

 

[Bullitt]

CNBC reported about a possible AMBAC bailout at about the time the markets went straight up.

I stopped watching CNBC, so thanks for the news flash CB. To me, that move up at the end of the day is a good indicator that there aren't too many Cool Hand Luke's playing the short side of the market. Speaking of Cool Hand Luke, that's another movie that I just love.