fabijo's account talk

[Wildboar53]

"OH MY GOODNESS!!! " Shirley Temple

LOL Paladin

 

[merlin]

. I mean, we could have 10 to 15% moves in a day (either up or down) if they keep these protections turned off. Before the big ups happen, we'll probably have some wild swings until you hear the average Joe talking about how bad it is to be in the stock market.

What protection has been removed?

 

[nnuut]

What protection has been removed?

Check this site, all you want to know about Circuit Breakers in the NYSE!
Norman
http://www.nyse.com/press/1167392590947.html

 

[FogSailing]

Makes me wonder who's running the substation?

FS

 

[nnuut]

Yeah, removing the circuit breakers? What are they expecting, or inviting?:notrust:

 

[Birchtree]

They don't want to stand in the way of the next meltup. It'll be tremendous.

 

[Silverbird]

Yeah, removing the circuit breakers? What are they expecting, or inviting?:notrust:

Computer trading is only as good as the programmed assumptions.
"....The 9000 series is the most reliable computer ever made. No 9000 computer has ever made a mistake or distorted information. We are all, by any practical definition of the words, foolproof and incapable of error." HAL, 2001 a Space Odessy. :worried:

 

[fabijo]

They don't want to stand in the way of the next meltup. It'll be tremendous.

Yes. Many will watch from the sidelines in awe. :nuts:

 

[fabijo]

Oops. I better sell my stock in a biofuel company. It has already been beaten up bad. Let's stick with oil for now.

Nigeria: UN Expert Seeks 5-Year Freeze On Biofuel Production
http://allafrica.com/stories/200710310238.html

An independent United Nations (UN) human rights expert, Mr. Jean Ziegler, has called for a five-year moratorium on biofuels.

Zeigler, the UN Special Rapporteur on the right to food, told reporters in New York that converting crops such as maize, wheat and sugar into fuels was driving up the prices of food, land and water, according to a UN statement. Noting that the price of wheat has doubled in one year, he warned that if the prices of food crops continued to rise, the poorest countries will not be able to import enough food for their people.

"It is a crime against humanity to convert agricultural productive soil into soil which produces food stuff that will be burned into biofuel."

........

 

[kaitlinsnana]

Trying to understand. Are the breakers removed entirely or just set higher for the quarter.

Gail

 

[fabijo]

Trying to understand. Are the breakers removed entirely or just set higher for the quarter.

Gail

Well, it looks like I misread what actually happened in the decision process by the NYSE. They did not remove the circuit-breakers. The circuit-breakers are still in place. They are adjusted on a quarterly basis. Instead, the NYSE removed the trading collars which only affects index arbitrage trading. Here's the notice on the NYSE site:
http://www.nyse.com/about/newsevents/1193393234513.html

And here's a quick definition of index arbitrage:
from http://www.investopedia.com/terms/i/indexarbitrage.asp :

An investment strategy that attempts to profit from the differences between actual and theoretical futures prices of the same stock index. This is done by simultaneously buying (or selling) a stock index future while selling (or buying) the stocks in that index.

This is done with program trading. Using software that monitors both a stock index and futures contracts on the index, traders can be notified when there is a larger than normal gap.

 

[kaitlinsnana]

That's a relief.

Gail

 

[fabijo]

I just put together this chart using monthly data I downloaded from the Federal Reserve. This is a weighted average of the foreign exchange values of the U.S. Dollar against major currencies. Here is how the Fed explains this index:

The major currencies index is a weighted average of the foreign exchange values of the U.S. dollar against a subset of currencies in the broad index that circulate widely outside the country of issue. The weights are derived from those in the broad index.

I figure this data is useful when we talk about the value of the dollar. The value of the dollar in the broad index doesn't look as bad. But when we look at the value of the dollar compared to the world's leading currencies, we see a long term decline in the value of the dollar. Here's the chart:

 

[fabijo]

Looks like Armageddon out there.

100% S.

 

[fabijo]

Here's the 4 year daily chart of the S&P 500. I keep hearing about broken support, but that's not how I'm looking at it long term. Watch how fast we hit 1700 by year's end. We won't know what hit us.

 

[nsurf9]

I hope your right. I feel a nagging "fear" in the background that, if the American consumer doesn't hold up and spend, that will be the last stick - adding to hight and overprice oil, subprime loss, mortgage credit vapor lock, home devaluation, market psychology, dollar devaluation sticks that sends us somewhere else. It could be the perfect time to buy the "fear."

 

[Birchtree]

What's easy to do is almost always the wrong thing to do. And what's hard to do is almost always what makes you money. That's my personal philosophy.

 

[fabijo]

What's easy to do is almost always the wrong thing to do. And what's hard to do is almost always what makes you money. That's my personal philosophy.

You know that feeling when you are leaning back in a chair and the chair almost falls, but you quickly catch yourself? That feeling, just when it feels like the chair is doomed to send you to the floor, that's how I've been feeling in this market. I guess I'm doing the right thing.

 

[fabijo]

Not too shabby. I'm just gonna keep holding tight to this wild market. The gypsy monkey warrior is still calling the S Fund the most volatile fund of the three. I still haven't figured out how to predict anything. All I can do is say what has happened and assume that it will keep happening at least for a short while. :worried:

 

[fabijo]

There are a lot of scared investors out there. It's tempting to join the selling crowd. I just thought I'd take a look at the 10 year chart of the S&P, so I don't lose sight of the big picture. Almost looks like the long term action is accumulation right now. We're playing with levels near all-time highs here. If we keep testing the resistance, we should break through and enter a new angle of ascent for few years.