Griffin Account Talk

[Griffin]

Well I started to waffle on my move to a CP position (I did make the move - 100% into the F). There is reason to suspect that we could see a few more green days ahead, but I also believe we have much stronger possibility of seeing a retest soon and I really like the idea of bidding my time in the F fund, waiting for a the moment to pounce on the retest/new low.

Apparantly, the big boys were not interested in what JC had to say either, they are craving Bernanke steaks and it looks like they are setting the stage for another slaughter.

Break out the A-1, cause Ben's rump is on the menu.

 

[Silverbird]

Apparantly, the big boys were not interested in what JC had to say either, they are craving Bernanke steaks and it looks like they are setting the stage for another slaughter.

Break out the A-1, cause Ben's rump is on the menu.

What, the boyz want more $$$ into the system (rate cut)? As in "watch out for falling $'s?" What problem does that fix?

 

[fedgolfer]

What, the boyz want more $$$ into the system (rate cut)? As in "watch out for falling $'s?" What problem does that fix?

The big boys want more liquidity... there's significant amounts of money leaving equities and probably a lot of it is not coming back in unless a cycle of cutting is interpretted by the general public. Institutional investors have less liquidity due to the yen carry trade -- retail investors have less due to the credit crunch. There's a good technical indicator, Time Segmented Volume:

http://www.investopedia.com/terms/t/tsv.asp

When used with index ETFs like SPY, QQQQ, DIA, R2k, etc, you can see TSV is plummeting like a rock... money is leaving equities and as it stands now, new money doesn't appear to be cycling back into equities as in previous bounces/dips.

 

[Griffin]

Wow,

Very eloquent Fedgolfer, <<<golf clap>>>>

I was gonna say something ham handed like: the big boys are setting the stage for the release of the Fed minutes - so that investors are going to be crying by next Tuesday and cursing Ben for denying them relief.

Anyway, Ben's named has been hog tied and it's about to dragged through the mud for the next week.

Here's a little tid bit of history for y'all: "Two months after Alan Greenspan took office as Fed chairman, the stock market crashed on October 19, 1987. In response, he ordered the Fed to issue a one-sentance statement before the start of trading on October 20 "The Federal Reserve, consistent with it's responsibilities as the nations central bank, affirmed today it's readiness to serve as a source of liquidity to support the economic and financial system." (from Fed101 - Federal System FAQ) - .........will history repeat itself?......

The big boys want more liquidity... there's significant amounts of money leaving equities and probably a lot of it is not coming back in unless a cycle of cutting is interpretted by the general public. Institutional investors have less liquidity due to the yen carry trade -- retail investors have less due to the credit crunch. There's a good technical indicator, Time Segmented Volume:

http://www.investopedia.com/terms/t/tsv.asp

When used with index ETFs like SPY, QQQQ, DIA, R2k, etc, you can see TSV is plummeting like a rock... money is leaving equities and as it stands now, new money doesn't appear to be cycling back into equities as in previous bounces/dips.

 

[Griffin]

I am looking at our current position from the perspective of where we would after the first test of the low during the first couple trading days of March 07 and the last days of July 07

View attachment 2538

The pattern of the MACD, RSI and Slo Sto are all very similar to what we are currently seeing.

In both of those scenarios, the next couple of days would vascilate with a slightly positive trend, that ends in a sharp move downward. In the march scenario this was the retest, in the July scenario, this was the beginning of a much larger systemic breakdown, but with some very short buying opportunities.

Again, I am poised to pounce. Today, I will take my pennies that appear to be forthcoming from the F-fund and slip over to the G. The TNX is at a bottom, and if it moves lower, then I will probably slip back, keeping in mind that a sharp move downward in the stock market and I will buy into the red - probably the C-fund.

 

[Cortez]

Nice chart analysis. You never have a breakdown that melts straight back up without a rally and retest of the lows from the inital plunge. Our best case scenario would be a retest of SPX 1450 that holds and creates a double bottom like in FEB/MAR downdraft. Second best would be a H&S bottom with this next low being the head. Worst case is of course a downtrend with lower highs and lower lows.

 

[Griffin]

Nice chart analysis. You never have a breakdown that melts straight back up without a rally and retest of the lows from the inital plunge. Our best case scenario would be a retest of SPX 1450 that holds and creates a double bottom like in FEB/MAR downdraft. Second best would be a H&S bottom with this next low being the head. Worst case is of course a downtrend with lower highs and lower lows.

Speaking of a H&S (of course your talking about a reverse H&S), I want to clarify something mentioned a couple of posts ago about two major patterns developing. One - the highs of July and August are a double top and the other being a H&S, with the highs of July being the left shoulder, the highs of October being the head, a neckline around 1370 (which is where this latest move would/could go) and a follow on rally back to the realm of 1540 making the right shoulder.

Folks, I agree with what Cortez has written here - and either one of his first two scenarios could develop, then either two of the scenario's I mentioned would be the follow-on pattern. I hope that clarifies things.

In the end, these are major reversal patterns and would represent a significant shift in macro economics. Of course, a breakdown out of the 5 year channel would be confirmation.

There are lots of ways to play this. It's easier to play the larger patterns, but it can be more rewarding to play the shorter patterns. Speaking of which, I intend to pounce tomorrow - maybe I can still get some tail feathers.

 

[fedgolfer]

i'm not an options trader, maybe Grif or Bullitt knows? If the hedge funds holding Nov puts outweighs those owning calls, would that make tomorrow a possible bloodbath? If the opposite holds true, we could see another squeeze/short covering?

Maybe the big boys sold their Nov calls on the previous short sqeeze, and they're waiting for the other shoe to drop this afternoon or tomorrow to sell the puts? I know that's all speculation, but I thought I'd throw it out there since we've been put in the habit of seeing short covering in a 5 year measured bull move!!!

This 1459'ish pivot/support point is not that suprising.

 

[Griffin]

i'm not an options trader, maybe Grif or Bullitt knows? If the hedge funds holding Nov puts outweighs those owning calls, would that make tomorrow a possible bloodbath? If the opposite holds true, we could see another squeeze/short covering?

Maybe the big boys sold their Nov calls on the previous short sqeeze, and they're waiting for the other shoe to drop this afternoon or tomorrow to sell the puts? I know that's all speculation, but I thought I'd throw it out there since we've been put in the habit of seeing short covering in a 5 year measured bull move!!!

This 1459'ish pivot/support point is not that suprising.

I'm not going to speculate on an answer to that question - bullitt's probably the man for that one. But IMHO I don't think these late day sell offs have that much to do with manipulating the options market, in my view this is the big boys beating up on the Feds (you have a bunch of committee members speaking tomorrow), and these guys want to make them as uncomfortable as possible. They want their rate cutting cycle and they are going to blast away with the liquidity issue until the Fed delivers the goods. By making these late day manipulations they are able to trigger the quants into action and bring down the whole house. It's hard for the fed to address a room full of people and talk averages, when it's a blood bath on the streets.

I'm actually glad I didn't make the move back into stocks today - with the FOMC minutes due on Tuesday, we could be looking at the reverse H&S scenario Cortex mentioned.

 

[ATCJeff]

I'm actually glad I didn't make the move back into stocks today

Thanks Griffin, that's all I needed to hear. I'm all in tomorrow in the S. Hoping for a one day DCB!

Jeff

 

[nnuut]

I'm not going to speculate on an answer to that question - bullitt's probably the man for that one. But IMHO I don't think these late day sell offs have that much to do with manipulating the options market, in my view this is the big boys beating up on the Feds (you have a bunch of committee members speaking tomorrow), and these guys want to make them as uncomfortable as possible. They want their rate cutting cycle and they are going to blast away with the liquidity issue until the Fed delivers the goods. By making these late day manipulations they are able to trigger the quants into action and bring down the whole house. It's hard for the fed to address a room full of people and talk averages, when it's a blood bath on the streets.

I'm actually glad I didn't make the move back into stocks today - with the FOMC minutes due on Tuesday, we could be looking at the reverse H&S scenario Cortex mentioned.

Manipulation is the word!:nuts:
Wasn't as obvious today as it has been, usually a SUPER spike either up or down within the last 30 minutes of trading.

 

[Bullitt]

I don't want to pretend I'm someone I'm not when it comes to speculating what kind of options activity is in the works. This market has been so crazy, it's anyone's guess. The late day selloffs are a sign of a weak market. I mentioned before that I agree with Griffin in that there are some plungers working this market. We might be seeing some signs of sector rotation as well. Of course, if we were to ask a Quant manager what's going on they'd probably say that these market moves are only supposed to happen once every 100 years. LOL.

One thing I am sure of is that some hedge funds are aggressively dumping bellweathers such as AAPL, BIDU, YHOO, and GOOG. It's almost like they don't even care if the trading world sees that they are getting the heck outta dodge.

The bull in me is seeing that Reverse head and shoulders forming up over the next few weeks. A very powerful reversal pattern may be in the works.

Guys, keep the great ideas coming.

 

[Griffin]

I've been waiting for the Fed to announce another surprise cut on an options expiration Friday like they did in August. If you recall, the announcement was timed to inflict maximum pain on the shorts, teach them a lesson, and make them wary of trying to push the market lower any time soon. The surprise cut in the discount rate supposedly prevented what was shaping up to be a bloodbath on that particular Friday and turned it into a huge gain. If futures indicate we are about to fall off the cliff tomorrow morning, I wonder if Ben would try it again?

Naw, a 2-3% gain on Friday is probably out of the question...

Ben did that emergency cut to prevent a breakdown of the five year channel (at 1370), were not there yet - (5yr channel bottom is about 1400 now). That would mean another 50 points off the S&P (that's about 3.3% below where we closed).

If Ben did an emergency rate cut now - I'm not sure if would help or scare the bejesus out of folks.

Last time we were in this position, I jumped in expecting a bottom, got caught in the breakdown and missed the recovery rally - I definitely do not want to do that again. I'm searching for a bottom then I go back into my B&H strategy - it worked last time, it worked a year ago for pointman72 and I am throughly convinced that is the way to play it, except this time around we have to factor in a major market reversal! :worried: (i'll cross that bridge.....)

Sounds like fun!

 

[Griffin]

Thanks Griffin, that's all I needed to hear. I'm all in tomorrow in the S. Hoping for a one day DCB!

Jeff

Jeff,

There is a good chance you will get your DCB. If that does happen, the bad news is that we all are going to have to take a guess about the situation Cortez detailed if - that's going to be a real tough call because it sets Monday up for a monster move one way or the other.

 

[ATCJeff]

Jeff,

There is a good chance you will get your DCB. If that does happen, the bad news is that we all are going to have to take a guess about the situation Cortez detailed if - that's going to be a real tough call because it sets Monday up for a monster move one way or the other.

Easy call for me. If we bounce, I'm out. I'll protect the gain. If were down, I'm out. I said this from the begining, this is a one day play.

I do not like what I see moving forward. I'm in serious CP mode. However, I will keep playing these one day in and outs.

 

[kaitlinsnana]

I'm locked in 60% S/40% I for tomorrow, but then I'll be running like a scalded dog. Scary stuff happening. As always, thanks for your insight.

Gail

 

[FogSailing]

The excitement just won't end..Tomorrow we see whether we fall under 1440 or move up from here..

Option 1: We get the DCB tomorrow and move up (Good luck to those of you who took the risk tomorrow). Monday's economic calendar is empty so we'll be subject to whatever news is being sold over the weekend. I don't like it..so I'm smelling the fear..

Option 2: If we fall below 1440, I'll stay out until the P and H charts or the news gives us a signal that the downward trend is reversing...a further downturn could take us into down to 1400, then 1350..

IMO, if the Wall Strret captains want more rate cuts, Monday will be a bust. If I were in their shoes, I'd want things to look as bad as I could. If they need liquidity, I'd say that we'll be hearing about the lack of it..

It will be interesting..

FS

 

[Show-me]

Sounds like the buying opportunity I am looking for.

 

[TerpTrader]

View attachment 2538

...The pattern of the MACD, RSI and Slo Sto are all very similar to what we are currently seeing.

I just noticed something so simple. Since you mentioned the MACD, Griffin, I thought I'd point out further that the crossing of the fast/slow MACD lines pretty well signaled the reversals in both March and August.

NOT that they are necessarily the bellweather, but DEFINITELY something to keep an eye on, in addition to the other indicators, when eyeing that elusive bottom, imo.

I too expect we'll dip a bit lower before a true reversal....very tempted to bail to all G tomorrow. :suspicious:

 

[FogSailing]

Show Me: You have become a man of few words...and excellent returns..

Congrats on your good investment decisions recently dude!!! If you buy in, I'll probably be right behind you.. but as of now, I'm sitting tight until I see which way the train is going

FS