optionman's Account Talk

[SteveTSP]

Thanks for sharing your insight. It sure helps my thought process and learning experience. Steve

 

[amoeba]

Greetings fellow MB members

For those wondering about my entry and plan, here it is.

I am long term bearish, but short term bullish on this market.

Although we are in a bear market we will likely see intervening rallies and I believe we are on the cusp of one now. I expected yesterday to be a down day allowing a better entry, but it was up. I expect a pullback today and would like to see SPX hold above 850, if it doesn’t, I’ll have to see where it closes, if it closes below 825 I’ll probably bail. The next few days should be interesting, auto bailout/jobs report etc.

Why the I fund? The US Dollar on a longer term basis looks like it could pullback. If I’m correct and the market begins to rally and the dollar pulls back a bit, the I fund should get a strong bounce. If I’m correct and this entry works out as expected I plan to rebalance in to some combination of the S and C funds very shortly as I don’t expect the USD to pullback much, I’m looking at the 85 area.

Trade Well!

dollar isn't moving - but asia opened up nonetheless, so (looks like) you're making money at this moment.....tomorrow is another day......however.

 

[Diesel]

OM,

Thanks for the insight and good luck with your strategy. I wish you well.

 

[robo]

dollar isn't moving - but asia opened up nonetheless, so (looks like) you're making money at this moment.....tomorrow is another day......however.

I think his plan for the trade was more than just a moment or tomorrow. However, he might trade 30 min charts in other accounts, but not with his TSP account. You are correct that tomorrow is another day....

Optionman,

I joined you for an I Fund trade - maybe we can make some money on this trade, but not at the moment.

Take Care and good trading!

 

[robo]

Greetings fellow MB members

For those wondering about my entry and plan, here it is.

I am long term bearish, but short term bullish on this market.

Although we are in a bear market we will likely see intervening rallies and I believe we are on the cusp of one now. I expected yesterday to be a down day allowing a better entry, but it was up. I expect a pullback today and would like to see SPX hold above 850, if it doesn’t, I’ll have to see where it closes, if it closes below 825 I’ll probably bail. The next few days should be interesting, auto bailout/jobs report etc.

Why the I fund? The US Dollar on a longer term basis looks like it could pullback. If I’m correct and the market begins to rally and the dollar pulls back a bit, the I fund should get a strong bounce. If I’m correct and this entry works out as expected I plan to rebalance in to some combination of the S and C funds very shortly as I don’t expect the USD to pullback much, I’m looking at the 85 area.

Trade Well!

I wanted to see 811 hold today after the terrible jobs numbers and it did. I moved into the market with a large position after the sell-off last Monday.

Post your thoughts if you get a chance about the next resistance levels.


Thanks!

Do Da-Wave:

"Support for the SPX jumps back up to 848 and then 789, with resistance still at 912 and then 935. Short term momentum was oversold at today's lows and ended overbought after the rally. Certainly a positive turn of events today. Best to your weekend"

MEDIUM TERM: downtrend low at SPX 741

LONG TERM: bear market rally still underway

http://caldaroew.spaces.live.com/

 

[optionman]

Robo,

You’re absolutely right about my IFT last week. I never do an IFT for 1 day.

My thoughts on the market?

I’m long term bearish. IMO we are a long way from an ultimate bottom. I believe the ultimate bottom will find the SPX 500 below 500, probably closer to 300-400 sometime in 2009/10. The fundamentals just do not support a sustained rally, but I do believe we will see intervening rallies before we see the ultimate bottom.

I expect the big 3 will be bailed out after their “congressional spanking” (can’t imagine congress saying no, go ahead and fail this close to the holidays, especially with the dismal jobs numbers just posted), unfortunately I have no confidence in them remaining solvent and expect at least one of them to fail in 2009.

In addition, we are beginning to see the next shoe drop, that is commercials are beginning to fail (expect to begin hearing more about commercial defaults in the early part of 2009). So while jobs continue to erode, houses continue to lose value, and millions are still facing foreclosure and will likely be foreclosed upon even with plans now being contemplated and regional banks continuing to fail there is just not a lot to be bullish about.

Having said that, the reason I made an IFT into stocks first and foremost is that my propriety signal system is on a buy for stocks and I believe we will see a year end bear market rally before the downtrend resumes. I’m watching 900 for short term resistance but expect it will be taken out shortly, the real resistance points I see are 950-1000. I’ll be watching to see how the market reacts at those points if we get there. Not so sure we will get above 1000, but we could. A close below 840 from here would be extremely bearish and I would likely bail. Another thing that would have me out quickly is if we move up to far to fast 10% + within a few days (this would likely lead to some whipsawing to the downside making large % down moves).

Bottom Line: IMHO we are in a bear market and will remain there until the fundamentals and technicals get in sync. We will get bear market rallies and one may be developing now, but I don’t expect it to last to long.

This is just my opinion and I could certainly be wrong, but remember earlier this year when I said that just because the FED begins lowering rates does not mean the market will rally as many expected, then in July I said I expected a crash before the end of Oct.

Trade Well!

 

[amoeba]

famous last words (up too fast, +10% in a few days); yet here we go again, asia up another +5-8%.....

 

[Braveheart]

Robo,

You’re absolutely right about my IFT last week. I never do an IFT for 1 day.

My thoughts on the market?

I’m long term bearish. IMO we are a long way from an ultimate bottom. I believe the ultimate bottom will find the SPX 500 below 500, probably closer to 300-400 sometime in 2009/10. The fundamentals just do not support a sustained rally, but I do believe we will see intervening rallies before we see the ultimate bottom.

I expect the big 3 will be bailed out after their “congressional spanking” (can’t imagine congress saying no, go ahead and fail this close to the holidays, especially with the dismal jobs numbers just posted), unfortunately I have no confidence in them remaining solvent and expect at least one of them to fail in 2009.

In addition, we are beginning to see the next shoe drop, that is commercials are beginning to fail (expect to begin hearing more about commercial defaults in the early part of 2009). So while jobs continue to erode, houses continue to lose value, and millions are still facing foreclosure and will likely be foreclosed upon even with plans now being contemplated and regional banks continuing to fail there is just not a lot to be bullish about.

Having said that, the reason I made an IFT into stocks first and foremost is that my propriety signal system is on a buy for stocks and I believe we will see a year end bear market rally before the downtrend resumes. I’m watching 900 for short term resistance but expect it will be taken out shortly, the real resistance points I see are 950-1000. I’ll be watching to see how the market reacts at those points if we get there. Not so sure we will get above 1000, but we could. A close below 840 from here would be extremely bearish and I would likely bail. Another thing that would have me out quickly is if we move up to far to fast 10% + within a few days (this would likely lead to some whipsawing to the downside making large % down moves).

Bottom Line: IMHO we are in a bear market and will remain there until the fundamentals and technicals get in sync. We will get bear market rallies and one may be developing now, but I don’t expect it to last to long.

This is just my opinion and I could certainly be wrong, but remember earlier this year when I said that just because the FED begins lowering rates does not mean the market will rally as many expected, then in July I said I expected a crash before the end of Oct.

Trade Well!

I remember those words exactly. How many believed you at that time I know I did but greed got the best of me. I got smoked in the C Fund but yet I made a good sum of money buying & selling in the market. I can't hold stocks in this market and I know there a many just like me.

Your I Fund IFT will pay well today tomorrow is another story. It is up very fast IMO too fast and just like the market with the up 300 days down 777 days it's flip a coin. There is really nothing but bad news and Obama with his spending plan has the folks thinking this trend is over and happy days are here again. What they miss IMO is this is the beginning of the end and I expect the DOW to drop 4000 points from here.

There are no real jobs and fixing roads is great - problem is there won't be anyone driving to work since we are losing 500K jobs a month. There won't be anyone buying cars, homes or stocks. Bank failures will start a panic.

I expect Bank of America to be the final nail in the coffin.

 

[Corepuncher]

Agree with the thinking here...lets see if we can get above 900...if it looks like we are hard up and going to close 920-930+...might be a good time to bail. I'm not sure we make it to 950. If volume dries up as we rise, look out...get out! Agree 850 is the line in the sand and a close below will likely lead to new lows.

I expect job losses to accelerate. The entire system is fragile on so many fronts...very risky being in stocks. I hope I do not get too greedy...looking for 1000. Let's just see how the market behaves. Go with the flow, but beware. I would really like to see a big short covering rally into the close...bring us up to 920-940 range. Would be opportune time to sell. Will look to sell today if internals look good...because I just don't see how we DO NOT bounce back down off the (50 SMA + Upper Bollinger band = 930-940).

 

[robo]

Robo,

You’re absolutely right about my IFT last week. I never do an IFT for 1 day.

My thoughts on the market?

I’m long term bearish. IMO we are a long way from an ultimate bottom. I believe the ultimate bottom will find the SPX 500 below 500, probably closer to 300-400 sometime in 2009/10. The fundamentals just do not support a sustained rally, but I do believe we will see intervening rallies before we see the ultimate bottom.

I expect the big 3 will be bailed out after their “congressional spanking” (can’t imagine congress saying no, go ahead and fail this close to the holidays, especially with the dismal jobs numbers just posted), unfortunately I have no confidence in them remaining solvent and expect at least one of them to fail in 2009.

In addition, we are beginning to see the next shoe drop, that is commercials are beginning to fail (expect to begin hearing more about commercial defaults in the early part of 2009). So while jobs continue to erode, houses continue to lose value, and millions are still facing foreclosure and will likely be foreclosed upon even with plans now being contemplated and regional banks continuing to fail there is just not a lot to be bullish about.

Having said that, the reason I made an IFT into stocks first and foremost is that my propriety signal system is on a buy for stocks and I believe we will see a year end bear market rally before the downtrend resumes. I’m watching 900 for short term resistance but expect it will be taken out shortly, the real resistance points I see are 950-1000. I’ll be watching to see how the market reacts at those points if we get there. Not so sure we will get above 1000, but we could. A close below 840 from here would be extremely bearish and I would likely bail. Another thing that would have me out quickly is if we move up to far to fast 10% + within a few days (this would likely lead to some whipsawing to the downside making large % down moves).

Bottom Line: IMHO we are in a bear market and will remain there until the fundamentals and technicals get in sync. We will get bear market rallies and one may be developing now, but I don’t expect it to last to long.

This is just my opinion and I could certainly be wrong, but remember earlier this year when I said that just because the FED begins lowering rates does not mean the market will rally as many expected, then in July I said I expected a crash before the end of Oct.

Trade Well!

The dollar looks to give us boost today in the I Fund since it’s currently down - It is due a short-term correction.

Thanks for posting your thoughts and I'm also still playing by Bear market rules. I don't think we are headed to 500, but I thought 1100 would hold and we headed down to 750.

However, when we break-out and the herd gets bullish again I will be back in the G Fund and shorting in my brokerage account. I'll be watching the VIX - when it gets back to the 20's look-out-below....

I do agree the Bear is far from over and we will see Big corrections in 2009 and 2010, but we are not buy and hold and are playing much shorter time frames so whatever happens, let unfold and we will trade it then.

I'm fully long in my brokerage accounts - 3X funds so I might reduce today if we get a big enough short-squeeze - that includes my TSP account. The problem is making decisions 4 hours before the close.

Futures looking good, but I have seen the futures up 200 before and still close 500 down. They could push this up today to clean out the shorts and take out the tight stops. If the Boyz can push it thru 900 it will generate lots of new buy signals. Later in the week take it down again and then close it up by Friday... Crooks.... That way they punish - frustrate- and get the maximum number of folks out of the market....

Things in the economy will get much worse – it looks like we are headed to 8% to 9% unemployment. The question is how much is priced in the market? The Bears will fight all rallies and provide fuel for some of the best Bear Market Rallies of all times and some short squeeze's like we have been seeing all year. I’m positioned to catch this one and looking to sell some even today. I ‘m not in love with any long position…

Buyer anxiety might set in soon and the thought of missing the rally might just cause some folks to chase.. Plenty of folks still waiting for the retest - me too after I make 10% on this Bear market rally. The market could get me here, but I play it one day at a time in this market. Will we close up 500 or down 500 today? The Bulls will push at 900 all day and if they get it the Big Squeeze is ON! The Bears with tight stops are already out of the game since we just hit 900... Now will they cover today or add to their short position? We shall see!





Take Care and Thanks....

Good trading to you!

 

[Warrenlm]

optionman, When you talk of monitoring volume, are you speaking day by day (not hour by hour), useful for the next day's IFT?

Also, if you see market levels as drastically low as these, what sites/blogs are you reading for the implications?

I take it that even those who have ridden the slope down with some of their TSP should seriously consider bailing in any increase now.

 

[optionman]

optionman, When you talk of monitoring volume, are you speaking day by day (not hour by hour), useful for the next day's IFT?

Also, if you see market levels as drastically low as these, what sites/blogs are you reading for the implications?

I take it that even those who have ridden the slope down with some of their TSP should seriously consider bailing in any increase now.

Warren---I monitor daily volume. When you see a rally, but volume is shrinking that rally is suspect. Take a look at the SPX from about 27 Oct through the 1st of Nov, prices kept moving higher while volume was shrinking. The rally that started on the 21st of Nov had the same characteristics until volume picked up in early December after the strong sell off on Dec 1st.

As far as the market levels and lows, my opinion is based on many sources. I read quite a bit to stay up with market activity. For news sources I use bloomberg.com and marketwatch.com. I do frequent 3 websites that I find are very informative. They are:

ingerletter.com by Gene Inger. IMO this guy has a great handle on market fundamentals and I agree with his position for the most part. For a free sample of his newsletter visit decisionpoint.com and go to top advisors. He posts there once a week.

syhardingblog.com by Sy Harding. I like to read Sy's daily blog. He generally posts about 20 minutes before the market opens. He posts a weekly newspaper article also which is also free at decisionpoint.com and posted every Saturday morning. I like Sy's short term market outlook.

decisionpoint.com About every 2 weeks Carl Swenlin the decisionpoint.com site administrator posts his market outlook. Although I don't use his sight for charts and indicators, he is a very savvy technician and I like comparing my market outlook with his.

These are the main sites I frequent.

As far as bailing, I'm in the I fund myself right now and expect a short term rally here. I do plan to move to a combination of C&S probably later this week. If we close below the up trend that Tom has drawn I would probably bail, but at this point although we will likely get a bit of a pullback I expect the trend to hold.

Hope this helps. Trade well my friend.

OM

 

[KevinD]

I'm not sure if it helps Warren but it helps me. Thanks!

 

[mojo]

Your insight is always appreciated. Thanks for the links.

 

[mojo]

Following your 65s 35c move.

 

[dannyboy]

[pullback I expect the trend to hold.

Hope this helps. Trade well my friend.

OM
Thanks OM, for the insight and most importantly those links!! I have great respect for all those on the MB and I screwed up by jumping off the Lilly Pad(LP) 1 day early and I lost a few $,k's. :embarrest: Oh Well, I had been on the LP, for so long (2 weeks) that I just had to jump in, at C,S,G:50,30,20. Good Luck to all and lets hope the Auto Exec's (Succeed?) . I was looking at the world market http://money.cnn.com/data/world_markets/ and it seems like that every other person liked helping Detroit out!
Dannyboy

 

[Braveheart]

I remember those words exactly. How many believed you at that time I know I did but greed got the best of me. I got smoked in the C Fund but yet I made a good sum of money buying & selling in the market. I can't hold stocks in this market and I know there a many just like me.

Your I Fund IFT will pay well today tomorrow is another story. It is up very fast IMO too fast and just like the market with the up 300 days down 777 days it's flip a coin. There is really nothing but bad news and Obama with his spending plan has the folks thinking this trend is over and happy days are here again. What they miss IMO is this is the beginning of the end and I expect the DOW to drop 4000 points from here.

There are no real jobs and fixing roads is great - problem is there won't be anyone driving to work since we are losing 500K jobs a month. There won't be anyone buying cars, homes or stocks. Bank failures will start a panic.

I expect Bank of America to be the final nail in the coffin.

Remember the date I posted about Bank of America the big 3 of Banks is going under. See the recent reports on the bank.

http://www.reuters.com/article/InvestmentOutlook09/idUSTRE4BA5CO20081211

NEW YORK (Reuters) - Jim Rogers, one of the world's most prominent international investors, on Thursday called most of the largest U.S. banks "totally bankrupt," and said government efforts to fix the sector are wrongheaded.
Speaking by teleconference at the Reuters Investment Outlook 2009 Summit, the co-founder with George Soros of the Quantum Fund, said the government's $700 billion rescue package for the sector doesn't address how banks manage their balance sheets, and instead rewards weaker lenders with new capital.
Dozens of banks have won infusions from the Troubled Asset Relief Program created in early October, just after the Sept 15 bankruptcy filing by Lehman Brothers Holdings Inc (LEHMQ.PK: Quote, Profile, Research, Stock Buzz). Some of the funds are being used for acquisitions.
"Without giving specific names, most of the significant American banks, the larger banks, are bankrupt, totally bankrupt," said Rogers, who is now a private investor.
"What is outrageous economically and is outrageous morally is that normally in times like this, people who are competent and who saw it coming and who kept their powder dry go and take over the assets from the incompetent," he said. "What's happening this time is that the government is taking the assets from the competent people and giving them to the incompetent people and saying, now you can compete with the competent people. It is horrible economics."

 

[amoeba]

as the clock strikes midnight, nocturnal optionman bails!!! analysis please?

 

[optionman]

as the clock strikes midnight, nocturnal optionman bails!!! analysis please?

amobea---my IFT is based on my propriety signal system moving from a buy to neutral combined with the SPX having broke and closed below its short term up trend and below its bearish wedge formation.

The short term rally appears to be losing steam. Doesn't mean it can't go further, it can and seasonality is on its side, but it appears it may roll over in the next day or so.

Trade well my friend!

OM

 

[optionman]

SPX Below 500?

I stand by the forecast I made in my last post until proven wrong. Here’s why:

IMO the US economy will get worse before it gets better and as a result the stock market will continue its downward spiral regardless of a new stimulus. The stimulus will have an impact, but it probably will not be felt until late 2009, maybe 2010.


In the short term we will likely see:

• lower corporate earnings
• commercial property failures--- malls, large dept stores and others
• more bankruptcies (some by large corporations, maybe even 1 of the big 3)
• housing prices continuing to decline
• more home foreclosures
• more bank failures
• more layoffs and job losses
• the fallout of Madoff’s $50B scheme

Some say the stock market turns bullish about 6-9 months before the economy begins improving. This is probably true to some degree, but at this point there are too many variables still unknown and as they come to light the market IMO will continue to deteriorate.

This is a very gloomy outlook and I hope I’m proven wrong. I would rather see things improve sooner than later, but I look at these conditions and just don't see any improvement, at least not yet.

Trade Well!