optionman's Account Talk

[FogSailing]

Appreciate your thoughts CP. I know you approach this market with that sense of realism that makes for good decisions..

FS

 

[clester]

Optionman,
Since you moved to F fund and you have buy signals on both stocks and bonds, I'm guessing you are betting on stocks moving down in the short term. Do you have an idea on when you will look to buy stocks?

 

[optionman]

BAM!!

Greetings fellow TSP Talkers and new MB members.

In July I forecasted we would see a market crash between then and the end of October (post 321 & 329).

Not sure if 2 mini crashes equals a crash or if yesterday’s mini crash had the makings of a capitulation, IMO it did not, there’s just not enough fear out there yet and the market may need to capitulate before it can begin a tradable rally, but we could get lucky here with the markets so oversold and one of my short term stock fund signals looking like it may move to a buy as early as tomorrow.

So where to from here?

If the crash is over, and that in itself is hard to tell, but assuming it is we will likely see a snapback rally of 5%+ that will fail within a short time (few days to a few weeks), a pullback to test the crash lows (probably not all the way down to the lows, but could be and could go even lower as a result of the ban on shorts being lifted Wednesday night [and perhaps a capitulation at that point?]), then a tradable rally that should last a few weeks or possibly even up to a few months.

If this plays out as expected I’ll look to enter stock funds after the test of the crash lows, but keep in mind we are in a bear market so rallies should be sold near upper significant resistance areas especially if they look like they’re rolling over.

I pointed out in the same forecast that I expect the market to continue to deteriorate even after a crash. Our financial markets and institutions remain in terrible shape and I continue to expect this to be the case leaving those who only trade their TSP accounts or long positions with trying to catch bear market rallies.

I rarely post anymore so for those trying to keep up with my moves please keep an eye on recent IFTs in the autotracker.

Trade Well

 

[Bravo Sierra]

Thank you optionman. I remember your posts well. July was the timeframe I was alerted to a possible "tsunami" as some sources put it- your posts included- regarding financials. I have been very defensive since early August thanks to you and a few others. I am grateful for being so.

You may not post often, but generally, they are good ones that I look forward to.

Regards

 

[mojo]

Good to hear from you again.

 

[optionman]

More Pain?

Unfortunatley it looks like those in stock funds could be in for more pain before the medicine (bear market rally) begins. These markets remain on a crash course and we could see the "throw in the towell, run for the hills, get me out at any price, panic driven sell off (commonly referred to as a capitulation) very soon, then maybe we can rally, until then, I remain 100% G.

A trader on CNN using a mouse trap analogy put in context today saying most are now at the "you can keep the cheese, just get me out of the trap" point.

The markets are oversold to the point one would think we would see at least a dead cat bounce and perhaps we will, but I believe the greater concern at the moment is how the markets will react to the lifting of the ban on short selling Wednesday night.

The FED could step in with a rate cut as early as today or maybe tomorrow especially if futures are deep in the red prior to the open in an attempt to soothe the markets, unfortunately I'm not convinced it will do much good. Just don't see it getting much more than a knee jerk reaction.

Trade Well

 

[Guest2]

Re: More Pain?

The FED could step in with a rate cut as early as today or maybe tomorrow especially if futures are deep in the red prior to the open

Great Call OM !

 

[Intrepid_Timer]

Re: More Pain?

The markets are oversold to the point one would think we would see at least a dead cat bounce and perhaps we will, but I believe the greater concern at the moment is how the markets will react to the lifting of the ban on short selling Wednesday night.

Trade Well

Lot of good that ban did, everything's been down since. I think all it did was make people say "well okay, I'll just sell everything and sit on the sidelines". That is NOT what the market needs. It needs money coming in, no matter which way they decide to trade it. Hopefully lifting the ban will bring people back so we continue to "trade" the market.


ATTENTION MODERATORS could you please move this to the thread entitled "short selling comes back today" Thank You

 

[optionman]

The Good, The Bad and The Ugly

Greetings fellow TSP Talkers and new MB members.

The Good: My propriety signal system moved to a buy for stocks on 29 Oct and confirmed the same date. The trigger to enter was Friday, but I decided not to jump in front of the jobs report especially with the recent volatility.

The Bad: Our economy is in much worse shape than most seem to grasp and unfortunately as a result the stock market will likely remain bearish (with intervening rallies) into sometime in 2009/10.

The Ugly: There remains a potential for the market to crash. I don’t mean a slow motion crash like we had in Oct, but a 1-3 day heavy down volume--15-20% capitulation type of crash. This would wash out the market and probably set it up for a year end rally of 20-30% from the bottom.

With my system on a buy I’m reluctantly bullish, (there remains the possibility that we could rally from here) but since I believe we are still prone to a crash and the SPX remains in a 20% trading range I’ll wait for either a break out of the range and pullback to test it before entering or a market crash in which case I will look to catch the lower end and enter for a year end rally.

For those who ask if your system is on a buy why are you reluctant to enter? The answer is my system is an elimination type of system meaning that when it is on a buy one can either buy or stand aside, but absolutely no shorting and when it is on a sell short (SS) one can either sell short or stand aside, but absolutely no buying. So for now I choose to stand aside.

Bottom Line: IMO an SPX break and close below 900 would be extremely bearish and probably lead to taking out the Oct 10 lows and challenging or breaking the 2002 lows. But, (although I’m leaning toward lower lows near term) seasonality favors a rally so this could still go either way.

Trade Well!

 

[mojo]

Thanks for the update.

 

[mick504]

I appreciate the insite/info...nice to know what others are thinking...thanks for sharing! Clint Eastwood....my favorite!

 

[Warrenlm]

Are you thinking that if a "washout"/big drop in the market were to happen that we'd still be in a bear market til late 09/early 10? Or would that signal an earlier end to the downtrend?

 

[FUTURESTRADER]

O-man, can you give us the strategy/rationale for your move today??

 

[KevinD]

O-man, can you give us the strategy/rationale for your move today??

+1...

 

[SteveTSP]

Optionman, I would also like to thank you for posting your latest IFT. Just like others, I would appreciate any insight on your decision process to move to 100% I fund. I wish I had the nerve to follow today but the I fund has been hard to track at best. Best of luck on your move and if you have the time, please pass on any insights. Steve

 

[amoeba]

I saw that on the tracker - so me too (what is optionman thinking?)

Bloomberg TV has talked about chinese sovereign funds, or government bailouts of various sorts, propping things up there short term.....but I'm not sure.

 

[Guest2]

I went 100% (I) Fund myself. I can't speak for Optionman, but I can say
there's good cause to believe the European Market may lean towards the
upside based on the European Central Bank's announcement. Today they
are expected to cut Interest Rates by a half percent (-0.50%). Just as
the US Market moves when our Federal Reserve announces the lowering
of our Interest Rates here. Further, my O/D Tracker shows a double digit
deficit of 0.16 tsp cents that needs to be paid to us by the Fund Mgrs.
That coupled with a positive Rate Cut gives me hope for a nice day today.
Right now, Japan is down -1.02% and that certainly doesn't sit well with
me, but it's early in the morning and anything can happen between now
and 4pm. The US Futures Market show a average loss of -1.20% as well.
Not a very good way to start the day off. We'll just have to see how it
all works out at the end of the day. The hard part comes at 11:45am and
the follow up decision I must make.

 

[optionman]

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!

 

[Guest2]

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!

OM, Thanks for the breakdown. I appreciate your insight and knowledge.

 

[Show-me]

Good stuff, thanks!