The S&P 500 also had a good day for the bulls. I've drawn the downward-sloping pennant that I believe is confining the market action these days.
http://3.bp.blogspot.com/_DC_WvCGCWQ8/RoLHgxJT8-I/AAAAAAAADCM/3LR1AeXcBxE/s400/0627-%24spx.jpg
Now it just wouldn't feel right if I didn't offer my JCP chart of the day. One reader commented I should get out of those puts. Well, earlier today, I did. I don't think the fall has exhausted itself, but I'd rather take profits now and re-enter the puts after a retracement. If this stock pushes its way back to the neckline, I'm going in big-time again.
http://4.bp.blogspot.com/_DC_WvCGCWQ8/RoLHhBJT8_I/AAAAAAAADCU/MfbMeD1Am0g/s400/0627-jcp.jpg
I'm long Micron (MU) now. It won't be a long-term hold, I don't think. But this is a nice little bullish chart for now.
http://1.bp.blogspot.com/_DC_WvCGCWQ8/RoLHhRJT9AI/AAAAAAAADCc/7kVnFzLMQcw/s400/0627-mu.jpg
Let's enjoy a little George. See you tomorrow.
at 6/27/2007 28 insightful comments
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Labels: $vix, jcp, mu
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[ 本帖最后由 hefeiddd 于 2009-4-28 08:06 编辑 ]
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[ 本帖最后由 hefeiddd 于 2009-4-28 08:08 编辑 ]
Tuesday, June 26, 2007When It Seems Easy, Feel Queasy...
I began this blog over two years ago, and I think that it has made me a better trader. Having to step up to the podium each day and offer up opinions (which are subject to scrutiny, disparagement, and future review) makes me think long and hard about the market. And the occasional public floggings I have received have imbued with me a healthy dose of humility that I think is essential to profitable trading.
Trading profitably has become far too easy recently for my liking. If bearish trades start becoming like shooting fish in a barrel, I know it's time to take profits. There have been times in the past.......and this is very common among traders.... when easy profits encourage more trading. And the tide starts to turn against you. So you pile on more. And the losses start to pile on. And, before you know it, all your fantastic profits from the last downturn are M.I.A. I really don't want to go through that again.
So as the trading day ended, I was kicking myself for having such a substantial position of puts on the Russell 2000 in place. There are some areas in my life where "irresponsibly large" is welcome, but options positions is not one of them. Let's just say I hope I don't wake up to a huge gap-up in the indexes. It could happen.
http://2.bp.blogspot.com/_DC_WvCGCWQ8/RoGFnwmb1-I/AAAAAAAADBU/aSmxhKaezhM/s400/0626-%24usasevenstages.jpg
The basis for my nervousness.......besides my own angst........is the $VIX. Just take a look as this multi-year graph. For ease of viewing, I have circled peaks and troughs. We have certainly had $VIX levels higher than the present one, but let's face it, this is pretty peak-y. As I said: I'm nervous.
http://2.bp.blogspot.com/_DC_WvCGCWQ8/RoGFnwmb1_I/AAAAAAAADBc/A1j_hnTA-KA/s400/0626-%24hansblixdigsvixandchicks.jpg
The Russell 2000 is below its supporting trendline, but this trendline isn't horribly significant. In other words, I don't put a heck of a lot of weight into the fact that it is broken. I'm glad it's broken, to be sure, but there's still a fair amount of support at these price levels.
http://3.bp.blogspot.com/_DC_WvCGCWQ8/RoGFoAmb2AI/AAAAAAAADBk/_labhfCj8bY/s400/0626-%24rut.jpg
One way to look at the market is that, for the past month or so, we've been caught in a trading range, and we are at the bottom of that range now. I've highlighted the range area on the S&P 500 daily graph here. I do not think we would break into new highs from here, but we might wind up with a triple top or at least partially retrace our way back up near the former highs.
http://3.bp.blogspot.com/_DC_WvCGCWQ8/RoGFoAmb2BI/AAAAAAAADBs/d5w_9NW79Wo/s400/0626-%24spx.jpg
One could look at the market another way........it is pretty easy to lay out a massive rounding top. Just look at the intraday chart of the S&P 500, where I've embellished it with probably one of the worst arcs drawn in human history. (I am not much of an artist).
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One could look at the market another way........it is pretty easy to lay out a massive rounding top. Just look at the intraday chart of the S&P 500, where I've embellished it with probably one of the worst arcs drawn in human history. (I am not much of an artist).
http://4.bp.blogspot.com/_DC_WvCGCWQ8/RoGFoQmb2CI/AAAAAAAADB0/AadqjUIBff8/s400/0626-%24spxintraday.jpg
Returning to the $VIX, however, the zoom upward has been swift. And if the market settles down and starts marching upward again, the premium values built into options are going to shrivel up faster than Strom Thurmond's johnson on a chilly southern evening.
http://2.bp.blogspot.com/_DC_WvCGCWQ8/RoGFVwmb15I/AAAAAAAADAs/47CN8rkES6w/s400/0626-%24vix.jpg
OK, a few stocks. Stocks like CROX! I have, as I've mentioned before, lost some cash on buying CROX puts before. Fool that I am, I gave it another go today. My puts are slightly profitable. I was inspired by an article this week in Barron's. They say that easily 20% of this stock's value could be blown away just by right-sizing it to its industry. Plus, I think it's a fad.
http://3.bp.blogspot.com/_DC_WvCGCWQ8/RoGFWAmb16I/AAAAAAAADA0/2h1FuSjLtFI/s400/0626-crox.jpg
One similar shoe fad which is already "post-bust" is Heelys (HLYS), those obnoxious shoes that kids wear with the wheel on the heel. As you can see, the stock is doing poorly.
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One similar shoe fad which is already "post-bust" is Heelys (HLYS), those obnoxious shoes that kids wear with the wheel on the heel. As you can see, the stock is doing poorly.
http://3.bp.blogspot.com/_DC_WvCGCWQ8/RoGFWAmb17I/AAAAAAAADA8/g9REa-aICxc/s400/0626-croxhlys.jpg
I hate to mention JC Penney every day, but this continues to do beautifully. I've highlighted my price target. The puts I bought on this are up huge.
http://4.bp.blogspot.com/_DC_WvCGCWQ8/RoGFWQmb18I/AAAAAAAADBE/YCjVlZvFQu4/s400/0626-jcp.jpg
Vulcan Materials (VMC) has a plainly defined range which seems to be breaking down. I'm short this, and it's got a nice ways to fall to the trendline.
http://4.bp.blogspot.com/_DC_WvCGCWQ8/RoGFWQmb19I/AAAAAAAADBM/Un2456g8t3g/s400/0626-vmc.jpg
at 6/26/2007 40 insightful comments
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Labels: $rut, $spx, $vix, crox, jcp, vmc
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Monday, June 25, 2007Oh, Baby...........
I'm feeling a terrific sense of control over this market (at last). Recently, I've been doing extremely well. Even with intraday trading, I'll buy calls at just about the bottom, sell them at just about the top, then buy puts, and then ride those all the way down. I'm rarely this "in synch" with the market, but it's been a good feeling.
http://4.bp.blogspot.com/_DC_WvCGCWQ8/RoBhegmb10I/AAAAAAAADAE/UBvvqYd_LTM/s400/0625-%24abbybaby.jpg
I noticed that Barron's this week features Blackstone's CEO on the cover, pointing out that a massive public offering of the largest private equity partnership clearly signals the peak of these beasts. I couldn't agree more. Oh, let's check in to see how the public's investment in the two-day old Blackstone has been faring.......
http://1.bp.blogspot.com/_DC_WvCGCWQ8/RoBhewmb11I/AAAAAAAADAM/JZLnHPUco-8/s400/0625-%24bxrocks.jpg
Of course, the big news today is that today's bounce from last week's downside action completely evaporated. The Dow surged 120 points higher (and I profitably closed out some calls I bought earlier in the day, then gobbled up a huge number of puts), then the entire gain by blown to smithereens. As you can see from the Russell, the medium-term trendline is now broken.
http://1.bp.blogspot.com/_DC_WvCGCWQ8/RoBhewmb12I/AAAAAAAADAU/i_Ew-DqmDmY/s400/0625-%24rut.jpg
About half an hour before the close, I sold all my puts (DIA and $RUT), since I felt the selling was - - at least very short term - - overdone. Here's the S&P 500.....
http://2.bp.blogspot.com/_DC_WvCGCWQ8/RoBhfAmb13I/AAAAAAAADAc/-ivXWaJfNpM/s400/0625-%24spx.jpg
In a broad sense, I think things have changed. It's been horrible awaiting the change, but I think it is finally here. In the broadest view, I think we have witnessed the passing of the Mother of All Double Tops.
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In a broad sense, I think things have changed. It's been horrible awaiting the change, but I think it is finally here. In the broadest view, I think we have witnessed the passing of the Mother of All Double Tops.
http://3.bp.blogspot.com/_DC_WvCGCWQ8/RoBhfQmb14I/AAAAAAAADAk/pRfUTY0dyAM/s400/0625-%24spxdoubletopmassive.jpg
This is not to say I'm speculating on outright collapse from here. On the contrary, I think we're probably due for another bounce up. But - as with today's - I may well decide that the bounce has exhausted itself just a couple of hours into a single trading day. My portfolios are devoid of any index positions right now, and consist of carefully-selected equity shorts, equity puts, and a couple of longs (DXD and BBI).
If you're just dying for a bullish stock, AutoDesk (ADSK) looks interesting:
http://1.bp.blogspot.com/_DC_WvCGCWQ8/RoBhJwmb1wI/AAAAAAAAC_k/4AogMbGcqvs/s400/0625-adsk.jpg
Real estate has been in a freefall for months. I was thinking it would stabilize. But we might be in for some more downside action. Apartment Investments (AIV) has an impressive head and shoulders pattern.
http://2.bp.blogspot.com/_DC_WvCGCWQ8/RoBhKAmb1xI/AAAAAAAAC_s/Na8psnzGbnM/s400/0625-aiv.jpg
My short in BEAS had a good day. I've put the clearly defined support and resistance horizontal lines here.
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My short in BEAS had a good day. I've put the clearly defined support and resistance horizontal lines here.
http://2.bp.blogspot.com/_DC_WvCGCWQ8/RoBhKAmb1yI/AAAAAAAAC_0/35uIgF0-oQo/s400/0625-beas.jpg
Bear Stearns was the "culprit" behind today's fall. I've been mentioning this as a short (or put purchase) for a long time. You can plainly see how, after its fall from its ultimate high, it tried to retrace........but the jig is up, and it's been falling ever since.
http://3.bp.blogspot.com/_DC_WvCGCWQ8/RoBhKQmb1zI/AAAAAAAAC_8/nN6XrD4p8IA/s400/0625-bsc.jpg
Looking at a broader chart, you can see a major, major supporting trendline has been shattered.
http://1.bp.blogspot.com/_DC_WvCGCWQ8/RoBg3wmb1sI/AAAAAAAAC_E/mZeZPP5wi4Q/s400/0625-bsclong.jpg
Goldman Sachs - employer of the hottie pictured at the top of today's entry - is suffering as well, although not to the same degree. My puts in this are up, and there's plenty of downside left on the stock, tinted here.
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Goldman Sachs - employer of the hottie pictured at the top of today's entry - is suffering as well, although not to the same degree. My puts in this are up, and there's plenty of downside left on the stock, tinted here.
http://3.bp.blogspot.com/_DC_WvCGCWQ8/RoBg4Qmb1tI/AAAAAAAAC_M/AUTR6W3K3Fk/s400/0625-gs.jpg
Another set of puts that's doing great is JC Penney (JCP). I've illustrated a potential target. Thank you, polyester! Thank you, leisure suits! Thank you, lawnmower care supplies!
http://4.bp.blogspot.com/_DC_WvCGCWQ8/RoBg4gmb1uI/AAAAAAAAC_U/qQEofvYbC1Q/s400/0625-jcp.jpg
Massey (MEE) is sporting a monstrous, gorgeous head and shoulders, and I think the retracement is complete now.
http://1.bp.blogspot.com/_DC_WvCGCWQ8/RoBg4wmb1vI/AAAAAAAAC_c/0TnpkXG9Jv4/s400/0625-mee.jpg
A bunch of people have written me asking to explain some options trading basics. I'll do it on a quieter day when the market is up half a point or something. I've had enough. I'm going for a swim........
at 6/25/2007 45 insightful comments
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Labels: $rut, $spx, abby joseph cohen, adsk, aiv, beas, bsc, bxp, gs, jcp, mee
Ratatouille
Just a very quick early morning post to say that I've closed out all my index puts and have (on a smaller scale) gone long indexes for the time being. I think a bounce is in store, although whether the bounce lasts only an hour or two today or for a number of days in a row remains to be seen. Suffice it to say I'm pulling in my bear paws on indexes, although carefully-selected bearish stock positions remain in place with good stops. (Update: I actually 20 RUZ-GD at $25, sold them at $27.50 about an hour later, and went heavily short.......)
I have the good fortune of being related to an employee of Pixar, and as such, I get to see (with my family) their films in advance. Yesterday we went to the Pixar theatre and got to se
Believe me, it is their best yet. Even better than The Incredibles. If PIXR was still public (as opposed to being part of DIS), I'd say buy it. Even if you don't have kids, it's a fantastic film.
And thus ends today's movies section!
http://www.aintitcool.com/images2006/RatatouillePoster2.jpg
at 6/25/2007 46 insightful comments
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Friday, June 22, 2007Poetry in Motion
I've got a riddle for you.
What well-known Jewish personality made a bundle of money on Wall Street today and needs to have their back hair waxed? If your answer is Abby Joseph Cohen, you are technically correct, but the answer I was seeking was Stephen A. Schwarzman of Blackstone.
OK, here's the second part of the riddle (isn't this fun, kids?)
What percentage of public investors have profits on newly-minted Blackstone Group (BX) today, now that the trading day is through? The answer: basically zero. Oh, I'm not talking about the midget founder of the place. He's doing just fine with his billions, thanks for asking.
I'm talking about the poor schlubs who thought they could get inside the club by buying into this stock. Virtually every single share bought is in a losing position. Nice going, folks.
http://2.bp.blogspot.com/_DC_WvCGCWQ8/RnxXWAmb1pI/AAAAAAAAC-s/hI1C13Gp7uo/s400/0622-%24bx.jpg
Yesterday, if you'll recall, I wrote:
But tomorrow is - at last - the big day. That's right - it's Blackstone day. Apparently the demand for shares in BX is about seven-fold oversubscribed. Nothing would be more poetic than the market taking a fall tomorrow.
Well. Down 189 more points. Nice.
I actually had a great day, making money both on the short side and - for the brief bounce of the day - on the long as well. I remain cautious and humble in the face of a massively moronic and gullible public that could be coaxed into buying again. Thus I tighten my stops every day.
http://2.bp.blogspot.com/_DC_WvCGCWQ8/RnxXWAmb1qI/AAAAAAAAC-0/Jng1x3bpaPE/s400/0622-%24indu.jpg
The Russell has been stronger (relatively) than I'd like to see. But it remains attractive to me largely due to its reasonable bid/ask spread on the options. I remain dumbfounded at the complete rip-off represented by the S&P 500 options market. It's just criminal.
http://4.bp.blogspot.com/_DC_WvCGCWQ8/RnxXQgmb1kI/AAAAAAAAC-E/AWdF6i6HHxY/s400/0622-%24rut.jpg
Oh, speaking of the S&P - - - in spite of the recent fall in equities, we remain absolutely sky-high. Dare I even say grotesquely overvalued. Oh, well. It'll take years to sort out. Long story short, don't be fooled with the tiny inching down we've been doing. It's nothing compared to the radical overvaluation
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still present. Trillions of dollars of equity need to be destroyed before we are at interesting values again. Whether the top has passed it totally unknown. And it doesn't matter to me, as long as I manage and maintain these stops responsibly.
http://1.bp.blogspot.com/_DC_WvCGCWQ8/RnxXQwmb1lI/AAAAAAAAC-M/4JJEzcKlBm8/s400/0622-%24spx.jpg
Symbol ALB bounced up to a perfect retracement, thus permitting me to re-enter the position which I closed profitably just a couple of days ago.
http://2.bp.blogspot.com/_DC_WvCGCWQ8/RnxXRAmb1mI/AAAAAAAAC-U/Lfmm4jnzPhU/s400/0622-alb.jpg
Symbol CAH isn't doing badly for me either. I own puts on this.
http://3.bp.blogspot.com/_DC_WvCGCWQ8/RnxXRQmb1nI/AAAAAAAAC-c/FQJ8nqI8HmE/s400/0622-cah.jpg
Although Cigna (CI) is too big to simply collapse, it's got a cute little H and S pattern whose neckline was broken today.
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