I am lightening up every hour on my [[VXX]] position; but I will NOT be adding to any longs, NO MATTER WHAT. At this point, I am booking 50-90% gains on [[VXX]] , while incurring blows to the scrotum in a variety of longs. By lightening up here, I run the risk of losing 1.5-3% (my estimate) tomorrow, via my 45% long positions. However, I am willing to accept that risk, AND MORE, considering my year to date gains are now north of 25%.
On a personal level, in order to abate conflicts of issues, I will hold the entirety of my long VXX position into tomorrow’s fuckery. I will have you know, my position is quite large, but so are my balls.
I know many of you are tempted to go long here. However, if we are going to double dip, thanks to Europe/China melt down, 10,100 will look rich as fuck, 6 months from now. Should we double dip, the Dow is going to 8,000 minimum.
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I see 1060 on the horizons.
I see debt people
Is The Fly a “debt people”?
Barney Frank in 2005:
http://www.youtube.com/watch?v=iW5qKYfqALE
I will not watch that video. Reverse peristalsis occurs at the sight of him.
so that would be a “no” to a new position in FTK at the low, low price of 1.34?
I’m confused Fly, as the first and second paragraphs of your post seem to contradict one another.
well then, you will have to remain confused. (I manage money for a living, HELLO!)
Oh right, sorry. VXX in your private account.
personal vs client accts
Euro off to the moon
Someone tell goldman to stop stealing trades from my stocktwits posts.
They didn’t even come up with a 1.35 target until 2 days after I posted it. Coincidence?
http://www.youtube.com/watch?v=O2yVZCVLK3E
Sold out of VIX and FAZ and piling in to Canadian bonds via XGB.TO. Still holding on to DRV though. Commercial real estate still hasn’t gotten what it’s got coming.
The solution to all this bullshit is easy as fuck: Print money (every currency, including
USA dollars) HAND OVER FIST, and, and have the governments prop up
the equity makets with ANNOUNCED buying: “The USA will be buying, for the
Social Security Trust Fund, $20 billion dollars of broad-based stock index fund WEEKLY
until further notice. We hope the EU and BRIC countries follow our lead.”
DEFLATION is the threat on the horizon, folks. Speed up them printing presses.
you may be more right than you know…
Disgusting. I’ll take the deflation before I take governments purchasing property in the form of common stock with empty promises in paper form.
You assume that they haven’t already been doing that…
This is what does not make sense. They print Trillions of $US and Euros, but we have deflation. How can that be?
Just my 0.02
MV = PQ
M is the total dollars in the nation’s money supply
V is the number of times per year each dollar is spent
P is the average price of all the goods and services sold during the year
Q is the quantity of assets, goods and services sold during the year
printing money increases M, and assuming all else is equal (V and Q), the prices will increase. The problem in my opinion is that right now all things are not equal, because V is going down because once governments print money the bank don’t lend it out and just keep it, and this is what reduces V, and in turn this will bring the other side of the formula (P) down as well.
So prices go down, companies’ margins compress, they earn less, cant hire workers and lay off some, people get scared and some wait to buy goods when they’re cheaper, so prices go down…etc etc
I think this is the situation in the short term at least. SImplistic explanation i know, but oh well.
Oops meant to type Ozz not On as my nickname haha.
This downmove today had dick to do with europe, it was the carry trade unwinding. Check eur/aud.
yes.
Just hearing from a NYC currency friend. There is a large square off happening in the Euro as a result of margin calls coming in from equity side and pushing the other margins. But here is no intervention.
That’s apparently the the spike in the Euro.
Fly- please don’t get a big head, but…..U DA’ MAN!
Nice calls. Today is proving your conviction to your positions.
After seeing how you invest and manage money, it puts to shame edward jones, and any other clerk shop out there, that calls themselves an investor!
jlab–Do not worry about the Fly getting a big head. He will remain ever humble despite wins that would make lesser men gloat
“Should we double dip, the Dow is going to 8,000 minimum.”
God bless the resurrection of a Mr. Horatio Clawhammer!!
i told people boston would beat orlando, but in my bullshit bodog account I bet on orlando
Nice …
The measure of a real man is whether he is able to deploy cash into this butchery while listening to the carpenters. Anybody can do it while coked up or fretting or hiding behind a computer with a billion charts.
“don’t you remember you told me you loved me baby? baby baby baby baby oh baby”
Do it with that stuff on, while still calm enough to enjoy the song…
nibbling slowly at ATPG and very long dated, very int he money TCK calls again. And long/in money GOOG calls. I typically sell enough naked puts when buying LEAPs to wipe out the time premium, thereby NOT ever going long time, which I am loathe to do. Because time has this way of tick tick ticking by…
Instead my intent is to convert the long calls into call spreads on a bounce. At some point I’ll sell a call for the entire amount paid for the previous call, thereby having my cash and a profit equal to the spread between strikes. I’ve always wanted to try this…
Still just nibbling, but getting more excited about it than I was yesterday, still don’t think we’re at bottom.
Gun to my head we avoid a double dip and a second round of wanton worldwide economic butchery … via printing Euros and Eurozone QE combined with China’s own, significant, interest and ability to prevent itself from complete implosion.
Interesting methodology… you should extrapolate over on the peeg. Serious.
_______
excuse my rampant ig’nance, but what is peeg?
The PG – The Peanut Gallery
ok, I’ll find it this evening and try to post something.
I sometimes buy calls instead of shares for various reasons. I dislike “going long time”, however, as of course time always ticks by and its inevitable that the “time premium” component of a call option will be lost if you sit on it for a long time.
So say I wanted to buy calls in something like CAT and DE last april 20th, which I did in each case. I would maybe buy an in the money call on CAT, like say a $20 for jan 2011 if it was trading at about $30, which if my memory hasn’t been completely destroyed by jack daniels it was. And I, then, also sold $20 puts for the same month to create a long position.
However as time has gone by and after thinking it over a great deal, I have sort of changed my strategy when it comes to synthetic longs and now tend to sell puts at the money, while buying calls deep in the money. Frequently I sell only enough puts to wipe out the time premium (if that isn’t the proper terminology, I apologize and will explain. Imagine its February of this year and BAC ist rading at $14.50, and you are checklist and consider it absolutely cast in stone that it trades significantly higher than $14.50 at some point between then and jan 2011. You might buy a few thousand of the jan 2011 $10 calls, which you’d pay perhaps 5.50 for. The intrinsic value is only $4.50, so you are basically long $1 of time. The $15 put is trading for say $2.50-3ish and has $2-2.50 of time premium, so you’d sell about 1/3 as many $15 puts as you bought $10 calls to create a situation where you are not long time. As a matter of disclipline you would ALWAYS buy back any short option, put or call or covered call, if about 75% of the premium was out of it. So I bought back all of the puts a month or a few weeks ago).
This time, as I accept that I do not understand the market and that what is happening here is somewhat different than, say, July 09 or Feb of this year, I am opting to NOT sell puts to wipe out the time premium, but instead I plan to convert the long-call positions into call spreads at some future time by selling calls to create a position where I am net short time OR in which I have taken all my original cash off the table on a bounce.
By using only, ever, very long dated (typically the most long dated possible) calls I should have a chance to experience a bounce and create the call spread while there is still enough time to expiration where I can take in some significant time premium.
Thats my thought, its a first time trying it.
And if anybody cares, my portfolio is perpetually short time premium. On rallies I sell long dated well above the money (at or around my intended sell price) calls. If we get a correction, the premium falls out of those very fast, and I buy them back.
For example, $45 and $50 calls on ASH around last may 8th were bringing huge premium, something like 5-8 bucks. You could buy them back later, with ASH at similar prices (but with its blinding upward momentum tamed) for a tiny fraction of that. On May 8th last year I think the Dec 09 $40 calls on DIN were paying like 9 bucks, and I bought them back for 2 sometime later, sold DIN for 35 earlier this year.
This kind of thing is employed for tax reasons, as I am in the most cornholed tax bracket possible and the 20% difference between capital gains and income is a big enough deal to be worth considering.
The pith helmet came out today.
Man up and sell some vol.
That just pithes me off.
_____
Nice YTD, Señor T. ! 😮
and, for a moment of optimism…
With carry trades relating to the yen suffering significantly at least a time or three during this correction, and with negativity certainly getting at least fairly significant. … I’m sure short interest is up, margin is probably well down, … the stage is slowly set for some upside.
My “time to buy” checklist, in no particular order
1. Tech Ticker on Yahoo brings out nothing but uber bears predicting the end of days and sits there gloating about how screwed everybody is (they do seem happier when things are ugly). Pretty much a check
2. Doug Kass turns bullish, begins offering reasons why things aren’t so bad in long eloquent pointed form, and eventually pokes gentle fun at the crowd. 2/3, no gentle poking of fun yet.
3. My former business partner calls me to go over his dividend income, the likelihood that it remains intact, and concludes he has like 5x more than he needs to live gloriously, then calms down. check
4. Checklist goes from annoyance over watching his account balance shrink to fear to excitement over how big his account can get on a rebound. 75%. Only semi excited here, but better than yesterday.
5. The crew at Real Money Silver turn ugly bearish. Cramer says you cannot be in, the chartists say more downside looks likely, the rally=missing permabears gloat. 50-60%. Its honestly still not quite as bad on there as it was in February.
6. The blogosphere abounds with negativity and predictions of doom. Once high-flying bearshitters, beaten into complete silence by the last 15 months, come back and predict things like WFC to zero and Dow 5000. 60%. Dow 5000 is by far the prediction of the month, but overall they aren’t really that cocky yet.
7. Checklist cancels a trip somewhere or the purchase of a new car on the logic that spending money when there is so much to be made with it going forward is dumb and loses 10 lbs in 5 days fretting. 75% just canceled UFC in vegas next week. down 4 pounds.
8. And this one is experimental, but … The Fly and the IBC crew have attitude changes. Let others do your work for you is frequently a good idea in life, and whether I had 250+% in 2009 or not, I am a novice at this crap and am not by far the best positioned to predict market or economic turns. Hence #2 and, the new, #8.
That is all, I still think we go lower. I have a plan of cash deployment, then defensive position liquidation & re-deployment into beaten down names.
good luck everybody, remember that 40 points a day doesn’t really make the big bucks, its crashes and rebounds and wild stuff that does…
I lost all respect for Kass when he started buying ETFC yesterday. ETFC’s fair value is zero. You cant charge 50% more in fees and commissions than a 1997 internet broker, in 2010.
But, i agree on the excessive bearishness out there. As i said in the peegee, it seems worse than 2009 lows. I cant find one blog/analyst who inst turning negative here.
worst since early 2009 anyway…
Kass is interesting. I think he kind of slants bearish in general, but he has had a really good record of bottom ticking in the last 15 mos. He was like 5 days early in march 2009, on it in july 2009, and on it in February of this year as well as, I believe, november of 2009.
Don’t forget that for Kass for every four times that you remember him being right, he called the bottom, and was “all-in” long five more times before each of these dates. He’s a serial top and bottom caller, yet doesn’t know when to quit because it makes good marketing material when he is right….your posts are amusing.
Really enjoying these posts of yours
thanks. I enjoy IBC and all the humor and contributors…. I blog at the motley fool caps game blogs once in a while as well if anybody cares whats on my mind. I won’t claim that the blogs are always good or always make sense, or that I even try to always make sense, but…
last march I did post a couple of blogs just before the bottom that document the biggest part of how I made about 4x my money from jan 5 2009 to the april highs this year, and 6x my cahs from the march bottom w/o using any leverage except sold puts and what not.
on a side note, I have bloodied a toe and I am none too pleased about it.
Off topic……….but not really when you think about it. The topic being of course that we are totally and irrevocably screwed.
I don’t know whether to laugh, cry or barricade myself after contemplating this video. Our institutes of higher learning have ceased to be establishments of higher learning and have become tools for brainwashing what would appear on the surface to be rational intelligent people. May God and Fly help us all.
http://dailycaller.com/2010/05/19/valley-girl-kind-of-like-asks-david-horowitz-like-the-dumbest-question-ever-video/
http://www.reuters.com/article/idUSN1817215020100519?rpc=77
I hope with every fiber of my mind that Congress passes this bill. I hope internet gambling is legalized and taxed.
Can you imagine it? At first, I was worried that it might cut into MGM’s revenue. But, considering that MGM’s entire gaming floor in their new City Center project is more or less on their network, it would be easy for them to adapt that same business model so that you could load their games right onto your computer screen at home.
Who are you going to gamble from: http://www.bgslutsandmfos123.com, where a picture of a fourteen year old girl half naked sits on a screen that keeps asking for your social security number, or http://www.MGM.com which, for all purposes, has the backing, support, and reputation of their established gaming operations?
Fuck the pullback, I still say MGM is a hold, and a screaming buy below $10.
By the way, I made both of those links up in the body of my little rant, so I wouldn’t click on either of them. No idea where they’ll take you…
As much as I dislike gambling, I cannot see the logic in criminalizing the internet variety. It would be “nice” if they put the tax proceeds toward the Social Security and Medicare black hole deficit, especially since so many seniors are dumping dollars at casinos nationwide.
Internet gambling should be illegal, I think, because dumbshits lose all their money there and then we have to take care of their children. I think gambling should be restricted to Nevada and Macao.
The shadows near my fav urinal are smoking crack pipes now, never a good sign
why do you new yorkers need so many cocoa derived mental fun funs? coked up traders and crackhead shadows
Drink more tea
Crude futures for July are preparing to bust through $70 a barrel on their way to zero. You can witness the devastation from a front row seat here. Just go to energy, then scroll on down to NYMEX Crude oil.
Observe how all futures are down another 2.5% today, after losing more than 1/8 their value from the start of this pullback, and start panicking as appropriate.
CANCEL ALL ORDERS!
http://www.youtube.com/watch?v=jtLogcQ6ahQ
Totally cool, pull up daily chart, you can see the flash crash caught support on 233MA on the daily SPX and is testing support on it again.
233MA ?
I’m a fibo girl….came up with my very strange system…sort of forget at times everyone is not as strange as I am…..233 Moving Average
Coked up traders hitting the sell button like they’re playing space invader
Fly, impressive calls and anticipation.
With the Euro crashing and possible staying down, any thoughts here on trade barriers by the US, we have China exporter excessive to us, now Europe will be doing the same. US could react with Trade barriers here?,……any thoughts?
For those of youze out here who watched today without the benefit of the PPT, you should really:
1. If you had profits today, you should take a bit and sign up as a distinguished gentleman.
2. If you had losses today, you should stop trading, take a few bucks of your next loss and sign up as a distinguished gentleman.
WTF are you waiting for?
I’ve been asking myself that same question for about 6 months now. I think it’s time to take the plunge.
I am sitting out until 8k for now.
The 3/09 Lows will be retested. Only a matter of time.
The worst has yet to arrive both domestically, as well as Globally.
Buckle-up!
Indeed.
Congrats on the YTD!
The EUR/USD hit 1.26 today and nobody cared. We are ready for Lehman II. which Euro bank is going to bust this weekend?
You should never have killed Samsonite Hamburgalar. He warned about black smoke and egregious stock exchange declines (or was that Mr. Devil Dog?).
Nice up day today though. Puts on BHP, BPT, DIA, SPY up 17%-55% on the day. AKS, PXP, and HGSI (short positions) all down. Contra ETF EDZ up 14%. Even puts on GLD up a respectable 6%. And my biggest long position only down 1.67%.
SELL SELL SELL
Signing up for the PPT tonight when I get home for work! You are truly a space alien magician.
G*ddamnit, after being up more than 15% on the year, I’m only up 3% now. I swear, no matter how many puts and ultra-shorts I buy to hedge, its just never enough. FUCK ME I should have just gone with VXX.
Later… Off to enjoy a 2 1/2 inch Rib Eye, and a nice wine.
Forgive me Fly for I went long with out hedging, may the PPT predictions of divine reversals come true.
Will S&P 666 hold again? Looking forward to buying AAPL at 80 and NFLX at 40.
The Fly is God.
I bot a little CAAS today, very small buy to add to that position. Yeah, I got plunger raped today. But no fear. It will come back in time.
Have no fears. The Plunge Protection Team will come up with some Midnight Surprise to save the market from declining and we will rocket higher tomorrow. There is no risk to being long here unless your time horizon is a few minutes. BUY BUY BUY!!!!!
Great handle and even better gravatar. HA!
If government borrowing is coming to an end, does that mean bona-fide money printing is about to happen? In this situation, do equities inflate to offset a declining dollar?
checklist- I read your options post above. I’m an amateur, but my instinct says you may have a Black Crow in there somewhere that will eventually bring grief.
I don’t know enough to understand how being short time premium is enough of an edge to overcome changes in implied volatility. That and getting the price direction wrong would seem to spoil the party, over time.
Please keep thinking and posting, and put together an essay and post it in the Peanut Gallery here.
I think StevePlace’s comment was on point.
mx,
I don’t use options recklessly. If you look over the post you can see that the methods I propose are basically the same as a synthetic long, but with less use of margin and ultimate downside risk in an armageddon, due to the use of less or no short puts.
Being short calls is not risky as I typically do it as they are covered. Imagine its last September and you have, since March, GNW and XL as 2 of your 3 biggest positions and they have just had a big run… your plan was to sell GNW around say $17 and XL around say $25. Sell a call at or around those strikes, long in the future. If they go up past it and the shares get called, great, you hit your target. If the share prices correct or stabilize you will get a chance to buy the calls back at a profit. etc.
The only risk is limiting your upside potential, which isn’t really a risk. Selling 1000’s of puts at $2.50 and $5 against GE last February was risky, but only if you believed GE would go bankrupt. I was willing to go down if GE did and had calculated how much money would be left in such a scenario so I would still have been able to eat. GE was not going BK, etc.
If you are inclined, post a trade strategy or thesis in the Peanut Gallery and those who are interested can discuss!
Have a good evening.
Ben Bernanke has my back so my portfolio is insured against losses. Fed will monetize the stock market before they will allow a bear market. Bear market are unnatural events and must be prevented. Helicopter Benny understands this so there is no risk to being long stocks. All bad decisions will be bailed out so just back up the truck and buy them with both hands!
HA!
That blow to the stomach which started a few weeks ago had a few head fakes, but with the wholesale, across-the-board incompetence in Washington and Wall Street right now, this thing re-tests the lows for sure.
Dig out the bunker, get a few guns, lots of ammo, some gold dust and a scale, stocks of liquor, and some extra women (to trade for food)
Blood on the highway.
Prepare for a rip your face off RALLY!!!
http://www.cnbc.com/id/37254403
http://www.rallymonkey.com/oldvideo.php