Partially sold longs: FSYS ( -4.17% at 44.54, bought at 26.48)
Don’t work out right away… sell it.
Comments »Vix hit the 42, then reversed… rally time?!
My Vix theory nails this reversal yet again.
There has still yet to have some volume to back this rally, but so far I see a lot of stocks reversing. The key was waiting for the Vix to finally reverse.
MasterCard Incorporated [[ma]]
American Express Company [[axp]]
Goldman Sachs Group, Inc. [[gs]]
Morgan Stanley [[ms]]
… too many to mention. [[skf]] and [[fxp]] should get hit hard. Lots of imbalance.
Update: The HUGE drop in SKF in the past 10 minutes signals more fear for a bounce. There is more people expecting a relief rally, therefore these relief rallies will not be as powerful as we wish… they should come when they are not expected. SKF…. what a stock.
Comments »Caution: Vix double spike on the 3-month = probability for rally is high
Fear fear fear fear fear fear. I’ve been waiting for this setup:
1) a break above 35 resistance
2) a “double spike”, where “spike” = > 12% move. One from 26-32 = 23% spike, and one immediately from 30 – 36 = 20% spike. That leaves you with a total move of 38% in 3 days (wow!), and a staggering 94% jump from the September lows. WOW! This is epic fear fellahs.
How to read this? There are several points and theories to consider:
- First, remember a real bottoming process takes weeks, perhaps months. I manage a number of SEP retirement accounts and a lot of these people are foolishly and desperately closing them out. It will take a few weeks before the last of the rats jump ship. I use my own clients as an indicator… how evil!
- Second, the talk of fear in the media has reached very high levels. I want them ALL to say uncle.
- I tell you this, pretty soon the Inverse-ETFs will become a better indicator than the put/call ratio. Well, maybe not better, but at least a strong contrarian indicator. You heard it hear first.
- Every Vix double spike does NOT lead to a bear market rally, but almost EVERY super bear market rally occurred after a Vix double spike. Its a probability thing.
- A bear market rally is very near, and my numbers point to tomorrow (Thursday’s) final hour of trading as a good place to look. Therefore, it would be MORE BULLISH for the open with a large gap down, to give the market a chance to fill the gap.
- In my plan, I always had Vix40-50 as the ultimate bottom. But lets say the “next double spike” above 40.
- How to trade this? Ha, I knew you would ask… a Vix double spike means nothing more to me then: Do not short here. Cover your shorts if you have them, the “easy” money shorting is done. Sometimes, it will mean more… if VOLUME increases on a double bottom on any of the 3 major indexes, then I will get long or short an imbalanced inverse ETF. Oh yeah, I always go into the day thinking the scenario will NOT play out. That way if it surprises me, then I’ll make a move. Given the current economic status of our country, we could very well continue to fall… but I like the chances for a wall of worry here.
- Hence, I will wait for first, an intraday reversal, and maybe if there is follow through, I will play a multi-day squeeze.
Hope that helps! Remember, Vix is relatively low right now. To keep things in perspective, I posted this in March at my old blog:
Tuesday, March 25, 2008
This is for you blind bears…
Too many people out there thinking “this is the bottom.” Say what?! I had to pull out a long term chart of the Vix to put some sense in yah. Look, the market got smoked in 2000 and the Vix was trading in the high 50s. Right now, we are about half of that. After forming a base for almost 2 years (from 05-07), the Vix is starting to make a move back up. What I need is more foolish longs buying this rally because that will get the Vix lower. It doesn’t go back to the teens anytime soon, so I think the trend of the Vix (which is UP), will be re-established soon.
Don’t forget the trend…. IT IS DOWN until proven otherwise. LoL!
aloha!
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Guess that stock: Day’s Range: 11.70 – 24.72
I could have made much much much much much much more on this. Lol. What stock am I?
Comments »iBankCoin… we are the future.
Cramer? CNBC? Kudlow? Maria? Goldman? Morgan Stanley? Why are people paying these people money? All you have to do is point your browser to iBankcoin.com. I checked Fly’s post, even Traddinggoddess made a visit today in the comments. Howard Lindzon stops by some times. And probably Tim Knight. There’s some talent in the stock blogging community, and you’ve come to one of the best.
I still believe most people don’t know how to trade this market. Come on now, if you are green YTD, then you’re doing great, I mean stupid great! But we have bloggers here with insane gains, like +50%! Its safe to say, they’re finally catching up to me. 😉 …I posted this over at my old blog in April:
Tuesday, April 08, 2008
Right now, you shouldn’t trade
I’ve come to the conclusion that most people out there don’t know how to handle this market. All good trading systems should have majority cash in their portfolios, whether you think you’re a momo trader (LOL!), or a day trader (bleh!!), or even a CANSLIM like me (sortah, I remove some letters). I’m not really a traditional canslim dude, because I short non-canslim canditates. You know what the “M” stands for in CansliM? Well, if you did, then you know you shouldn’t be going aggressive long about this time. Anyway, for the sake of the long run, you should take a step back and let the market grind it out. Every now and then it’s okay to throw in a day trade, like when you get high volume trends, but I bet most people out there (and most bloggers are swing traders, then some day traders… trust me, if you were a great day trader, you wouldn’t be blogging. Why? Because you have no life) will get eaten up.
Why am I dogmatic all of a sudden? Because I see people still buying GRMN, or AAPL, or VMW, or GOOG …. HAHAHAHA!! All of them will re-test the lows in a few months… GRMN did so today, that was your warning. Hello folks, GRMN started the bull rally in 2003. And now I’m here to slap that into your face… so don’t tell, “yeah, I’m going long term these warriors.” Look, GOOG will NOT get back to the 200 MA, it will have to consolidate for months… YES MONTHS, maybe like 14 months, to get back to that level. And people who keep buying GOOG for “the long term” just tell me that they are rookies, who don’t know what a QCOM, CSCO, MVIS, IOM of 2000 are. Too many people are guessing right now, that includes about 90% of the bears (I probably know only 4 guys who know how to short stocks… one of them is Fly).
… therefore, look at your portfolio, if you are long any stocks that are heading back up to the 200 MA, then well, you’re an idiot. I now no longer have any longs, but I am just watching a few of them from the side that are consolidating on low volume, and some that actually managed to break out… these are smaller companies with products I believe will be hot post-recession. So go ahead, and try to find “bargains” in old leaders, I’m setting up for the next forest-fire recovery period. If you are not suspicious of THIS MUCH GOVERNMENT intervention in our markets in such a short period, then you’re forgetting the big picture. Capital markets work best in laissez faire (spelling?) environments… as I’ve said before, mess with the laws of economics, you’ll be punished. The market ALWAYS balances itself. If it doesn’t, the game is over. Vix to 40.”
My best call ever. Aloha!
I know what you’re thinking… don’t do it.
That was one of the worst closes I’ve seen ever. A nearly 300 point drop in the Dow in about 1 hour, and about 1,000 drop in about 1-week.
I have no idea what tomorrow will bring, but I know what you are thinking, and I know what you will try to do. Yes YOU…
… if you’re bullish investor, you are beyond the point of when you should have sold. I know you want to sell now. Don’t do it.
… if you’re a bullish trader, you are deep in the red. I know you want to get everything back in 3 trades, or you want to desperately breakeven. Don’t do it.
I take money from traders like that. I don’t want to take yours. Don’t do it.
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