After Hours with Option Addict members: on Monday we painted a market picture for the week, which in hindsight, was a thing of beauty.
It called for a sell-off in the Nasdaq/Russell yesterday, with underperformance in the Dow/S&P. Then we discussed a “follow-through” day, in which the Nasdaq/Russell would probe lower, but the Dow would reverse from small losses early, or go from red to green.
“For the first time ever, the Dow is your indicator” said yesterday.
Match that with a little chat/email capitulation, we have a tradeable bounce.
I don’t repeat this to pat myself on the back, I do this to reiterate the edge we have in using sentiment to measure market movements.
OA
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aw hell, here’s a pat anyway
Emerging markets doing well as well.
So rather than chase this up, be patient and identify your picks between now and Friday.
Do you therefore believe there will be a better buying opportunity next week?
I got urge to buy, but I’m gonna go long vacation till end of month, so I can not do anything till then, means gonna miss great opportunity. I will look at and pick beginning of Nov. Sir. OA, are you bullish the market toward the end of the year ?
I hear ya. I wanted to pull the trigger on GS YOLO 155 this morning, but I’m jumping on a plane tomorrow. Hard to manage from 30K ft.
GOGO, fly and trade.
I’m grabbing some GOGO here by the way…
gogo has been treacherous the last few weeks
AAPL seeing support at the 480 level this week and now bouncing with a couple potnetial catalysts coming up
careful…this feels like a mid day bounce ending in a EOD sell-off
We’ll discuss the sentiment layout after the bell. The market will still reach discouragement, but individual stocks won’t from here.
means individual stocks are/will still disbelief ?
Feels like there’s still lots of fear. A bull trap type of day happening today. and the stocks that will get sold first and hardest are the high fliers of late: China/Solar/Social Media
GOLD going down to $1050 -Goldman Sachs
GOLD going down to $1000 – OA
GOLD going down to $900 by Jim R.
GOLD to zero because it has no utility …whatsoever. Now, OIL on the other hand can keep you warm and help feed you
hard to short GOLD when its sitting right at the 1300 level
Utility? The biggest one is a hedge against political mismanagement of the money supply. Also it can be a diversification tool for central banks who must also hold the dollar as it is the reserve currency. And governments hold it to hedge against their own mismanagement.
Can also be asset class of last resort.
ALSO… Dentistry, computer chips and future innovations in space exploration.
Gold probably drops under $1000 but the comment you just made does sound a bit like discouragement or aversion…
Oh yeah… I forgot Jewelry
$900.
Got 1 night of the Phish NYE run from the lottery, so bummed I didnt get more…anyone have any they want to sell?
No, went to the 2003 NYE comeback show after the hiatus though. Just got back from seeing Steve Kimock, he is unreal.
Bought some KBH nov 18’s
LOL LITB every time it seems death is upon us it is saved
LIFE in The Box
That’s me prayin’ for it, BTW.
AAPL just busted day high
Any sort of upside thots here, Ian?
Nice call, btw
Hmmm – upside thots eh ?
Well, I guess I’m the only one in the room still sleeping with YGE – she’s cute and I’m keeping her. I posted earlier about an AAPL hedge – still think it’s a smart trade if you have Friday weeklies.
I think we are going to be in a race to Friday and likely exit the position JUST as the stock has really started to pop. However I think we could easily see a DOW up 100+ tomorrow or Friday at the expense of NASDAQ.
Me, I’m just sittin here watching my balances go red/green/red/green – soon it will be $HAS time with the missus, then wait for the rain to start.
Thank you – still with my YGE too, btw.
Was thinking AAPL in particular as I work to exit my weeklies above zero – very much aapreciate the overall thots – as well as the heads up on the put spread for AAPL – not something I’m comfortable with – yet – so will watch and learn.
Generally what I do for spreads is pick something that HASN’T happened on a 20 day closing history, then see if there is a play there. The beauty of it is you make money on the spread AND you make money on your calls (if the stock goes up). At worst case you get your premium for the calls back from the puts, unlike most hedges.
More thoughts – AAPL has done EVERY thing it should to rationalize our trade. It WANTS to go up. It needs to go up. The question is whether it can do it by Friday. I really think it can get into at LEAST high 490’s by then, at which point I’m green.
As for YGE, I predict here and now you and I both exit the trade a week from tomorrow at 9.25 to 9.55.
FWIW
*writes down in trading journal*
Thank you
498ish seem like a magnet to my eyes for AAPL
I’m perfectly okay with YGE in the 9s, btw.
Still have the FSLR 45s too – I’ll be happy to sell with you in the 48s
After Monday’s FSLR equity sale, and my accumulation today, I will happily sell at $48 with you guys.
For a good time, look at the MW chart today.
What makes you guys think YGE FSLR still hit the target ? Even if rotation happening ? Even if OA sold the YGE?
( I sold FSLR but holding YGE )
Resonating with what you said, short indices, long quality stocks is the strategy that is working for me.
It will be the saving grace from a discouragement low. Quality won’t follow lower from here.
Finally booked my SPY puts for 52% gain. It’s a dead cat bounce in indices as far as I am concerned, but you got to go with the flow. Planning to get back into another index short as a hedge to my longs but not now.
thinking that we still end the day in the red across all indices. Hoping that i am wrong tho
chub,
You are right we will definitely see more red, but I don’t think it would be soon. The internals and the tick are really strong today. But the flush never happened and most of the indicators did not reach truly oversold. This tells me this is a dead cat but more red coming. I don’t know if it will be tomorrow or next week.
Take McClellan for instance. It never went to the levels it saw in August and June.
The times they are a-changin’
It hit -75 intra-day.
OA, I don’t see it. What “study” do you use? I use both prophet and TOS charts. The non ratio adjusted NYSE osc on TOS kept going up. Could you point to the right “study”?
At the open this morning it was at -75. I use the McClellan on Prophet for intraday readings. Have it on video.
Closed at -60
For the life of me, I cannot figure out. Must be doing something very wrong. Here is my MOSC from Prophet. It shows it never went to 75 or even 60 at close. Perhaps I need to adjust my parameters for the indicator?
Here is the screen shot of the McClellan from Prophet which seems to be different from what you saw
http://my.jetscreenshot.com/13249/20131009-mrzn-5kb
Ah, you must not be on a daily chart.
Here is the daily chart with McClellan on Prophet. I am feeling stupid as I don’t see what you are seeing. http://my.jetscreenshot.com/13249/20131009-nyue-8kb
And then of course there is the McClellan on Stockcharts.com that is in fact showing closer to your values (still not 75 but closer). I am going to dig your video to see what I did wrong on Prophet unless you don’t mind the trouble of addressing it in case if it is a quick answer.
http://stockcharts.com/freecharts/McSumNYSE.html
Can you tell me exactly what indicator you selected from the list? That isn’t the McClellan.
It shows up as “MOSC” in the graph and is referred as “McClellan Oscillator” in the “apply studies” dialog box.
this could be wave 2 type action. buy the dip’ers are generally strong. if so, then a wave 3 down could get that flush. Best guess would be from the 1680ish area. I don’t have a wave count worked out at the moment though.
I’m dying to know, what gives you that impression? What are you looking at to make that comment several times?
are you talking to me? I was just quoting Bob Dylan…
I’d like to know too, since it’s happening…
SR, I let go of mine yesterday after following you in for 102% gain. Took the money and ran.
Congrats new guy! Way to go. Do you have any other hedges or gonna wait and watch?
It’s a dead cat bounce unitl its not
One thing I’ve always wondered…..
You know the old adage about how a cat always lands on its feet and that buttered bread lands buttered side down ?
So what happens if you butter a cat on its back and toss it off a building ?
(This is what I do so as to avoid watching the ticker).
Buttered bread on a cat’s back is a perpetual motion machine, everyone knows that ahaha
BBY down in the 34’s earlier, now mid 36’s so my puts ain’t dead yet.
Started a position in ETRM, this is a play on the “obesity theme”, time frame medium to long term. It has a good overhead structure and appears to be under accumulation.
Nice red to green on KORS
haha – replaying AHWOA from monday and noticed how calming it is listening to OA. next time VIX breaks 20, I’m hitting replay as background music
Are BRKB GSK MSFT VZ good quality stocks for you ?
as i predicted. EOD selling
But what told you that? Breadth was strong all day. Strongest its been.
hmm…maybe different charts we are looking at. breadth been strong relative to last week but overall, seemed pretty weak.
Haven’t had an intraday TICK this high since Fed day.
Did you have something you were looking at earlier, or just gut call?
i was just looking at volume charts during the end of day drift off and it looked to pick up as the mkt fell. but i am a newbie to all this and have been learning through the forums lessons.
Just seems that if there was really going to be a significant bounce that would last, the mkt would have held up better into the bell
We weren’t calling for a significant bounce, just a shift in price action.
what eod selling? in what instrument?
spy, dow, nasdaq
Call me crazy and stupid, but I’m going down with GMCR to the hell, and when it hit I will buy more, and ride up. That’s my obsession to this beast. Anybody?
I told you to leave that stock alone. Easy read for lower prices.
Yes, Sir. GMCR is my favorite tool since 2009. Bright side is ( as always you say ) position size, which I only have small, so I can handle torture to myself. Please let me know when you get interested in it near future, then I will buy more.
Break up with her. She isn’t good for you. Talk to other stocks. Who knows, you might hit it off with another one?
ha,ha,ha,, that’s human nature that more difficult to get more attractive. I started dating with GME. Will see how see treat me : ) Thanks OA !
“she”
I believe the words used were:
“That stock is Satan !”
Into the close, I am bought UNH weekly puts as a hedge and DIA weekly calls, in addition to existing longs. Healthcare services has been the weakest, and went DIA long to take advantage of the strongest index in this dead cat bounce zone.
i rebought my spy puts for a price lower than original. added some extra in case tomorrow is the gap down.
not a believer in the cat that bounces ?
gap ‘n crap.
when I don’t know what to do, I don’t do much
Here comes that dead cat bounce
The move before discouragement I suppose.
bingo..crystal ball operational…nailed the call…that’s how you roll indeed
OA, why is this a dead cat bounce and not a reversal..i see a lot of money being pumped into the market?
Sarcasm.
ha guess i’ve been a bit tense last couple of days 🙂 well you’re spot on again. it’s unbelievable!
My words last night…
There was an initiative buyer today. Buy quality, be a buyer of dips going forward. This is the bottom of the 9th inning in terms of this move lower.
I’m trying to make this as easy as I can for you.
what a captain. chapeau
( no sarcasm intended )
Good idea to use it to salvage the weekly aapl $500?
being that today is thursday, you’ll have a 5-10min window for that opening option spike…..that is unless AAPL goes ahead and makes a new high or takes out 500.
wow. 10 mins was all you had.
I think today open will be sold eventually ( if no news persist after the opening ) . just saying . daytrading .
hookers and bl^H^H^H^rainbows and unicorns!!!!
$free is still again freackin bullish.
there’s been some pretty high speculation , but also support on this name
anyone who’s in watch for some bdyi pull short term http://www.4-traders.com/BALTIC-DRY-INDEX-5343408/
someone released Gamestop from the stable….she’s off running.
So we are in the discouragement phase and are starting to slowly climb a wall of worry.
$GME and $ARUN off to the races! If $ARUN can break 19.20ish, it’s going to absolutely take off. I bought time when we originally looked at it, and am holding $19 late Oct calls
$ARUN might be just passing aversion, and on its way up, no?
OA – I nailed a nice dip in AAPL and picked up put spreads (490/485) which JUST cover the cost of my 500 weeklies. There was about 2 bucks of time value in the put, so I figure anything over 487 I should be OK.
Still have some value in the 500’s – question becomes take it off, or let it ride as a YOLO ?
Bird in hand and all that…
Thx