While the next great Hindenturd Omen has circled the cubicles and office watercoolers across the land, I’m at a complete stage of disbelief right now. The market is 2% off of all time highs, and the level of anger, frustration, anxiety, nervousness, and negativity is literally suffocating. Fear and greed are the primary drivers of investor actions and emotions, and yet it seems like discouragement is on the rise lately as the market gracefully works its way to another all time high.
We’ve been circling the wagons around these market pullbacks for months. They’ve all had a very similar flow to them in terms of sentiment. However, it seems as if the level of discouragement this time does not match up with the recent excitement in the price of stocks. As if the recent move was surely something different than last, and trader’s fled from stocks thinking this was the right play. Rather than being frustrated at themselves for leaving, they should be frustrated with the noise surrounding them telling them to jump.
There are three distinct phases to bull markets cycles. Recovery, improvement, and speculation…or as Dow Theory suggests, accumulation, public participation, and excess. Where would you suggest we are in the current cycle?
For those that were around in the late 70’s, early 80’s, BusinessWeek did a nice piece that came at an inflection point in market psychology. Seems very similar to Bill Gross’ call last year that stocks are dead.
Rather than get discouraged here and jump ship in stocks, dedicate some time to making your approach better. Figure out what is working, what is not, and make changes. Trading will always be hot or cold, but there is always opportunity.
OA
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Hear, hear OA!
Ironically, my account was red today with holdings in solar and social media
Hence the post.
http://www.zerohedge.com/contributed/2014-02-11/stock-market-repeating-1929-run-great-depression
we’re still on track for le great depression 2.0
Headlines I doubt we’ll ever see:
“Why gravity stopped working, and what you can do about it”
“Tupac Shakur, Biggie Smalls, Michael Jackson and Elvis Alive! Hear The Music Collaboration!”
“The Great Depression everyone and his brother saw coming! What’s next? Everyone Knows!”
“The Most Hated Rally”…. living up to it’s name, for sure…
I hope to live for 30 more years, so that I may extract every last bit of milk that this goat has to give.
excellent post
much like my memory, my charts only go back to the 90’s
“Where would you suggest we are in the current cycle?”
The “menstrual cycle” where all the guys in here suddenly have their period for the first time and take it out on the option addict.
+1, though I’ve probably have done my share of “feelin’ the flo”
haha
That Great Depression must have left a huge volume pocket.
Great post. When I stopped bitchin to myself about the poor price responses in my options, I noticed that I was right on the stock movement on 7 of 8 so far. If I keep doing that, I’m golden.
Just have to track IV and time decay fluctuations better in my journal to figure out what’s going on these days.
For those of you in it, Viva la ANGI!
Its different this time, Bernanke is gone 😉
Yellin is the same dude.
I remember this http://www.businessweek.com/stories/1979-08-13/the-death-of-equitiesbusinessweek-business-news-stock-market-and-financial-advice
I tried to hyperlink that in my post. Thanks for adding it.
Great article. One of these days I am going to gather all the terrible comments/”advice”at the worst possible time. It will look something like:
“invest for the long term” (2007) “Dennis Kneale joins CNBC (at top) “buy the dip (2008)” “your money is safe in Lehman”(2008), “buy and hold is dead”(2009) “fire your advisor/mutual fund/etc if they don’t own apple… aapl to $1000 (when it was at the top) “trust the politicians, hold stocks leading up to debt ceiling” 2011. “hyperinflation is here, gold to 40k” (2011)”stocks are dead” (2012). “Get on my level” 2013 “1929 is here” (2014)
Tour de Force. Great stuff.
::resumes lurking::
I have an ANGI, TRLA and Z superfecta going into earnings. Got pretty much no choice in TRLA.
Want to thank you for your discussion on market correlation and the whole point on “market of stocks” vs the “stock market” today AH. A great reminder today.
+1
the +1 thing is pretty gay
It’s my turn today with the impostor!! Jumping for joy.
gotta love it.
LOL
+…2?
Hey Harper, how is your NES position working out? remember that day it was down like 50% after you go super long?? lmfaaoooooooooo
+2
Harper, when is the last time u got stuffed like a thanksgiving turkey? I assume last night when Hank got home from a tough day at the doughnut shop
Jeff, would you mind talking about tomorrow which instruments you generally prefer to use when playing earnings? Do you prefer to use the shortest dated options, stock, or some combination, depending of course on IV, etc.?
While I am certainly frustrated at the recent decline in my trading account balance, it is all relative given that I am still up over 200% since joining AHWOA in early December…thanks OA.
Awesome returns – congrats!
Watched the $RUT put on a good show today, but options on $TNA acted very poorly today, decided into the close just to sell out and take what profits I had. I would like to think that we see 1140-1145, but feel that would be time to get short for a leg down to at least 1080.
Great piece.
Finally joined the reputable club of impostor glory. Any existing members want to give me some advice on how to deal with this new world of fame and fortune?
its really an underwhelming , yet life-changing experience.
Twinkies typically deals by deep throating twinkies til all of the white contents have exited
wow – I have been copied. I feel privileged now.
today is a mcbride flapping handbird day, sir.
you dont have much going on during the day do you?
nice try imposter. picking the low key name that doesn’t have an avatar. well played douche bag.
LNKD still masquerading around as the FAZ
Missed WPRT but picked up HOV and NIHD this morning.
$FB 45,986 Jun. 20 – $65 Calls bought at $6.30. WOW!!!
nice find. that was literally all in one trade because the vol is there on a 1min chart. That’s a $28,971,000 trade. Jesus.
Thanks Matt. That’s wild. I read the post as a $45,000 purchase.
47K Feb 55s were rolled to the June.
Why buy ATM with so much time?
i’m struggling with the rationale at the moment. I get it, their bullish. But heavy at the money just seems like the worst play out there. A fraction OTM can get you the same return if you’re right, and you lose less if you’re wrong.
Then again, i’ve never traded with $29 million bucks before so what the fuck do i know.
In the face of it it seems like a retarded trade. I’d rather buy less time and play OTM. You might as well hold stock otherwise.
Jason, you must be new here, you need to know your fuckin role and shut your fuckin mouth
damn bro, dats harsh
Clearly not the real Lanforce.
lol… Jason, there’s an imposter imitating people running around defiling good people’s name.
@autmunal, it would be funny of Ian used that voice, but just for the drunk passengers in first class over the Pacific.
hahahahaha @rabbit
sold 1/2 of my angi. holding the rest for the gamble.
This is where my head is at as well today–thinking I’ll go 50/50
you are gonna lose 50
OA you got an opinion on Zillow earnings?
$ANGI option news………
http://www.bigoptions.net/1/post/2014/02/options-activity-update-21014.html
heading to Woodies for a drink (downtown philly) after the schallacking i took last night from billy
What if these guys existed in real life?
It reminds me of the identity theft protection commercials…
Needless to say Billy from Philly never touched my dilly… I mean… really?
Holding HIMX because I like the chart, but earnings are today. Is there be any reason why I shouldn’t buy some same-dated (Feb monthly) OTM puts for protection? Just wondering if there is a way to hold through earnings and still take advantage of the chart…
IV of the options would be the primary reason.
Thanks Ian, IV is a concern, but I was thinking strictly a one day hold in case it drops. Before each earnings period in the last year or so has shown the wedge pattern we like, and has either went up right away (no gap up though) or took a couple of minor down days before rocketing higher. This pattern is different however, as it is more lateral in nature, and not the ol GRPN/FLSR feel it had in the past.
I almost wish TRLA didn’t rip 7% this morning…now its time to decide to take a loss or gamble earnings…prior to today it was yolo earnings…now I’m undecided…probably split it down the middle
Sold half of ANGI 17.50s, holding 10 contracts for earnings/Feb expiry. Sold Z Feb 85s for small profit, 2nd time bounced off of 93 overhead resistance, not risking a gain on earnings day. Piker’d out of TWTR for almost a 200% gain. I’ve had my best winners evaporate this month, not going to let that one go. THANKS for the TWTR motivation OA!
Anyone else lacking conviction today? I’m in and out and now net short.
Should go make a sandwich.
I put sandwiches in every orifice I can daily because I work with the deli with my bf and he likes it like that.
maybe we should all join in the fun?
Ah, I’ll have a taco instead
Anybody who’s been in the KBH Feb’s still holding? Chart still looks ok but I don’t think it makes it back above 19 by mid next week.
I still have my Feb KBH 19’s and PHM Feb 21’s. Holding for now…
Might need some more time to capture the full move.
Yea; I’m still holding out hope. I’ll either sell or roll by Friday. Don’t need three extra days of Theta burn because Monday is a holiday
Didn’t even know the market was closed Monday… I still like the idea so I’m going to find a good spot to roll into the Mar 19’s.
In it and holding for now
holding – it’s consolidating here and looking ready to make it’s next move.
*its
Still holding KBH February’s (19’s and 20’s)
That Chart is looking nice!
Unless this is one of those head fake bear trap moves, doesn’t look like there’s much stopping $LNKD from going to the mid 180’s.
I SOOOOOO regret not following with $TWTR when you did 5 days ago… dang !!
What do y’all think of a “not down” play on MSFT either via put or put spread. Not huge returns, but at least a non-emotional trade to make SOME money via defined risk.
Anything to make this horrible month seem better LAN