iBankCoin
The first hit is always on the house.
Joined Aug 2, 2009
1,847 Blog Posts

THE PAIN TRADE

Trying to determine what the crowd has been thinking hasn’t been easy recently. However, it occurred to me yesterday after a twitter conversation that even the bears are looking for a rally here in order to get short. The pain trade here is not getting a rally. Force the bears to participate lower, should they want to participate….and stop out longs. Seems to be the same old play that the market has been working forever.

Fortunately, there’s a really low degree of correlation here. All my China names are up, and several other plays are helping keep things afloat as well.

Considering getting smaller here. Will decide by the close.

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106 comments

  1. trashman

    I find myself wondering what bchu is doing right now

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  2. matt_bear

    the grind part of the cycle.

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  3. kidstockibc

    Thoughts on Gold and Silver Jeff?

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  4. thegametheorist

    liquidated everything in trading account 2 days ago for personal life reasons. I can be the new bchu. half net worth in cash now. rest in TLT and still some of these small cap oil stocks lol… FTI to the moon!!!!!!!!!!!!!

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  5. noord

    OA,
    what do you think about $LULU?
    Earnings coming out tonight.

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  6. Thomas Jefferson

    I’m thankful I added balance with a few shorts from higher.

    I am looking at my positions a lot harder, and taking profits a bit more aggressively rather than giving them too much room to erode. With this good run I’ve almost tripled the size of my cash position in the options account (psychological comfort), while slowly accumulating 4x the number of positions I’m used to. I was letting things work when I felt really good about market direction but at this point I am loathe to stay this exposed if market direction is closer to 50/50. I’d personally rather leave some upside on the table than end up with nothing to show for this great run. Particularly with plenty of good setups out there to trade back into if the ground firms beneath the market.

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  7. mfalke

    I remember Obama’s reelection in 2012 led to indiscriminate selling and dumping of 401ks from a certain type of person. Here’s hoping election fears set up another great buy opportunity.

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  8. trashman

    UrbanCarmel (yesterday after close) Index put/call 1.76. Only n=20 in last 5 years. $SPX closed higher at least once next 3 days 18/20 times; next 5 days, 19/20 by avg 1.6%

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  9. kidstockibc

    Liking TWTR as as short sale candidate….acting like FIT on failed retest to $16

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  10. Formergeek

    Geez FEYE on fire

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  11. probucks

    That’s been my question all week man. Thanks for sharing your view on sentiment.

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  12. scarface

    Ugly reversal in $YY. Was hoping it would hold over the 200 sma after a couple rejections there.

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  13. trashman

    new figures as of yesterday. http://www.aaii.com/p/sentimentsurvey

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  14. Brian

    Russell Growth Index has gone green on the day… definitely worth noting. You could even make a case for a failed head and shoulders break down since the end of July if this sticks.

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  15. baba

    OA
    I added few $MCD puts and $V calls. Thoughts?

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    • Option Addict

      When I observe the charts of stuff you trade, I see no similarities. No correlation from one idea, entry, sector, etc. Seems random.

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      • baba

        Point taken.

        I tend to stalk some charts for a while, before pulling the trigger. That is why I trade too less.

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        • Option Addict

          The entries always seem late. You wanted to buy $FDX literally at the high. Remember that convo?

          If you stalk charts a while, why are the entries so bad?

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          • baba

            I used to buy everything without a second thought. Now it is the opposite.

            I agree that I need to improve on the entry part.

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          • Option Addict

            Didn’t mean to come off as rude, just to the point. May be a good stock, but location determines good/bad trade.

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          • baba

            No offense taken.

            I am more into old school stocks, and I try to time the trade after there is inactivity over a period of time.

            The monthlies should be a better way for this, and I try to get overconfident and go with weeklies, sometimes.

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          • Option Addict

            Old school stocks make this detail even more important, since there is limited movement. If you trade options on old school stocks, multiply the importance of these concepts times 100.

            The idea is to use options to leverage stocks that move. If you trade options on stocks that don’t move, and you enter too high, I don’t see how you’d ever win.

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          • baba

            Thank you for the detailed response.
            The reason I go with old school stocks is that I can ignore the sudden changes due to news.

            I analyzed my transactions, and retail and old school are the only money makers for me. I do not rule out the luck factor totally though.

            I shall post my plan on my next trade.

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        • frog

          Thanks, OA. When you give feedback to one person, the rest of us here are learning a lot too.

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          • Option Addict

            Yeah, I try to keep that in mind. Sometimes I’m a dick and don’t mean to be. Trading sucks..lol

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          • frog

            Yes, it does suck. OTOH, you are very talented at it, and I hope you are able to enjoy that a bunch at times, despite the inevitable frustrations. I respect and like you a lot and want you to have the most happiness you can.

            Here’s a book for you, just in case U R interested in finding ways to increase your happiness despite a high stress vocation: a book about using meditation without the dogma part of it, for the purpose of making oneself happier.

            The author only says “10% happier” because he did not want to oversell it. He is a correspondent for ABC News, an anchor for Nightline and co-anchor for the weekend edition of Good Morning America. So he is coming from a place of knowing what high pressure work is like.

            10% Happier: How I Tamed the Voice in My Head, Reduced Stress Without Losing My Edge, and Found Self-Help That Actually Works–A True Story Paperback – December 30, 2014
            by Dan Harris (Author)

            https://www.amazon.com/10%25-Happier-Self-Help-Actually-Works–/dp/0062265431/ref=sr_1_1?ie=UTF8&qid=1472764775&sr=8-1&keywords=10%25+happier

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          • Option Addict

            I appreciate this. I’ve been working with a woman this year that has done some emotion healing/processing with me. Was life changing. Helped me immensely.

            I love this sport, and love having earned a seat at the table. I say it sucks, but its to express empathy for those that are working to become better at it.

            Much respect to you as well. Thanks for the book reco, I’ll pick up a copy this weekend.

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          • frog

            That’s wonderful about the healing work you did. I’m so happy for you. You deserve the best in life.

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  16. Darren

    To go along with your longer term outlook about where we are in the sentiment cycle Jeff, I was chatting with a family member yesterday and they seemed pretty relieved that they’re almost at breakeven in their wealthfront account and was considering just going to cash because they were fearful that:

    “markets are high and any type of overall market pullback seems like it could drag down”

    Meanwhile I’m sitting there like: http://3.bp.blogspot.com/-eTyH–ZMPD0/VgjkuyIOEuI/AAAAAAAAFxU/LkC99xVkvU8/s1600/excellent-4689_preview.png

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  17. scarface

    Any love for $SPLK here? Watching the 30 min it is breaking above the down trend

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  18. greenlander1

    Would really like TWLO to close strong here on good volume

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  19. greenlander1

    Going to pull off half QQQ longs if we hit the upper bollinger on the hourly.

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  20. marc

    OA…on $WDAY is this significant move above the 85 level a major longer/mid term sign. Or was that just a short term signal.

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  21. Chuck

    Looks like $appl weekly is climbing the wall of worry. Maybe wait for the aversion dip near the end of the year back to the 90’s and back up the truck.

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  22. Mac

    I’m new to this site and I am not sure if you have talked about this before but I was wondering what your take on TSLA is and if it is something you would own in your LT account?

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  23. Richard Chmara

    Can we get a petition going to reinstate Bchu? Maybe if he apologizes profusely to Fly for “not always choosing the right words” like Mr. Trump does???

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    • frog

      Maybe folks could ask Fly to convert him to only a partial site ban. No one is asking for him over at Fly’s blog.

      Bchu could just post here, and be a contrarian indicator, if that’s what he is. Although I think some people may be hoping for too much there. If some people were perfect contrarian indicators, we’d all be richer than God from just fading them 100% of the time. Trading is never that easy, except according to those spam advertisements for trading classes that cost many thousands of dollars.

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    • frog

      Anyone who hasn’t subscribed to any of Jeff’s services yet, that’s where the big value is– and with very affordable prices. I’m in the Boot Camp one– am learning a lot already and still have a couple of days more to go.

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  24. kidstockibc

    Bot small position FB next weeks $130 calls for .1

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  25. kidstockibc

    Liking NTES 220’s for next week

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  26. lplongo

    I assume there will be a corresponding discounted rate for joining the service since a key indicator has been removed? Ha ha.

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  27. purdy

    X ready

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  28. MSGT HARTMAN

    Sold EXK to the highest bidder and I thank him very much.

    I have half a mind to sell FB. If Zuck doesn’t watch out, he will ENRON his company and guess who ends up holding the bag.

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    • Tom

      Where does that idea, Zuck ENRON, come from? Is there any rumor? Thanks.

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      • MSGT HARTMAN

        ENRON went into the broadband business and failed.
        GOOG went into the broadband business and failed.
        FB is going into the broadband business and failing.
        Only Bell knows how to do communications, he should just hire them to do it instead of wasting investor dollars.

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        • Tom

          Thanks. Yes, my brother had worked Enron and all his shares went ashes…. traumatized experience.
          I have small investment port from 30s, took some off along the way, thinking to hold much longer, but makes me think… Appreciate your insight as always.

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  29. canalsrb

    OA – So I about fell out of my chair as I heard “Gold buyers held hands and bought today” hahaha!!! At least they’ll have a support group as it falls… hahaha!!

    So I get that Bears want a rally to short now… but I wonder how high are they willing to short? Are they expecting a sweep of the highs to short, or what is their pain level to the upside?

    Late bulls want a drop… Bears want to short that drop for them… At what point do they both give up and believe that drop doesn’t come?

    Just playing devil’s advocate here…..

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    • Option Addict

      I appreciate that. This is a tough one. I felt confident today as the market fell and my stocks ripped. I could argue either case here. I hope we throw down another month of .5% or less.

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      • canalsrb

        I agree. I feel like I want to find something wrong here, but I’m struggling… all the indexes felt like lower was coming earlier today, but managed to save it. I dunno…

        I do like the outside reversal day in Russell Growth Index tho… that is probably the one thing that gave me any kind of strong feeling. Everything else felt like grind.

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  30. kidstockibc

    Out of SLW….shorted TWTR. Top long idea FB

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  31. carolina

    Took in stock HCLP yesterday morning 14.10….looking to manage short -term. Comments welcome…

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  32. hesitation

    PANW 141 calls, 5x+ woot

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  33. traderconfessions

    CHKP launching. Like it to at least 82 with some volume. WBMD an interesting fellow here too.

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  34. Thomas Jefferson

    $KR earnings next week. Looks like an awesome long ANDshort on the weekly and with volume profile. I’ve never played both sides before, but this one could be a candidate.

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  35. LEE

    X Sept 3 20s its at support

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  36. kidstockibc

    Too biotech ideas? Anyone?

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  37. Scarface

    @OA will you sell $YY at a target price or let it ride if it continues making higher lows and higher highs daily

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  38. kidstockibc

    Bot SBUX next week’s 57.5’s and added to next week’s FB 130’s

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  39. Richard Chmara

    Dip Buying Discipline: Maybe this question is better answered during your Boot Camp, but how do you determine when to step into a position during a broader-based sell-off? When we go through a few weeks of chop it might be tempting to step in right away but likely better to wait for lower prices.

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  40. baba

    OA
    One thing I notice/have regard for you is not jumping on hedges. When do you really consider a hedge, based on VXX or something else?

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