I left town on Friday, opting not to pay any attention to the chest thumping and trolling that took place over a market sell that nobody truly understood. I just returned to my trading terminal just it time to see most things put back on their shelves and restored to their appropriate places.
I talked about this in my comments section on Friday, but most of the days selling came from these volatility funds unloading equity on Friday. There was about 14b that was sold, and while everyone chased their tails trying to figure who the big seller was, they opted to front run the selling knowing that a Monday gap and sell was a certainty.
With everyone going home short into the hole, naturally we fucking rip higher.
I am just getting back to my office, but wanted to throw up something fresh in order to facilitate new conversation.
See you After Hours.
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FCX ripping the faces off johnny come lately short sellers. Huge candle. APPL coming close to putting on an outside day, which would be impressive
+1 on “friday was the dip buy chance” from the previous post
Anyone out there still holding shorts or is everyone bullish again? Got my tits ripped off on Friday and I fear more whiplash
All well and good, but the fact that 80% of my calls expire this week means that a freaking single-session 2% drop was still pretty detrimental to my positions
80%? Damn, sorry to hear that.
My 300% gains in UAL went to breakeven, then to a slight loss today, and are now moving higher. Strike is 55 so we’re within (pun) striking distance. Holding for now.
If they’re at your basis, why not roll?
The way I see it, we’re still in the volume pocket between 50 and 55, price action looks bullish, so I want the gamma from the shorter dated options.
Honestly, I’m probably just salty that this winner got wrecked in a day. I’ll take a second look to see if rolling makes sense.
That’s the problem. Once you fill the pocket, you retrace and fill it. Hard to hold after. Just a meltdown of premium.
This has to be the easiest bear to bull swing of all time.
I’m now in XIV from much lower prices. Going to ride this for a few days.
Wonder if we hit all time highs again after this? I’m planning on going to cash pre fed meeting though.
OA, your confidence in TWLO helped me stay in and buy more calls on Friday. Big props to you.
Same here! …and $BLUE Oct. 55 calls, which are heating up nicely
LOL. True. It was a weekend full of bear porn. You were right, OA, about the pain trade on this.
OA, props on your call regarding volatility funds dumping. Proven right today. How did you know that? Is it chart related or just talking to folks inside the business at institutional investors
Talking to people Friday.
Gotcha. Thx
Almost everyone on stocktwits was bearish on Friday. I did take some TWLO calls near open, as well as FLS calls. Also bought LULU and UA for long term.
So you want to ‘throw up something fresh’? Is this a vague reference to $CMG?
$IBB daily candle today: “…it’s Magnum…it’s glorious!”
indeed
But IBB volume is nothing special for this % increase. People rushing in with abandon to be knee-capped tomorrow?
Bullish engulfing candle here. Not traditionally bearish. Volume well above average here.
Certainly bullish engulfing candle. Greater down volume yesterday and 8/23-24 then up volume day. Just something to think about. I miss the slow days already.
Think about that. Wouldn’t you say people were more certain on Friday to unload than they were to purchase today?
Fedheads got people rushing from one side of the boat to the other trying to spot whales
Didn’t one of the pony-tailed guys on CNBC sell his entire portfolio on Friday? Maybe that was the tell.
Don’t feel so bad selling my QCOM & HSY puts around 11:00am Friday. Went through the whole weekend telling myself, “gotta let winners run! ” :^p
Got stopped out of an ISRG long and realized my stop was triggered just as it filled the gap. Poor entry on my part.
Love the #timestampherefromlastweek haha
Feels like the real pain trade is of the volatility guys sell into the bounce and then get proven right tomorrow. As someone heavily tilted long I’m much too complacent here
Bull trap?
Got the timing right on this morning’s move, but not the stock. Got into DATA and MBLY when I was also looking at TWLO, AMBA and SWKS.
If I was going to be there live for After Hours, I’d vote bear, but I’m not selling any long dated paper (bought with low IV) here, so my opinion doesn’t count for much I guess
$APC buying $FCX deepwater assets news.
Someone in the hallowed halls mentioned this, and I preface this by saying that I am not intending to bring a political conversation at all; this is all purely a “what if” and the impact on markets… Could the ultimate pain trade (for long term) be a Trump win and the markets to rip higher after the initial move down? Again, not trying to get political at all, and of course this idea is predicated on him having to win, but this struck me as thought provoking and fairly reasonable.
Where is pain involved?
Participants think a Trump presidency is bad for the markets because of his semi anti-establishment posture, his non globalist statements, and the general uncertainty baggage that he carries. So, hypothetically, the polls start going in Trump’s favor and a Trump presidency starts to look like it could actually happen (he does well on all the debates, doesn’t go too off the handle, etc.), the market starts to get rattled. We wake up the day after the election and the headlines read Donald J. for the win, the market craps even further… However, after a small period of time (say around a month), markets start to bottom and settle down. Again, this is all conjecture and depends on so many variables but the more Hilary struggles, the more I can see this narrative playing out.
I still don’t understand pain here. You are describing the election, not market positioning.
Maybe I’m using the phrase pain trade in the wrong context. The best way I can say it is that a ton of market participants will position themselves on the sidelines in anticipation of a Trump win. However, with so many people on the sidelines, they realize he’s not going to start WWIII and they are forced to chase.
boyaj, what leads you to believe that “a ton of market participants will position themselves on the sidelines in anticipation of a Trump win”?
First they’d have to believe that he is going to win. And then they’d have to believe that he would be the first president in 30 years to keep his promises about shaking things up and going against the establishment. Every pres elected in the last 30 years has campaigned on being a Washington outsider who promised to shake up the establishment– and then didn’t keep that promise.
Yeah, what you are asking here I don’t think has much to do with “pain trade.” Maybe its how the market sets up down the road, but I avoid fantasy when its that far away.
Political views tend to cloud our judgements We want to protect our precious egos at all cost from being wrong, and that means if we think we believe something, we defend it with more absurd beliefs to explain why we’re right. Our reticular activating system will ignore information that contradicts our beliefs to protect our perceived “identity”.
Political parties, politicians themselves and Religion do a good job at getting people to identify as a group or “type” of person. Confirmation bias does the rest as we like to maintain some sort of self consistency or at least justify to ourselves that we are consistent with the type of person we perceive ourselves to be.
So if for example, you identify as a democrat and let’s say Trump wins, every bit of volatility will trigger confirmation bias of the Gartman suggestion that Trump presidency will be bad for the markets, or that Trump will crash the economy. You would tend to react emotionally first and may not really remember why you felt the markets would crash, and you would try to rationalize later, rather than considering the potentially politically motivated ideology that “Trump will crash the economy” is wrong because you want to maintain self consistency, particularly if you think in more of “absolutes” such as “them bad, us good”.
If Hillary is elected and you think her health is in question and that the uncertainty will crash the economy every bit of volatility triggers confirmation bias on that suggestion, and there is an emotional pull to react, often times at the worst possible time.
That isn’t to say everyone will react to it if you are disciplined and set up measures in place to protect you from yourself becoming your own worst enemy as a trader, but it’s something to be aware of and watch out for.
Why do I have a feeling we are going to reverse yet again tomorrow. I’m going all cash
I think we reverse an early rally.
So, the same as today? We started down for the first 10 minutes or so, then climbed all day. Makes sense that it would do the same thing tomorrow.
What would be interesting is to see the /ES go up another 10 points in the overnight, then come back down to +3 at the open… Then at the open, pop up 3 or so, then tumble all day.
That would be a perfect mirror image of today’s tape.
I would think gap up tomorrow. Too many bears quick to engage, too many longs that hesitated here. Gap and go for a half hour or hour, then fade into the lows at the close.
That sounds good to me. I’m done playing for now, until I get a safer setup.
I’ve never seen such an easy market. This is a bull for the history books.
It bothers me people pass on this in order to be retarded.
Retest certainly possible.
Any thoughts on AGU and POT? AGU seems like an easy gain to 96, 97, or 98. IMHO, regulators–not even EU ones–won’t kneecap Commonwealth industries because Russian competition is too severe to call any potash maker a true monopoly. The real problem is figuring out which one to buy on the pullback–most ppl would pick POT, which is why I went AGU. Now you can be sure POT will rise 🙂
Been saying all year these are great long term prices.
Crazy market
TWTR stuck in a 10 cent range for the last two days. Strange.
Stock looks amazing here IMO.
Dip Buying List AAPL WDAY TWTR REGN
Aapl isn’t even dipping
CYBR, RHT, CALD look interesting here. FIZZ still worth a sip.
Added to FIZZ, Bought YY.
My FIZZ has fizzled. It hit the 50 day and buyers hit the cash register. Except for me.
AAPL call play was boss, boss.
Thanks. I still remember the comment here that helped me pull the trigger. That stock has been a perfect sentiment play. They all hated it before earnings, they all loved in near $110…said higher into announcement, then lower the day after.
I need a couple more of these to pay down some colon punches this week. Fack.
Seriously. Getting ugly. Looks like a bull trap yesterday. Fml
Bro, you are amazing at this.
I feel that in my TWLO.
I hate to say it, but I’m looking at the daily and this looks like a great spot.
Grind phase. Aapl helps to ease some of the pain.