DJIA

[amins]

Head n Shoulder reversal confirmation or just unemployment numbers... If so, possible supports 7900, 7600, 6500?

If it breaks 03/09/09... what's next?

Interesting times. I've got my shorts so I'm good this time!

[Vanraw]

You may be right. Kinda wishing I saw this at the 9k level. Here are a couple interesting charts. The first one shows the Internet bubble burst.

At May 2001 we are sitting around 11500, September / October we crash to somewhere close to 8300. We see a post crash rally to 10k and then in July 2002 boom down to 8000.

Fast forward to day. May 2008 we are at 13000, September / Octopber we crash to 8000. This time we dont see as powerful of a rally, crashing to below 7000 but then rallying back to almost 9k. then July we start to see the sell offs. Question is will it drop at the same levels as 2002? If so we will see 6k again.

   
   

I think the issue right now is that wall street is impatient, Just like it was in 2002. Earnings season isnt going to show any massive increases. There is in general, a lack of good news. In May there was "news not as bad as thought" but that wont carry water for very long.

And then you have the oil speculators getting totally burned, as they were trying to drive the price up yet again. This has a lot to do with current correction because much of the commodities market is in mutual funds and ETF's now.

Add to that that the banks are still holding on the money, because they still have a bunch of mortgages that are a massive jeopardy. Thanks dont look good until 4th qtr. IMHO

My prediction is low 7k correction. And we wont see anything positive unto a late October rally.

[amins]

Now check out the DJI during the great depression... leading up to it and wha thte chart patterns looked like.. crazy similarities.

[Grieve]

不收费的免费电影真的有吗?小锤就是其中一个.还有成人电影呢!甜性涩爱也可以免费看的.

Just what I was thinking myself...

[amins]

I was just informed there are reverse ETF's for the DJIA / SPX... and they're CHEAP (not sure if optionable, just found out on thursday): DXD & SDS

[Grieve]

I was just informed there are reverse ETF's for the DJIA / SPX... and they're CHEAP (not sure if optionable, just found out on thursday): DXD & SDS

Yeah, I've looked at those before - they've been around for a few years. And you can get options in them.

I've thought about going short the Dow a couple of times in the last few months, thank goodness I didn't. It's up a good 1700 points since this thread started. Getting short this market is too dangerous...any form of pullback and the buyers flood right back in. I think this is going to be a decent earnings season, so I'm going to try to ride it higher...

Incidently, for the year to date, the Dow is now up 12.40%, the S&P is up 18.63%, but the Nasdaq is up a stonking 35.65%! Tech is the place to be right now.

I'm sticking with Apple (up 123.16% YTD, and should go higher with the recent accounting rule changes), EMC (who I work for, up 73.35% YTD, storage industry just upgraded yesterday), a couple of financial/industrial plays (BAC and GE), and a biotec (DNDN).

My emerging market plays are doing well also - Brazil (EWZ) is going gangbusters, up 106.12% YTD. Also thinking of getting back into China (FXI, up 47.44% YTD) and India (EPI, up 85.84% YTD). Only BRIC country I'm leery of venturing back into is Russia, but it's been red hot this year as well (SBI up 112.32%). If you're bullish, best bet of all? EDC, 3X emerging markets ETF - up 162.95% so far this year!

[amins]

Don't those numbers disturb you a bit though: 126% "recovery"? Look at BIDU, it's gone back up to 07 highs' (429ish), and it's not the only stock that's doing it... PCLN another good one.

From a technical perspecitive, the recovery's come so fast there's bound to be some kind of consolidation/breather period for the market/stocks to find a secondary support to feb/mar, wether that be the 07 high or somewhere inbetween...

I've hedged a few of my positions, well worth the $$$ in Puts on my longs...BIDU, AAPL, PCLN, FSLR, CME, ISRG.

Lately I've been hedging into my swing positions, just cuz of all the damn whipsaws... RIMM, AZO, MA, SHLD.

If anyone's interested, a group i'm in post soem of our swing trades on a facebook site. Nothing serious, usually 3-7 day holds (sometimes up to 2 weeks, rarely longer), w/ the goal of 15-25% ROI: Consolidation / breakouts, upgrade/downgrades, and continuation patterns. There's about 5 of us that post, some of us are extremely new and others have been trading for decades w/ large capital.

Anyhoot, my next target for djia is the 10350 area, which is a .5 fib retrace off the high to low, for a bullish position.

If anyone's interested, there's a great webinar (free) that's a great introduction into Option Trading. Let me know if anyone's interested... was a HUGE eye opener for me, comming from a very social/Arts background and knowing nothing about the market: Now, I know next to nothing.. an upgrade! woot woot.

[Vanraw]

Value of the Dow has stopped being about real value along time ago. Its all emotion now. If people believe we will have a recovery in 60 months then they are all buying now.... Its also about the big players that manipulate the pricing.

Ive stopped doing shorts. they are dangerous. I sometimes do puts if I am really sure about the negative of something. But for the most part Im ether investing in something because I think it will go up, or Im not investing.

Remember what they say. Buy the rumor, sell the news.

[Dustie]

Value of the Dow has stopped being about real value along time ago. Its all emotion now.

I don't know if its all about emotion. I would say that the gyrations around the normal expectations of future earnings are emotional, but its not all about emotion. Emotion is just that delta between a realistic expectation of future earnings, and overly pessimistic views vs overly optimistic views of future earnings.

If it was all emotion, charts like this wouldn't swing up and down around some realistic PE. If you think about it, we invent something new every once in a while and think, "this is a new world, everything is different now, PEs of 30 are justifiable because future earnings are going to be amazing!" Then, we come back down from the clouds and realize, "all of this has happened before and all of this will happen again." (haha)


http://2.bp.blogspot.com/_i47TEqZoAbw/Sa...+Graph.jpg

[Grieve]

Don't those numbers disturb you a bit though: 126% "recovery"?

Not really. It all depends on the sector and the individual stocks. For example, some of the banks dropped 90% from the high, as the shorts speculated they would going out of business. Since that didn't happen, a run of 100%, 200%, even 300% isn't unreasonable, and still leaves the stocks massively off their highs.

Then there are stocks like AAPL. It's earning more now than it was a year ago, and with even better to come - why shouldn't it be at a 52-week high? Same for EMC, VISA, McDonalds, Celgene, AmGen, Gilead, First Solar, etc.

And emerging markets are coming of the recession a lot faster than the US, especially with rising commodity costs, so it makes sense for them to outperform.

From a technical perspecitive, the recovery's come so fast there's bound to be some kind of consolidation/breather period for the market/stocks to find a secondary support to feb/mar, wether that be the 07 high or somewhere inbetween...

I don't disagree, but how on earth do you time such a thing? Plenty of people have tried and lost a lot of money doing so over the last few weeks. I screwed up myself shorting AIG.

I've hedged a few of my positions, well worth the $$$ in Puts on my longs...BIDU, AAPL, PCLN, FSLR, CME, ISRG.

I've looked into that, but never actually done it. How far out do your puts go, and how close to in the money? For example, if you were buying a put today on 100 shares of AAPL, what would you buy? An October $185 put for $105+fees?

[Breand]

Here's my dinky lil day trading portfolio:

C CITIGROUP INC 113.24 %
FAS DIREXION DAILY FINANCIAL BU 94.85 %
HIMX HIMAX TECHNOLGIES INC 87.68 %
IRWNQ IRWIN FINANCIAL CORP -94.62 %
NEM NEWMONT MNG CORP HLDG 7.23 %
PGH PENGROWTH ENERGY TRUST 48.47 %

doesnt include PIR which I sold for 250% of the value (crazy enough if I held itd be worth 500%)

IRWNQ was a bank that went under. The FDIC grabbed control so the stock became worthless. Stupid bet on my part, but it was the smallest dollar amount of my portfolio I only lost a couple hundred bucks on it.

Overrall my portfolio value is 125% of initial investment.

I dont do puts/shorts. Don't know enough about it.

[amins]

Don't those numbers disturb you a bit though: 126% "recovery"?

Not really. It all depends on the sector and the individual stocks. For example, some of the banks dropped 90% from the high, as the shorts speculated they would going out of business. Since that didn't happen, a run of 100%, 200%, even 300% isn't unreasonable, and still leaves the stocks massively off their highs.

Then there are stocks like AAPL. It's earning more now than it was a year ago, and with even better to come - why shouldn't it be at a 52-week high? Same for EMC, VISA, McDonalds, Celgene, AmGen, Gilead, First Solar, etc.

And emerging markets are coming of the recession a lot faster than the US, especially with rising commodity costs, so it makes sense for them to outperform.

From a technical perspecitive, the recovery's come so fast there's bound to be some kind of consolidation/breather period for the market/stocks to find a secondary support to feb/mar, wether that be the 07 high or somewhere inbetween...

I don't disagree, but how on earth do you time such a thing? Plenty of people have tried and lost a lot of money doing so over the last few weeks. I screwed up myself shorting AIG.

I've hedged a few of my positions, well worth the $$$ in Puts on my longs...BIDU, AAPL, PCLN, FSLR, CME, ISRG.

I've looked into that, but never actually done it. How far out do your puts go, and how close to in the money? For example, if you were buying a put today on 100 shares of AAPL, what would you buy? An October $185 put for $105+fees?

If I was buying a PUT today on AAPL, I wouldn't be looking at a Long Put position, I'd have a price target of around the $177 area (Gap), max, w/ testing of 184 ish... which isn't a huge retracement.. leading me to buy a Nov. Option w/ a higher Delta (.8+: for each $ the stock moves, I'll get the Delta in return, so .80 cents), typically 2-3 strike prices ITM.

So, for me, this would look like a 200 or 210 Option. The difference is quite big in price: 200 is about 14.85 w/ a delta of .63, whereas 210 is 22.18 but has a delta of .776. One will have a higher ROI but the other will make you more money.

Give yourself enough time, options expire 3rd fri (sat @ noon) of every month... aapl's been pounding that 187 mark for 13 days before breaking it, and even then, it's been tossing spinning tops and doji's... so, it might take a bit to break through it again and you wouldn't want your hedged position to fold due to time.

OTM options, I've only used for Spreads (Credit Spreads, not Debit (i don't have that trading level yet)).

If you were long on aapl and wanted less risk and just to get into a hedge position, you could do an OTM option like the one you posted... it had a delta of .38, but was extremely cheap...costing 6.73... bu tyou're only making 38 cents to the dollar move... if it tanks, then it'll eventually get up to that .9+ delta and go $ 4 $, and you've dollar cost averaged down on your long position.

The difference is the value you buy in the option and how long you think it'll take to get to that price target.

[Grieve]

Okay, so say you buy the 210 November put for $2218 plus say $14 in commisions, for a total of $2332. Plus you have 100 shares of AAPL worth $19k (at a stock price of $190), at an original cost of say $17k.

Next week AAPL blows away the numbers, and shoots up to $210. The value of your stock is up by $2000, but your put is likely only worth $910 (based on the cost of an at the money Nov put now). So instead of making $2000, you've made just $578. And that's assuming you sell the put instead of holding it to expiration.

If instead AAPL misses (or just disappoints), and drops to $170. Your stock has dropped in value by $2000, and your put is probably up around $1800. So you've limited your losses to around $200.

So I guess I can see the risk/reward benefit makes sense to a degree, but I'd rather just stay long and strong with AAPL. Even if there is a temporary dip, I have no doubt it will cross the $200 mark fairly soon, probably the end of the year, and will likely hit $300 by the end of next year.

For lower quality companies, though, like a Citibank, or a something where bad news could tank it 80%, like Denedron, I think it makes a lot of sense. I'll have to look into it more.

[amins]

The other option is to write a covered call: instead of paying the premium for the right to sell (PUT), you recieve the premium however you're now obligated to sell.

A much better 'sideways' strategy if you think AAPL's going to take a breather for a month but you still want to make $ w/ your shares.

To add to your previous point, I'd have set a 'Stop Market Order' just above the resistance so you do't loose the entire premium you paid for you Put.

Additionally, if you're long on a position you probably know the majority of consolidation points along the way where the stock could revers/retrace... that's when you hedge your position because the $1500 you'd loose (assuming you didn't place your stops) is worth the thousands you saved... as well as a bit of security of mind.

Hedge on stock you own (or a LEAP Option):
1) Protective Put (pay a premium); strat for retracements
2) Covered Call ( recieve a premium);strat for retrace/consolidation move

[amins]

Quote: "For lower quality companies, though, like a Citibank, or a something where bad news could tank it 80%, like Denedron, I think it makes a lot of sense. I'll have to look into it more."

Another way to utilize the protective put is against Earnings... Ala RIMM... Earnings @ a resistance... ewww.

[Breand]

weeping today. PIR is up 20% just today. I bought it awhile back at .64 and sold it for a 250% profit. If I had held it my return as of today would be 730%

[Grieve]

weeping today. PIR is up 20% just today. I bought it awhile back at .64 and sold it for a 250% profit. If I had held it my return as of today would be 730%

That's the agony and the esctasy of stocks. When you sell it right before it goes up, or you hold onto it right before it goes down, it sucks. But when you get it just right...it feels great.

My DNDN options, which had been cooking, dropped in value by almost 50% in two days a couple of weeks ago...really sucked... They are making a bit of a comeback this week, luckily for me.

[Vanraw]

Yea, that's why calling bottoms or tops is a fools game. I would just be happy you got the 250% gain and dont look back!!!!

If I woulda
Then I coulda
Oh I shoulda

[Grieve]

I was just informed there are reverse ETF's for the DJIA / SPX... and they're CHEAP (not sure if optionable, just found out on thursday): DXD & SDS

Okay, all the talking heads on CNBC doom and glooming about a 10-20% correction finally got to me - I just bought a bunch of DXD November $34 calls. Which means for sure that the market will shoot up another 2000 points before then.

[Vanraw]

Hey I was watching that as well. Every thrid word from CNBC was "correction".

You can just feel the shorters all getting their panties wet.

[Hoofhurr]

So have any of the predictors from the first page of this thread been born out by reality? Er I meant to post this in the Dryships thread.

[Vanraw]

My predictions are always right, except for when they are wrong.