Tag Archive for 'VIX'

4 in a row with no relief!

Published on June 24, 2010, 7:29 pm in Charts and Trading. Closed Tags: , , , .

In my 10+ years of trading, it has never been tougher than trading this week. Both banks and oil led us down. Banks kept us down while oil looks like it’s trying to recover. The only thing I traded today was ES, the S&P emini. Looking over the trades, not one was more than 5 minutes and several were under 120 seconds in duration! Oh my! Sure it was a down day, but all my trades were long.

Check this out….you would think we would go a lot lower with a VIX of 349!!

Sure it’s a bad tick, but I thought I’d grab a picture of it just to remember. :)

The TRIN again closed high at 2.99. Remember what I said a couple days ago when the TRIN closed at 3.82…The Arms Index says: TRIN close over 2.0 results in bounce next day 9 times out of 10. No bounce? Market in trouble…..and we got NO bounce…and yes we’re in trouble.

So we’re down 4 days in a row. A 3 or 4% correction is no big whoop, but that is assuming tomorrow the markets get back on track and show some bullishness. If not, the bear is back and we may be on our way to some new lows.

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Fickled Fat-Finger of Fate

Published on May 7, 2010, 7:45 pm in Opinions. 1 Comment Tags: , , .

Why must someone or something be blamed for the market correction we are having? Is there something wrong with a correction? Sure, they got rid of the uptick rule a while ago, so we all knew that. And we already know that can speed up some downside moves. They were pretty stupid to get rid of the rule in the first place. But, I’ve been accumulating inverse ETFs, puts on the indexes and talking about it in the blog for some time now. So I’m a criminal now because I made money in the 10-minute crash of 2010? WTF? I warned you.

By now you have heard of the “fat-finger” error. I didn’t believe it the first time I heard it on CNBC. Then I started seeing it on “civilian” TV. First of all, who would put into production a software package that would allow such a mistake? C’mon programmers, tell me you don’t put in safeguards for human error….I want to make sure I don’t ever hire you. Finally today, we started seeing blogs and news agencies talk about that stupid excuse…“Fat finger” role in selloff likely a myth or this one, Fat Finger Error?

Today was a bit more worrisome than yesterday for me. I had cashed out all my short positions so I couldn’t really take advantage of the continuing down move. And, as I said yesterday, I was looking for a bounce today. The VIX made another big up move and this time, stayed above the 40 mark. OK, volatility is back!

I’ve also noticed that there are more and more references to the week before the ’87 crash (they must read my blog :-) ). I do think it will be this weekend’s news that governs Mondays market….will there be a resolution, a good resolution to the Greek tradgedy? Will there be a resolution to the U.K elections? Will they cap the oil spill? Or do we follow the 1987 history book?

We live in interesting times :!:

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One Day Wonder

Published on April 29, 2010, 10:00 pm in Opinions, Tools and Trading. Closed Tags: , , , .

It looks like the bears only have enough energy for one day. Every once in a while, like yesterday, the bears come up with enough energy to drive the market down. But they soon exhaust themselves and give the field back to the bulls, like today. I think it just may be a dance in this whole topping process, or part of the correction process, but these swings can make sausage out of your portfolio….so you better find a bun to put it into. :mrgreen:

I tried to have another great ES trading day, but I traded 2 out of 3 losers…and my one winner could not make up for my 2 losers. I did clear out some of my short positions, but the way the indexes closed up strong, was to me a signal that it may be time to short again.

After hours today had some interesting mews. A Federal criminal probe opens into Goldman Sachs and staff over possible securities fraud in mortgage trading. That will not sit very well with the gang down on Wall Street. SEC sends Goldman case to prosecutors. Remember what happened two weeks ago when GS had some bad news? Uh oh.

Some strange happenings today…did you notice how the goveernment jobless claims every week raises the previous weeks numbers so that this weeks numbers look like they dropped a whole lot more than it should? Are we really that dumb? Did you notice that this is about the 10th time that Greece has had a report that it is being bailed out? And that the other Euro loser countries will need to help out…like Portugal, Spain and Italy? Did you notice how GOOG has been having a tough time lately? Did you notice the VIX is back to its lacksidasical self? Did you notice that these up moves continue to go up on lousy volume?

Ok, here’s a postscript: I’ve been working on explaining how I use different indicators and tools. It’s a work in progress, but I would appreciate any notes or comments you may have. Check out How?, or Moving Averages or Stochastics….and keep checking. Thanks.

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I told you so :-)

Published on April 16, 2010, 8:47 pm in Trading. 1 Comment Tags: , , , , , , , .

We’ve been looking for an excuse to correct this market and today we found one. If the market indicators weren’t on sell signals already, maybe the market wouldn’t have reacted to GS so badly. It’s not just banks that went down today. Either way, I suspect no more campaign contributions for this administration from GS. I’m also gonna venture that GS bought its own April puts ahead of the news and will report a stellar quarter next week. GS volume was 7 times above its average trading.

Other good news today: Unemployment rises in 24 states in March according to the Labor Dept. All the big earnings report companies sucked, but not as bad as GS’s surprise: GOOG BAC GE ISRG were all down big.

For the week the Dow ends up .19%, the S&P down .18%, NYSE down .57%, the Russell up 1.7% and Nasdaq Composite up 1.1%. So the high beta stocks are still doing okay, but the blue chips suffered. I expect next week to be down for the small caps.

Should Small Investors Jump Into Stocks?

And oh yes, the SPY puts, VIX calls and TZA did their jobs today!

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The show has started

Published on April 12, 2010, 10:14 pm in Tools and Trading. Closed Tags: , , , .

Earnings season had its opening pitch today from AA…and boy did it suck. Not really that bad, but the hype and anticipation had traders looking for more….and they’ve just got to be disappointed in the morning. Tuesday will bring more reports to light including CSX and INTC among others.

Monday continues its pattern of being a green day… it’s been an up day 28 of last 32 Mondays!

The S&P 500 has risen on Monday 80 percent the time during the past six months, compared with 52 percent for Friday, Bespoke said. It averaged gains of 0.17 percent and 0.05 percent on Tuesday and Wednesday, respectively, and a loss of 0.04 percent on Thursday.

Read the whole story at Bloomberg.

And speaking of patterns, VIX now below the 2008 intraday low, which was the start of a 15% correction. The last time it closed this low was July 2007 which was the top before a 9% correction to the S&P. Just a little nudge for you to be careful out there. Here’s more info on the VIX from TraderFeed and the Daily Options Report.

I misspoke in my Saturday entry when I stated I was long/short at 35/65%. It is true but it looked like I was 100% invested. I should have pointed out I was 55% in cash. So a truer picture would have been a cash/long/short positions of 55/15/30%.

Either way I’ve been waiting for even a slight correction to cash the shorts, but now I’m thinking it may be a bit more than slight. Will AA earnings start the ball rolling down? Maybe INTC gives it another nudge down? I’m thinking even good reports, unless they’re blowout great, markets will sell the news. Wait and see.

Futures this evening are heading down, as are Asian markets. You can check the futures market here. So for now I’m content to have cash as my largest position. It would be good to have some resolution with a big volume move…in either direction. Volume continues to make new record lows. Sure would be nice to have more traders around. :D

P.S. I haven’t been updating the old blog over the weekend, mainly because this cold keeps me drowsy and lazy. So make sure this URL: http://wtftrading.com is your main link! And update your RSS feeds.

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The time draws near

Published on April 7, 2010, 10:33 pm in Opinions and Trading. Closed Tags: , , , .

This was an ugly day…low volume rallies and high volume breakdowns. Are we heading for a correction or a crash? I can sure ask the question, but I have no idea about the answer…I can only play ‘em one day at a time.

I’m still sticking with my bearish positions via TZA and TWM along with some QQQQ puts and VIX calls…and boy was that stance a pain today. But it worked out by the end of the session. Patience pays. It was a great 10-year auction today, but offset by an ugly consumer credit report. The credit report won…or is that lost…with all the indexes ending in the red.

The worry over PIGS is back…just in time for an ECB Monetary Policy meeting on Thursday. And back in the homeland we have Retail Sales, Initial Jobless Claims, a 30-year bond auction and last but not least, Tiger returns to the game. So if traders are not busy worrying about interest rates or growing debt, they’ll be watching TV. 8O

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Green Monday, what else is new?

Published on April 5, 2010, 9:27 pm in Trading. Closed Tags: , , , , , , .

It was such a low volume day I think anyone buying more than 1000 shares of a stock actually moved the market! 8)   The ES didn’t hit 1 million contracts until after the cash close. Sure Europe was closed as was about half of the Asian markets, but still, I usually look for 2 million by 3PM EST. Trading was slower than a Christmas eve!

I digress. The indexes closed in the green but it was a very boring day. I covered half of my UNG calls for 62% and half of my DRYS calls for 23%. My VIX calls are about worthless, but I still have 9 trading days to see if they perk up. TZA is looking pretty crappy but I added a few shares near the close. In keeping with my bearish bent on the markets I also added QQQ puts and TWM calls. I’ll see how far that gets me this week. Oh, and VG which I bought about a month ago, finally turned green.

It’s reading stuff like the following that gets me shaking my head and wondering “why?”
Huge 25% hike for small businesses kills New York jobs.

Office vacancy rate hits 16-year high

Tomorrow we get FOMC minutes and find out how the Treasury’s 3-year note auction behaves. Today’s auction was pretty good, with the 10-year interest rate hopping above 4% briefly, but did not cause any consternation in the equities. Let’s see if the world returns to trading on Tuesday.

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Is it time yet?

Published on March 29, 2010, 9:44 pm in Trading. Closed Tags: , , , .

Y’know…for the market to correct. I’ve been preparing for it, but it never comes. Every time the bears make a play, the bulls trample them. But, the volume of bulls keeps getting lower and lower. Monday continued it habit of a green up day.

Did you notice this morning that the indexes opened up and so did the VIX? Usually one is up and the other down. That got me worried that something was going to happen…but it didn’t. Seems like cash is probably the best position to be in, but I keep nibbling on the short side with QQQQ puts and the inverse ETF TZA. I’m also on the long side with DRYS…so I guess I go both ways. :oops:

After hours trading today was wild. AAPL and VZ busted to the upside when the Wall Street Journal reported AAPL to make an iPhone for the Verizon network. Of course this hurt both RIMM and T which went the other way. Another move was GNVC when they announced a failure of a Phase 3 trial…the stock dove 75%….traders couldn’t get out fast enough. 8O

Tuesday we get the Home Price Index and the Consumer Confidence Index along with a spattering of earnings reports. Let’s see if any of those can get us a turnaround Tuesday….to the downside.

Here’s some reading that should show us the way….
Consequences Of Health Care: Valuations

Massive Deficits, Debt Overhang and Rising Bond Yields

Raise Taxes and Cut Services? Why Not Stop Unnecessary Bailouts, Unnecessary Wars and Unnecessary Interest Costs Instead?

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Why is this market climbing?

Published on March 23, 2010, 6:29 pm in Trading. Closed Tags: , , .

I don’t know why, but to assign some sort of logic to the market is futile! Remember, after Monday and Tuesday even the calendat says W T F . . .

I got stuck between my longs and my shorts. I didn’t make money in either direction today, so I’m sitting overnite at about 40% long and 60% short….Long via DRYS VG GNVC and short via TZA VIX calls and QQQQ puts. GS wasn’t able to catch a bid all day. Usually you see GS leading the market, but it was divergent today. So will GS catch up to the market or will the market follow GS down?

This double top in the SPY shows some possibilities of a reversal….and there’s still that unfilled gap area from a couple weeks ago. 

Some news coming out tomorrow: Durable Good Orders and New Home Sales along with crude inventories.

Here’s more “good news” that should keep this market going up:
Underemployment Hits in Mid-March

Why the U.S.-China Currency Brawl Puts Global Recovery at Risk

Yes, I’m being facetious. 8)

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Unexpected

Published on March 22, 2010, 9:52 pm in Trading. Closed Tags: , .

I really thought we would have a down day on Monday, but I guess all that down sentiment got used up overnight. Futures slipped all night but started recovery right after the cash gap down open and continued upward all day long.

So Monday continued its green streak….well its 28th out of the last 37 Mondays streak! I’m wondering if turnaround Tuesday will continue also?

I’m still in TZA and VIX calls…although I could have got out near the open with a decent profit, not expecting the hot acceptance of healthcare reform, the positions are underwater…but it’s shallow. I’ll give the market some time to clear its head. :twisted:

Here’s something that should juice the market higher: 2010 Bank Failure Tally Hits 37.

Lightning and thunder around here…..I think I’ll backup the computers!

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