Saturday, September 5, 2009

Mania Continues, and Asset Classes That Ruled are in Danger

Artists that were in vogue are now having tough times. Why did they think that the good times would never end? Mania. Not their own, all part of the overall human population centrally connected socio-economic driven connectedness.

Throw Michael Jackson into this mix. Sorry Mr. Jackson, you were the King of Pop, but you ended up like Marilyn Monroe. You had your own baggage, and we all do, however in the end it is not a matter of what baggage you have, its a matter of how you carry your baggage.


Chart of Charts

Neutral and Bearish signals are popping into what used to be a fully bullish trend. Of course Friday was bullish, but that is a very bearish sign....super light volume, and the pro's already made their year...they are in the Hampton's just monitoring by occasional laptop sign in.

ES and SPY and HELO's with Fire Buckets

This picture is from my rooftop.

Funny as all get go -- A Pretcher Critic

This discourse took place on Saturday. It's funny as all get go. I sent this to EWI, telling them, don't worry, we got your back.

Yeah, we will all give EWI a hard time at times...but they stand head and shoulders above 99% of all financial commentary, 95% of the time.

I am sure Maria is a nice person, and honestly I have no idea her style, as I refuse to watch CNBC even as a contraindicator, but this unsolicited email received today gives me even more stalwartness towards the short side.

If you like what you see over on this Blog

One BLOG owner has complained about Hawaii Trading posting on their site, and "pimping your blog". I will probably be posting less on some other sites. So if you like what you see, please bookmark or drop an icon on your desktop as waiting for my posts on other blogs may not be as frequent. Plus IMHO I think I have some pretty good stuff that you won't get anywhere else, and the price is right :-)

45,000 visits and like 50 comments? I guess I was a blog lurker for years before I thought I knew enough to even comment. But please take the time to provide some feedback, comments, additional insight, or just be irreverent. Hell....this September we are even having a special on Rants. Go for it.

Computer Backup before Mercury Retrograde

Sunday the 6th starts the Zeal of Mercury Retrograde. The Astro Freak stuff is interesting, and you don't have to believe it, but I highly recommend you follow this advice -- you know you ought to be doing it anyway, so backup up your computer systems.

During Mercury Retrograde, technology, communications, and transportation breaks down. It really does. Last retrograde in May my stalwart computer "blew up", it wouldn't even give me the blue screen of death. Another blog participant indicated that same thing happened to him.

Again, you don't have to believe it, but this is a great time to do what you know you ought to be doing anyway.


Computer and System Backup

Most people will have 1 “best” trading station. When the chips are down, this is going to be the one that is setup “just so”, and the one you are most familiar with.

Protect this computer by backing up all the data to 2 sources: Burn to DVD and store on an external hard-drive.

Create a “Drive Image” which can be used to completely restore your computer. Read up on these to convince yourself how awesome this is. It goes far beyond just doing a system restore.

Make a drive image, using Norton Ghost or Acronis true Image. They both work, but I now use True Image just because Norton is about as big and dumb as a corporation can devolve into – I want to transition away from them on everything.

Store the drive image on your local hard-drive of the computer you are backing up, as this is the easiest way to rebuild, but it won’t always work, especially if the hard drive is physically damaged or has a bad sector. Also store the image on an external hard drive which plugs in by USB. See the very bottom for some comments on partitioning of your hard drive.

If you have a RAID system, you may run into complications on restoring the system, be ready for this. The best way to do it is to test it. Really do a disk image restoration…on a long weekend so if it totally screws up, you can rebuild or bring in a real Geek. Be aware that you need a floppy drive, one installed into the computer is the best, most foolproof. An external floppy drive connected by USB is OK…but again, when the chips are down you want simplicity and foolproofness.
Have multiple computers that you can trade on. One of them being a laptop is good, if you need to go somewhere to get internet access if your power or cable is down.
Have a dial-up connection and modem installed in at least one computer. If your cable goes down

UPS system-must cover all operational aspects of your system. The computer(s), the monitors, and USB hubs that need power, the cable modem, router, switches.
Install all your trading software and email programs into each computer , test them. I mean really test them, bring up charts, enter trades, send and receive emails. You won’t have time for this when the SHTF.

Email comment: you probably receive trade confirmations, alerts, relevant new articles (I use Yahoo to find stories about relevant companies and automatically send them to me), by email. Therefore email is an important part of your trading. Make sure your various email accounts are setup on all your computers and tested. I recommend that for your backup computers that you select the option to “leave email messages on the server” so that when your proper operation is restored, that you can download all emails into your main computer.

Make sure you know how to get at your email without your standard email program such as outlook. I use webmail in a pinch, or when you are offsite. Write down the account information, web-site address, and password. You may think that you can quickly look these up in a pinch, but in a pinch you don’t want to be futzing around with this. Roadrunner is notoriously difficult to find the web mail –all their commercial balderdash gets in the way.

Phone numbers and account numbers for all trading accounts taped right onto the bottom of your monitor array.

Test your systems. I mean really test them. Throw the breaker to your power feed and see exactly how the UPS performs. How about your phone…does that require power to operate, if so, it better be part of a UPS.

Upon power failure, you may want to shut off your laptop right away. The battery capacity may be very nice to have later on.

It is not always practical, but it recommended that your trading computer not be used for other business or personal use. Surfing the web is problematic for introduction of mal-ware and other nasty things.

Don’t allow any major changes such as Windows updates, new browsers, new media readers, or any such updates to install themselves before the trading day. There is plenty of time for that afterwards.

Never open any potentially executable file, including Zip files from an email. Executable files can pretty much have their way with your computer and data.
Occasionally run chkdsk, maybe every few months is practical.

Keep your computer defragmented. I use Executive Software Diskkeeper. It runs automatically at night.

Partitioning the hard drive. I partition my hard drives into 3 parts. 30G for the Operating system, and the rest split up into Data, and Applications. Your operating system is the most likely thing to blow up, so you keep that on it’s own “partition drive”, call it C. Then you make another partition for Data, and call it the D Drive. Finally, your last partition, E is for applications—all the programs you install.

When you install applications, force them to install to the E drive, which is usually easy to do. Your applications and the operating system are the most likely things to blow up…keep them separated as I described.
Outlook will automatically choose to put it’s PST file on the C drive under Document and Settings. You may choose to allow this. The upside is that your PST file will be backed up everytime you do a system image. The downside is that your system images will be larger in size.

De-dust your computer internals occasionally, maybe every 3 to 6 months depending on conditions and how many dogs you have.

Friday, September 4, 2009

4 More Banks Closed by the FDIC Today

Oops! It was actually five, one was a credit union. A reader pointed that issue out to me, thank you very much.

These banks aren't speculative Florida and California or Vegas bubbles, these are all in the "Conservative" Midwest.

Check the right side of my blog, the failed bank link is a permanent link. After all, this is at the root, a banking crisis which has only just started.

Stink Puts Example

Executed Stinks Put. I also picked up some IWM puts. Seems like QQQQ and IWM will lead a downturn. These filled nicely as the exuberance proceeded.

The buy the dip and buy and hold crowd are probably giddy, thinking how resilient this market is. But seriously, we do have to consider that after the biggest mania of many centuries, that a spectacular "recovery" from the first crash is possible--more upside is possible. I hope you took note of the volume of the early sell-off this week. The big boys were panicking also. This tilts evidence towards a real correction.

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Example of stink puts, staggered purchase price.

On a big market pop upwards, puts will drop in price. The game is to lay in wait for this to happen, and pick up puts at good prices.

You can also sell some high priced stink calls. I have never done this, naked calls are risky in this stock environment.

Maybe on Tuesday I can sell for a profit. See below, orders are ready.

ES Shenanigans and Stink Puts

Thursday, September 3, 2009

Long ES and Long Term Short "Investing"

Full Disclosure---Long ES, but ready to short the market. Not too much to say tonight, just that I will do final preparation on some stink puts, and place orders tonight. For sure these will be based on recent Boatloads O' Tickers

Ol' Head and Shoulders strikes again

Wednesday, September 2, 2009

ES nighttrade

Small Boat O' Charts

Williams Sonoma -- Great Products, but not what the average person is looking for when they are worried about the mortgage.

I got this from Charts and Coffee LCRD --have a look

LCRD Volume is kind of weak. Perhaps short on an exuberant pop.

Junk is Beautiful

Reminds me of Sanford and Sons :)

JNK was a pick a few weeks back,

We entered the short on pattern and "fundamentals" that if the market broke, a flight to quality and away from Junk would occur. The market gets more and more insane as a top is neared, and JNK performed perfectly in that regard. Now it is performing perfectly ---on the short side, see notes on the chart.

However, this chart is even better, since a "Hanging Man" kicked off the bear party.

And thanks to Charts and Coffee, a technical blogger, who also points out that TLT, LQD, and HYG are good tickers to get on your radar. Maybe they even deserve their own watchlist. TBT is an Ultrashort...if you play any 2X or 3X realize there is large losses through time and fees, even if you are right on direction. Do not buy and hold, and think you can just come back in March and collect your spoils.

ES Roadmap / Battleground

Tuesday, September 1, 2009

USD may lose ground here

Since the correlation of inverse relation between USD and spx has been so strong, I will believe it until it is gone.

The /ES looks 5 down at 4AM EST, and the USD looks ready for a break. TWT.

Full Disclosure 100% Short

The old small downward wedge appears to be in play. As a swat down. I thing the third day down will be enough to get scared bears back in short....after all, in distribution, the HBB needs someone to sell to, even if temporary.

I expect a bounce up tomorrow starting around mid-day

Nice lines on ES and Discus Sign In Problems

The bears are excited!! Watch out for a serious whipsaw

Don't get all giddy short here now. Pick your shorts for the next pump attempt.

Maintaining short positions that you can stomach through a big push up is OK, but expect it--a massive pump on the indices. Obama is calling BB and even Hank, saying what the heck is going on...just when we almost had the confidence levels up to the self sustaining can we keep it going? We have too much invested to let this thing slip now. Lets get some money into the market.

Alot of people think that the market capitalization has some relation to our countries "wealth" and at this point I agree....It has an inverse correlation. Until we can start rebuilding from a much lower point, the irrational exuberance and living beyond our means is a big negative. S&P at 200 is a good solid base to build a wall of worry from.

We knew a big correction (or resumption of the current major trend which is down) was due, and it ran to ridiculous levels, and don't think it can't hit a higher high based on say $20B of futures poured into the market. And if S&P hits out for 1120 lickety split.

Mercury Retrograde


Here is more than a little is the inner working of my feeble little pattern recongnition brain......

I dont like current month options, hardly even except for truly day trading which I dont have time for right now. Theta burn sucks, I like selling this month option, calls or covered calls, or vertical spreads....

Oct puts could pay nicely, but spend some money and get Mar, Apr, Jan 2011--then study the waves and fundamentals enough to sit on your hands as Mr market tries to scare you out of your postition.

This was originally posted last week---Please review it.

OK game plan from 5000 feet. Next week is a pre-holiday week, end of the summer for many people. Some of the big boys will be gone, lighter volume, easier to push the tape.

Because HBB games EWI I expect a drop on Monday AM, decent gap down, 1%...this encourages bears to sell but doesnt scare out the new bulls quite yet. Then market moves down in waves for 2 the bears are piling in...pissed that they missed part of the move. Now on light volume, HBB paint the tape higher, to new highs...shaking out the bears and puffing up the bulls who knew buy and hold and buy the dip would work.

Asia tanks on Sunday, Sep 6th, but US can't do diddly, markets are closed--but everyone can talk about it at the Monday Labor day holiday over a nice BBQ with corn on the cob, anxious that they can't do anything because the market is closed. They enter stop loss order right under their long positions, but the market gaps down pretty big like 3 or 4 percent, and they are forced to sell into an abyss.

Also, you don't have to believe, but its always good policy to back up your computer and other data. Do so now, before Mercury retrograde also hits on the 6th. My stalwart computer blew up last retrograde. And communications of all sorts get challenging during the Mercury retrograde period.

I'll have stink puts ready to buy on that final pop later half of next week, but already picked up some nice stink puts today, all 2010 expiry. Get your tickers ready. And review my boatloads. Many of these "weak stocks" that have shown surprising strength are exactly that...a sentiment extreme in which non-pro "investors" get attractive to risky assets, like going to Vegas (like Fujisan...except that she is the opposite of retail, one of the best).

Monday, August 31, 2009

Short Ideas

A short review, no pun intended.

I am not a financial advisor much less your financial advisor. Shown here are some tickers that I have been following, many are already covered under a "Boatload O' Charts, or maybe a Kayak". You will find these annotated charts on the blog, type in boat as a searchword and you will be shown all the boatloads posted.

These office reits stand in a class all by themselves....research them on your own, and please advise findings.

Lots of puts is a good thing

It can be a good thing to roll through the weekend with 200 puts, and some short futures...

Sunday, August 30, 2009

Fib Structure on the ES

This is the classic and much pimped out ES "Alphahorn" so coined as the Alpha or "upper" horn, or expanding pattern. I still think a push to 1050 or 1060 will be the final blowoff before a really big down or a pretty big down. Hedging my bets that the start of primary 3 down maybe met by huge government intervention. It's like trying to stop a glacier from moving....sure you could throw a few nukes at the glacier, but the overall thermodynamic forces will laugh at any attempts of intervention.


When I was growing up, the words Shanghai and Highway Robbery were synonomous. Hell, even Ghengis Khan couldn't conquer China...he was assimilated by it. And I think that after the graciously executed Olympics and the vision of economic strength that some Westerner's began to question the democratic process and think that China's authoritarian approach to guiding their businesses was proven by success. Bullshit. A corrupt democratic process does not have an edge over a corrupt socialist/communist process...they will all be proven wrong.

The real question is, what will fill the void?

Hussman Commentary

Hussman is a brilliant analyst, although he can be fooled by fundamentals. This market can stay irrational longer than you can stay liquid, is the classic line. However, that only applies is your positions are moving against you so much, and you are operating on margin, that you are "forced to cover". Well....don't do that!!!!!!!

Hussman grants permission to use these few paragraphs. Please review his entire article and awesome website. And if you have a few million that other have been mismanaging, throw him a bone.

ES Nightrade

I have plenty of puts and credit spreads (bearish) so closing my ES short futures was not too upsetting. It was shocking to see ES up over 1030 on Sunday open...which sure looked like a shakeout run on stops. They didnt get my positions, nor my money.

Call Barney Frank

Mike Shedlock, aka MISH, first got my interest with a chart of Japanese housing prices, in 2005. He has been early, but spot on.

In his latest blog, at the end, is Barney Franks phone number. Call him, seriously, let him know what you think about auditing the Fed, bailouts, trader tax. It would be really neat if like 20,000 constituents called him.

Call him. You can talk to or leave a message for Barney Frank --

DC Phone: 202-225-5931
DC Fax: 202-225-0182

MISH's site is awesome...and if you start feeling overly bullish...just read a few pages. MISH has always been a permanent link on the right hand side of my blog.

One Chart to Rule Them All

We are at an inflection point.

This is probably my best work ever in charting. And what better subject to chart, than charts themselves. Comments appreciated. If anyone has way too much time on their hands, finds this chart approach interesting, and wants to get more historical data so that a deeper look into history, let me know and I will share the secrets of charting analysis of charts.