Saturday, September 17, 2011

Think Big -- Put Things in Perspective

The Aurora from TSO Photography on Vimeo.

Audible Tick Alerts

This is from thinkscripter, I decided to past it here in case thinkscripter goes away or something.

 Audible $TICK Alerts

UPDATE: This looks to be a much easier way to accomplish the $TICK alerts without use of a complex formula. I’ll leave the Complex Alert methodology below as a reference.
1) Just set up a TOS alert like you would for any other symbol (i.e. LAST at or above 1000/ at or below -1000), check “Recreate alert for reverse crossover” and customize the sound if desired.

Thanks to an email from TOS’ Guido passed along to me, we now have a way to have audible $TICK alerts in TOS that reset automatically. Here are the basic steps:
1. Go to the Market Watch Tab and enter the symbol $TICK
2. Press the Study Alert button
3. Choose Complex Formula
4. In the formula box enter either high > 1000 or low < -1000 (Substitute your own thresholds as required). You’ll need a separate alert for the high and low $TICK
5. Change the Tigger if to Above 0.50
6. Select 1m for the aggregation period
7. Press Create Alert
8. Back in the Alert Book, right click on the word “Active” in the status column and select “Cancel/Replace Alert”
9. Click the little gear at the far right of the new alert
10. Check “Recreate alert for reverse crossover” and customize the sound if desired.
11. Ensure the threshold value is still 0.5 (mine resets to 0 – Might be able to skip step 5)
12. Hit OK and then Create Alert
Three cheers for TOS and Guido for listening to our requests.

Doctor J with Theory on UBS Trader

Friday, September 16, 2011

DRTV pattern Dog Returneth to Vomit ( PANL )

Those backtests wipe out the “smart guys” who got on the long on the breakout, move their stop to breakeven, and then get stopped out before the real move happens….

Double tops and double bottoms are this same beast.  

Amazing not one single book or research has previously identified that to me….the most common, most flagrant thing.    I nicknamed it, DRTV pattern, Dog Returneth To Vomit…..

Manipulation, or just a natural function of the market?   Who Cares?   Trade it! 

And get over the "gotta be right" deal which makes no sense in trading, got it?   It makes no sense to insist on being right in trading, it is a completely different game than all other fields which we may excel in.    

If I think this goes up, and instead it breaks down, don't just close the trade, reverse it!

 DTRV---Good simple graphic image that you can remember in the heat of the battle.

Conflicting Info, euro risk of dragging US market down

Euro did and overthrow on this channel and is respecting the b0 and b100, the blue lines, I break to downside would be a confirmed change in trend, which should drag US equities down also.

Thursday, September 15, 2011

SPX in Real Money, Gold, and Baltic Dry

This is perhaps the clearest sign I have that things are going to appear to get better.    However, tonight I remain short NQ futures.   With RIMM blowing up, the Pollyanna panacea of Euro salvation may not be enough to overcome gravity.  But Dabama's printing presses may pick up the slack.

The inverse head and shoulders means that this indicator should continue to go up, this is a fine basing pattern, the best.

And finally, remember when everyone was harping on the Baltic Dry, well it has started sneaking upward.

RIMM killed after hours

PANL is a Breakpoint Trade trade idea.   I did not partake.

Played my methods today and got my ass handed to me

Anything can happen.

I waited patiently for "Kee" resistance--waiting for the market to move to it, very slowly, layin gin wait.   Then it was hit, and went short NQ futures.  The small up and down ramps eventually invalidated this call (after some stop outs, chewing away a hundred or $200 each time).

Finally, toward the end of day, the tick fade method showed a double top over 1000 tick, a good short signal, took it even though I had been burned on the previous diligent method I was following.   

And got burned again.  

Overall, my thoughts were that we have a general uptrend, based on Obama Dollars, seasonality, high put/call.  

Well, so be it.   Went against my medium term perspective, followed 2 solid trade methods that said short, and although for a short day trade, probability was on my side---got my ass handed to me.

Both methods, Kee resistance and Tick Fade are invalid after hours.   Plus my view was that the puts had been hammered enough, and there would be a slough off into expiry. Didn't happen.  

Actually, I do believe that most index options are settled on Friday morning, based on Thursday close.

Here I sit with 3 futures short.    Not huge, but significant.   

Good rule of thumb...when a day trade becomes a swing trade, bad sign.   When that swing trade becomes an "investment", very bad sign.  

My habit has been to ignore trading on Expiry day, tomorrow.   I will need to either trade, or set a stop and limits based on some technical level and call it a "Box of Chocolates" up tomorrow and see what is in the box.

I am going to assume that the end of day ramp was to facilitate really screwing the put holders for index puts, and that the indices will drop into  tomorrow.     Holding 3 short from 2283.75 NQ, for better or worse it is my call, 100% my responsibility.

Satire, my coined LOLO Laughing Out Loud Ouch (truth is funny but it hurts)

From Daneric!

  • My signal system generated daily buy signals on the rest of Europe today. ( )

    Tokyo y Bombay also went on buys. With the rest of the US indices that I didn't already have on daily buys going on buys yesterday ( ) that leaves just Hong Kong and the All Ordinaries, and they are on incipient buys.

    As I mentioned yesterday, a trader's also got to be keeping an eye on those weekly charts now since a Friday close at current levels or above would trigger weekly buys as well.

    That's what I've got to share with normal folks without agendas who are just trying to trade shifting markets - which is to say everyone who isn't a "fact-bending, fear-mongering opportunist", as Felix Salmon of Reuters referred to Dan Ivandjiiski in this very interesting article. (Don't know what I'm talking about? Read it. I'm confident you'll be glad you did. As well as being good reading, it's also quite informative.)
  • What a kook that guy is -- believing that alumni of Goldman Sachs have formed a powerful cabal at the helm of U.S. policy, and that the Treasury and the Federal Reserve are colluding to preserve the status quo.  That's some crazy shit.  Hoo boy.

Dax breakout completed, Bridge over the river Denial

I have Cable long, odd though it did not follow NDX up on the second push up today.

German Index DAX is breaking out from a 34% butt whooping.    This could mean the problems in Europe have been kicked down the can for now.  PS they won't tell us first.

When they tell us, then HBB will take the markets down to take money from those who then went long.

 Elliot offered up a free video, narrated by Daddy P himself.   It was really good, it set the stage for a P3 event, and a decline in all asset prices into 2016.  
 PANL -- looks great for a long

Wednesday, September 14, 2011

German DAX and the Greatest Lies

I really WANT to go short at this time.

Remember opposite George Costanza? Well doing nothing is the option I am choosing.  

One of the great lies out there is that Forex is the largest market in the world.   The purpose of this lie is to make you think that markets are highly liquid, and that your positions won't be hunted, that they are not thin.

But sure as shooting, if you drop a 100k order into the Forex market, it is lie dropping a fawn in the middle of a pack of wolves.    They will stop, shell shocked for the moment and assess how to make the kill.    One trick I use to protect a stop order, if I am paying attention, is to put a buy order underneath it.   That scares the market upward....they hate to "fill" an order.  

And they will definitely run your static stops.  The quants keep moving their stops around...even putting up fake orders and then quickly removing them.   Of course, anything that is legal, and many that isn't will be programmed into this trading warfare.

Dax -linkable version, falling wedge$DAX&p=D&b=4&g=0&id=p20551320819&a=243817560

Use of leverage is way up

August 2011 Total Contract Volume August 2010 Total Contract Volume August Total Contract % Change vs. 2010 YTD. Avg. Daily Contract 2011 YTD. Avg. Daily Contract 2010 Avg. Daily Contract % Change vs. 2010
Equity Options 501,947,732 262,234,107 91% 17,193,490 14,145,555 22%
Index Options 48,101,675 21,253,003 126% 1,353,037 1,194,173 13%
Total Options 550,049,407 283,487,110 94% 18,546,527 15,339,727 21%
Equity Futures 507,238 407,036 25% 14,496 21,547 -33%
Index / Other Futures 4,284,314 1,233,881 247% 155,333 79,319 96%
OOF 1,504 287 424% 28 22 27%
Total Futures 4,793,056 1,641,204 192% 169,857 100,888 68%
Total Volume 554,842,463 285,128,314 95% 18,716,384 15,440,615 21%  

Above data is from OCC.
Moral of the story? Leverage has reached new highs, as a trading system, and as a society, nothing has been learned and perhaps nothing will be learned until a greater trial is prepared.

S&P 500 are the Dummies? and Dow are the smarties?

Look at this intraday data.   Look at the ratio on the bottom.

It shows the majority of option players are doing exactly the opposite of what they ought to be doing.

Is that a lion in the forest, run away!    yeah, a nice pasture, lets chow...wait is that a gator in the river?!   Run away!   Congress outlawed gators...yeah!  relax.

Know what  bunch of birds is called, a flock.   Know what a bunch of Baboons are called, no joke they are called a Congress.

Repeat of a Dash, and Terrible "Advice" from a so called advisor

This from July 7th, 2011, I thought it worth reviewing.


What this blog was for

I started this to record my own thoughts and charts and trade rational.

Also to document links to good sites, and other newsworthy stuff.

I always liked reading "A Dash of Insight", it was 1 of 2 of my "Bull all the time" blogs. They never once saw the crisis coming, and they never sold off during the crisis.

Now they state:
Investment Conclusion

Please note that my forecast is much more specific than the other sources.

How you trade the debt ceiling debate depends upon your time frame. If you agree with me that this will play out over the next two weeks, there might be a better buying opportunity.

Having said this, most investors (and many managers) have trouble chasing stocks after a big rebound. My own approach with recent new accounts has been to establish partial positions. There may be a further decline, but it is better to get started than to be caught completely flat-footed. I continue to believe that this is a good time to invest for those with a time horizon of a year or more.

How agile are you?

So he is basically calling a "bottom" here, he says, it might get a little worse, but since you guys are bad traders, we know you won't buy in once it starts going up --therefore buy in now before it starts going down (and then up, in the perfect world).

They rarely take a stand, they are taking one now.   Don't be caught flat footed.

What say you? Go all in long?   Leveraged 200%?   You would give poor Pretcher a heart attack!

I am going to hit them a bit the story, they are setting up the debt ceiling issue as the Straw Man, and that if they Straw man can be knocked down, that all problems are solved, and that the market can forge ahead  again for years.  

How weak is this?   Certainly to not recognize that there are other problems of significance is beyond foolhardy.   There is a chance the market keeps moving up for a year or 2.   Like 25%

There is also a chance the market drops 80% similar to the first great depression, say 25%.

That leaves a 50% chance of "just plain sucking" dealing with reality of 30 years of too easy of money.    Heck even if the market goes up, that doesn't mean diddly to the average business owner or worker.  Unless you go "all in" long.

Business leaders are talking to Republicans.  And everyone knows this.  Wall Street pros are taking this in stride.  The average investor is the victim.
Well time will tell, but calling investors victims, because they are being caught flat footed (not all in), is an amazing thing to say.    

I kind of agree....this debt ceiling thing is a bunch of bull, it matters not.   We all KNOW that the US is already defaulting on it's debt by the greatest monetary expansion in history.    WE KNOW IT.  After the last crisis, our country has learned less than nothing.   Why less than nothing?   Because some of the wrong things to "know" have been reinforced.   Housing Giants are back, leveraged house loans are back, and people are forgetting that anything happened.  "A larger trial will be prepared".    Not sure about that, but I am sure that a larger trial will be needed to knock people upside the head enough to realize that serious changes in behavior are needed for a sustainable future going forward.   Any way that is not sustainable, will be unsustainable.

Egg of Doom (original, uncut, unplugged, unbelievable), ES H&S,

Bear crushing rally

I been on the wrong side of these before.   Not today, shorted around 11189/1190

The final spirit crushing ramp job, betcha put call drops a bunch today.    Bears stating ''its too much I have to be responsible and take my lumps"

steveo stating....time for the expected expiry slough off, the big work has been done, go short for 8 to16 points of drop through the morning.

Spike through the B177 channel is a good sign of top, for today at least.

DAX Long, from BPT

We could certainly break down big time based on swans, fundamentals, Europe collapse. But the data that I follow is not showing that.

The hard trade is long.

Breakpoint trades posted this on the weekend, before the wedge test.

CSCO Long trigger is close, Chart from Breakpoint Trades

CSCO not only is this a nice H&S, it is also a pretty good cup and handle which has been an awesome pattern over the last year if you had the guts to go long. The H&S measures to about 20% rise from here, not bad with some type of options credit or debit spread, which limits the upside but protects the downside and minimizes the cost into the trade.

Instead of a cost, you could actually get a credit from selling the options, and some people look at this as "income" which is one of the great lies of the options market. IT IS NOT INCOME. As soon as you place the trade you have an asset and a liability, they are the same value. You have not produced income, you have sold time. True though, if the trade moves as expected, you reap the value of that time, over time.

When I was a newbie my 20 year experience CBOE and Swiss markets buddy told me "never sell naked options". A few years ago, once, I didn't listen to him...I did that once.