Dow 2007

[tricks]

added to short at 93

Ouch!

Have another go, short 635 cash - Thursday's market

 

[free4440273]

The dow closed at yet another all time high, the spx did not quite make it, I am quite comfortable shorting at these levels, the risk/reward is good, I made good profits over the last drops, especially last Friday, one is bound to have a bad day, even if if goes up a bit higher it will come back to these levels, if anything to retest the previous resistance.

...i really hope so: i am short at the moment for the September contract. any geopolitical event could also do untold damage. mind you, markets are so crazy, they have probably factored that in also!!!!

 

[mark twain uk]

Ok, so it's a Dow thread....but fwiw just shorted DAX @7818 (cash).

One minute before the close I did not resist and added at my DAX short at the same 7818 cash, it was too tempting. The trouble is that I now have 3 short positions in dax, and tomorrow could be another up day, and I will have to cut my losses at some point, most big losses are made on positions that run away from you.

 

[mark twain uk]

Back in mid-March, which is not that far away, SPX cash stood under 1,400 for about four days. Eleven weeks later it closed at 1,530, that's 1,300 points or almost 10%. I agree with folks who think that 1553 is going to be touched, sooner or later, but exactly because it's such an obvious target it may just fool everybody and stop just before.

 

[mark twain uk]

...i really hope so: i am short at the moment for the September contract. any geopolitical event could also do untold damage. mind you, markets are so crazy, they have probably factored that in also!!!!

First thing to bear in mind: do not overtrade. Second thing to bear in mind: do not overtrade. You can guess what the third thing is.

It's OK to have a loss of 100 point or even 200 points as long as it does not exceed, say 10% of your trading pot. If losing 200 points would take you down 50% then it's just a matter of time until the market moves 400 points against you and you will get wiped out.

 

[free4440273]

First thing to bear in mind: do not overtrade. Second thing to bear in mind: do not overtrade. You can guess what the third thing is.

It's OK to have a loss of 100 point or even 200 points as long as it does not exceed, say 10% of your trading pot. If losing 200 points would take you down 50% then it's just a matter of time until the market moves 400 points against you and you will get wiped out.

...have not reached anywhere near 50 per cent. thanks for your advice also. only have one position open at the moment and that is indeed the september contract (short). yeah, would not surprise me at all if dow reaches 14,000. that's just the way it goes

 

[hobby]

Back in mid-March, which is not that far away, SPX cash stood under 1,400 for about four days. Eleven weeks later it closed at 1,530, that's 1,300 points or almost 10%.

1,300 S&P points?!

Now there's an S&P long I'd like to have caught! :cheesy:

 

[firewalker99]

... I remember a seminar by Steve Nison in which he said that you never get more than 11 white candles, this is going to be the 12th week...

Interesting thing there... is that something he found out from analyzing historic charts?
And on what time frame? Looks like he's going to have to change that 11 into 12 soon...

 

[firewalker99]

It's OK to have a loss of 100 point or even 200 points as long as it does not exceed, say 10% of your trading pot. If losing 200 points would take you down 50% then it's just a matter of time until the market moves 400 points against you and you will get wiped out.

Each has his own style and every trader has to determine what is a fair stop/target, but 100-200 points loss on a single trade? I'd never risk 10% of my account on a single trade...
Suppose you have two losing trades that take out 10% of your account each. To get your account back to the starting point, you know have to win 23,45% :-0

 

[mark twain uk]

Each has his own style and every trader has to determine what is a fair stop/target, but 100-200 points loss on a single trade? I'd never risk 10% of my account on a single trade...
Suppose you have two losing trades that take out 10% of your account each. To get your account back to the starting point, you know have to win 23,45% :-0

Fair comment, I did consider writing 5% instead of 10%, but at extreme market positions as we are witnessing now, one could take a risk of 10% as the potential reward would be even greater. But this is not a good strategy in long term. The point I was trying to make is that overtrading will wipe you out, the figures were just examples.

 

[mark twain uk]

I now read the whole of the FOMC meeting minutes, and I copy below the last paragraph of it:

In light of the recent economic data and anecdotal information, the Committee agreed that the statement to be released after the meeting should acknowledge that economic growth had slowed in the first part of the year. The Committee thought that the statement should reiterate the view that the adjustment in the housing market was ongoing, but that nevertheless the economy seemed likely to expand at a moderate pace over coming quarters. While readings on core inflation were lower in March, members felt that it was appropriate to emphasize that core inflation remained somewhat elevated. The Committee agreed that the statement should continue to note that their predominant policy concern was the risk that inflation would fail to moderate as expected, and that future policy adjustments would depend on the evolution of the outlook for both inflation and economic growth.

So, economic growth had slowed in the first part of the year, but... nevertheless, the economy seemed likely to expand at a moderate pace over coming quarters. What a typical case of wishful thinking. The future is always rosy in these statements. Nobody ever says, sh1t, we are going into some rough times. And after the event there will be scores who will scream blue murder, but it will be the president of Iran, or OPEC, or global warming, or Cuba, or anybody else to blame but themselves.

 

[2468steve]

I now read the whole of the FOMC meeting minutes, and I copy below the last paragraph of it:

bad news is good news in these markets......if it wants to go higher who are we to try and figure out why it should be going down......between 1942 and 1946 the Dow went up 100% .....irrational and crazy yep...shorts got blown up quicker than the ships in Pearl Harbour....

cheers

 

[ajaskey]

bad news is good news in these markets......if it wants to go higher who are we to try and figure out why it should be going down......

"Bad" newz causes the dumb money to sell early and the smart money gets what it wants cheaper than without the "bad" newz.

 

[2468steve]

"Bad" newz causes the dumb money to sell early and the smart money gets what it wants cheaper than without the "bad" newz.

Agreed.The smart money is unloading big time into these up moves...we've had distribution going on for months and we getting down moves on larger volume...one of the reasons that when pre-market futures are up big,price cannot hold...smart money exiting...
Even so,doesn't mean they can't squeeze it even higher...wouldn't liked to have been short today....and definately won't want to be long when the music stops

cheers

 

[ajaskey]

Agreed.The smart money is unloading big time into these up moves...

Not quite what I said... The smart money has been buying as the dumb money sells/shorts every piece of newz that is "bad". When the dumb money beings to buy - which should start now because CNBC is excited - the smart money will sell. First all the dumb money must cover the record level of short interest. Then the dumb money must go long.

The equity Commitment of Traders futures report shows the commercial hedgers are net long a bundle. This only happens when the rest of the world has taken the other side of the trade and hedging giant equity portfolios has become too expensive.

 

[Atilla]

Agreed.The smart money is unloading big time into these up moves...we've had distribution going on for months and we getting down moves on larger volume...one of the reasons that when pre-market futures are up big,price cannot hold...smart money exiting...
Even so,doesn't mean they can't squeeze it even higher...wouldn't liked to have been short today....and definately won't want to be long when the music stops

cheers

I'm waiting now to see 13700 the long time quoted level.

The scary thing is some people have now started talking 13800, even 14000.

I am bearish in opinion but glad I have been out of it last couple of days.

Here is a little market research for everyone... Off the DOW and TA but I'm sure relevant with all the interest in Reits and how vibrant the property market is blah blah blah ( you can see my sentiments ).

One of my long time (10+ years) clients are based at Great Portland St. They are in the rag trade and they are essentially a fashion house - design and manufacture clothes and sell it to the big retailers like M&S, Wallis, Debenhams and the like etc.

They stopped doing business with M&S because they are too cut throat and no money in it ( or you could say my clients costs are too high - what ever ).

The lease came up for renewal and the demand went up from £40K to £70K. This is a reasonable size office on a third floor. The 4 th floor with a balcony but a little smaller looks great is up for £40K and has been vacant for the last 18 months. My client tells me there are a number of other offices vacant for the last year or so. His decided not to take the smaller space.

His business has been strugling for the last two years or so. Very tough trading conditions. So now he is merging with another design house and moving to a cheaper location a little out of Central London. Few personnel losing jobs and a little consolidation is taking place. Call it a M & A.

Now property prices have gone through the roof as we all know. Retail rents are going up but is there demand. No. Plenty of empty offices which aren't let. Landlords may try and get their 6 - 7 % return on their property assets but does the rise in property values justify the rent increases. No. Will they be able to pass this on? No I don't think so.

If businesses are strugling because of price pressure like from the Tescos and M&S's of this world and property prices are going up, is it right to expect business and individuals to pay a collosall sum for rent? Ofcourse not is the answer but that's not what is happening on the ground. May do on paper and on the charts but the fundamentals don't add up ( Yawn yawn ).

So either rents have to come down or property prices have to come down. Something basically has to come down sooner or later. What ever. In all this as it is also happening in the markets to point to M & A Merger and Acquisition activity as a good thing is bonkers because these two companies not forming because they want to but because they have to - to survive. To say M&A boosts the indeces and markets is good for business is a load of tosh. No real output into the economy.

Another point, the fashion industry a little like transport imo is a good indicator of market sentiment. Because winters expected demand is being catered for now. But the market is like a ghost town. Eerrie silence. The Chineese are crushing UK and European textile and clothing industries. Even the Eastern block labour is too dear in comparison with the Chineese production.

My point is that level of hype is up in the stratosphere and some of this market bull sh1t is going to come down on us pretty heavy.

Coupled with the much touted 13700 June time (maybe second week) was much talked about.

I genuinely felt sad and sorry for my clients and feel as much as the markets maybe made of teflon, the stench will not have to stick to have it's presence felt.

Not if but only a matter of when in June... :cheesy:

 

[mark twain uk]

Not if but only a matter of when in June... :cheesy:

Same here, sell in may and go away did not work this year, but sell in june and make a fortune sounds nice

 

[firewalker99]

"Bad" newz causes the dumb money to sell early and the smart money gets what it wants cheaper than without the "bad" newz.

That's very correct. Yesterday's chart is a good representation of your astute observation.

 

[firewalker99]

One minute before the close I did not resist and added at my DAX short at the same 7818 cash, it was too tempting. The trouble is that I now have 3 short positions in dax, and tomorrow could be another up day, and I will have to cut my losses at some point, most big losses are made on positions that run away from you.

With DAX opening higher, I feel sorry for your loss... but again probabilities favoured an openings gap to the upside (very common after a strong uptrending session).

 

[mark twain uk]

With DAX opening higher, I feel sorry for your loss... but again probabilities favoured an openings gap to the upside (very common after a strong uptrending session).

I added at 7850, and now am waiting to see what happens next, I would close if if breaks out, and add if it breaks down, one way or the other I will reduce my position today, it is looking increasingly like a bad trade and has the potential to become worse