Dow 2007

[firewalker99]

i'm love it when the market is uncertain

Well... don't underestimate the volume of last two weeks. One thing looks certain: this will be going down sharply sooner or later.

Things will start to look very grim if DAX can't hold on to support tomorrow...
Should be an interesting day.

 

[firewalker99]

for what it's worth...

my guess is 13200 (fut) will get smashed tomorrow...
possibly even premarket

and if it doesn't, I'll just repeat this post at a later date lol

 

[firewalker99]

repos agreements do work in reverse also...they can be 3 day, 10 day etc which means that the 24blln will have to be given back to Fed once the markets settle down ...of course Morgan,Goldman etc can sell assets gradually so as not to destabilize markets....

ECB done similar thing also today...I suspect a few EU banks are in deep poo poo..

http://www.bloomberg.com/apps/news?pid=20601087&sid=a8PM3DfGxMnU&refer=home

Deep is the word:

"LONDON - One of Europe's largest banks, France's BNP Paribas, said on Thursday it had frozen three of its investment funds, citing volatility in the U.S. asset-backed securities market. The funds' exposure to risky subprime loans means the bank can no longer calculate their net value."

http://www.forbes.com/markets/2007/...prime-markets-equity-cx_ll_0809markets06.html

 

[counter_violent]

Hands up all those who think we have seen the topping of this index for this year...


An alternative and not at all popular view point I suspect, as follows.

A technical viewpoint....Some non standard T A also.

Considering the increased volatility of the last few months..wild swings both up and down...something has still not happened in this particular phase of price action.....that is namely a blow off exhaustion top of a magnitude equal or greater than the preceding market action...the price shape at the top is simply not correct...the rises have been steeper with each succesive leg up but I can't for the life of me see how we are done on the upside.....the maximum pain/gain phase could just be beginning...pain is increasing over the days and weeks...why should the pain not increase further to the upside?...Can these wild days not be seen as convincing the shorters that the top is in....for sure, they can, but max pain would be to the upside now....I can easily see a further upside potential of between 2000 and 2500 points over the coming months...irrational markets type behaviour.

Simply making a case for more upside...it may of course not happen this way..

C V

Examine the periods 1996-2000 and 2006-????...Two charts attached.

 

[lurkerlurker]

my guess is 13200 (fut) will get smashed tomorrow...
possibly even premarket

and if it doesn't, I'll just repeat this post at a later date lol

Good call firewalker. The Fed pumped in some funds, the ECB pumped in some funds, and yet we have the Dow 50 points away from that level as I type this. That is the last remaining recent support, and if that goes we could see 12,800 before long. Somehow, I think a bounce may be possible. I do not think this market will trade much below 200, if at all today, however a major decline into the close could take out that level as longs are reluctant to hold over a weekend. The last few Fridays have had a sharp sell off into the close, so we will see what happens today...

I'm overtrading again. Today, I have set a target of a maximum of five Dow trades, to be taken from a 1h chart or higher, in the direction of the trend as defined by the moving average. I've had a profitable week so far, and a positive week last week, but while my trading last week was nothing short of disciplined, I regret to report that I have been overtrading this week, executing double digit round turns as a matter of routine. Good for my SB firm (although I hope they don't have problems hedging me with that frequency); not so good for my commissions as a % of P&L, or maybe even the P&L for that matter. A short from the open today held into the close would have outperformed my intra-day trading 2:1, at around 1/30th of the transaction costs.

I'll post tomorrows YM trades in the journal, and only take them according to 1h charts.

Good trading all.

 

[Hook Shot]

Counter V- You make some valid points....

The Dow seems to be finding support well above the spring highs which seems to imply that it's still firm long term and there is more to come on the upside........
As Bill McLaren might say support has come in at a high level.... given that we are well above 12796 of this spring and ........... above 12850 40wma

http://stockcharts.com/charts/gallery.html?$indu

Interestingly we've been through this credit market turmoil with GM a year or two ago ... a big deal at the time but then we went on to make new highs......... and GM went ballistic

In some ways I think I'm getting sucked into the indices game when some of the real big opps are in stox... Citigroup rallied around 500pts into Wed close and AIG rallied 700pts
as to examples and at least one US housing stock has almost doubled from its lows........

New highs can't be ruled out cos 12m ago or so we all thought we were finished and then the Dow went vertical for several months......... Imho bank stox yields are too high so prices have to rise.........

 

[lurkerlurker]

CV, HS; yes, I don't think the top for the year is in yet. I do think that we will see more violent movement both up and down in the near future. Given that today is one of the lowest closes in the Dow, how about we start a thread about either value investing in equities or day trading them? There must be some opportunities to get great American and British blue chips at a fraction of fair value.

Also, and this may be a contentious issue on these boards, but would anyone consider it appropriate to gain exposure to individual Dow 30 / FTSE 100 shares by using the "quarterly" share contracts provided by SB firms? I understand that they do not suffer from the appalling "overnight financing charges" levied on "daily" shares. Further, for a small investor, surely it is better to buy 500 shares though a SB firm than to try and get equivalent exposure by buying the shares and paying the stamp duty, etc. The brokerage would most likely be equivalent also. Thoughts?

I apologise for the off topic. I have looked at CV's charts and in my pretty amateur opinion the last few months does not look like a bull market top. I'm not really properly bearish until 12,850 goes, but I'm happy to sell a break of 13,200 if I get the chance.

Good trading all.

 

[2468steve]

Steve's solution

Can't no-one sleep guys??....have we all gone nocturnal.....

i've thought of a solution...instead of ECB,Fed etc throwing liquidity at the markets why don't they just take on the liabilities of all the sub prime debt......

Problem solved,everyones a winner !!......U can tell I've thought long and hard on this and obviously never studied economics.....what's Bernanke's mobile number,or should we just send him a text....

 

[Hook Shot]

So what happened to the 'debt crisis'? What a load of old rot from a bunch of crooks. It pays to ignore all the 'news' and trade the chart. The amount of money around is mind numbing- and perhaps 75% of it is genuine, but that doesn't matter- trade what you see, not the filthy lies trotted out by the media- markets run on money laundering and insider trading-how much more proof do we need?
I don't know why it annoys me- I make a living, I just see a great mass of ripped off investors and traders who shouldn't have to put up with this cr*p.

Dow on its way to 13700........ logic said it could not last but the market can be irrational as we all know....

 

[lurkerlurker]

Can't no-one sleep guys??....have we all gone nocturnal.....

i've thought of a solution...instead of ECB,Fed etc throwing liquidity at the markets why don't they just take on the liabilities of all the sub prime debt......

Problem solved,everyones a winner !!......U can tell I've thought long and hard on this and obviously never studied economics.....what's Bernanke's mobile number,or should I just send him a text....

Very strange. I suspect we are all watching the fall towards 13,200 wondering whether to break all our own rules and short at 2am?

I would be happy to, except 90% of my trading balance is in an SB firm which doesn't offer out of hours Dow, and I can't be bothered paying a wide spread with CMC to trade £1pp.

 

[lurkerlurker]

Anyone here trading the forex? Which pairs, which way, and why?

I'm going to look at some USD / GBP carry pairs...

 

[Hook Shot]

Can't no-one sleep guys??....have we all gone nocturnal.....

i've thought of a solution...instead of ECB,Fed etc throwing liquidity at the markets why don't they just take on the liabilities of all the sub prime debt......

Problem solved,everyones a winner !!......U can tell I've thought long and hard on this and obviously never studied economics.....what's Bernanke's mobile number,or should we just send him a text....

If I read your previous post right the CB's lend money which they reasonably expect to get back from the troubled banks via asset sales etc....... sub prime debt which homeowners are walking away from doesn't seems quite as attractive somehow...
Surely there has to be a quid pro quo......... Cb's need to make money too... I suspect :cheesy: Maybe I've taken this a bit too literally....?

Re Sleep ............sleep is 4 wimps ... but seriously my adrenaline levels won't calm down.....

 

[lurkerlurker]

Order in to sell GBP/JPY at 237.50, stoploss 238.00. Maybe that will be triggered by the time I get up. I can't believe GBP is down 6 Yen since yesterday. I think I've missed that trade, then I remember February.

 

[lurkerlurker]

Any ideas how the market will behave today? Are we really going to see more downside, or will the Central Banks intervene again? Aside from a small rally today, the extra liquidity didn't seem to help prices. How likely is it that 13,200 will break? Is it a valid signal if it occurs premarket?

I'm also quite disappointed to note that my "Trading the Debt Crisis" thread (which I put up 2 days before the beginnings of the crash) didn't receive much interest. Perhaps it was just badly done, but I thought it would be rather topical.......

 

[2468steve]

If I read your previous post right the CB's lend money which they reasonably expect to get back from the troubled banks via asset sales etc....... sub prime debt which homeowners are walking away from doesn't seems quite as attractive somehow...
Surely there has to be a quid pro quo......... Cb's need to make money too... I suspect :cheesy: Maybe I've taken this a bit too literally....?

Re Sleep ............sleep is 4 wimps ... but seriously my adrenaline levels won't calm down.....

too literally m8...was a lighthearted comment.....

On a serious note tho'......it's not sub-prime debt anymore...but how CDO's are structured and priced....AAA debt is being discovered to be no better than junk,where the riskier debt is being hidden in mezzanine tranches of AAA....this means that when the holders of such debt now mark to market at months end the bid is pulled making it all effectively worthless....there will be more horror stories towards each month end going forward as these CDO's have to be valued...problem is how can you value something for which there's no buyers...

 

[2468steve]

Any ideas how the market will behave today? Are we really going to see more downside, or will the Central Banks intervene again? Aside from a small rally today, the extra liquidity didn't seem to help prices. How likely is it that 13,200 will break? Is it a valid signal if it occurs premarket?

I'm also quite disappointed to note that my "Trading the Debt Crisis" thread (which I put up 2 days before the beginnings of the crash) didn't receive much interest. Perhaps it was just badly done, but I thought it would be rather topical.......

more liquidity and we tank...not good ....Japs are down 400 pts at moment also...wait for Hong Kong to open...currently quoted -700

 

[Hook Shot]

What's more interesting than manic indices ??? Euro/$ this is competing for the prize of the next big trade as it meanders within sight of its highs.......... Swissie looks interesting too ......... but I've digressed enough... :cheesy:[/QUOTE]

I'm short Euro/$ and just checked 'm still in ........
(incidentally Trichet hinted that a big european bank would get into financial trouble in ~feb this year.... shortly after the World Economic Forum

I think yen weakness is the next big trade to jump on (again) soon - the incentive for japanese investors to find a higher yield than what's on offer at home is pretty compelling ... Japanese growth is easing so can't see the logic of rate rises... ergo $/Y resumes normal service..in a southerly direction................... don't try this at home requires a bit of patience...

 

[lurkerlurker]

too literally m8...was a lighthearted comment.....

On a serious note tho'......it's not sub-prime debt anymore...but how CDO's are structured and priced....AAA debt is being discovered to be no better than junk,where the riskier debt is being hidden in mezzanine tranches of AAA....this means that when the holders of such debt now mark to market at months end the bid is pulled making it all effectively worthless....there will be more horror stories towards each month end going forward as these CDO's have to be valued...problem is how can you value something for which there's no buyers...

Reminds me of something I read in one of Elder Alexanders books. It was 1929, and Singer stock was trading at $100. Suddenly, there is no bid. A panicked trader runs to the floor, shouting "I need to sell, what am I bid". A clerk shouts "One dollar". He got the shares.

The value of something for which there are no buyers is zero. "Freezing" your funds doesn't change that.

On another matter, who agrees that I should take my funds out of this underperforming piece of junk and use them to trade my own account, or buy bonds?

 

[2468steve]

HS,
you still short Dow m8....currently quoted down another 100 pts....

 

[2468steve]

Reminds me of something I read in one of Elder Alexanders books. It was 1929, and Singer stock was trading at $100. Suddenly, there is no bid. A panicked trader runs to the floor, shouting "I need to sell, what am I bid". A clerk shouts "One dollar". He got the shares.

The value of something for which there are no buyers is zero. "Freezing" your funds doesn't change that.

On another matter, who agrees that I should take my funds out of this underperforming piece of junk and use them to trade my own account, or buy bonds?

LL,
what is it ...some sort of commodity fund ??