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| maxreturn 745 posts msg #59876 - Ignore maxreturn |
2/22/2008 4:11:41 PM Deanengle, thanks for sharing. Would you mind getting into the details of your strategy a bit? Regards Max |
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| nikoschopen 2,824 posts msg #59877 - Ignore nikoschopen |
2/22/2008 7:34:40 PM
Truth be told, I got buried in the rushing stampede. I was pretty damn sure the market was heading lower and took on some significant short position. (#@%$&@%^%$^!!!) With the exception of "surprise! surprise!" rate cuts by the Fed, this kind of hysteria doesn't manifest itself very often and certainly almost never in the last 20 minutes of the session. But the very nature of this rally is suspect in my opinion. As I stated above, to rely on those same troubled banks that you insure to bail you out is outright ludicrous. How the hell will that change anything for the credit crisis that many of these banks are facing that, in turn, was the catalyst which led up to Ambac's current problem? |
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| maxreturn 745 posts msg #59878 - Ignore maxreturn |
2/22/2008 8:53:24 PM Niko...agreed. When the rally started I looked at my trading partner and he, seeing the vertical nature of the rally stated that the Fed must have announced another surprise cut. I said no way...the market lately has not been in the daily free fall mode which would prompt an emergency cut. When I saw the news story on Ambac I thought...that's it? You gotta be kidding me! Truth be told...I too was thinking about buying SPY puts when the low was taken out on low volume late in the day. But ALL too often lately seems the support/resistance levels are barely taken out just before major buying/selling takes the market higher/lower. Glad I waited. Sorry you didn't have a good day :( |
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| johnpaulca 12,036 posts msg #59879 - Ignore johnpaulca modified |
2/22/2008 9:04:54 PM Niko..busy at work today, crazy day in the markets I had a peek this morning and saw a lot of red...gunned down on CRM, made good coin on my today's long..WFR and DO. I also made good coin on ESRX which I bought earlier this week. Were you referring to WFR and DO as head and shoulders or all the stocks I have been posting??? P.S Because of time restraint I will stop posting trades on SF soon, I will be heading into my busy season at work...I will be skulking in the background. e-mail: john-paul@myway.com |
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| EWZuber 1,373 posts msg #59884 - Ignore EWZuber modified |
2/23/2008 1:45:22 AM I have been posting for several weeks on a Raging Bull forum that for the COMP to have any hope of preventing a massive bear attack, the Weekly Chart pattern support for the COMP at 2306 must hold at EoW. I am certain in my own mind that todays rally was orchestrated by big money and used the 'news release' as a signal to start buying. The COMP was headed firmly into LT Bear territory just 45 minutes before the close. I had no sooner commented on RB that the Weekly Chart was most certainly going to close below Weekly Chart pattern support, then the 5 minute chart went parabolic with huge buying volume. The COMP closed at 2303.35, close enough to 2306 to maintain Weekly Chart pattern support. That was no accident! Blantent corruption, IMO. A close anywhere near where the COMP was before the 11th hour rally would have brought on selling in the following weeks that would have put the index below critical support at the 50 MO.MA and into a full blown Bear Market with support at 2000, 1800 and lastly the 2002 low at 1250. What they are trying to do is hold the COMP above the 50 MO.MA at 2250 at the end of the next couple months long enough for stochastics to become oversold and make a final bounce up off the 50 MO.MA in an oversold condition. Monthly Chart Stochastics have not been oversold enough to allow for anything but a consolidation pattern so far. |
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| nikoschopen 2,824 posts msg #59885 - Ignore nikoschopen |
2/23/2008 1:50:08 AM It's a very skittish time. I wouldn't be at all surprised if the market gives back everything it gained on Monday. In this type of environment, nobody is committed to holding any sort of long term outlook. Only Warren Buffett has the balls, as well as the resources, to sit through all this turbulence. JP, I'm gonna miss throwing dirt against ure trades (wink wink). Just kidding, dude. I hope you will come back in no time to keep us both entertained and educated. No kidding this time. |
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| deanengle 33 posts msg #59890 - Ignore deanengle |
2/23/2008 12:16:02 PM maxreturn, I have been an active investor for about 40 years and about 10 years ago I finally obtained a sufficient degree of intelligence to stop buying and selling stocks which was contributing to all the fat stock brokers who just want to see trades so they can make a commission from you . I deal more exclusively in commodities but my great passion is options. Over some period of time I have found many stocks which decline 25 % or more on a specific day may have a tendency to bounce back up ( dead cat bounce ) a bit if the reason for the decline was some benign issue such as earnings, or some behind the scenes news event which might have analyst downgrade the stock but nothing like legal issues or accounting fraud. So if a stock drops greater than 25 % and has a daily trade volume greater than 50,000, and there is sufficient option volume to show some interest, and the bid and ask spread are reasonable, there might be reason to think that the stock might bounce back up. This assessment must be made within a few hours of the down event, you cannot just wait too long and the window o f opportunity will pass. Start reviewing some "FREE" sites to educate yourself such as OPTIONETICS, find some stocks that have options and perhaps stock patterns ( candlesticks ) that may support a potential up move. Paper trade for awhile until you find out what information is not TOXIC to the stock from it bouncing back up. I do not know what your level of training and market exposure might be, but I will tell you that most investors tend to complicate things by wanting to know every last detail of what may or may not take place. KISS IT or keep it simple stupid and by utilization of some very basic systems you will find that you can make a very nice return on a consistent basis. As always remember " A FOOL AND HIS MONEY ARE SOON PARTED." Trade your own account, do not allow any one else the discretion of making decisions about your trading account. Be the master of your own destiny.....CARPE DIEM should you desire a more direct contact you may use my email ( deanengle@sbcglobal.net ) I will be pleased to help you but I will not provide all the answers...you need to learn by your own experience. |
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| maxreturn 745 posts msg #59891 - Ignore maxreturn |
2/23/2008 2:11:49 PM Thanks Dean. No need to spoon feed me. Been around for a while. Not as long as you :). That's more than enough to get me off on my own do to some research. Thanks again for sharing. Max |
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| deanengle 33 posts msg #59892 - Ignore deanengle |
2/23/2008 6:58:39 PM Maxreturn just a little crumb for Monday, it may or may not work, check it out I have selected LNET as it appears to have a high probability to bounce up this next week. This stock lost just over $6.00 in 3 days over some bad earnings and of some note is that the analysts following this stock did not down grade it at this time. The Black Schoals value of the option is $1.20 and the ask price is $1.25 so we are in the ball park for valuation. This stock has a 20 % move to double the option price so it must move up by $2.50 for a 100 % increase in the option value. The implied volatility is 61 % I generally prefer a 10 % to double factor but I feel this stock will have a dynamic move the first of the week. WE SHALL SEE |
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| EWZuber 1,373 posts msg #59893 - Ignore EWZuber modified |
2/24/2008 12:14:26 AM deanengle, I think there is a more disciplined way. Possibly not as simple but I suspect more effective. First there must be some kind of support at the point on entry. If the stock has dropped ~25% then it will very likely need to be long term support, like a long term supporting trendline or a moving average on the Weekly or Monthly Chart. Daily and Weekly Chart Stochastics & Williams %R will need to be oversold (at a minimum). If the technical damage has spread to the Monthly Chart then I wouldn't even bother until some support area has been reached within that time frame. Next look for the Hourly Chart to also become oversold. From this point there are two methods of entry. 1) Wait for the 5 minute or Hourly Chart 10 periood MA to flatten out. Then wait for the stock to rise above the 10 period MA and bounce up off this moving average. This bounce must be accompanied with a stochastic +Xover in that time frame. 2) Wait for a consolidation pattern to form (within one of those two time frames) and enter the stock when that pattern is resolved. This is probably the safer of the two methods as you're not trying to catch a falling knife. That is to say, find the exact bottom. Using this system you are supplied with a very disciplined sell stop when the pattern support within that time frame is violated. If the entry point fails quickly then typically the position can be closed at a small profit or at a loss of <1%. Wait for the buy signals to set up again and try the next buy signal. IMO |
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