Yep the Market closed up for DAY #3 of the Rally...and its up going into the long weekend to boot....and WHY is this Rally hapening....cause I said it would....

That is the main reason I have not tried options. My (so-called) trading strategy is very specific. I short the stocks recommended by Jim Cramer during his TV show while his idiotic fans are bidding prices through the stratosphere in the After Hours market. Then I buy to cover the next morning - typically before 9:45am. I used to sell Cramer short at the opening bell, but I found that shorting during the broadcast got me in at better prices. The trend I am trading against is that Cramer's stock picks typically spike at the open and the quickly drop (usually bottoming around 9:40am). But of course, like I said, they spike even higher betwen 6pm and 7pm.

No worries - but thanks for asking. I sold short at around 6:30-ish pm at $28.80 and bought to cover right at the open at $28.68. Not a huge gain but every gain is...well...a gain! :D:D:D

Well, to begin with, options are more complicated than short sales and I don't understand them. So the fear of the unknown is a factor (yes, I admit that is not a rational excuse). Also, as 911skb said, I can't trade them in the After Hours so they don't fit in neatly with my trading strategy. And lastly, the stocks that Cramer pumps seem to be small companies with very small options activity. So the lack of liquidity scares me. My whole (so-called) trading strategy happens between 9:30am and 9:40am - 10am at the absolute latest. I opened an account with OptionsExpress and tried some virtual trading in options and got killed every time. The prices of the options did not follow the price movements of the underlying stock closely enugh for me to take advantage of the Cramer Effect. I can bail out of a $60k short trade in just a few seconds. But options? Not so much.

"Only buy something that you'd be perfectly happy to hold if the market shut down for 10 years" -Warren Buffett

"you really don't need to begin saving for retirement before you reach 60. At that point, simply save 250 percent of your income each year and you'll be able to retire comfortably at age 70."
-Jonathan Pond

But hey, what do these guys know? ;)

Both of the above quotes from the book: "The Boglehead's guide to investing" by Taylor Larimore, Mel Lindauer, and Michael LeBoeuf. Instead of looking for hot tips or trading tactics here, I'd strongly suggest giving this book a read. It's written in plain language that even I can understand. Warning: This is a book that brokers and those touting day trading hate...it tells the truth, and many brokers don't handle the truth well.

cause I said it would? :p

Yucky.

Edit:

Still yucky. That's a technical term.

Even staples names, which are outperf'ing mkt, are down. KO -1.3% etc.

NDX back down to lower part of trapped zone, so still sitting on the NDX short.

The market is plummeting...because I said so.

:D

Last week's rally was undermined by the strong run of new lows vs new highs. Where is the leadership? My health care positions are looking rough. I'm debating jumping ship.

DEAD

CAT

BOUNCE

Its time to fill up that Honda with silver.

Health care is thought of as a defensive sector, but within health care there are aggressive groups like biotech, medical devices, and specialty pharma, and defensive groups like providers and large-cap pharma. Depending on what market cap you're playing in, overall health care may or may not be defensive. In small cap, quite a bit of the sector's weight is in the aggressives, hence, small cap health care has been a very poor performing sector in this selloff. Large cap health care has been a better performer.

There have also been fundamental problems for health care. The FDA has been leaderless for years and is becoming increasingly dysfunctional, a growing risk for stocks dependent on new drug approvals (biotech, pharma, maybe med device). Health care inflation has been so high for so long, the rest of the economy is fighting back now, with restrictive reimbursement for new drugs and so on. Any sign of government interference in healthcare spooks the market, even Medicare Part D is viewed as a risk. Big pharma is facing a lot of patent expirations without enough pipeline to keep revenue growing more than barely. The sector has been a good performer in recent years, so valuations got pretty high.

I don't know if health care overall is ready to be "defensive". Biotech and specialty pharma don't look ready to me, PEs still high. The providers have been acting mre defensive lately. Big pharma is getting cheaper, maybe its getting ready.

I guess if I were looking for defensive groups, I'd consider big pharma and providers. But "defensive" might only mean going down less than the market. Hard to be more defensive than cash.

Financial markets are different strokes for different folks. Active players don't have to be correct every time. I wish that I could pick 3 horses out of 4. I bet on a sure thing horse before the races had drug tests. He was leading by a wide margin after the 1/2 then jumped over the fence and broke a leg.

Much of US dominated markets are self flushing. Sooner or later a crook goes broke and is charged. It's a great race track if you're a player.

I always found the pension flows into the global markets among the best at self regulation. 20-40B of liquidity flows daily with no disruption. Congress got involved in some pension management regulation a couple of years ago. The Fed spoke out against it. Every layer of regulation slows incentive. Some would say that our Fed Chairman is the most powerful man in the world but politicians know what's best to get reelected. The world doesn't know what they're dealing w/new Chairman. At least w/Greenspan you knew he shoot from the hip. I hope the newbie kicks some worldwide ass. That's his job imo.

Right now worldwide markets are taking a beating. I'm not expecting any overall market strength till after the elections. US businesses are flush with cash and are ready to expand given the opportunity and a good attitude of politics to business. NY Sen Chuck Schumer sic could be a problem if the Rep lose full control. The NYSE seeking global marketing influence means that the politicians screwed up with their SO accounting bs on listed companies. If the trend continues I'm moving to Belize.

You either believe the US economy is currently the strongest in the world and poised to increase their value or you don't.

77 million baby boomers are set to spend a fortune on health care. Instant bucks to the guy who figures out how to stop tattoos from wrinkling. The FDA and politicians are an impediment to the dynamics imo. I guess that would also add to volitality.

Had to search to find this thread. Guess we got distracted for a while.

Major indicies are decisively breaking down.

NDX has broken 100, 200, 300 day MVAs and trendline at 1570 and is knocking on 1530 support.

SPX has broken 200 day MVA and knocking on 300 day and support at 1247. Next support 1125 then 1200.

DJI has broken 200 day MVA, approaching 300 day and support at 10731.

Killing of Al-Z did not help markets, neither did fall in oil price. Multiple central banks all around world raised interest rates.

Remember during May I was saying no capitulation? Still no capitulation. Trading is described as orderly, most selling is by long-shorts, some buying by longs. Seems like market being led by selling of futures and by hedging. Insitutional sentiment negative but some indicators of individual investor sentiment still positive. Volume is rising - today will be substantially higher than last few days. Market getitng oversold but in the past month, oversolds have been worked off via several days of choppiness w/o resulting in meaningful rally.

Since April high, NDX has fallen -12% and SPX -6.5%. SOX -17%.

P.S. I focus on capitulation b/c as long as long-onlys are complacently holding their stocks, they're a big fat juicy target for shorts. I think market seeing hedgies pound on futures to break indicies down through successive support levels. Meanwhile the longs lack ammo to shoot back, since they haven't sold anything. Until longs capitulate, every reason for shorts to keep trying this.

What numbers will you watch to determine when there is capitulation?

My tiny portfolio of XHB put options is up 105% before trading fees. Sometimes it's better to be lucky than good. :D On the down side, my Japan mutual fund is being raped. I was up 25%. Now, I'm up 3%. On the flip side, I dug into some Medtronic (MDT) to firm up my health care stance, and it might work. All in all, it's peanuts, because I'm running a 90% cash - 10% equities balance.

Made $848 today selling Cramer short.

:D

what do you guys think of this?

BEARX

High volume, steep decline, very negative sentiment, w/ fear-driven indiscriminate selling by long-only investors, both institutional and individual, panic-like behaviour. Peaking put/call, extreme low RSI, other oversold indicators.

We've had much of this. Today was very high volume. I still don't think there's been the fear-driven indiscriminate selling.

Lots of traders are saying today's reversal marked the bottom, calling for a strong, real rally to start tommorrow. I've heard calls that the lows for the year are in. That seems too easy to be true, to me.

BEARX, 8% return YTD. Not bad. It would consider it for a mid-term position, 1-3 years. I would wait to see how this market plays out.

Perhaps it was, indeed, too easy to be true . . . NDX opened up now down intraday -

6-month t-bill is inverted with the 10-year. If the 3-month t-bill inverts with the 10-year, a recession is upcoming. Well, at least history says the probability is high.

Did I tell U boyz that Mother is happier than a pig in *****. I called her up on the telephone and said, "Mother I am worried about the stock market and the value of my trust fund." She said, "What the fk are sniffing airplane glue again."