Tuesday, September 30, 2008

Looking for some hot young chicks that are into kinky stuff like Pole dancing?  Then look no further. 

Here's a few tips ladies-

Can you imagine what would happen if there was a fight,,,

Also, make sure you don't make this mistake-

Family Guy famous Stripper Quote-Peter talking to the camera: ...but I'll tell you what's not cool--killing strippers.  Strippers are people too; naked people who may be willing to pleasure you for a price you negotiate later behind the curtain of a VIP room.  Besides, there's no reason to kill them, 'cause most of them are already dead inside...Good night, folks! 

Undoubtedly, there was huge sums of money lost and made today.  I cut profits too soon twice today which cost me probably 2k in profits(Hold the trade until you get a reversal signal).  I also put on 2 bad trades that weren't based off signals and it cost me some lost profits.  Today was a great day to use momentum strategies, a strategy day traders love.  I made a good amount of money today.  No records broken, but a good day nonetheless. 

Friday, September 26, 2008

After trading for 22 hours yesterday and 6 hours today, I'm taking a rest this weekend. Things to do later this week-Explain the indicators on the charts and make instructional video. Go over trading rules and make instructional video. 

I thought the WaMu news was actually good for the economy.  No FDIC failures.  No treasury issues.  It seems a lot of the problems stemmed around Wamu finding a suitor.  The market is down because congress cant decide on a bailout plan.  Is the indecision by congress something we haven't ever seen before?  People should be happy we aren't spending 700 billion on another big bailout.  Better for the US dollar and the economy.  Good Luck longs.  The end/bottom is near-er. 

Well, Today was a good day for the guys in the room.  The trade signals seemed to work pretty well.  I'm working on holding my trades longer.  I cut myself off about 8pts on my gold short and 10pts on my NQ long at the close.  Of course we got Gasparino coming in 10min before the close on CNBC to pulloff a 100pt rally on some more rumors about what the FED is going to next.  Some shorts that weren't watching there positions closely, got ZOLTED pretty bad. 

I'm having problems with Comcast this week, as they are doing service in my neighborhood.  Dam internet went out at 7:20, right before the 100pt sell off.  At least I had no open positions.  I called Comcast and they are going to credit the account a whole $25 for all the troubles.  Yeppie.  What a joke. 

Following the announcement of the ban on short sales, two ProShares inverse funds (including the widely held UltraShort Financials ProShares (NasdaqGS:SKF - News)) ceased trading for a couple hours this morning in order to give the issuer a chance to sort through the implications of these government actions. 

Why did SKF and SEF stop trading? 

As previously discussed, due to the short-selling ban on financial stocks, there are no counterparties willing to buy/write the issuers' swap agreements, as the wide sweeping ban on shorting financial stocks means that the counterparty would be unable to hedge away its exposure.  The shares of these ProShares ETFs did resume trading in the financial markets today, but they seem to be trading at prices that are not in line with their intraday indicative values.  This is to be expected, however, based on the simple laws of supply and demand.  Viewed as one of the remaining avenues to gain short exposure to the financial sector, the demand for the SKF and SEF were expected to explode.  Essentially, all who were covering their existing short positions in response to the ban were expected to attempt to gain short exposure via these inverse financial sector ETFs. 

Thus, ProShares contacted the American Stock Exchange this morning to note that it was not planning to create new shares in light of the SEC's unprecedented ban on shorting 799 financial stocks.  The AMEX responded by halting trading on the securities to prevent huge diversions between the indicative benchmark value and market price. 

Sunday, September 21, 2008

A few quotes from this week-"I don't want the American taxpayer to get this bad debt and then the guy (whose company once held the bad loans) gets millions of dollars on his way out the door," said House Financial Services Chairman Barney Frank, D-Mass.

Paulson said that "it pains me tremendously to have the American taxpayer put in this position but it is better than the alternative." 

My edge is completely gone and the government is now in full control of your money.  So sad. ( howardlindzon)

The U.S. Government's historic reaction to the financial crisis firmly puts us in a place not seen in generations.  We have officially crossed the line from capitalism to socialism in less than a week.  The Fed synthetically owns Wall Street as we speak.  The historic checks and balances built into the system, e.g., the ability to freely buy and sell, have been suspended for a large segment of the market.  While the sayings "Wall Street privatizes gains and socializes losses" and "When there is too much capitalism you need a little socialism, and when there is too much socialism you need a little capitalism" have had symbolic meaning to me, they have never sounded so true than they have this week. ( Information Arbitrage)

Saturday, September 20, 2008

The SEC's actions on Thursday to BAN short Selling on Financials was CORRUPT.  But what where they suppose to do?Let WaMu go under, which would then cause the FDIC to fail because there wasn't enough reserves to cover the customers deposits(overleveraged), which in turn would cause a run on the banks, which in turn,,,,,A CHAIN REACTION....

We have a major problem now.  Traders do not believe this run up in the stock market.  IT WAS MANIPULATED BY THE US GOVERNMENT.  This is NOT A FREE MARKET.The Traders that covered there shorts WILL NOT BUY FINANCIALS and the common investors will not BUY at these levels.  THAT IS WHAT EVERYONE THINKS.  One way markets fall off cliffs.  The SEC and US government made another bad choice. 

I'd like to compliment my broker for giving me no problems this week. I heard that there were several brokers that had issues. I however did have problems with my internet provide comcast. COMCAST, YOU SUCK.  My internet went out 35 minutes before close on Wednesday when I was short YM right at the markets peak before rolling over 300pts into the close.  I called my broker immediately (having stops already in place on the DOM), and I closed my short position.  I would have made $4,500 if I held that trade into the close.  Some of you may say that I can't blame COMCAST, but I'm blaming them to make myself feel better about not holding that trade. THANKS COMCAST. 

Skip ahead 18 min to see trading at the open. 
Today futures went limit up.  A day many traders have never seen before.  Here's my trading from the open.  Sound doesn't come in for video until around 10min.  The Chart isn't frozen on ES, ES FUTURES ARE LIMIT UP!!!  Skip ahead 13 min to see other charts. 

Its Friday.  D-DAY.  Will the FDIC get another bank to add to their failed bank list or not? 

I wouldn't be long the US dollar going into this weekend.  Those are my thoughts. 

I'm trying to analyze todays rally. 

Lets face the facts.  The government is accusing institutions of spreading rumors and causing stocks to sell off hard and they are blaming short selling. 

Obviously we were oversold, but was the buying caused by the rumors of another short selling ban?  Or was it rumors of the US government setting up another bailout? 

Who's the one spreading rumors now? 

Was the government blaming short selling when we were making new highs last year?Or could the selling be because all of these big banks lied and had major loses? 

Investors withdrew money from money market funds and mutual funds in epic proportions the last month, especially this week.  Surely some of this weeks selling in the market was forced due to hedge fund liquidations, but no one knows for sure if we are out of the woods yet. 

I have no clue where we will go.  The fear is high.  The type of fear you see at lows. My thinking is that if WaMu goes under, like the rest of the failed institutions, then there will be a run on the banks.  The problem is the FDIC doesn't have enough money to insure a bank that big. The FDIC even said that, the writing is on the wall.  The Russian stock market is crashing. If Wamu goes, expect a US stock market drop and the US dollar to drop. 

Tuesday, September 16, 2008

I can't help but laugh at the auctions going on at Ebay.  Last night I saw an auction for Lehman Brothers for 99 million.  This one is even better.  AIG save the world BagThe Sellers name is hopingforseverance and this is the description of the Bag-

"As you may have heard, an AIG collapse is imminent and would cause a catastrophic global economic depression.  In order to stave off such a catastrophic event AIG needs $20 Billion in capital.  Therefore, to rescue the world from this debacle, I am auctioning off this authentic AIG Emergency Bag in hopes of raising the required $40 Billion.  This very stylish bag can be used as a backpack during both emergency and non-emergency situations and can hold up to $75 Billion (must use really large denomination bills) which is exactly the amount needed to salvage AIG from ruin.  Although not photographed here, the bag comes with a pair of goggles and a gas mask issued to me on orientation day at AIG.  The gas mask is unused, however I did put the goggles on a few times and run around the office (Christmas parties, Wednesdays, things like that)." 

In real news- The Government is Bailing out AIG for $75 Billion. "The Federal Reserve said Tuesday it would provide up to $85 billion in an emergency, two-year loan to rescue AIG, which teetered on the edge of failure because of stresses caused by the collapse of the subprime mortgage market and the credit crunch that ensued.  In return, the government will get a 79.9 percent stake in AIG and the right to remove senior management. ")(Reuters)

When the Cock and Balls hit 117, we jerked upwards quickly.  I want to strongly advise all shorts that this is OPEX week, and when the Cock and Balls get this low, they tend to jolt up, and OPEX week works like Viagra, so the move will be violent.  SPY could bounce to 128 by Friday....

A crazy day to say the least.  I'm kicking myself for covering my ZB short and selling my YM long so soon.  There will always be another day.  I really feel like shorting ZB on every bounce up, as I believe US Treasury yields will go up from here. 

Yesterday I saw a spike in visitor traffic.  Most people ventured here on concerns of:What if AIG goes bankrupt?What happens to my mutual fund?What happens if Washington Mutual goes bankrupt? 

People are worried for good reason.  I'd like to think that right now is a perfect time to buy stocks with the current market turmoil, but I fear the worst for our market. I know there are a lot of long term investors out there that are stubborn when it comes to holding positions and that they think everything will be fine once all of this LEH, AIG, FRE, and FNM mess is over with, but unless the stock is at ZERO, we haven't seen a bottom. I was looking at the Russian Market, and just in the last 4 months, the Russian stock market has dropped 50%.  Yesterday the RTSI had to halt trading as the stock market dropped 17%."Russia's two biggest banks, led the decline in Moscow, falling 23 percent and 31 percent respectively.  Financial stocks worldwide slid after American International Group Inc., the biggest U.S. insurer, had its credit ratings downgraded." ( Bloomberg)

The VIX and More has been putting some nice pieces together and his blog is worth checking out. 

Remember, its OPEX week and crazy trading is going to be seen.  The market could rally 1000pts in the next few days or we could see another big drop in the market. All I know for sure is, that I would fear holding anything over the weekend considering the stance that WaMu and AIG are currently in. 

The swings in stocks and futures are pretty volatile these days.  30-50pt swings on the Dow Jones in a few minutes time.  Rumors come out during the day and you see stocks like AIG pop a dollar, only to see the move get faded over the next 30min.  You cannot be married to a position for long in this market. 

Don't worry people.  I'm sure there is a video out there that will tell you everything in the stock market is fine, I just can't seem to find it right now.  Time to go workout on the Gazelle.  Be back later. 

WASHINGTON, D.C. - September 15, 2008 – The Securities Investor Protection Corporation (SIPC), which maintains a special reserve fund authorized by Congress to help investors at failed brokerage firms, issued the following statement this morning in relation to reports about the bankruptcy filing of Lehman Brothers Holdings, Inc.

SIPC President Stephen Harbeck said: “SIPC has not initiated a liquidation proceeding against the broker-dealer Lehman Brothers Inc. and we do not currently anticipate doing so.  As of this morning, it appears that all customer cash, stocks and other securities are accounted for. 

It is important to understand that the holdings of broker-dealer Lehman Brothers Inc., would not be directly impacted by a bankruptcy filing at the separate entity Lehman Brothers Holdings, Inc.

Should the situation at Lehman Brothers Inc. change in some material way not now anticipated by SIPC and regulators, we will, of course, intervene as necessary to protect the cash and securities of customers.  However, I want to underscore that such an action is considered unlikely at this time. 

SIPC is working closely with the U.S. Securities and Exchange Commission (SEC) to monitor the situation at Lehman Brothers Inc.

The Securities Investor Protection Corporation remains vigilant and committed to our core mission: When a brokerage firm is closed due to bankruptcy or other financial difficulties and customer assets are missing, SIPC steps in as quickly as possible and, within certain limits, works to return customers' cash, stock and other securities.  Without SIPC, investors at financially troubled brokerage firms might lose their securities or money forever or wait for years while their assets are tied up in court." 

Your stock portfolio holdings or mutual fund value depends on the stock market values of all the stocks held in the fund, so you are fine unless the US stock market crashes.  If your Broker files for bankruptcy over the weekend and you can't trade because your broker is out of business, you should be able to transfer your holdings to another broker. 

If your broker goes bankrupt then the SIPC (Securities Investor Protection Corporation) will replace up to $100,000 in cash and $400,000 in securities.  SIPC is a nonprofit, private organization that insures the assets of customers of broker-dealers registered with the SEC (Securities and Exchange Commission) .  To see the fine print check the SIPC website. 

This leads into the question, what happens if my bank goes bankrupt?  You are insured up to $100k as long as the Bank if FDIC insured.  However, do you want to deal with the hassel of waiting in line if there is a run on your bank.  The strongest survive theme applies here too, WaMu customers are leaving and going to Bank of America. 

What happens if AIG goes Bankrupt?  Your broker is suppose to have reserves set aside encase they go belly up.  If the reserves are not big enough to handle the claims, then there are state guaranty funds that should cover the claims.  To see how much your covered by your state if your broker fails, check the Annuity Advantage Website. 

Friday, September 12, 2008

Jules in Jumbles- This blog is about a female futures trader.  She's fairly new to the game but so far pretty consistent.  She's been trading ER2, but will likely make the switch to the Mid-Cap contract with ER2 moving to ICE.  She posts her daily trading logs(something I use to do that readers loved), and she makes posts about her life, which I like most of all. 

Sage- He's a Trader in the Virtual Office that Trades mainly ES.  He's works a full time job, lives in Asia, and trades the US markets at night.  He also posts his trade logs. 

Ainkurn- He use to be a trader in DT's Virtual Office, but has now become a financial Adviser.  It's interesting to read all the tests he's had to take and what the typical day is like for a financial adviser. 

Trader Bubs- Also an old Trader from DT's VO, Bubs is still trading and working on becoming wealthy. 

Tuesday, September 09, 2008

Mortgage rates have spiked lower dramatically. How low will mortgage rates go?  When the 2yr treasury note is yielding 1%, maybe we'll be closer to the bottom. ZB is grinding higher, yields continue lower, and more financial stocks like LEH and WM go lower.  You have to question the drop in yields in conjunction with the weakness in these stocks.  Is the price action suggesting one or both of these stocks will go under.  And if these companies go under what effect will this have on US treasuries.  Definetily a spike lower will occur just like we saw with the Bear sterns bailout.  The question is, if and when will it happen. What are blogs saying about FRE, FNM, LEH, and WM? 

Monday, September 08, 2008

In the next few weeks scientists will smash 2 atoms together.  This could be the end of the world from the cause of a black hole, or this could unlock many mysteries that could tell us more about our universe and some say even cure cancer by revealing the more information about subatomic particles.  Excerpt from THEAGE"When the beams collide head on, they will create fireballs and showers of subatomic debris never witnessed before. 

Dr Varvell said the impacts could produce man-made mini black holes, reveal that the universe has extra dimensions that are normally curled up, and throw light on the nature of the mysterious dark matter which makes up most of the cosmos. 

It should also reveal whether the Higgs boson, or God particle, exists or not." 

If you haven't heard about the story of the Atom Smasher, checkout this clip. 

If you were like many Americans this summer who just bought a foreclosed house because they were so cheap, you can now look back and say that your timing was a little bit off because Mortgage rates are much lower and the government just took over Fannie Mae and Freddie Mac. 

Sunday, September 07, 2008

Ok.  This after hours jump could just be the PPT (Plunge Protection Team).I'm not trying to make predictions on where the market is going based on news, but let me just say that the current news we have this weekend is terrible and the US Economy is in the shitter, and its getting shittier if that's even possible. 

I like this post from Elite Trader on the 5 horseman(thanks to Digs)1.January-Fed lowers rates dramatically January 2008 to help banks.(January 21st the world stock markets plunge, and on Monday morning the FED does a surprise 50bp interest rate drop, and another 25bp days later at the scheduled FOMC meeting)2.February-MBI/ABK delay downgrading3.March-Bear Sterns bailout over the weekend. ( interest rates on bonds spike at their lowest levels for the year, BSC to be bought for 2, but then is raised later to a higher price at $10)4.July- SEC enforces rule of "NO SHORT SALES"(naked shorts) on selected financial stocks, which made it incredibly difficult for anybody to borrow shares to short on selected financial stocks like BAC, C, and GS)5.September- Government bailout of Fannie Mae and Freddie Mac, which will cost taxpayers billions in an economy seeing record levels of unemployment and mortgage foreclosures.  6.  Whats next- AutoMaker Bailout?  WaMu or other big bank failure?  FDIC failure? 

With that acknowledgment out of the way, I'm ready to trade my signals no matter if the market goes up or down.  300pts can become 600pts, and 300pts can become -300pts. 

It's sunday night.  A night I wish was January 21, because YM futures are up 280pts right now.  Why?  Is it the government bailout of FRE and FNM that has everyone jumping for joy?  It seems I'm wrong on all my calls, so its probably just best to fade my ideas.  Crude Oil is up, Gold is up, Treasury yields are set to open up, and guess what, the Euro is up.  I guess everything I said that was going down, is now up.  Is 12,500 the next target on the Dow like I thought a week ago?  Or are we going down like I thought yesterday.  My conclusion is, I have no fucking clue where this market is going anymore.  Maybe I should buy a house....Whatever. 

Here's the 2yr bond future contract.  Looks just like January/March all over again. 

I thought that interest rates were likely to be raised next year and that treasury yields were likely to bounce at these levels and never return, but, with the government taking over FNM and FRE, I'm not so sure. The FED could lower interest rates more and mortgage rates could go lower.  With the FED taking over FNM and FRE, I'm wondering how big of an affect this will have on US treasuries.  Will there be a lack of buyers?  What happens if a large bank like Washington Mutual collapses and the FDIC needs to go to the US treasuries for bailout money?  We already saw the FDIC increasing reserves a couple weeks ago.  The FDIC failed bank list is growing, with expectations of over 100 banks to fail before it is all said and done.  I'm not sure where treasuries are headed right now.  Even though we are at historically low levels, we could still go lower.  The best thing I can do is to stay on the side of the trend and the trend is down. 

I sold out of my long on YM too soon.  I was thinking of re-entering long, but ZF was at its lows at the time.  I was expecting a bounce in ZF around 8:30 AM (at which time I was expecting YM to pullback a bit after its bounce off its lows) but it didn't happen, so I waited and watched YM rally higher, missing 2/3rds of the total bounce.  Oh'well. 

Daily Advance DeclineNYSENASDAQAdvance Decline WeeklyNYSENASDAQThere is a huge difference between NYSE and NASDAQ A/D line, but remember the NASDAQ exchange has many more stocks.  Assuming NYSE A/D line needs to fall below the 2006 lows just because the NASDAQ A/D line is already past its 2006 lows is probably bad reasoning. 

AMEXWeekly Advancing IssuesNYSENASDAQAMEXWeekly New Highs/LowsNYSENASDAQAMEXGo to StockCharts.com for THESE CHARTS