Market Watch for week of 8/17/2009

Here is the outlook for QASP. It could go either way tomorrow. I know that is a brilliant statement, but when you look at the chart you will see what I am talking about. :)

The Spinning top is above both the ema9 and the ema 36, which is a bullish sign, even though the spinning top is black. I suppose there is a case for the triangle being a descending triangle, but it would be so ever slight that is is not worth picking shit with the chickens. For all practical purposes a pennant has just been formed.

As far as buy and sell. I would just wait to see where this puppy is going for a while before making any buying decisions. It would be a "hold" out of the gate in my mind, and then a "buy if". IMPO.


http://www.coloradohandyman.com/qasp.jpg

dave whats the optimal radius of a stop on an option?

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Originally Posted by billhart22

It could go either way tomorrow. I know that is a brilliant statement,

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LOL - sounds like my forecasts!!!!! Let's see, what did I say about HAS - if it rally's while the rest of the market tanks, its good. If it falls with it, it's bad... LOL.

Just pray QASP doesn't open and close tomorrow even with today's close... otherwise, you'll be wrong! LOL

bill how are you?
what kind of renovation did you do today?

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Originally Posted by bassmaster

dave whats the optimal radius of a stop on an option?

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Depends on the time frame and your choice of contract.. that's what makes them so tricky, for this trade, I'm just going for underlying JPM not to break today's high tomorrow, since it's a quickly. This wasn't the best of trades, but I like the closes today.

For intermediate trades, some guys go with 50% of the cost of the contract. Some go with 80%. But the strike from being in the money, and the time left to expiration kind of dictates those choices. It's really easy on an intermediate trade on a contract that's far from the strike to be down 90%, and then back to profit in a matter of 3-4 days. Likewise, trading them in the money, you would be looking at swings likely well within the 50%, and not get stopped out.

If GS and JPM start backtesting their trendlines, which is possible, we don't have a good entry, and we'll definately see that.

The best way I have found so far, is to wait until the stock is in a trading range... where bollingers are compressed... then you have a good tight stop loss - you pick the direction - technically you could buy a call and a put then, and once a the new trend pops, if you have one contract, you have your stop loss at the top or bottom of the tight range. With playing both, you just cut the one going the wrong way, and let the other out pace the loss. This is called a strangle.

Let me know if you want me to post my track record that I have tallied for these quickies... you can see the volatility. I think I could make a snap shot.

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Originally Posted by Dr. Dave

LOL - sounds like my forecasts!!!!! Let's see, what did I say about HAS - if it rally's while the rest of the market tanks, its good. If it falls with it, it's bad... LOL.

Just pray QASP doesn't open and close tomorrow even with today's close... otherwise, you'll be wrong!

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That is hilarious!

Dave, that is called hedging! I can't tell where the damn thing is going, lol!! It is stuck right in between light and darkness right now and is just a hair dark. This is a case for Obi Wan Kenobe :)

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Originally Posted by bassmaster

bill how are you?
what kind of renovation did you do today?

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Hey buddy,

I just replaced a kitchen faucet for a friend of mine. He is a great friend - he pays. Tomorrow if it isn't wet out I am going to touch his deck up. He has his house on the market. It is one fantastic home. Probably 1.5 million. I have done all of the work on it.

Are you ready for your tournament tomorrow?

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Originally Posted by billhart22

Hey buddy,

I just replaced a kitchen faucet for a friend of mine. He is a great friend - he pays. Tomorrow if it isn't wet out I am going to touch his deck up. He has his house on the market. It is one fantastic home. Probably 1.5 million. I have done all of the work on it.

Are you ready for your tournament tomorrow?

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my tournament is on thursday.. and getting close to ready. starting to feel good, which is a step closer

Quote:

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Originally Posted by bassmaster

my tournament is on thursday.. and getting close to ready. starting to feel good, which is a step closer

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LOL, so my friend (who is really a friend of a friend that moved here) that I went to see Fan Halen with (btw, that show was creepy, those guys were so close to the real thing, that we caught ourselves believing it here and there - but even the band made jokes about it - ie. "Rule #1 - drink as much as possible, so that as the night goes on, you'll think that you're really watching Van Halen") I found out is a full time TA based futures trader. But get this, he hates casino's and gambling.. I think his anger is more directed toward slot machines and games where you have no choice but to lose, like roulette - but I found it funny, and even he joked about it.

I can see where playing poker could really help in the market in terms of guaging risks, etc.

Quote:

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Originally Posted by billhart22

That is hilarious!

Dave, that is called hedging! I can't tell where the damn thing is going, lol!! It is stuck right in between light and darkness right now and is just a hair dark. This is a case for Obi Wan Kenobe :)

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Maybe we can become talking heads on CNBC - it would help the public at least to be right 50% of the time. LOL. You're show could be called "Stock Shop".

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Originally Posted by bassmaster

my tournament is on thursday.. and getting close to ready. starting to feel good, which is a step closer

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I no sooner posted about the weather and now it it thunder (tons of it) lightning (all kinds of it), rain and hail. It sounds like a zillion golf balls hitting the house. Wow!!

So much for work tomorrow. It looks like it snowed out....

yeah , well optimal poker skills include understanding of game theory, odds, ranges , frequencies to determine plus or minus equity value. maybe missing a couple more information indicators but you get the idea im sure.

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Originally Posted by billhart22

I no sooner posted about the weather and now it it thunder (tons of it) lightning (all kinds of it), rain and hail. It sounds like a zillion golf balls hitting the house. Wow!!

So much for work tomorrow. It looks like it snowed out....

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do you ever enjoy the light shows?

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Originally Posted by Dr. Dave

LOL, so my friend (who is really a friend of a friend that moved here) that I went to see Fan Halen with (btw, that show was creepy, those guys were so close to the real thing, that we caught ourselves believing it here and there - but even the band made jokes about it - ie. "Rule #1 - drink as much as possible, so that as the night goes on, you'll think that you're really watching Van Halen") I found out is a full time TA based futures trader. But get this, he hates casino's and gambling.. I think his anger is more directed toward slot machines and games where you have no choice but to lose, like roulette - but I found it funny, and even he joked about it.

I can see where playing poker could really help in the market in terms of guaging risks, etc.

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i also learned to use my bankroll management skills. i started out with small stakes until i felt comfortable playing the game of trading. and thats all this is to me, just a game. so i definitely try to incorporate any game skills i have into trading stocks.

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Originally Posted by Dr. Dave

Maybe we can become talking heads on CNBC - it would help the public at least to be right 50% of the time. LOL. You're show could be called "Stock Shop".

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I could be a good talking head. I've got it down. We could do the "Dave Show". You could have Bass and I on there on a daily basis giving our opinions while you baffle everybody with charts.

I caught Cramer (5 minutes worth) the other night. It was one of the very few times that I have ever seen him. IMO, after 5 minutes, I was convinced that anybody that would listen to him would have to be a complete fool.

He was banging on buttons that make noises and he hops around like that Elf Geithner. What an obnoxious SOB!

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Originally Posted by bassmaster

yeah , well optimal poker skills include understanding of game theory, odds, ranges , frequencies to determine plus or minus equity value. maybe missing a couple more information indicators but you get the idea im sure.

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They probably just come natural to you now after playing so long. It is probably like driving a car.

I dig the light shows except when they burn modems out and computers. One time my VCR caught on fire when lightning came through the line. I had to open the sliding glass door and toss it out into the yard. That lightning hits right here and about blows your ears out. One time I was standing by a telephone pole in Aurora and lightning hit the wire up by me. Everything turned blue and there was a big blue ball on the line that took quite a while for it to disappear. That was a really wild one.

Now it is nice and quiet out now (just distal thunder and some rain). That is Colorado for you!

Quote:

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Originally Posted by bassmaster

i also learned to use my bankroll management skills. i started out with small stakes until i felt comfortable playing the game of trading. and thats all this is to me, just a game. so i definitely try to incorporate any game skills i have into trading stocks.

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Thank the trading gods I decided to go in small after I decided to do these options trades on my own... the first few I did on my own were intermediate term, and that was costly, so I finally tuned it down. Though I'm winning, I didn't have the emotional ties to the trades, which helps a lot in developing/following rules, and it could have gone the other way, which you'll see if you keep going and don't set any stops, is a sure way to get into a run of 95% losses really fast. These things can move like pennies, I have two 1 day trades that I booked just over 100% on, so you can see how easy it is to book a 95% loss - which in this game is 100%... as the value generally is a nickel until expiration.

I think that's key whenever you switch trading styles or get into a new game like the pennies. Until I have about 30-40 of these option trades under my belt and an ok record, under different market conditions, I'm keeping the same price limits.

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Originally Posted by billhart22

I could be a good talking head. I've got it down. We could do the "Dave Show". You could have Bass and I on there on a daily basis giving our opinions while you baffle everybody with charts.

I caught Cramer (5 minutes worth) the other night. It was one of the very few times that I have ever seen him. IMO, after 5 minutes, I was convinced that anybody that would listen to him would have to be a complete fool.

He was banging on buttons that make noises and he hops around like that Elf Geithner. What an obnoxious SOB!

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I guess the hedge on my show is that I draw 400 lines on each chart and tell the audience that one will hit... eventually... lol.

Seriously though, how many times did those clowns call the bottom is in... and then in march said that we are in big trouble. Actually, I saw a great vid, which I should post a link to, from one of the greats, who just looked down when asked about the news and basically said he believes they are paid somehow to pressure retail into going the wrong direction.

Quote:

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Originally Posted by billhart22

They probably just come natural to you now after playing so long. It is probably like driving a car.

I dig the light shows except when they burn modems out and computers. One time my VCR caught on fire when lightning came through the line. I had to open the sliding glass door and toss it out into the yard. That lightning hits right here and about blows your ears out. One time I was standing by a telephone pole in Aurora and lightning hit the wire up by me. Everything turned blue and there was a big blue ball on the line that took quite a while for it to disappear. That was a really wild one.

Now it is nice and quiet out now (just distal thunder and some rain). That is Colorado for you!

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We had a storm out here in San Diego once, and I got an email forward from a friend, showing the news story... "San Diego swept by Storms" or something along those lines. Then there was a picture of someone's backyard deck, and one of those white plastic outdoor chairs was tipped over.

Quote:

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Originally Posted by Dr. Dave

I guess the hedge on my show is that I draw 400 lines on each chart and tell the audience that one will hit... eventually... lol.

Seriously though, how many times did those clowns call the bottom is in... and then in march said that we are in big trouble. Actually, I saw a great vid, which I should post a link to, from one of the greats, who just looked down when asked about the news and basically said he believes they are paid somehow to pressure retail into going the wrong direction.

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They have to be paid. I don't listen to any of the punditocracy pertaining to stocks. They are so far behind that when they report it the action is over with. That in itself is a great lesson - nobody is going to make money from the T.V. people.

I believe that T/A and DD are the only things that give you leverage and odds with stocks. Now with pennies, if a goat farts it is worth 3 ticks. Pennies are so news driven that it is insane. Forum after forum all sound the same. Either they are elated or they are depressed while waiting for a PR.

I love this forum, because we can discuss things and all know each other after a while. This is a cool place.