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Effective Immediately...
After last year's debacle, most hedge funds feel lucky to still be alive. After suffering through the steepest, fastest bear market in history, many lessons were learned. And I'm guessing that many hedge fund gamblers are starting out in January with some New Year's trading resolutions.
In a nutshell, nobody, I mean NOBODY will be improperly positioned for the next bear market. And NOBODY will be missing the upside breakouts, either.
- Effective immediately, the fund will no longer invest in any asset that cannot be bought or sold in size with a mouseclick. No more private equity. No more OTC traded items. No more real estate. No more mezzanine debt. No more "alternative investments".
- Effective immediately, the fund will be trading liquid stocks only. No more futures or options, as to minimize losses due to Options Expiration shenanigans.
- Effective immediately, all company research and fundamental analysis will be dropped. Buy and sell decisions will be entirely dependent upon price action only.
- Effective immediately, traders will be limited to using 3 screens only: Daily chart, 60-minute chart, and 5-minute chart. Nothing more is necessary.
- Effective immediately, all "portfolio strategists" will be fired. Our new portfolio strategy will be the following: If its going up, buy it. If its going down, sell it.
- Effective immediately, all MBA's on staff will be fired, unless they have proven themselves as Top 5% gamers in either Grand Theft Auto, Madden NFL, or UFC 2010 Undisputed.
- Effective immediately, when the XLF is over the 50-day EMA, no shorting allowed. Nada, zero, zip.
- Effective immediately, when the SPY drops under the 50-day, the fund will go to 50% cash.
- Effective immediately, when the SPY drops under the 200-day, the fund will go to 100% cash, NO EXCEPTIONS.
- Effective immediately, when the SPY closes under the 200-day for a weekly close, 50% of the fund is to go short.
- Effective immediately, no stock on the Investor's Business Daily Top 100 will be traded unless they are in the S & P 500. Too many are looking at this list, and all those stocks are subject to shanks, clothesline drops, wild gaps, and reach arounds perpetrated by Goldman's Prop Desk.
- Effective immediately, no more buying commodity ETF's in the energy sector, as they have proved to be the 2nd worst investment vehicles ever designed.
- Effective immediately, no more trading in 2x or 3x inverse ETF's, as they are the No. 1 worst investment vehicles ever designed.
- Effective immediately, no more buying breakouts when the market is overextended.
- Effective immediately, all breakouts in the XAU or HUI are to be shorted, and all breakdowns are to be bought.
- Effective immediately, no shorting of any stock unless it is up 5 days in a row.
- Effective immediately, when the Vampire Squid is acting well, forget about shorting, period.
- Effective immediately, all bad news or good news regarding the economy is to be ignored. Price action will dictate everything.
- Effective immediately, all hopes of Erin "B-Cups" Burnett or "Bathtub" Becky Quick getting breast implants are to be abandoned.
- Effective immediately, all hopes of losing that last button on Amanda Drury's blouse are to be surrendered.
- Effective immediately, all hopes of seeing Amanda Drury and Michelle-Caruso Cabrera in a mud wrestling match are to be dismissed.
Let's see what happened today:
Today's Rocketships:
So far, its all good for the bulls.....
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tnx, notes WERE taken :)
Kick ass RobotTrader!
Robot- STEC=ridiculous...unless of course you're onboard. Nice ones on SNDK & IAG a while back. Thanks.
Rubberband on the left hand of the Goddess is interesting. I guess she has to snap herself to remind her how unbelievably gorgeous she is.
wtf, dude? You are looking at her wrist? I didn't even notice she had arms!
Funny, but always check the wrists and (k)ankles.
about 25% of the float in STEC is short. they gettin' the squeeze.
Shank to the jugular could come around 20-21 when gap closes.
I like hot chicks with hot hands. I don't want a chick with man hands. You've seen the Seinfeld episode. Not cool.
That episode is one of the best ever.
Is that an eyelash? Make a wish.
Did it come true?
mmmm....no.
Keep an eye on these Chinese solar stocks:
http://finance.yahoo.com/q/cq?d=v1&s=csiq,jaso,ldk,sol,solf,stp,tsl,yge
Below, Mykonos crazy 2007 (pre-crisis...don't get too excited...lol)
@Leo yup anything Chinese is a bottle rocket. HMIN made another new high today. and then there's Kandi (KNDI). is this legit or a penny stock pump and dump?
oh mykonos is so wonderful. enrico and marcello did a photo shoot there this summer
http://www.yvymag.com/2009/08/enrico-de-giuli-by-marcello-de-giuli-part1/
oh and if you missed it, high class escorts have now become celebrities
http://www.marcelloandenrico.com/
Do your homework, Chinese solars aren't pump and dump penny stock bullshit. As for Mykonos, the first time my buds and I went there years ago, we walked right across Pierro's:
http://www.pierrosbar.gr/
We were like WTF??? Then we turned the corner and discovered Skandinavian Bar:
http://www.skandinavianbar.com/
The amount of gorgeous women that hang around this bar at night is incredible.
I'm gonna disagree here. "Options Expiration shenanigans" is likely to be their biggest source of trading revenue, given that the basis trade is now all but dead. However, they will look for companies with high volume and a large OI.
Example- the AAPL end run to just above $195 as the Decembers expired.
Unscarred,
I wholeheartedly concur. For details, "Trading Auctions at Expiration" by Jeff Augen is the full Monty and it can limit your workmonth to Expiration Friday - if you really do your homework . Unless you really need to catch up with the Hamptons, in which case more shenanigans will be needed for the rest of the month, I'm afraid. But honestly, you can spend that working on Leo's "investment grade" promotion - guaranteed bang for the buck :-)
Shorted RDN, AGAIN, at $8.30 this morning, got a bit lucky to have almost top-ticked it. At some point people are going to figure out the middle-lower-class borrowers that the MIs insure have a bullseye on their chests.
Effective immediately All traders with fat fingers are fired.
One RMBS is enough to ruin the month.
Robo you will have a tough time outdoing the above post. It's not only your best but is closer to the truth than many realize.
Nah. The chart doesn't tell the real story.
RMBS went as low as 15.80 ish.
Trades were cancelled a lot later.
Thats right!
"Our new portfolio strategy will be the following: If its going up, buy it. If its going down, sell it."
Brilliant!
Robo...one of your most brilliant pieces of writing. Honestly, I mean that.
Funny, funny shit.
We know you're an LA guy: any truth to the rumor that you have been snuggling up to your favorite rep Maxine Waters for the inside scoop on XLF et. al.????
Vintage Robo
The sad thing is that some still think that they can beat the odds of this laughing stock market.
And where is the SEC? Polishing their CV's.
Good stuff Robo. Not much I disagree with in the post, otherwise known as the "modern day trader's bible."
One thing, I think shorting 2X or 3X ETF's can be very profitable, as you are selling the rebalancing effect and time decay. E.g. if you think the SnP is going down short SSO rather than buy SDS. Just a thought.
Sure you can do that but most broker dealers are going to charge you a premium to do so because this is not secret and they want their piece of the free money. They take more than half that decay value in short interest and misc fees to borrow them.
once again reading a robot trader post leaves me psychologically pistol whipped
gut hurts from laughter
the putter is stiff
and my head is swirling looking up all the three letter ETFs
like having a porn star college roommate who is on the deans list
dude you're obsessed with Drury's chest!! don't blame you, good to see you back, funny as s*** as always
Yes, this is vintage W. Great stuff.
I concur about that being one of your best posts.
@Robo,
The name of the game is LIQUIDITY. Stay nimble, let your profits run, and get out at the first sign of trouble! Excellent post.
I want to see how often these RMBS HFT algo meltdowns are going to occur before anyone does anything. Like the phk december 30th. This market is going to get toasted one day on this type of shit. One piece of bad news and this market could drop 200 spoo points in 5 minutes cause of the HFT auto cover the loser algo. They just get the fuck out when it goes so far against them and it is a snowball effect very very fast all bids disappear cause they are driving the real liquidity providers out of the market. Market chaos is coming to an exchange near you. Be ready. You could really get screwed like a friend of mine did today. He bought RMBS after it bounced off its low and made 2 points on it in 1 minute. They bust the trades and he is now illegally short and losing a point on his illegal short. What a system. HFT got pull to get them busted. Here is what I think is coming. Trader tax passed but broker dealers like Goldman have an exemption. They are on a mission to drive everyone out of the market except funds they can pick clean.
If we now already see moves >25% down in 1-2 minutes on a single stock
with no real news. What will be next ?
What when panic hits the market for whatever reason ?
-33% on the market in a single 5 minute bar ?
Seriously. A double figure sudden drop is not that unlikely.
Long live the boxes.