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Still surprised the only market volume is always to the downside? Talk to the machines.
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Well, they jumped nearly six dollars yesterday. I wouldn't exactly call it rolling over until they retrace most of yesterday's gap up. However, it is interesting posture as we head into earnings season. It would be incomprehensible that GS would not report a hefty trading profit along with healthy underwriting volumes. Maybe conventional wisdom is wrong?
P.S. It might be interesting to keep an eye on LIBOR since Bank of America seems to be exhibiting similar behavior.
Robot's on a cigarette break
How is everyone managing to stay short? My delta on my index options is -3500. It is costing me a fortune to stay short. The decay on TZA is incredible. Please no pithy comments about how you have timed market perfect.
I sold at the top.
perhaps puts on the long etfs might work better, since the long etfs decay on the sideways tape and leverage increases as the tape moves against the long etf. my $.02
Yeah, I'm sure professional option market makers completely fail to factor this into their quotes.
I remain almost fully short despite the bubble up (moved to net short back in June).
I am also adding shorts on days like today (added TZA at 11.97).
I have a few principles:
1. Hedge. Get some 3x longs when the market is down 1-2% to offset my massive shorts. Sell after 1-2 updays.
2. Focus. Focus on the most overstretched segments (in my opinion these are EEM, Energy, Small Cap, ...).
3. Be patient, shorts always take time to reverse. But watch for the adversity of the year-end as some losses on shorts will have to be taken to offset gains.
4. Pray for the market to become more overstretched. Remember those who made money on the upside will want to escape as soon as the music stops). Oct is a killer of profits on the Long side.
you're looking at the wrong places
http://www.scribd.com/doc/19939665/Wall-Street-Manna
First of all, I think your assumption that "everyone" here is short is a little off. You can however trade around a core position, taking it off, reversing during the day and still remain short, just at higher and higher, maybe non-profitable entry points.
Other than that I use perfect market timing.
I am short
I mean I am short of capital remaining
I cllosed out my shorts on Monday for obviously less than I could have on Friday. But am thankful I sold yesterday and not suffered through today's madness. I was short the market via ETFs and made out OK, I did time it well but not perfect. But rather than chalk it up to skill I feel I was jus lucky. And I am not here to gamble. Who knows, the markets could sink tomorrow just as much as it went up yesterday and today. Or maybe we'll break 10,000 tomorrow. It is not only unpredictable but over exuberant in both directions.
You have to be an action junky to even try to trade that volatility. I can't take the irrationality of it and decided to go to cash with the exception of 2 stocks I have owned and held for years that I like even in this environment.
The market makers are not maintaining an orderly market they are traders like anyone else, except they have huge advantages and legal exemptions, and they exploit them. Their privelges and advantages should be stripped and they should just trade equally like all others.
So this trader, who has made very good money over the last 5 years in the stock market, is just about done with it, and I'm still quite young. While I really loved trading more than anything else I have done (I run a pretty successful manufacturing business too) I just don't recognize anything anymore. The tools and patterns and techniques and instincts I once used no longer work, fundamentals are out the window, technicals matter not a whit, there are not enough prime players, market makers are in it not for the spread but for the move, robots are fighting robots are fighting humans, and the free money for the few IBs to dick around make it a completely disorderly, irrational, unpredictable and frightening market for the average guy. Basically I'm pissed about all the things we've all read bout here and then some. So why should I even try to get in the middle of that mix?
Sorry for the rant, but I'm disappointed. I've enjoyed trading for a long time and now I don't. I'm sad.
Hey TD, have you noticed that it "seems and feels" a little quiet out there. Calm before the storm, or eye of the storm? Felt like that in '87 too. Sorry, we're showing our age. Have to hand it to you and your staff, you do, do good work. We appreciate that, since it's not easy. The site really has a sense of quality and substance.
Everyone is buying this new thing called "portfolio insurance"
Don't need it. The Fed insures our portfolios.
Yup, the new "new" portfolio insurance.
Ah - perfect explanation why AIG is UP then :-)
And our buddy John Succo warned of that backe in '87, and again to Lehman management before LTCM blew up. Let's just say "portfolio insurance" works, until the models blow out their set deviations.
yes I heard that worked out well
"portfolio insurance"
i remember it all too well, as well as the cat who said on 08/25/87: the market is clearly going higher.
shades of pisani in 07 saying she's going to the moon.
There is an unconfirmed rumour in the markets that Goldman Sachs have had a $1bil loss in derivatives
uh huh. And then yesterday, in the middle of the day, they announce a report claiming that the banking sector was doing very well and drove the entire market and the DJIA in particular up another 200 points in a day and a half.
If they lost $1b in oil futures, they made it up already.
perhaps the push by tiny tim (full court this week) on financial overhaul has the financials somewhat spooked?
of course i am reaching here because no regulation is going to be enacted that impedes the GS money machine.
i'll feel better once we fill and kill the spx 1016ish gap.
Whats the deal with GS. Anyone know anything? Rumors about earnings or ?
One pithy comment, from TD no less. Shedding tear......
And here it is in black and white on Yahoo finance. It is so obvious the HFT has been running amuck!
1:30 pm : The financial sector has pulled back from a 2.3% gain to trade with a 1.0% gain as shares of Goldman Sachs (GS 186.69, +0.22) make a sharp reversal amid a spike in trading volume. The financial sector was a leader in the broader market during the previous session.
http://finance.yahoo.com/marketupdate/overview?u
I'm guessing the RANSquawk headline is saying there is an unsubstantiated rumor that GS lost $1 Bil on a derivative bet? That could explain this hiccup. Lloyd, how could you let that happen?
Yeah, but the $1b gain on the CIT bankruptcy should make it all a wash...
True, but investors just can't accept the possibility that GS could EVER lose. On the other hand, this could be a well-placed rumor to allow more buying at lower levels before earnings kick off tomorrow...
Hey....no problem....BB will just give them another $10BB of our money and they will still get their $gig bonuses.....It's a wonderful world playing with funny money....
TD's comment might have had broader meaning. In
Oct 1987everybody was buying portfolio insurance on
the way down. Close that pit! Open that pit!
shut up, you cried all the way up 60%
Edit: What Bear said.
Gold(man) futures loss? That would be a shame.
The crocodiles are waiting for the herds to swim back across the Mara River. After a million crossings there won't be any animals left. Then what will they feed on?
the rats deserting the sinking ship of fools. not masters of the universe but fools by virtue of their behavior.
I was about 8 years ago at the Mara River and what was most stunning were the vast number of dead animals, primarily Wilderbeast, floating down the river after trying to cross the river while it was flooding. Mixed in with the Wilderbeast were some Zebra that foolishly followed the herd of Wilderbeast in the crossing. So what is the hazard of flooding waters if the crocodiles are the Goldman traders? (And, yes, the crocodiles were pulling dead Wilderbeast to shore to feed on.)
Did someone read Robo's post?
Each other - just like last fall.
Bingo
Gold(man) futures loss? That would be a shame
Heading for another reversal, just like last week. Low volume ramp on the Monday and then a big reversal.
Goldman insiders are selling a few shares. Nothing to see here.
"BIG" reversal? you mean that 1% reversal after more than 50% up?
I am dying to know who is the short side of all the new csdes and cdoes as a replacement of AIG. I think TD would become a household name if he manages to breakout news about that. I am sure there are some cds on CIT,so who is the other side of those?.There must be somebody now who is holding the bag for the big guys. Who is it?Work your brain guys and strech your imagination.The new Steven Hopkins of finance,would also become the future billioneer....
Can anyone explain me how $1b loss corresponds to GS VaR. ZH wrote about it some time ago.
Wouldn't that be - if true - very black swanish?