With all of the clutter and insanity due to groups turning into recruiting grounds and advertising forums for esoteric and mindless products, I was compelled to launch my own LinkedIn Group which is being emphatically embraced by the systematic and discretionary proprietary trading universe, to my delight. I know many of you are Prop. Traders, [...]
The ego is a particularly strong component of the human mind and we are naturally prone to certain egocentric tendencies. All traders and investors must work to understand these tendencies: Egocentric memory: the natural tendency to forget evidence and information which does not support our thinking and to remember evidence and information which does. Egocentric [...]
What is the TRIN? Richard Arms developed Arms index, which is better known as the NYSE Short Term Trading Index. The indicator is used in a contrarian manner to detect overbought and oversold levels. The indicators calculation creates an inverse relationship with the market. In the most basic analysis, a rising TRIN is bearish and [...]
Game Plan – VOLUME EXHAUSTION BARS IN FINANCIAL STOCKS. Campaign – Position trade 2nd tier financial names. Continue to focus on gold stocks and buy on dips, sell into rallies. PRIORITY- Volume climax in financial names. Short-term trend exhaustion. Dow recovery of 7450 level short term reversal in progress. Week of Feb. 23 Dow showing [...]
I’m posting the response I gave to a close family member upon hearing that he took profits on positions established last Friday with my advice. My objective per his request was to build a long-term portfolio of financial stocks with the potential to start paying dividends several years hence… His reasoning for taking profits? “I [...]
Or should I say “feast”, to better reflect my opinion? Perfect catch of the turn. Having switched from net short to net long mid day and scored doubles on both sides is excellent for a typically uneventful Wed. Nevertheless, should have crushed it beyond what was achieved. Seems like overly cautious following prior 8 weeks [...]
All inverse ETF’s, including double and triple inverse ETF’s, are in the process of discounting (i.e. price discovery) a “volatility” premium due to institutional hedging in times of extreme market stress. When gamma explodes because of the impact of volatility on derivative pricing, hedging becomes much more difficult as “prudent” hedges seem to malfunction all [...]
Week of November 3 THUR- Heavy volume on the sell-off. Market’s spooked by the lopsided gov’t. As expected, but didn’t exploit. Monitor airlines for entry levels (see below). Many charts look like gaps from Tuesday were closed. Only problem is volume expanding across the board. So many charts look terrible, I feel like we’re going [...]
Week of October 27th: Wed p.m.- Yesterday, markets rallied 880 points. Today, a 300 point rally reversed to close almost flat. This is a very bullish sign. The euphoria became excessive because we had rallied almost 20% in 2 days. So the late day reversal was a definite shakeout of the fast money, weak hands. [...]
“We’re going to see five hedge funds fail for every bank, maybe more,” A moment of reckoning for many hedge funds may come at the end of this month, when their exposure to credit default swaps must be “marked to market” to reflect the increased obligations at the end of the third quarter. Olivant, the [...]
Week of September 16 WED: Overnight thoughts: If Morgan is considering a takeover, then Morgan is in trouble. And as LEH showed, the downward spiral is viscous. It has to fall. Think about it. All financial counterparties to MS are looking to eliminate risk as fast as possible. Whether MS is well capitalized or not [...]
Friday’s rally confirmed by volume.
Biotech Index continues to hover near all-time highs, testing October 2007 levels. Red flag is Accum. Swing Index, which has not confirmed high (except Monthly). A broad market rally focused on Tech, catalyst being USD, will rotate $$ out of defensive stocks (e.g. healthcare). Wait/watch for pullback in this sector.
