We cashed out of everything today. We ended up taking a small loss; however, we are upset with the performance. We went against our rules. Now, who would have ever known that the markets would have rallied so hard on thin air. The point is- it doesn't matter.
1. We didn't set stop losses on our trend trade.
2. We didn't fold when we lost sight of where the markets were going.
3. We didn't believe our computers.
These are very important rules and although we paid a small price for the errors today- they are not acceptable. The losses could have been large if not for the counter trades set a few days ago.
One cannot play this game without following their rules. We decided to step aside for a couple days because it is getting twisted in here and we did not follow our rules. It is becoming pure gambling and we are not comfortable with that. Check emails. We will ony check the markets at the end of the day for formations. Until then cash is where we rest.
Wednesday, September 14, 2011
Counter Trades To The Rescue!
Luckily our CTs (Counter Trades) have stabilized our emotions and our portfolio- otherwise we would be running for the hills like the other battered bears. Our CT's in XIV are holding us together and minmalizing our bear bets substantially. This is why we use them- in case we get ambushed! Whip Saw Protection - Don't leave home without it!
We may be get out of this ambush with just a small scratch- or maybe even a profit;)
We may be get out of this ambush with just a small scratch- or maybe even a profit;)
Looks Like Every Body Is Nervous.....
The Bulls, The Bears, Everybody. It is almost impossible to hold a trade in here with any confidence. The markets are susceptible to any news at a whim. This is what we call a "Meat Grinder". Everybody loses. We will be looking to abandon our TVIX trade soon. It is giving us a headache. The news and fundamentals continue to weaken while the traders are bidding up prices- or at least the computers are. They are really trying to get the "shorts" out of the market or they are just playing the range.It hit the bottom of the range (11,000) and will go up to 11,200 because...well..thats what computer programs do in range markets;) Silly us for not playing the range- the news gets in the way.
Range: 10,800- 12,500
Posssible new Range: 10,800-12,000
Range: 10,800- 12,500
Posssible new Range: 10,800-12,000
The Arrival of Geithner...
We are not sure where he has been this whole time; however, he is now all over the place. The President didn't help the markets, Bernanke didn't help, and now Geithner speaks. Surprisingly, he helped sooth the markets at least 20 minutes so far. He stated there is "not a chance" that Europe's major institutions will let there be risk in the eyes of the market.
Wow! That is a bold statement. Not sure what to think. He probally regrets saying such a statement at an insignificant juncture-Dow 11,000 is not the place to waste a statement like that.
Wow! That is a bold statement. Not sure what to think. He probally regrets saying such a statement at an insignificant juncture-Dow 11,000 is not the place to waste a statement like that.
Update: All Signals Point Down
The short-term trend has just signaled: DOWN. The technicals are all negative. Technically. it is at the bottom of the range and should still signal a bounce up; however, Our "Formation Forcaster System" is signaling a high potential for a break-down in the support area. We don't usually like to trade before confirmations, but this signal is flashing "High Alert". Dow 11,000 is a very strong floor. Bear attacks have not been able to penetrate it for very long. We believe the floor will break.
Interesting to watch-let's see.
Interesting to watch-let's see.
Tuesday, September 13, 2011
Multiple Action Manuevers (MAM's)
Our Counter Trades (CTs) picked up some XIV at 6.22 yesterday. Today we went trend shopping and picked up some TVIX at 69. We are trading volatility exclusively. Our plan is to trade the rising fear up and invest in stability at low prices. We think the trend is still down; however, we would like to fund our counter trades with profits from our trend following trades. We are skewed 4 to 1 long/short volatility. Our plan is to average down on XIV as TVIX goes up.
Check emails for for details on MAM
P.S. Looks like it is comming out of the cloud on the downside.
Check emails for for details on MAM
P.S. Looks like it is comming out of the cloud on the downside.
Friday, September 9, 2011
Counter Trades being Deployed....
We have begun a bullish "Counter Trade" program utilizing "Pyramid Pricing Strategies". Our target of Dow 10,000 is now only 992 points away (or a few bad trading days). As we expected, The Fed will stay out of the way until this point gets near. The market is looking to break out of the bottom portion of the Ichimoku Cloud. If we buy at the right sizes and prices, we should be able to comfortably navigate the potentially "gut wrenching" fear of buying during a turbulent period.
Check emails
Check emails
Thursday, September 8, 2011
In The Clouds............
The market is currently in an Ichimoku Cloud. This is a technical formation used by
computer traders. Our readers can go to YouTube to see it in action. What is important is that the difficulty level of trading in this "No Man's Land" is high. The markets can move up or down with no real patterns and headline to headline.
The Cloud ranges from about Dow 10,800 to Dow 11,600
Check emails for our plans and strategy in this formation.
computer traders. Our readers can go to YouTube to see it in action. What is important is that the difficulty level of trading in this "No Man's Land" is high. The markets can move up or down with no real patterns and headline to headline.
The Cloud ranges from about Dow 10,800 to Dow 11,600
Check emails for our plans and strategy in this formation.
Wednesday, September 7, 2011
Month End: Notes and Performance
It looks like we got caught by a whipsaw on our last trade of the month. I really did not see that coming.-good thing we cut and ran before the loss got too big. Our months end on the 7th since we started on the 7th. It keeps it simple. There are no decimals either-they are rounded to nearest number.
WSR Performance from 7/7/2011 to 9/7/2011 is +110%
SP500 was 1350 to 1199 or -11%
WSR Out/Under Performance: +121%
Total Trades: 16 (32 Transactions)
Total: 9 Long (56%) / 7 Short (44%)
It has been a great start. We were balanced as we did about equal long and short. We did not just ride the market down. Check emails for full figures and notes.
WSR Performance from 7/7/2011 to 9/7/2011 is +110%
SP500 was 1350 to 1199 or -11%
WSR Out/Under Performance: +121%
Total Trades: 16 (32 Transactions)
Total: 9 Long (56%) / 7 Short (44%)
It has been a great start. We were balanced as we did about equal long and short. We did not just ride the market down. Check emails for full figures and notes.
Tuesday, September 6, 2011
The Two-Headed Coin.....
It seems the MSB''s (Main Street Boys) have reached new lows. The markets were down 300 points when a major financial media outlet reported: "Bernanke says European Debt Crisis Manageable"
The problem? This was a letter from July!(Courtesy of the ATF boys). It was released as if it was current news.
I have never seen so many attempts to "calm" investors and convince them of "the great deals" as I have seen during this latest turmoil. The funny thing is- they have never really done it before when later-the market snapped back. They usually try to get you to sell your stocks. A really strange event. So what did we do?
Bought TVIX at 61. We were going to stay out; however, this seemed too strange-so we bet the market would go down again. When they are flipping a coin and "heads" mean they tell you to buy and the coin has two heads-It is time to sell.
Back to 50 cash/ 50 short.
Check emails for the up-coming trades and strategy.
The problem? This was a letter from July!(Courtesy of the ATF boys). It was released as if it was current news.
I have never seen so many attempts to "calm" investors and convince them of "the great deals" as I have seen during this latest turmoil. The funny thing is- they have never really done it before when later-the market snapped back. They usually try to get you to sell your stocks. A really strange event. So what did we do?
Bought TVIX at 61. We were going to stay out; however, this seemed too strange-so we bet the market would go down again. When they are flipping a coin and "heads" mean they tell you to buy and the coin has two heads-It is time to sell.
Back to 50 cash/ 50 short.
Check emails for the up-coming trades and strategy.
Trade Update
Sold our call options on DXD sept 20 @ 1.25. We bought them Friday @ .75- A nice 66% gain. We are back in cash and are going to scan the market. Check emails for details.
Friday, September 2, 2011
Trade Update
We took our 14% gain on TVIX from today and rolled the profits into a call option on the a 2X short ETF betting The Dow will go down-with a strike price of 20 that expires 9/17. Our reasoning is that we expect a 10% correction in here. If that does not happen, then we don't lose any capital and we can potentially make a 400% return on our profit. Whether it happens or not is not of concern to us. We have a free lottery ticket (not really but you know what we mean) and are back in 100% cash
Have a great weekend!
Have a great weekend!
Friday Update: The Best Strategy for The Fed
We will continue to hold our short positions even though they are up 14% today. We would even buy more or initiate new positions today. As we have been discussing, the structural integrity of the markets right now are in a very precarious position. There really is not much more to do but let the markets find their natural position. Artificially propping up the markets is really hurting credibility. It may give Main Street the sense of comfort and hope-unfortunately they do not control the markets. The Fed should let the markets find equilibrium at a lower price. This would wash out the lemmings and satisfy the real investors. Until the real investors have confidence that the market is washed out, they will not commit. This is evident in the whipsaw action of the markets. It is very difficult to have "real" committed money (The foundation for a new advance and stability) without shoring up the fundamentals and allowing the markets to reflect acurate pricing. It is time to bite the bullet and get rid of the "QE Investors". They are not long-term investors. They are leaches that are sucking the fundamental soundness out of our system. This would cause a quick void in the market as they limp off into the woods; however, they would be replaced by the real investors. Credibility would be restored and the market would have a solid foundation of committed investors. The "QE Leaches" wil come back because-quite frankly-they like to make money too. Having a 30% correction is a natural market event (at least it used to be). The persistence of creating "Moral Market Hazard" is destabilizing the markets. It is time for The Fed to cut the relationship with these investors and get down to the business of rebuilding a credible and stronger capital system.
WSR's Position: We do not like to be short. We just need the confidence in the markets to commit on the long side (as do many others). Unfortunately, that is not present at this time. We want America to be prosperous and get the heck out of this mess.
WSR's Position: We do not like to be short. We just need the confidence in the markets to commit on the long side (as do many others). Unfortunately, that is not present at this time. We want America to be prosperous and get the heck out of this mess.
Thursday, September 1, 2011
Words of advice from The Ultimate DudeMan....
"It isn't as important to buy a stock as cheap as possible as it is to buy at the right time."
"The is only one side to the market and it is not the bull side or bear side, but the right side."
"Be Right and Sit Tight"
"Give up trying to catch the last eighth- or the first. These are the two most expensive eighth in the world."
"The desire for constant action irregardless of market conditions is responsible for many losses on Wall Street."
" A man must believe in himself and his judgement to make a living at this game."
" The big money is not made in the buying or selling. The big money was made in the waiting."
"Stocks are never to low for you to begin selling and never too high for you to begin buying."
IF YOU DON'T KNOW WHO MADE THESE QUOTES, FIND OUT;)
"The is only one side to the market and it is not the bull side or bear side, but the right side."
"Be Right and Sit Tight"
"Give up trying to catch the last eighth- or the first. These are the two most expensive eighth in the world."
"The desire for constant action irregardless of market conditions is responsible for many losses on Wall Street."
" A man must believe in himself and his judgement to make a living at this game."
" The big money is not made in the buying or selling. The big money was made in the waiting."
"Stocks are never to low for you to begin selling and never too high for you to begin buying."
IF YOU DON'T KNOW WHO MADE THESE QUOTES, FIND OUT;)
What is holding this market up?
The news is bad and getting worse and we have been asked- What is holding this market up?
In our opinion, there are three factors-
1. The strong opinion that The Fed will start QE3 soon
2. The short-term technicals have been bullish.
3. "Performance Risk"
*It is hard to find a trader that does not believe QE3 will be beneficial to stocks- except us.
*Most technical trading programs are now basically the same today. Technical charting used to be an art and now everybody is a chartist. The ATS (Automated Trading Strategies" ) are controlling a larger portion of capital. They are strictly price sensistive.
*A lot of money managers sold in the firat part of August and they don't want to risk the chance that stocks go up at the end of the year and make them look foolish.
What WSR thinks:
The markets are by no means "safe" in here. This time is different in that there really is a lot of structural problems and The Fed has no new bag of tricks. Technicals can change instantly and all the "bulls" can turn into "bears" by mere price movement. The smart money will do one of two things- short or stay in cash. Our 'gut' is telling us that a major "down move" could be just around the corner. This is the only thing that would force The Fed to use their last bullet. The market may drift up a few hundred more as the ATS's try to max out the last bit of this move; however, it probally is not worth it to go long in here.
As for QE? QE1-shame on you, QE2- shame on me, QE3- total strike-out.
There are just too many investors counting on QE3 to pump the markets - they have abandoned their fundamantal homework. They think they all have the "cheat sheet" answers to the test. The markets will give them a different test this time.
In our opinion, there are three factors-
1. The strong opinion that The Fed will start QE3 soon
2. The short-term technicals have been bullish.
3. "Performance Risk"
*It is hard to find a trader that does not believe QE3 will be beneficial to stocks- except us.
*Most technical trading programs are now basically the same today. Technical charting used to be an art and now everybody is a chartist. The ATS (Automated Trading Strategies" ) are controlling a larger portion of capital. They are strictly price sensistive.
*A lot of money managers sold in the firat part of August and they don't want to risk the chance that stocks go up at the end of the year and make them look foolish.
What WSR thinks:
The markets are by no means "safe" in here. This time is different in that there really is a lot of structural problems and The Fed has no new bag of tricks. Technicals can change instantly and all the "bulls" can turn into "bears" by mere price movement. The smart money will do one of two things- short or stay in cash. Our 'gut' is telling us that a major "down move" could be just around the corner. This is the only thing that would force The Fed to use their last bullet. The market may drift up a few hundred more as the ATS's try to max out the last bit of this move; however, it probally is not worth it to go long in here.
As for QE? QE1-shame on you, QE2- shame on me, QE3- total strike-out.
There are just too many investors counting on QE3 to pump the markets - they have abandoned their fundamantal homework. They think they all have the "cheat sheet" answers to the test. The markets will give them a different test this time.
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