Yesterday's Dow move was mindboggling, after being -35 before the Fed announcement, the Dow climbed to +185 in the following 40 minutes after the announcement before some rumor about insurers possibly defaulting on their insurance regarding foreclosed mortgages evaporated the entire game and the Dow closed at -35.
This morning, the Dow opened down another 144 points with the FXP opening at 107 before the PPT stepped in literally within 4 minutes of the open and slowly chipped away at the gap down. It's currently at plus 100 with the FXP now sitting at 102.75. For what its worth in hindsight, unless I was one of at most ten traders, there was no way I could have rode down yesterday's 10 point decline of FXP in 40 minutes, and then ride it up another 10 points in the final hour. Also look at the six month daily chart of the FXI (which is the index on which FXP is based). It almost seems as if the FXI hit a Fibonacci level when FXP touched 108 intraday because it hit this level back on Jan 23rd.
I think the only missed trade is SLV. Because had I taken other shorts or longs, I would be a lot worse than -5.54% for the first month of 2008. Now just because I'm outperforming the indexes, there's no reason to pat yourself when the overall result is a drawdown. When the averages are positive YTD, you must beat at least one mainstream index. When the averages are down, you must finish positive and beat the money market averages.
Thursday, January 31, 2008
Wednesday, January 30, 2008
Possible reversal in final 30 minutes?
With the Dow up as much as 180 points, the gains are now 55 points with less than 30 minutes in the trading day.
While we were fortunate to get out on FXP (third time's the charm and blessed by two angels), don't get overconfident. Incidentally, that ultralong ETF trade you thought of, you wouldn't have gotten the 2 1/2 point gain because you weren't near a computer during that 40 minute period to get out.
SLV is still up 1.40 from the trade point. I think I might have to wait for a setup on a chart, before I can execute another trade. If I do pick something, might want to keep it under 50k so that I don't have as many sleepless nights as with the FXP position.
While we were fortunate to get out on FXP (third time's the charm and blessed by two angels), don't get overconfident. Incidentally, that ultralong ETF trade you thought of, you wouldn't have gotten the 2 1/2 point gain because you weren't near a computer during that 40 minute period to get out.
SLV is still up 1.40 from the trade point. I think I might have to wait for a setup on a chart, before I can execute another trade. If I do pick something, might want to keep it under 50k so that I don't have as many sleepless nights as with the FXP position.
Missed trade, 100 SLW 165.60
Bad thing about work. Couldn't switch to the trade screen with coworkers hovering over my desktop.
Markets initially rallying 3/4% after the FED 1/2% rate cut.
Markets initially rallying 3/4% after the FED 1/2% rate cut.
Two hours before Fed rate decision
We're back to 100% cash. YTD -5.54%. While we traded FXP really bad, we got lucky that it spiked up to 101 at the opening. As Livermore would say, the reason for its move will present itself after the fact.
I am tempted to try a ultralong ETF before the fed rate decision, but for the moment I don't have a tell on what the market perception will be. Historically, the point move that occurs in the 105 minutes after a rate decision is reversed the following business day. But I was more fearful on not losing my profit for a third time and decided it would be better to sit this one out.
I am tempted to try a ultralong ETF before the fed rate decision, but for the moment I don't have a tell on what the market perception will be. Historically, the point move that occurs in the 105 minutes after a rate decision is reversed the following business day. But I was more fearful on not losing my profit for a third time and decided it would be better to sit this one out.
Tuesday, January 29, 2008
For married couples to consider, three laddered term life insurance policies
While I have no need for the product, one of my trusted advisors suggested this might be worthwhile for a married couple under the age of 40.
What it involves is purchasing at the same time three separate term life policies. The first is a 10 year policy. The second is a 20 year policy. The third is a 30 year policy. By laddering the policies, you remove some of the advantage the insurer has over pitching the product to you.
The main reason you have the overlapping coverage is god forbid a spouse dies at a young age. The surviving spouse will be able to survive. As you both get older, the need for the money decreases because they have likely accumulated sufficient wealth during their lifetimes.
The real trick is finding an insurer that is honest. I've already talked about two who are dishonest.
Life insurance is designed either for wealth preservation or to keep the surviving spouse comfortable. It is not meant for investing purposes and you don't need the other attachment riders they want to sell you.
What it involves is purchasing at the same time three separate term life policies. The first is a 10 year policy. The second is a 20 year policy. The third is a 30 year policy. By laddering the policies, you remove some of the advantage the insurer has over pitching the product to you.
The main reason you have the overlapping coverage is god forbid a spouse dies at a young age. The surviving spouse will be able to survive. As you both get older, the need for the money decreases because they have likely accumulated sufficient wealth during their lifetimes.
The real trick is finding an insurer that is honest. I've already talked about two who are dishonest.
Life insurance is designed either for wealth preservation or to keep the surviving spouse comfortable. It is not meant for investing purposes and you don't need the other attachment riders they want to sell you.
Monday, January 28, 2008
Late night notes from Monday's session
Monday's trading recouped all the losses from Friday. Essentially, the last two days of trading didn't exist for the overnight holders. The Russell 2000 has the best chance for a reversal pivot point towards an uptrend. The Nasdaq Composite has the weakest chance because it had the worst two day performance of the major averages and was recovering from a few components reporting disappointing earnings today. AMZN, YHOO, and GOOG have yet to report so they will be a tell for this average.
The FED meeting starts tomorrow and their interest rate decision is expected to be made around 2:15p EST on Wednesday. I'm not sure if its stubbornness or ticker sense since my 875 share position in FXP has returned to its original purchase point. It was somewhat ominous that my losses for January total 8.88%. I'm not sure if that's a Harry Potter reference but it truly sucks.
Earlier this morning our FXP was trading around 97 in the opening fifteen minutes. As a trader, I could have easily taken the 6 points and said thank you. Unfortunately for the second time in as many weeks, easy money slipped away as by the time I looked again a few hours later it was almost six points lower.
It's not a good position when you are stuck and have to depend on the Fed to save you again, and hope they don't change rates in two days. Lots of media chatter saying they'll cut rates another half point and that could truly be devastating to my position. A few people have suggested I cover and take the near scratch. Unfortunately, my stubbornness won't hear it.
Today, agriculture was up, stocks like POT, MOS, and TNH. MOS is up about 20 points or 15% in 3 days. Guess what they say about buying a stock that returns to the 50 day average with an 8% stop and still has a solid uptrend is a worthwhile risk/reward ratio. Too bad, I missed it.
The FED meeting starts tomorrow and their interest rate decision is expected to be made around 2:15p EST on Wednesday. I'm not sure if its stubbornness or ticker sense since my 875 share position in FXP has returned to its original purchase point. It was somewhat ominous that my losses for January total 8.88%. I'm not sure if that's a Harry Potter reference but it truly sucks.
Earlier this morning our FXP was trading around 97 in the opening fifteen minutes. As a trader, I could have easily taken the 6 points and said thank you. Unfortunately for the second time in as many weeks, easy money slipped away as by the time I looked again a few hours later it was almost six points lower.
It's not a good position when you are stuck and have to depend on the Fed to save you again, and hope they don't change rates in two days. Lots of media chatter saying they'll cut rates another half point and that could truly be devastating to my position. A few people have suggested I cover and take the near scratch. Unfortunately, my stubbornness won't hear it.
Today, agriculture was up, stocks like POT, MOS, and TNH. MOS is up about 20 points or 15% in 3 days. Guess what they say about buying a stock that returns to the 50 day average with an 8% stop and still has a solid uptrend is a worthwhile risk/reward ratio. Too bad, I missed it.
Subscribe to:
Comments (Atom)