Did Media Blow Greek Smoke Up Your Rectum? Is It Time To Short Yet?

[shortie]

This is certainly a great market for those who can catch these monster turns.
Just a few days ago it was "the end of civilization" due to the Greek crisis. By now we have put up 5 monster Up days.
So what is exactly that we are witnessing here:
a relief rally?
Short covering?
end of quarter rally, first of the month rally?
is Greek news only now fully baked in?
is the market expecting even more good news soon?

could the market re-test the lows again or was it just a bad dream for Longs?
Is it safe to Short now? Oscillators show overbought (e.g. SPY RSI(5)=84).
VIX has totally collapsed and touched 15, the level we saw during Feb Top, but still not as low as Apr Top.

 

[shortie]

a major upper bollinger band violation today (and yesterday). i see a similar thrust Up in Nov. That one did not hold water.

 

[shortie]

VIX - biggest weekly drop since Aug 2007 - wild!

 

[bone]

Nobody seems to be able to trade Bollinger Bands correctly.

Amazing.

Every retail punter wants a level to fade.

Pivots.
Channels.
Wave Counts.
Volatility Bands.
Fibonacci.
The list is long.

Fading is a sickness.

 

[shortie]

i hear that some big traders fade moves.

you like spreads. i think you also like to trend via spreads. i am sure you can construct a spread of SPY:something but still will be fading or trending that particular spread direction.

do you always go with the trend (according to your spread) or do you fade extreme moves as well?

 

[bone]

Quote from shortie:

i hear that some big traders fade moves.

you like spreads. i think you also like to trend via spreads. i am sure you can construct a spread of SPY:something but still will be fading or trending that particular spread direction.

do you always go with the trend (according to your spread) or do you fade extreme moves as well?

Shortie, your question is superb. The only traders taking directional risk these days are the retail types. I do not time market turns. I have never bought a market low or sold a market high in 19 years, and I have no faith that will change and in fact I do not require market timing to make a comfortable living.

Spreads do not move like a directional flat price market. Put up a 5 minute chart of the Nymex Heating Oil future and then a 5 minute chart of the HOCL Crack Spread. Do the same for a Corn Calendar Spread or a NoB interest rate spread.

The theme is uniform: spreads trend incredibly well. I do not model for timing. I model for commercial/producer/HF/IB order flow and then join that bias. For size. Let them do the heavy lifting.

Another great feature about spreads is that they are really cheap to capitalize and to hold in terms of margin. Typically, you get a 65-95% SPAN margin REDUCTION to hold overnight a spread position.

Shortie, you can lever the piss out of them.

Something to think about: I have a client who went live on March 01, 2011 with a $25K account. He has returned 45% net on that as of yesterday.

In four months, on a net basis, he has over $36K in his account. Advantage Futures clearing, CTS front end, eSignal running my models, those expenses deducted from the account. Non-Member rates.

Swing trading futures spreads.

Max drawdown ridiculously modest.

Overnight SPAN performance bond margin credits of 65 % to 90 %.

I have another client who went live on April 01, 2011.

Same scenario, returned 10% net all expenses as of Friday June 24.

And that includes an impulsive scalping debacle which earned my wrath because he deviated from his trading plan.

Swing trading futures spreads.

 

[shortie]

Quote from bone:

Shortie, your question is superb. The only traders taking directional risk these days are the retail types. I do not time market turns. I have never bought a market low or sold a market high in 19 years, and I have no faith that will change and in fact I do not require market timing to make a comfortable living.

Spreads do not move like a directional flat price market. Put up a 5 minute chart of the Nymex Heating Oil future and then a 5 minute chart of the HOCL Crack Spread. Do the same for a Corn Calendar Spread or a NoB interest rate spread.

The theme is uniform: spreads trend incredibly well. I do not model for timing. I model for commercial/producer/HF/IB order flow and then join that bias. For size. Let them do the heavy lifting.

Another great feature about spreads is that they are really cheap to capitalize and to hold in terms of margin. Typically, you get a 65-95% SPAN margin REDUCTION to hold overnight a spread position.

Shortie, you can lever the piss out of them. ...

bone, this is valuable info that can be studied, discussed, etc. i know i can ruffle some feathers sometimes but when i see good info i am happy.

 

[bone]

Shortie, trying to scalp the ES or 6E or CL is so futile and crowded.

That is not how it really gets done, BTW.

 

[NoDoji]

Quote from shortie:

a major upper bollinger band violation today (and yesterday). i see a similar thrust Up in Nov. That one did not hold water.

The big difference between now and November is that in November the upper BB overshoot occurred at a previous resistance zone; the current overshoot is still below three more resistance levels.

There was also a BB overshoot in October (the 13th, I believe) that you're conveniently overlooking. Although it triggered a small pullback to the 20-day EMA, the uptrend remained intact and price ran up to test previous resistance, where the failed breakout was the reliable short signal.

If you're swing trading the market, I'd wait for a short signal before shorting.

 

[shortie]

Look at the extent of the current overshoot: two days in a row closes higher than upper BB, today actually much higher. Oct 13 can't be compared with this one.


i am wondering if this is a relatively normal market or is it back to the super-bull insanity of the last 2 years.