Managing Funds for a Living

Status
Not open for further replies.
So what was on my mind this past week (from C2 "Trading Journal"

-musings:

Wednesday: "Walking the Line on Volatility"
Market gaps up modestly, then moves straight back down to zero and become mixed - only to spike up at the end of trade.
Preliminary data showed volume trailed off in the final hour to come in below Tuesday's level.
Yes...volume did fade, late.
AMZN up more than 20% in pre-trade to finish +25% as 3rd quarter profit surges more than 73%.
10 year bond back down to 4.9%
Vix/Vxn spike 19.45/19.88 to then settle down some.
Some market leaders still being accumulated.
Fed beige book reports slowdown in some regions.
Earnings on tap after the bell: E-trade, Baidu.com, Apple, Symantec
Crude's rise of $2.32 to $75.88 a barrel appeared to boost energy stocks, many of which got a late-afternoon lift.
Doing well...machinery and equipment makers for the oil and gas industry, Oil & Gas-Field Services group and Field Services - ranked sixth in a group of 197
The market has withstood occasional bouts of distribution in recent weeks. But Tuesday’s action was potentially more severe.
Meanwhile, The IBD 100, which tracks the action of leading stocks, plunged 3.7% yesterday.
That made it the biggest one-day loss for the IBD 100 since a 5.8% sell-off Feb. 27, when massive losses on Asian markets spread to Wall Street.
The shift in tenor prompted a change in our Market Direction call from "Green Light" back to "Caution". It now notes the current rally as being under pressure.

PRKR stopped at 11.52 now up to 12.15
JADE settles at 7.21 -.32% - low was 6.97...pending KMPG earnings report/surge in share price?
TASR down .5 to 14.7 - went down as low as 14.2 - stop target at 14
FCSX up .5 or 0.9% in pre-trade, drops as low as 46.58 to settle around 50 or -1.9%
TSL after falling as low as 56 settles at 58.15 -2.3 or -3.8%
JASO 35 after going as low as 33.5
CVTX up .4 to 12.46
SNCR down another 7.3% to 32.66
HOKU went as low as 9 or -20% after earnings and downgrade
BWLD loses support

GOOG after being off as much as 5% settles off 1%
AAPL/RIMM/MA mostly up 1-2%

QQQ 49.4 [.68x.31:-5.71%](49.06-49.67)

Market closes up DJIA/NASDAQ/S&P500/RUT/SOXX up modestly in heavy trade
MID/SML down.

Basically, market recovers "some".
C2 in "drawdown" half of which is due to my error - the other half per usual.
In next 3.4 weeks until expiration.
If market rockets up/JADE reports...lock in 3-6% then do covered calls for 2-3% gain.
If market does not reach new highs...lock in spread trade 3-6%.
Total (after this) loss left to recoup 10-12%.
If market corrects keep further losses contained and add to spread trade(s).
Always use protective stops.

Meanwhile, the broad market indexes are all holding near multi-year highs. The NYSE composite sits 3% off its peak, the Nasdaq and S&P 500 2% each. The Dow lies 1% below its all-time summit.
But a look at the indexes' advance/decline lines shows some underlying weakness. The Nasdaq's A/D line has trended sharply lower, especially in the past two weeks.

-"official":

Week of July 28, 2007

Wednesday, July 25, 2007
Close

Stocks staged an up-and-down session Wednesday, closing moderately higher in mixed volume.

The Dow Jones Industrial Average vaulted 68.12 points, or 0.50% to 13,785.07.
The Nasdaq Composite ran up 8.31 points, or 0.31% to 2,648.17.
The Standard & Poor's 500 Index gained 7.05 points, or 0.47% to 1,518.09.
 
...more Fodder -

-musings:

Thursday:
Market tanks at the open.
Stocks opened sharply lower Thursday as fears about credit markets continue to grow. But the major averages quickly rallied off their biggest losses.
When do we add to WOTM index spread trade(s)? WAIT FOR BOUNCE
DJIA -150, Nasdaq -40
TASR gets stopped at 14
QQQ 49.3 (48.96 - 49.47)...48.62 (low 48.42)
QQQ spread trade looking good: more than 30% of total (8k+) possible realized if closed.
All of the indexes in the red today.
Vix/Vxn up 19.7/20.12 (high: 19.86/20.08)
Now with a little more than 1 hour left in the session - at highs 23.31/22.66 BIG JUMP (fear factor).
Vix now higher than March and a sliver offf last summer.
I'm guessing this market breakdown won't resolve itself very easily.
Yes, we are (finally) in a correction or (soon to be) "Stop-Losses" mode.
Still seeing heavy accumulation amongst some market leading stocks - even on a down day?
As a sign of the dark mood in the market, the put-call ratio — the volume of bearish put options vs. the volume of bullish calls — swelled to 1.32.

The major averages and leading stocks sharply lower in late morning trading. Volume rises especially on the Nasdaq.
Check index charts w/50-day M.A.'s.
SPX again loses support reaching new lows.
BULLETIN >> DOW INDUSTRIALS DOWN 320 POINTS AS SELLING ACCELERATES
London Markets: British stocks plunge over 3% on credit jitters (spreading globally).
Vix/Vxn skyrockets 21.9/21.36. Vix now above March levels (a fraction off last summers level).
Vxn still relatively subdued (in comparison)
New York Stock Exchange has trading curbs in effect.
Curbs lifted...DJIA drops another 90 points to fall more than 410, Nasdaq off 80.
Decline is orderly - but volume was tracking well above Wednesday's pace. Leaders continued to come under pressure.
Will we now correct? MID -6.7% RUT -8% from highs. Correction defined as 10%+ drop from highs.
DJIA/SPX/NASDAQ/RUT/SOXX/MID/SML all off sharply. If these low levels hold - enter DJX spread trade.

- the "official":

Week of July 28, 2007

Thursday, July 26, 2007
Close

Stocks plunge with the Dow down more than 300. Wall Street suffered one of its worst point losses of 2007 Thursday - leading a global stock market plunge, as investors succumbed to months of worry about the mortgage and corporate lending markets.

The Dow Jones Industrial Average plunges 311.50 points, or 2.26% to 13,473.57.
The Nasdaq Composite erased 48.83 points, or 1.84% to 2,599.34.
The Standard & Poor's 500 Index was lower 35.43 points, or 2.33% to 1,482.66.
 
One must remember that my contention is that ~50% gains ahve been racked up off bottoms to corrections. We have preserved most of the past gains. We are now looking for a bottom to do the same.

-musings:

Friday:
Indexes stagnant in the early going.
Now we are seeing a bit of a jump - +36 on the Dow.
U.S. second-quarter GDP rises 3.4%, fastest since early 2006.
Support has held (for now) with Dow.
Can try 2k+2k trades with DJX+SPX?
Is now 134.75 (high 135.20)
Waiting patiently for bounce.
Meanwhile profiting with QQQ WOTM spread trade - currently, 9750-5000= $4,750.
QQQ: $8,750 max (possible) profit.
On or before Aug 17th (15 trading days) profitable if QQQ less than 50.35 (now 48).
RIMM now getting clipped more than 3%
Now Dow and S&P reaching new lows - DJX at 133.20
More SOTM.
Russell 2000, Small-cap 600 and Midcap 400 in the tank.
Stocks Keep Falling Despite GDP Data.
Yesterday's Vix/Vxn numbers (23.31/22.66) - today's highs (24.17/23.18)

Indexes not making much headway today.
Still waiting on a bounce, if we get one.
In the past few days leading stocks from technology, financial, materials and retail sectors have fallen hard in rapid volume. Many have sliced through support levels, such as the 50-day moving average.
The double threat of the falling broad market and struggling leaders should prompt growth investors to act cautiously. Avoid making new buys. Take profits on your minor winners. Cut losses quickly on your losers.
If you own a stock that's up a lot from your buy price, you can consider holding. A big spike in selling, however, could warrant more defensive action.
Still, perspective is in order. Credit market concerns have put investors on edge. But corporate earnings are on pace to beat quarterly estimates. Most economic gauges remain in fine shape.

BULLETIN >> STOCKS SLIDE ACROSS THE BOARD AGAIN; DOW DROPS MORE THAN 200 POINTS
DJX - the most attractive index (has fallen least) of all that have fallen, didn't bounce any to speak of and closed just below (or at) lower support at low. Wanted to enter WOTM spread trade on decent bounce. If doesn't bounce further, may have to construct trade - for just above overhead resistance or 137-138 or 138-139.
I can wait for wild swing up (or do half-n-half).

Ouch! Indexes close at the lows. Dow off another 208 points.
See Vix and Vxn. Volatility indexes at extreme levels - again reahing higher today closing at highs: 24.17/23.18.
Vix exceeds last summer's highs. This correction may last longer than two months.
I saw the signs, wanted to keep new C2 fund in cash - but had to invest until market actually corrected.
Got stung with first headfake/unwind of newly phased in ~30% of portfolio for 3.5% loss. Then got stung with IOC. It happens, but usually not so rudely. Was compounded since bought back option that uncharacteristically barely budged and without using protective stop or another 7% or so. Then with the "Green Light" surge in institutional buying/lack of breakdown amongst leaders/Ross factor-lol, the 'always sudden' correction cost me the usual 7-12% (this time 3-4%) but compounded by stupidity (not unwinding JADE at stop-loss target and*gasp*adding to TASR shares - both sold at extreme lows!) That uncharacteristic trading cost me an additional 6%, yeach.

Anyway 5% made back up (thus far) with QQQ WOTM spread trade, and now "having fun" making money during correction - when usually months go by with no action (just waiting and watching).

Just summarizing and to continue ingraining methods to avoid as much bad ones as possible. In other words (since apparently others read this and may obtain value for them) - the loftier the market parades itself...the more pronounced (time and magnitude) the corrective phase. So if your methods are proven to work and stand the test of time - stick to them...they will always pay off (even when they seemingly don't) LIKE ME and my 16.5%+ loss thus far to this 8-week fund! We now look for an accurate entry, which is very important.

Bottom line: "Dow Falls 200; Worst Week in Five Years", Yahoo!
...well, the Nasdaq is more our metric and it may not have had it's "worst week in five years", but you get the gist.

-"official":

Week of July 28, 2007

Friday, July 27, 2007
Close

After hours of struggling to right itself, the market came under huge selling in the final 20 minutes.

The Dow Jones Industrial Average plummets 208.10 points, or 1.54% to 13,265.47.
The Nasdaq Composite sank 37.10 points, or 1.43% to 2,562.24.
The Standard & Poor's 500 Index erased 23.71 points, or 1.60% to 1,458.95.

This has been a broadcast from another conversation (mostly with myself) from another location. I did a seach using my websitte name and came up empty so I think this is still in keeping with C2 policy, etc.

Oh and Hi Atticus, Flipper-Flopper, Brain-Wave, optioncoach, and whoever!

Send me you financial statements...I'd like to now audit them. (lol)
 
Quote from paysense:


Oh and Hi Atticus, Flipper-Flopper, Brain-Wave, optioncoach, and whoever!

Send me you financial statements...I'd like to now audit them. (lol)
More...

I posted real results for quite some time on ET, not hypothetical Collective2 BS as a premise for subscriptions. Also I would write posts not pages and pages. Stick to your covered calls and hypothetical results. if you truly wanted to improve you might take a second to see that myself, atticus and others have some options information you could use as opposed to simply claiming covered calls can net you 50% returns on hypothetical accounts. I assume your account fared well this past week.
 
I'm not denying there are extremely smart, experienced individuals here in ET land - and believe me...I take what can benefit me an learn from it. Unfortunately, I am only one man and haven't the energy or time to exhaustively uncover more value from you and others' posts.

But the best of the best lose most all during events like we are in...just curious what one would add to the fold regarding such - since this is key.

I should be doing better...and will, but I continue to learn. The WOTM index spread info has helped (vs naked index calls). Still not sure that naked puts rule for me.

But yes, attracting "slippery money" and the need to make $$$ in good and bad markets is also a valuable insight.

Really, I am just planning that my simple approach is highly effective - even when stacked up against the best...but 6-12 months still need to go by.

Gilbert
 
Quote from paysense:


Oh and Hi Atticus, Flipper-Flopper, Brain-Wave, optioncoach, and whoever!

Send me you financial statements...I'd like to now audit them. (lol)
More...

I don't understand you calling out these individuals at this point. The market dropped and your portfolio behaved exactly as predicted. Every non-elementary options trader understands that little protection is afforded by CCs during a big market drop. OTOH, several of the various that others attempted to explain to you would've fared much better during the past week. If I were you I would've thanked these people for their suggestions and appologized for having been so rude in your responses, as following their advice would've likely had you beating the market at this point.
 
Quote from paysense:



Really, I am just planning that my simple approach is highly effective - even when stacked up against the best...but 6-12 months still need to go by.

Gilbert
More...

Your simple approach is a hypothetical covered call portfolio while others here are trading for real. You are not stacked up against the best because the best who are the major institutions and funds made a killing in this downturn.

Please come down from the clouds and look at reality. A hypothetical account is Harry Potter fiction. You would do better just to keep the long posts down to a minimum and focus on learning as much as you can rather than trying to call out traders when what you are doing is covered calls.
 
Paysense, as the author of the best performing system on C2 (just wanted to see how my short term strategy meausred up, even though I lag my real trades often and miss a few it has done rather well) the last 2 weeks I can tell you that you should be making a lot of money during this downturn if you are a decent trader and you should have been trading the market both long and short daily. The key to short term trading a market like this one is being very aggressive about cutting your losses short and have a very good entry/exit system (mine is a combo of indicators and tape reading), the volatility will take care of the rest. Having a larger position that you are hedging also helps but as my foray in to C2 proves it is not necessary. Good luck.
 
2CL:

I've done no such thing. Must've missed excerpts posted hear from my ongoing fund/journal at C2. Funny how that happens...still training the gurus:D - that still don't "get it".

Unless you are an extremely successful (albeit burnt out) daytrader...you will have much difficulty "beating the market" for periods more than 3 or 5 years.

You may have intelligence, experience and knowledge 100 times the average Joe and still come up short. Have you (by now) taken say 1/10th your net worth and over the last 10 years compounded it successfully? If so - my hat is off to you - BUT I DOUBT IT. You would be well on your way to a routine jump to your net worth into the 10's and 100's of millions in just another 5-10 years.

More likely you are "dumbfounded" and just "playing around" with your money!.So you say...covered calls? No way...it aint gonna happen. Well I am showing you - if you'd just quit seeing what you want!!

recent musings on 24-Jul-2007:

"Can I put myself out there?
I'm still invested (some) long.
Can I limit losses on spreads (yes, see ET).
Is there is room for making mistakes - always if manager is good.
So, my funds will still be fine - regardless!

"Man this has been some rocky-going - but I've learned A LOT.
How to leverage with spreads, investing with outside (the idiots) pressures, being "right", but frustrated - that leads to errors, diversify a bit more, let short call options go naked after stock hits stop-loss, use stops/pro puts w/ riskier issues re: biotechs, stick to stop-loss methods - NO MATTER WHAT (or it will cost), stay away from erroneous (stinking) thinking, make money in up or down markets, lock in 'slippery' money, be VERY selective with entries into late stage bull runs, first watch price/volume action then watch market leaders, wait to post "Caution" - but do trade appropriately, etc., The managing is the hard part weekend work is a breeze.

"But above all else - it doesn't matter. By being present to work at minimizing losses, substantial gains will be compounded.
And thank God I am (still) being trained!!!

"Run it (C2) like a hedge fund.
Silver lining? Yes!
Stick with proven stop-loss methods.
They won't ever understand how these gains are made.
Can start C2 Covered Call Fund for large account (Use 50-100+ priced stocks - not to sync with XxxxxxxXxxxxxx.com holdings."

I, for one, give credit where credit is due and do learn when the opportunity presents itself.

...and now to the more recent posts -

ps
 
and today - YOU GO DIG THE REST OUT!

Successfully called the "top" and went to Caution 24-Jul-2007 then to Stop Losses 26-Jul-2007.

Last time in this mode was right before the Green Light call 15-Aug-2006. This my guru friend - is what matters most (unless of course you want to stare at a computer with numerous positions and strategies and grind out - to a slow death, too - a hopefully heady annual average, with 'staying power")

-musings:

Friday (morn and midday):

It's nice to NOT have to be shackled to the computer (before the open or 5am PST) - again - like we were for about a week.
This/these strategies were designed to be able to sleep well - and sleep in!
09:40 am PST
NOT seeing a bounce from the averages (yet). The DJIA off more than 100 points in the early going - still in the loser column - but has bounced back some.
The U.S. labor market softened slightly in July. U.S. stock losses mounted further Friday after Standard & Poor's downgraded its outlook for Bear Stearns Cos.
As expected, Vix/Vxn jump again.
Indexes seem to like 'consolidating' at this level?
More leading stocks being accumulated.
Today's declines are coming on lighter volume.

As of Friday morning, 82% of the S&P 500 companies have reported, according to Thomson Financial. On average, firms have beaten earnings forecasts by 4.2 percentage points, a little better than normal. About two-thirds of firms have topped views, also strong.

S&P 500 profits are on track to rise 7% vs. a year earlier — and that assumes that the companies left to report will only meet views. So actual earnings growth might come in around 8%.

We remain in our wait-and-see or "Stop Losses" mode or looking for a signal that institutions are 'confirming' a new rally - the most recent that began on Tuesday. Until then, we don't want to get ahead of ourself. Meanwhile, the best course of action remains the same. Reduce your exposure by getting off margin. Sell your laggard stocks, both the ones that are down from your buy price and those that have only managed meager gains.

Exercise patience. Don't try to anticipate a market upturn or a "follow-through" before it happens. Let the price and volume action of the major indexes and leading stocks guide your hand. Follow their lead, instead of trying to predict what they might do.

If you decide to hold onto a stock or two, it's best if you take a stand with elite, institutional-quality issues. But as you do so, remember that every stock eventually will get hit if a correction lasts long enough, even those with the strongest fundamentals and the most robust technical action.

Taking stock of your capital and your confidence levels can help inform your decisions.

Say you have a stock that's up 50% from your buy point. If a correction persists, that stock could easily fall 25% off its high as it forms a base.

Ask yourself: Is my cushion big enough and my confidence sound enough that I can sit through that kind of pullback? If you don't think you can, taking some profits off the table can help you avoid selling at an inopportune time.
 
Status
Not open for further replies.
Back
Top