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Shorts: get over it. The government won't shut down. It never does.
- Thread starter wilburbear
- Start date
Treasury has until Oct 17th before they hit the wall. I wouldn't get excited yet.
Quote from Ash1972:
The crisis is always averted, except when it isn't.
Perfectly agree.
Last 10 months "they" spent their time teaching us that whenever there is a fall, there is a greater rebound, and everything is under control: volatility is low so you can (or must?) buy big size.
When everyone has learnt this lesson, then...
Quote from cmdtytrdr:
Straightforward: No trader (day, swing, etc.) except a long term buy and hold trader (which I call an investor) can make any kind of serious alpha when the market has a vix of 14 and no volume. Alpha. Capiche?
I can leverage my balls off and buy XYZ stock and hold it for 3 months and hope and pray the market goes up a lot and if it does I'll make a lot. That's not trading. That's investing or gambling.
If a stock has a wide range intraday or even a short period of time a trader can scalp it, flip it around, go long and short, etc. That's what a good market for a trader is.
I could adjust to the times and also sell 10 million Dec Vix at 14 and probably make a fortune. But that's not alpha. Dig?
This is absurd. The low VIX has nothing to do with 90% of the market. Why is this so hard for you to understand. The VIX is concentrated in large cap stocks in the s&p 500. And yes, I do agree with you that there is no easy money to be made trading GE or MSFT. That is more of a function of the shift to ETF's though, not the fed. Second, as I mentioned on another thread, another reason vol has died off in the large caps is that investors today have so many ETF's to choose from vs buying stocks and many of these ETF's are market short ETF's which means the public at large is very hedged and very diversified. This does two things. One, it reduces market volatility. And two, it lowers their overall return.
Neither of these have anything to do with the Fed. Honestly, the only time in history I think there was any kind of "easy" money to be made trading large caps was in the late 1990's. There has never been much alpha trading those products that are inputs to the VIX.
Quote from cmdtytrdr:
Me too. Just trying to figure out what's real and what isn't. Interesting that the first stock you brought up is PCLN. I know a bit about that stock.
Wanna discuss it?
Have you noticed that 98% of the float is held by institutions? Not retail. Not traders. INSTITUTIONS. So every day a tiny amount of the float freely trades. Now, do you think a trader is going to get a fair shake trading something like that? Who's on the other side of your trade? Who's going to determine where the stock goes? The market? Haha. In that stock - they are the market.
Vol in nat gas and oil is completely DEAD compared to even 2000-2006 period. You think nat gas is anywhere near as volatile as it used to be? Why would you use that as an example? It used to move 10% intraday regularly even before 2008.
Regarding HLF, give me a break. The huge moves are created exactly following a tweet or a cnbc appearance. Not just b/c there's large short interest. It's Carl Icahn knowing if I tweet, this stock is going up like crazy. Netflix was dead. Then he went on cnbc and reignited it. Now, it's not all his doing but a 15-25% move within two days of his appearance i would call manipulating a stock's price. Are we arguing semantics? Is all this just coincidental?
I agree with you that there are areas that a trader can go to in order to get some vol and avoid a lot of this bs, but to pretend like there's no manipulation out there is a joke. The trading landscape is filled with mines. Manipulation in now the rule not the exception...
Volatility in currencies? You've been around a while. You think the major crosses have serious vol this year compared to most any other period (ex Japan)?
Oh man, where to start. You know what would really help this debate? If you would make your argument without using an outlier as a baseline comparison. Sure, volatility (in stocks) are less then in 2008 and perhaps 1999 which happen to be 5 sigma data sets. You can't make that comparison. If you go back over the last 100 years, stocks are performing now with the same amount of range and variability as the long term avg. Again, nothing to do with the Fed. In fact, the irony here is this ridiculous argument is that it was the FED itself that created the volatility of 1999 and 2008.
Same thing with nat gas. Do some research before you post. The long term vol in nat gas is no where near where it was in that 3 year period in the mid 00's. That was an anomaly. An outlier. Gas has been cheap for 100 years. It's not suppose to be trading in the mid teens with 10% daily moves. Stop cherry picking data points and using that as an argument as to why the market is dead.
Same with PCLN. I'm not even going to respond to that theory that management is controlling the stock. Again, make that case but if I show you 100 other stocks where management owns most of the shares and it's performing poorly then you have no response to that.
If you are going to pretend to analyze data, please do it more objectively. Your theories do not hold up against any kind of scrutiny. They require a complete suspension of logic.
And currencies? You want to me to ignore Japan? LOL. That was a monster move in the entire Yen complex which was generational. Hedge funds feasted on that move and yet you want to ignore that because it doesn't fit into your theory? Nice.
Quote from Maverick74:
Second, as I mentioned on another thread, another reason vol has died off in the large caps is that investors today have so many ETF's to choose from vs buying stocks and many of these ETF's are market short ETF's which means the public at large is very hedged and very diversified. This does two things. One, it reduces market volatility. And two, it lowers their overall return.
Neither of these have anything to do with the Fed.
I'm not sure about the effect of buying ETFs: if the ETF is long and someone buys it, the firm must buy the underlying anyway. Short ETFs will cause firms to use derivatives,or if it's the same firm who sells long ETFs, they will sell their positions. In the latter case, yes,many retail transactions end at the firm before reaching the markets,thus reducing volume and volatility.
But I see a different,more common explanation: prices don't reflect value.Central banks are literally forcing people to buy,but this will leave many outside the game, as they think prices are not fair for buying, and they cannot sell because of market manipulation.
We saw it in 2002-2007 when the "economic recovery" was fake (just based on state help), and markets rose with low volumes and volatility.
Quote from pfranz:
I'm not sure about the effect of buying ETFs: if the ETF is long and someone buys it, the firm must buy the underlying anyway. Short ETFs will cause firms to use derivatives,or if it's the same firm who sells long ETFs, they will sell their positions. In the latter case, yes,many retail transactions end at the firm before reaching the markets,thus reducing volume and volatility.
But I see a different,more common explanation: prices don't reflect value.Central banks are literally forcing people to buy,but this will leave many outside the game, as they think prices are not fair for buying, and they cannot sell because of market manipulation.
We saw it in 2002-2007 when the "economic recovery" was fake (just based on state help), and markets rose with low volumes and volatility.
Your confusing ideology with markets. Don't do that. I'm a hardcore libertarian and I have no love for the Fed but that does not cloud my understanding of how markets function. It makes no difference what you think value is or what mom and pop are forced to buy. These are all inputs into the overall market equation. And when one input changes, it usually has an inverse effect on another input.
If the retail public is over hedged it's the same thing as saying they have stops in the market therefore lower prices does not create the same sort of panic it would as if they had no stops in the market. The modern day investor is over diversified and over hedged and their returns suck. Much of this is do to the multi-trillion dollar investment advisor community who manages retail money for a trailing 1% vig and over hedges their clients assets to protect their asset base.
You are really over thinking the effect the Fed has. If there is any marginal effect at play here, it's the FED is creating volatility that should not be there. Think about it. Ten, fifteen and twenty years ago the fed was seen and not heard. They operated quietly behind the scenes. Nobody paid much attention. Now the FED is very pro-active and almost all the financial news coverage is dominated by the Fed, what they are doing, what they might do, what they already have done. Think of all the news items in the last 5 years that generated volatility simply because the Fed might act on something or comment on something. If you took the Fed out of the equation you would see even less volatility because you would lose all those news shocks.
But aside from all that, if you look back over the last 100 years, markets are doing now what they always have done. And people are responding in the same predictable manner. Not much really changes.
Quote from Maverick74:
Your confusing ideology with markets. Don't do that. I'm a hardcore libertarian and I have no love for the Fed but that does not cloud my understanding of how markets function. It makes no difference what you think value is or what mom and pop are forced to buy. These are all inputs into the overall market equation. And when one input changes, it usually has an inverse effect on another input.
If the retail public is over hedged it's the same thing as saying they have stops in the market therefore lower prices does not create the same sort of panic it would as if they had no stops in the market. The modern day investor is over diversified and over hedged and their returns suck. Much of this is do to the multi-trillion dollar investment advisor community who manages retail money for a trailing 1% vig and over hedges their clients assets to protect their asset base.
You are really over thinking the effect the Fed has. If there is any marginal effect at play here, it's the FED is creating volatility that should not be there. Think about it. Ten, fifteen and twenty years ago the fed was seen and not heard. They operated quietly behind the scenes. Nobody paid much attention. Now the FED is very pro-active and almost all the financial news coverage is dominated by the Fed, what they are doing, what they might do, what they already have done. Think of all the news items in the last 5 years that generated volatility simply because the Fed might act on something or comment on something. If you took the Fed out of the equation you would see even less volatility because you would lose all those news shocks.
But aside from all that, if you look back over the last 100 years, markets are doing now what they always have done. And people are responding in the same predictable manner. Not much really changes.
OK, you're seriously dumb or just dishonest. Let's make no straw man attacks. You're logic in this last point is TOTALLY BACKWARDS. Maybe if I can get you to see that, you might be more openminded to having possibly some holes in your overall theory. But, I probably won't succeed. I'll try anyway with you. Last time.
You think the Fed's "transparency" is intended to or will increase volatility??? You jackass. Used to be greenspan and volcker just acted. One day you'd wake up and read in the paper on the way to the floor that rates had just gone up 1% that morning. Total shock and you knew you were gonna be in for a wild and crazy day. The rest of the time as a trader you were totally on your own.
Now, they use their mouthpiece every second to "try" (it's working for the time being) and assure the public and the market that they're on top of everything and the market will be ok. Dude, they're going to smooth out all of this crazy volatility from john q public (or maybe just the 1% but who's counting).
Next, they're going to taper. What a huge fucin laugh. Seriously. The fed is going to taper based on data. Jobs # was kindv good but not sufficiently amazing - ok, just taper 7 bln/month. Jobs # after that was a lot worse than Fed thought? Ok, Fed will add 12 bln/month. This is a total joke and a nightmare for traders and everyone else who believes in free markets.
The Fed is trying to control every little godamn movement in the overall market. They say they tie their policy to economic data. I call BS. I remember starting in 2009 that everytime the market would crap out a bit they'd trot along the next new policy decision. And they were very transparent about it all - kindv like Carl Icahn is very transparent about his stock holdings from time to time. It's not intended to be nice for YOU - they don't give a damn about you. It's intended to move and tame the market. So, this "externality" is the overwhelming reason why things are moving the way they are. Not inputs in your little system. Don't be so arrogant. Your theories on mainstream public holding short ETFs is lol. There is no mainstream public with ANY etfs - long or short. The whole investor class is a tiny fraction of this country. The rest are stone broke.
Just btw, regarding PCLN, I said institutions. I capitalized it. Not insiders. There is a difference.
The PCLN thing is a bit of a stretch but it does look and trade sketchy to me. Regarding the overall stock market, bond market (yea, they're not dampening volatility or trying to manipulate that at all), etc the Fed has done plenty. They've killed volatility. Which is exactly what they wanted. If you're in the 1% and just sitting on assets it's great. If you're not or you're trying to trade around positions for a living you're screwed.
In addition to the Fed (which is like a totalitarian agency now, not one that supports a free market ) you also have HFT. This is the reality of the times for traders. It must be a total coincidence to you that 90% of trading shops have closed and prop traders have left the business. So btw have many large hedge fund managers (like John Arnold in nat gas) as they view this as a shitty market to make any alpha in. If you want returns now just buy and hold and pray this Fed bs continues. And it's fine if you want to call that trading.
Quote from cmdtytrdr:
OK, you're seriously dumb or just dishonest. Let's make no straw man attacks. You're logic in this last point is TOTALLY BACKWARDS. Maybe if I can get you to see that, you might be more openminded to having possibly some holes in your overall theory. But, I probably won't succeed. I'll try anyway with you. Last time.
You think the Fed's "transparency" is intended to or will increase volatility??? You jackass. Used to be greenspan and volcker just acted. One day you'd wake up and read in the paper on the way to the floor that rates had just gone up 1% that morning. Total shock and you knew you were gonna be in for a wild and crazy day. The rest of the time as a trader you were totally on your own.
Now, they use their mouthpiece every second to "try" (it's working for the time being) and assure the public and the market that they're on top of everything and the market will be ok. Dude, they're going to smooth out all of this crazy volatility from john q public (or maybe just the 1% but who's counting).
Next, they're going to taper. What a huge fucin laugh. Seriously. The fed is going to taper based on data. Jobs # was kindv good but not sufficiently amazing - ok, just taper 7 bln/month. Jobs # after that was a lot worse than Fed thought? Ok, Fed will add 12 bln/month. This is a total joke and a nightmare for traders and everyone else who believes in free markets.
The Fed is trying to control every little godamn movement in the overall market. They say they tie their policy to economic data. I call BS. I remember starting in 2009 that everytime the market would crap out a bit they'd trot along the next new policy decision. And they were very transparent about it all - kindv like Carl Icahn is very transparent about his stock holdings from time to time. It's not intended to be nice for YOU - they don't give a damn about you. It's intended to move and tame the market. So, this "externality" is the overwhelming reason why things are moving the way they are. Not inputs in your little system. Don't be so arrogant. Your theories on mainstream public holding short ETFs is lol. There is no mainstream public with ANY etfs - long or short. The whole investor class is a tiny fraction of this country. The rest are stone broke.
Just btw, regarding PCLN, I said institutions. I capitalized it. Not insiders. There is a difference.
The PCLN thing is a bit of a stretch but it does look and trade sketchy to me. Regarding the overall stock market, bond market (yea, they're not dampening volatility or trying to manipulate that at all), etc the Fed has done plenty. They've killed volatility. Which is exactly what they wanted. If you're in the 1% and just sitting on assets it's great. If you're not or you're trying to trade around positions for a living you're screwed.
In addition to the Fed (which is like a totalitarian agency now, not one that supports a free market ) you also have HFT. This is the reality of the times for traders. It must be a total coincidence to you that 90% of trading shops have closed and prop traders have left the business. So btw have many large hedge fund managers (like John Arnold in nat gas) as they view this as a shitty market to make any alpha in. If you want returns now just buy and hold and pray this Fed bs continues. And it's fine if you want to call that trading.
Wow, you sound like a pretty angry trader. Debating you is quite a challenge as I have to sidestep around your anger and listen to you rant about the FED endlessly. This is why you should not trade what you think, but trade what you see. Blaming the Fed for your trading is not going to make you money. The Fed absolutely has increased vol. No, that is not their intention but rather a byproduct of their monetary policy. They create the bubbles that give us vol and then when the bubbles pop, we get even more vol. Yes, there are troughs in between. They are called cycles. This is nothing new. Honestly, I think people who can't separate their politics, their ideologies and their emotions should not be trading. Shorting the market because you hate Obama or buying Gold because you love Ron Paul or ranting about the Fed because you can't tick fuck the spoos anymore is not healthy.
The funny thing is, if you were to debate me down in P&R we would probably agree on most everything you said. I've ranted enough about the Fed down there as well as the government, regulations and everything else. But when it comes to trading, none of those things is an input. I look at data, analyze it the best I can and formulate a risk plan.
I never understand this retort of saying one is either a active tick scalper or long term buy and hold investor. Is there really no in between? I can't even keep track of all the large moves I see every day. Granted I follow everything and I keep obscene amounts of data, but there is a lot going on out there. If you can't pull money out of this tape, I'm not sure how to respond. Hell, we just had TSLA drop 15 pts in a straight line. Oh wait, that's just Goldman manipulating the stock, I forgot.
Honestly, I've said this over and over on ET. If guys put half the time into good old fashioned data analysis as they do to ranting about HFT or the Fed they would be much better traders. I'm being serious here. I can rant with the best of them and have. But at some point I have to get down to brass tax and roll up the sleeves and get a little dirty with some grunt work.
Oh and btw, a little correction here. The reason prop shops have been shutting down is because of market regulations for the most part. As someone who spent a decade in the Chicago prop firm community I can tell you that most firms operating on the margin are no longer able to cover the incidental marginal regulation costs. So many firms either cut back, shut down or changed the structure of their firm. My firm got completely out of the JBO business because the annual costs to maintain it did not justify all the other risks.