trading stats related to fridays selloff

jasonjm · Jul 28, 2007

its just information, do as you please with it

scriabinop23 · Jul 28, 2007

Quote from mschey:

So you have an 88% chance of making 3%, but what if the market drops 30% when you are wrong?

thats why you buy calls.

Landis82 · Jul 28, 2007

Quote from syswizard:

Guys - look at the charts back in the fall of 1998...and this market is playing-out very similarly (and the panic is the same as well as the economic "event")
Back then, one day into the swoon, I placed orders for SPX puts, NDX puts, and IIX (internet) puts. I was only filled on the IIX puts as the market was moving so fast. (the puts had already doubled that day, so I was a bit pissed about "paying up" for them).

Within 5 days, the 3 puts were up $5000. Next day, there was a bullshit announcement by the fed and the market rallied fiercely...and my position went to +$2000. I was worried, but I held. Remember, the IIX was not that liquid. 3 days later, selling continued. It went to +$8000. Stupidly, I placed a limit order to sell at a price which would yield me $10,000 profit. 2 days later that order was filled.
Within 2 weeks, and close to expiration, those 3 tiny puts went to +$30,000.

That was a 13% drop in 20 trading days. And Niederhoffer's liquidation by his clearning firm ( covering naked S&P puts ) was the dead-ass bottom.

LT701 · Jul 28, 2007

what has to be considered, is whether this is a bull correction, or a bear start

which is it?

i honestly dont know - it could be either

but i do remember the period of 2000-2001

people kept comparing it to this, and to that, from history

what they couldnt comprehend, is that history was unfolding before their eyes

doesnt mean that that's true now, this could be nothing more than a blip

showyouwang · Jul 28, 2007

hey jasonjm,

thank you for sharing the information it is much appreciated. do you keep track of this stuff by hand or backtest it through software? id imagine it would be pretty difficult by hand

Landis82 · Jul 28, 2007

Quote from LT701:

what has to be considered, is whether this is a bull correction, or a bear start

which is it?

i honestly dont know - it could be either

but i do remember the period of 2000-2001

people kept comparing it to this, and to that, from history

what they couldnt comprehend, is that history was unfolding before their eyes

doesnt mean that that's true now, this could be nothing more than a blip

You need to try doing your OWN homework instead of merely listening to what "others" believe to be applicable.

For example, the P/E of the S&P 500 currently is nowhere near where it was in 2000.

http://www.comstockfunds.com/files/NLPP00000/026.pdf

Furthermore, whether or not this leg down is merely a sharp correction in a bull market vs a long, pronounced Chinese water-torture bear market decline shouldn't be of any significance to your ability to "trade" given that you continue to adhere to smart "money management" principles.

If you trade technically ( with sound money management principles ) it really doesn't matter whether this is a bull or bear market decline.

LT701 · Jul 28, 2007

Quote from Landis82:

You need to try doing your OWN homework instead of merely listening to what "others" believe to be applicable.

For example, the P/E of the S&P 500 currently is nowhere near where it was in 2000.

http://www.comstockfunds.com/files/NLPP00000/026.pdf

Furthermore, whether or not this leg down is merely a sharp correction in a bull market vs a long, pronounced Chinese water-torture bear market decline shouldn't be of any significance to your ability to "trade" given that you continue to adhere to smart "money management" principles.

If you trade technically ( with sound money management principles ) it really doesn't matter whether this is a bull or bear market decline.

what put a bug up your butt?

Tech Analysis · Jul 28, 2007

Quote from NihabaAshi:

I'm making fun of the TA don't work types.

I once heard Cramer piss all over TA by snorting "Technical Anaylsis mumbo jumbo". From that day on I knew TA was a viable way to trade and for 6 years have made a living out of it.

piezoe · Jul 28, 2007

Thank you Jason, for the nice observation. There is undoubtedly a lot of short interest to fuel a rip up, and provide a second opportunity to those missing the first to dump. There usually is a second opportunity, isn't there?

patoo · Jul 28, 2007