Will the Fed pause on Tuesday?

[BrandNewTrader]

Quote from riskarb:

You're in SPX equivalent of 1050 strikes, down to 850? You're done. I know enough about option theory and curvature to know that the ONLY positive is the fact that your vols have increased from skew. Not terribly comforting when your options are trading at an 1/8. I know where those puts were trading when you made your 8/5 post. Any revisionist BS is simply that... bullshit after the death trade.

How do I measure an abysmal failure? COGNITIVE DISSONANCE. You're doomed to repeat this event. You actually added to this train wreck of a trade?

Bill Cara... Canada's capital markets? Oxymoronic? Here's some new math:

Sell stock short, buy call with strike price above market price (partial put)

My 17yo niece has a better grasp of synthetic positions. It's a synthetic put. Nothing partial about it. Word.

riskypoo, don't get your panties in a bunch honey. You sound like bill oreilly for christsakes. big fucking mouth, but nothing to say.

Listen, I am long puts on SPY from 120 down to 85 ranging throughout 2007. Not whatever it is you saidWhatever I wrote in that original post was a rough description of what I intended to do at the time I wrote the post. I bought the puts over a period of time, not in a few days - and I hadn't finished putting the position on when I wrote that post. If you don't know my positions, then you can't accurately comment on my timing or anything else related to my positions, especially in the manner you did. I'm not an idiot I know what my positions are looking like. You must really think I'm just a fool or a liar =)

Your psychoanalysis is noted, but not appreciated. I haven't added to the trade, I said I was planning on it. And so what if I do add to the trade during a rally? You think the market is going to keep going up up up? Perma-bull. but every now and then that bullishness turns to shit. It's my view, you can have another one. But why are you so concerned with how I choose to trade? I'm no dummy and I realize this is a tough job, but I will fckup every now and then and dont need to hear the nerdy schoolyard shit when i do.

Alotta yous guys like to do that to each other. Is it RETAIL TRADER SYNDROME? Tell me, let meknow the deal! Trips me out that some of the people here may be talented traders, and some get alot of respect for it. But it doesn't mean they're mature, respectful, honest, or have common sense. Just keep that in mind next time you get on your knees to service one of these guys...

Hey riskypoo, have you considered a career in journalism? Better yet, politics? Putting words in my fcking mouth...

Distorting and manipulating facts in an attempt to further discredit and humiliate me while reaffirming your "value-add" to this forum, and the ultra-subtle boost to your well-balanced ego.

get off my dick



no more personal confrontations please unless you have a reasonable point.

i dealt with this problem wheni first posted my trade ideas. The problem of misinformation. You can't believe what one of these fools writes about my trades, you need to go and read the entire thread yourself if you're going to post. That way all of you wouldn't be saying all this stupid nonsense. Take this response to riskarb for example - he doesn't know what my positions are. but he assumed he did because i had POSTED my thoughts. Anyway, I'm done...

 

[BCE]

BrandNewTrader,
Hope your trades eventually work out well or at least don't hurt you too badly. I didn't come on here to rag on you which many do. That does happen here a lot. People rip other people after the fact of a trade going against their call. Just offering some thoughts on what works in trading and what doesn't and pointing out you need to be careful and not assume you're right. That's one of the most dangerous activities for a trader. And also you need to manage the risks involved in case you're wrong or the timings off. Didn't you do leaps on this? As I recall you wanted to give this time to work in your favor. It's hard trying to play these things as conditions change and there are so many variables. One of the biggest things that has changed is the price of crude. Who knew there wouldn't be any hurricanes? And with Saudi Arabia's statement today they wouldn't be cutting production now can't help but thinking that they were encouraged by Bush & Co. to cool it until after the elections. If crude was still $80 a barrel or higher this rally doesn't happen. Also there seems to be a lot of manipulation during election years. And there will be a pullback at some point. How much no one knows. Stay tuned. Anyway, again, good luck with your trades.

 

[riskarb]

You're done? Ya sure? Maybe another 1000 words to complete your defense of the "death trade"? SPY puts: 1/8 to cab. You bought the peak of the VIX before a 80 point SPX rally. Yup, it's still a solid call. Money time.

 

[Rearden Metal]

Quote from BrandNewTrader:

Trips me out that some of the people here may be talented traders, and some get alot of respect for it. But it doesn't mean they're mature, respectful, honest, or have common sense.

Even if this <i>was</i> a not-so-subtle crack at me, that's one fantastic quote. Dead on accurate.
Contrary to popular assumption, being gifted with extraordinary talent in one's field doesn't make anyone a role model. Ask O.J.

Good luck...

 

[JimmyJam]

Quote from BCE:

BrandNewTrader,
Hope your trades eventually work out well or at least don't hurt you too badly. I didn't come on here to rag on you which many do.

Nobody's ragging on'em.

He's dug his own grave with his big-time (not) trash talk about how the market was going to plummet and it was going to be in-the-money time for'em while making a text book hail mary all-or-nothing long bomb trade ... holding this position despite well intentioned and cordially presented information and guidance to the contrary (oh yeah, there was also the little matter of price action that blew past anything remotely resembling a risk management protective stop).

OK, so what if he only spent about $5.00 on on his trade, that just makes him look all the more foolish (unless he did borrow against his great credit so that he could take an even bigger position). :eek:

BNT you're a textbook BNT.

I hope they keep this thread around for a long time ... so traders for years to come can stop by and see how it's not done.

Later big-time,

JJ

 

[BCE]

Quote from JimmyJam:
BNT you're a textbook BNT.

Bavarian National Television? What's BNT?
Oh, Brand New Trader? Well he is which was why I pointed out mistakes he made and yes he was adamant about his views. But people here get a little too critical when something goes against someone for my tastes. He made some mistakes which we all do when we are starting out. And we pay a tuition for that. And the more stuck you are to "being right", when you're in fact wrong or your timing's off, the bigger the price you pay and lesson you learn.

 

[riskarb]

Quote from BrandNewTrader:

Anyway, I'm done...

True dat, double true.

money time

SPX: 1362
SPY: 136

 

[JimmyJam]

Quote from BCE:

He made some mistakes which we all do when we are starting out. And we pay a tuition for that. And the more stuck you are to "being right", when you're in fact wrong or your timing's off, the bigger the price you pay and lesson you learn.

Quote from riskarb:

True dat, double true.

money time

SPX: 1362
SPY: 136

***
Pretty expensive lesson.

It's gonna take a hope and ah prayer for this thing to EVER come back in the money in enough time for him to even ... oh, I don't know, buy lunch at McDonald's?

Nah, he can kiss that one goodbye.

 

[2cents]

Quote from 2cents:

makes perfect good sense for the Fed to reduce the pace to bi-monthly / quarterly review now that the 'long term' commodities uptrend has been broken... there's plenty of room to raise rates again should oil & commodities price pressures persist and the US consumer continue to prefer high gas price punishment to alternative energies options...

i know the FF funds do not reflect that yet but odds of a 25bp hike at next Fed meet have increased substantially imo... quarterly inflation measures still above target range and no sign of them coming back down yet... positive 2nd round effects of lower energy prices may take a few more months to be felt, geopolitical context allowing... housing slowdown not a huge concern, equities doing well, consumer buying tons -> the mkt can easily absorb a 25bp hike

 

[BrandNewTrader]

It seems to me like you guys are thinking very short term. Assume this rally is being facilitated by forces loyal to the republicans, which isn't hard to believe considering all of the fundamental data pointing to a (potentially severe) slowdown in the future and the uncanny way the (faulty and irrepresentative) dow was at all-time highs based on a small % of its holdings showing strength, but the media was pumping the record highs, etc. Based on REAL rates of return, the dow would have to hit 14,000 to make a real new high b/c of the weakness of the dollar over the past 5 years. It's true.

Understand what I'm saying. I don't care about being right - I care about making money. I daytrade equities, gold and oil. I don't use too much bias in my daytrading, my bias is for my intermediate to long term options plays. As a result, I need to look at the fundamentals in combination with the technicals in order to determine my view 3 to 6 months out, or even longer. I'm no guru, but I'm not stupid. The best way for me to do this is to read an abundance of research and consider the biases of the researchers themselves.

I've followed bank research and independent research from economists and technical strategists. I've noticed that bank research isn't very good, they simply respond to changes and update their models. They also have a heavy sell-side bias, and very large long-only clients who use the research. Hedge funds use more targeted and short term research these days, unfortunately we don't have access to this research and trade-idea generation b/c the bank analysts now sit on the trading floor and speak to hedgies real time about their best trade ideas, rather than write generic, long drawn out reports.

Bottom line, you can say what you want about the current rally, but it doesn't change the nature of the fundamentals: Falling home prices, consumer has negative savings and their ATM (house) is running out of cash, record deficit, record and perpetual dollar weakness (how far are we from the dollar crisis?), corporate profits MAXING OUT, lack of corporate investment opportunities (record M&A, record buybacks, record dividend payouts) and high energy prices ($60 is still high, regardless of the brainwashing all of you have succumbed to. Think about it in absolute terms, not relative to where oil was 2 months ago. And what makes you think prices will stay here? That's laughable. Think about what happened with gasoline on the GSCI commodity index. Goldman + US Treas Sec Paulson + mid term election = manipulation on a grand scale. ) And let's not even get into inflation. Inflation has been outside the Fed comfort zone for a long time now, and they're JUST starting to realize that it may not be coming down. Very, very bad news given that the market has PRICED IN rate cuts next year on the basis of slower growth but contained inflation. What happens when the expectations of the growth slowdown turn out to be understated (they are) and inflation persists (it will). Stagflation and blood in the streets for the equity market.

Enjoy your suckers rally while it lasts. The next few years don't look good and the ability of our "leaders" to navigate the challenges looks even worse.

There's hope for the housing market b/c mortgage rates have come down. Well, that's easy to explain. Look at the open interest in 10 yr US treasury bonds. Unprecendeted levels that are so concentrated and so large, it's actually IMPOSSIBLE for it NOT to be manipulation. I wonder what would be happening to the housing market if yields weren't being pushed lower articificially? There would be mass defaults in Q4'06 rather than Q1-Q2 '07. At least this way the desparate get to refinance one last time.

Look at all the big banks snapping up all the little mortgage outfits. You think these are "appetite for risk" plays? No, this is to hide the mortgage losses that will then be transferred to the Fed balance sheet. Did you know that the President just signed a bill granting the US Attorney General the power to deem specific companies exempt from SEC securities reporting requirements and regulations established in 1933 and 1934? They claim it is to allow the govt to conduct intelligence operations in the interest of national security in tandem with public companies and ensure the integrity of the program. This basically allows the govt/Fed to massage the economy through the Citigroup, JPM, Goldman and the like.

I'm not joking about any of this, and it's all true. You guys seem to pay more attention to company and market-specific news and not so much broader economic stuff. Am I right on that? I'm not criticizing that at all, it's just that no one ever defends the bullish view with fundamentals. All they say is "the market can stay irrational longer than you can stay solvent". No one has bothered to explain away the risks I have touched on. I admit that my trade is very poorly timed/executed. But I think I have the right view/bias. I welcome any rationale counter arguments.

An example of misinformation in the media facilitating this rally. A small example. Oil has come down and they claim it is good for the consumer. First, it isn't that good, the incremental income from the decline in oil is miniscule compared to the level of purchasing power consumers will lose from falling home prices. CNBC will never highlight this. In addition, the fall in oil is actually representative of a broader correction in the entire commodities complex, it's just that oil's fall was more dramatic b/c it had spiked due to geopolitical tension. Why did the entire commodity complex come down? Demand is slowing on a world-wide scale, however the correction was exacerbated by the leverage of the funds playing those markets.

There are 3 reasons why oil should fall. 1 - greater global supply due to decrease in geopolitical shocks. 2- decrease in speculative demand. 3 - fall in global demand due to growth slowdown. The only explanation that logically explains the fall in all commodities, not just oil, is number 3 - fall in global demand.

The commodity, bond and housing markets are all saying the same thing. Equities are saying the opposite. Who are you inclined to think has a better pulse on the fundamentals and future economic prospects?

I'm not a fool. I paid for DIA calls a few weeks ago struck at 120 and hope the market rallies through 13000! But by the end of 1st and/or 2nd quarter next year it will be painfully apparent that this is a sucker's rally and will not be sustainable.

Given my put options are somewhat longer term I shouldn't have allowed myself to be drawn into this game of "i told you so". How judge when my time horizon hasn't had a chance to play out? Besides, the trade isn't a total loser. The put positions I put on in the near future as I scale in may even be much larger than the positions I currently have on. "Averaging down" as the trade goes against me. Usually risky, but in this scenario, by the time the signals for a severe correction/crash go off, it'll be too late to put on a meaningful position.

Riskypoo - you are still saying that "1/8" nonsense? I bet I couldn't get through to you by rapping my knucles on the top of your head.

In March 2001, 95% of surveyed economists did not believe the economy was going into recession. Too bad the recession had already started by then.

Isn't it harder for daytraders to make money during severe bear markets? Maybe it would be wise to hedge, given the risks? Risks? What risks? All time dow high! Good luck to all of you in 2007.