The Official Trading Thread
- Thread starter mGrunin
- Start date
Anyone holding long today going into into the FOMC statement & fed meeting is probably more frustrated than ever. Today when Ben spoke about tapering, he made sure not to drop any word that signaled immediate tapering of QE. When questioned repeatably as to when it is supposed to end, Ben said that there is no date in mind and it all depends on the recover of the economy. If the economy recovers at the right pace, then QE will be tapered. If not..well QE will continue at the same rate.
An analogy Ben used to describe how tapering would work, he said: "Imagine if you are driving and you take your foot of the pedal, the car continues to move but slowly slowing down. No foot on the brake is being used."
As much as Ben successfully beat around the bush over and over again and made no mention of tapering occurring until late this year, the markets still sold off. It is fair to say that at this point investors are selling off their positions to lock fantastic gains for the week. Pullback back to 1500 is inevitable.
A look at what the Fed meeting caused:
An analogy Ben used to describe how tapering would work, he said: "Imagine if you are driving and you take your foot of the pedal, the car continues to move but slowly slowing down. No foot on the brake is being used."
As much as Ben successfully beat around the bush over and over again and made no mention of tapering occurring until late this year, the markets still sold off. It is fair to say that at this point investors are selling off their positions to lock fantastic gains for the week. Pullback back to 1500 is inevitable.
A look at what the Fed meeting caused:
Taking a look at Apple:
Simply put, it is show time for Apple. Either it falls under the only support level and tests $400 and $385 or we bounce back up to at least follow the downward channel.
Bolinger bands are showing us that today's movement extended past the band, so seeing a bounce here would be proper.
Simply put, it is show time for Apple. Either it falls under the only support level and tests $400 and $385 or we bounce back up to at least follow the downward channel.
Bolinger bands are showing us that today's movement extended past the band, so seeing a bounce here would be proper.
Premature panic?
Many ETFs traded below fair value during Thursday’s global sell-off triggered by worries the Federal Reserve will pull back on monetary easing, the Financial Times reports.
Discounts widened sharply on Thursday as dealers had trouble keeping up with an avalanche of sell orders, according to the article.
Emerging market ETFs were particularly affected as shares of iShares MSCI Emerging Markets (NYSEArca: EEM) traded at a 6.5% discount to net asset value, according to the FT.
In Friday’s premarket, EEM was trading at a discount of 2.6% to intraday indicative value, according to Morningstar data.
“The selling also caused disruptions in the plumbing behind several ETFs. Citigroup stopped accepting orders to redeem underlying assets from ETF issuers, after one trading desk reached its allocated risk limits,” the FT reported.
Meanwhile, ETF provider State Street said it would cease accepting cash redemption orders for muni bond products from dealers, although in-kind redemptions were still taking place, according to the story.
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Many ETFs traded below fair value during Thursday’s global sell-off triggered by worries the Federal Reserve will pull back on monetary easing, the Financial Times reports.
Discounts widened sharply on Thursday as dealers had trouble keeping up with an avalanche of sell orders, according to the article.
Emerging market ETFs were particularly affected as shares of iShares MSCI Emerging Markets (NYSEArca: EEM) traded at a 6.5% discount to net asset value, according to the FT.
In Friday’s premarket, EEM was trading at a discount of 2.6% to intraday indicative value, according to Morningstar data.
“The selling also caused disruptions in the plumbing behind several ETFs. Citigroup stopped accepting orders to redeem underlying assets from ETF issuers, after one trading desk reached its allocated risk limits,” the FT reported.
Meanwhile, ETF provider State Street said it would cease accepting cash redemption orders for muni bond products from dealers, although in-kind redemptions were still taking place, according to the story.
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Well this was a fun week. Closed everything off. Made a decent chunk of change on the puts I've been holding since yesterday:
I'll have chart updates later today.
By the way, Apple is a piece of a shit stock.
even i did pretty good this week, thanks to my puts (by good I mean not losing any money)
yea AAPL is some bad. dead money. google & amzn much better..even grpn looking pretty good
all my gains in the last 4 months were basically lost in the last two weeks
Sorry to hear that. That is probably the best thing I like about trading vs investing is that at the end of the day I have no exposure to the markets. While the gains might still be "paper" gains since they are not withdrawn from the account, but it is a bit closer to liquidity compared to having open positions out on the market with full exposure.
The markets are still up 11% for the year. At the moment I am up nearly 50% on my total for the year. My maximum position size throughout this year was 10% capital utilization at all times.
Fortunately for the investors out there that still have their positions opened in index funds, there are two major support levels below us that might hold the markets up for the time being. For S&P we have 1575 as a support (high set in 2007), and then we have 1550 (high set in 2000).
When the markets were selling off today we had a bounce at 1575, and we ended up closing at 1592. Pretty decent bounce for intraday move if you ask me. If we break under 1575 then there is nothing to hold the index up until it hits 1550. If we lose that level...well 1500 will become in play very quickly.
For visuals:
https://www.tradingview.com/v/2fQ6Zuds/
Notice that we were overbrought on RSI when we started having this downside. Things are not looking good if we compare the pattern to the prior decade. We had the dotcom bubble in 2000 and mortgage crisis in 2008, question is if we have a black swan event in the waiting for 2013/2014.
My prediction? We will bounce back up to 1610 and then come back down to test 1600 again. If we can hold it, then we might see buying resume slowly. If we fall back under 1600 during that test...then short with both hands. If we do not get that bounce, then short under 1590 with a tight stop. Forgot to mention that today we attempted to break 1600 during the market open but we were only able to set a high at 1599.19. Definitely not good news when a prior support has now become a resistance. In the last trading hour we attempted to rally through again but fall short at 1598.16 ~ coming back down to 1,592.43 for the close.
When the markets were selling off today we had a bounce at 1575, and we ended up closing at 1592. Pretty decent bounce for intraday move if you ask me. If we break under 1575 then there is nothing to hold the index up until it hits 1550. If we lose that level...well 1500 will become in play very quickly.
For visuals:
https://www.tradingview.com/v/2fQ6Zuds/
Notice that we were overbrought on RSI when we started having this downside. Things are not looking good if we compare the pattern to the prior decade. We had the dotcom bubble in 2000 and mortgage crisis in 2008, question is if we have a black swan event in the waiting for 2013/2014.
My prediction? We will bounce back up to 1610 and then come back down to test 1600 again. If we can hold it, then we might see buying resume slowly. If we fall back under 1600 during that test...then short with both hands. If we do not get that bounce, then short under 1590 with a tight stop. Forgot to mention that today we attempted to break 1600 during the market open but we were only able to set a high at 1599.19. Definitely not good news when a prior support has now become a resistance. In the last trading hour we attempted to rally through again but fall short at 1598.16 ~ coming back down to 1,592.43 for the close.
Dallas Fed President Richard Fisher said Monday in an interview that "feral hogs" are testing the central bank, as bond yields have spiked higher. "Markets tend to test things," Fisher told the Financial Times. "We haven't forgotten what happened to the Bank of England [on Black Wednesday]. I don't think anyone can break the Fed . . . . But I do believe that big money does organize itself somewhat like feral hogs. If they detect a weakness or a bad scent, they'll go after it." Fisher said the central bank members fully understood there would be a significant market reaction to the notion bond buying could stop next year.
I just read that. To me it reads as a bunch of weak excuses and confirmation bias. He really shouldn't trade.
He says he's transparent and wanting to learn from his mistakes. Nothing in that PDF, to me, implies any rational objectivity, it's just excuses.
Firstly, he doesn't need a bigger account, he needs a smaller account as he's not capable of keeping his fear and greed in check, he's got to stop trading at levels beyond his comfort zone. In fact, he should stop trading, he comes across as a total chancer.
I mean whinging about 100-1 leverage, using that as a cause and saying he wants less? Trade smaller sizes then you cock. Just because you can, doesn't mean you should.
I can relate to some of what he says, but that PDF makes me shake my head and want to tell him to stop the excuses and "trading" (gambling). He doesn't even have stops at support or resistance, but an arbitrary figure of either 10 or 20 ticks?! Jesus!
Insufficient account size, slow execution and high leverage are not a "cause." Small brain is.
(This is not a reflection on you, Mr. Grunin, I love what you're doing, but I don't agree with that gambler.)
I just read that. To me it reads as a bunch of weak excuses and confirmation bias. He really shouldn't trade.
He says he's transparent and wanting to learn from his mistakes. Nothing in that PDF, to me, implies any rational objectivity, it's just excuses.
Firstly, he doesn't need a bigger account, he needs a smaller account as he's not capable of keeping his fear and greed in check, he's got to stop trading at levels beyond his comfort zone. In fact, he should stop trading, he comes across as a total chancer.
I mean whinging about 100-1 leverage, using that as a cause and saying he wants less? Trade smaller sizes then you cock. Just because you can, doesn't mean you should.
I can relate to some of what he says, but that PDF makes me shake my head and want to tell him to stop the excuses and "trading" (gambling). He doesn't even have stops at support or resistance, but an arbitrary figure of either 10 or 20 ticks?! Jesus!
Insufficient account size, slow execution and high leverage are not a "cause." Small brain is.
(This is not a reflection on you, Mr. Grunin, I love what you're doing, but I don't agree with that gambler.)
I agree with what you said, and that PDF just lists the reasons as to why the mass majority of traders fail. For his situation, his discipline cracked at the wrong moment, and he over-sized his positions. Problem with that is if you catch a wrong trade..everything is washed away. That is the difficult thing about trading, you must stick to your set of rules at all times, because that one time you slip, it can cost you everything.
I am going to spend some time right now explaining the way I see trading as a whole. Is trading a form of gambling? Yes it is, because successful trading comes down to understanding probability. I can read all the charts I want, and know every little financial detail about the company, but I will never be able to with certainty (100%) pinpoint that stock's movement every time. There is no edge when it comes to trading, the edge is formed though when you do not trade on low probability trades, and push on high probability trades.
Lets get right back to gambling. Gambling is all based on probability. BlackJack specifically carries a house edge (like all casino games). When you sit down to play each and every hand, after enough sample space you will definitely walk away a loser. But lets say that for you the rules are different. You only have to put your money down when you have a face card v dealer 6. If you kept playing that hand over and over again, does the probability change? Course it does, even though there is no certainty that you will win each hand, probability wise you have the greater chance of winning that setup. Similar thing to if the dealer has a 5 and you have two aces. Split the aces, right? In doing so you double down, and you know that your probability is much higher than if you have a 8 v dealer face card.
Considering all the charts I have posted on this thread, it should be clear that by now that there is a pattern to price action. This patterns can be taken advantage off, and utilizing them gives you that king vs 6 setup. You might come into that trade, and the pattern continues, or it might break finally; similar to the dealer catching a 5 with that 6 and then a face. The thing is, there is a bigger chance of the pattern holding than breaking.
If you roll back all the past charts on this thread and look at what the stocks or market did compared to my suggested annotation, you'll notice that 75%+ of what was expected actually happened.
For the bulls out there, I am going to give you something to hang onto.
What we have is marked gravestone doji and dragonfly dojis. The gravestone:
The dragonfly:
The gravestone candle represents a bearish turn while the dragonfly candle represents a bullish turn.
The doji pattern is a very realiable pattern, the cleaner it looks, the more likely it is to play out as expected. Generally said that the opening and closing should be within 10% of the lowest level or highest level. In that chart I have highlighted the clean doji's..notice how well they all planned out?
This is a weekly chart by the by. Currently there is a dragonfly doji forming, but first we must wait for the full week to finish to make that consensus. If the bulls can get a close of 1590 on SPX on Friday..then hell I might be jumping on the long bandwagon along with you.
What we have is marked gravestone doji and dragonfly dojis. The gravestone:
The dragonfly:
The gravestone candle represents a bearish turn while the dragonfly candle represents a bullish turn.
The doji pattern is a very realiable pattern, the cleaner it looks, the more likely it is to play out as expected. Generally said that the opening and closing should be within 10% of the lowest level or highest level. In that chart I have highlighted the clean doji's..notice how well they all planned out?
This is a weekly chart by the by. Currently there is a dragonfly doji forming, but first we must wait for the full week to finish to make that consensus. If the bulls can get a close of 1590 on SPX on Friday..then hell I might be jumping on the long bandwagon along with you.