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fired
02-14-2011, 05:43 PM
I'm long the VIX and have sold off the last of my general market position. Is it now time to take a short position on? Thoughts?

CaptainTripps
02-14-2011, 06:00 PM
It makes sense to me but as you know the saying "markets can stay irrational longer than you can stay solovent". Currently I think the markets are very irrational and in need of a correction. But the markets wont listen to me.

fired
02-14-2011, 06:47 PM
But the markets wont listen to me.

They don't listen to me either! Maybe if we shout together. :D

Venturer
02-14-2011, 06:57 PM
Have you ever heard the phrase; 'Don't fight the FED'?
Right now, the FED is the market. It's the Bond Market and it's the Stock Market. There will be a major correction when the FED runs out of US Dollars.
It's called 'Extend and Pretend' and it will go on until outside forces cause it to collapse. In the meantime, they will continue to crush the shorts.

radioone
02-14-2011, 07:22 PM
Have you ever heard the phrase; 'Don't fight the FED'?
Right now, the FED is the market. It's the Bond Market and it's the Stock Market. There will be a major correction when the FED runs out of US Dollars.
It's called 'Extend and Pretend' and it will go on until outside forces cause it to collapse. In the meantime, they will continue to crush the shorts.

Total agreement with Venturer (but then again, I usually am)...... what he said...... that or until the FED says no more QE, and ALSO starts raising rates..... extend and pretend will still be in full effect.... until that time, shorting will only leave you short...... FUNDS.....

chartsrgood
02-14-2011, 07:31 PM
Out of curiousity..............

Who is selling all the stock the Fed is buying?

An additional question.....

In reference to the NYSE how do the specialists on the floor and the legal insiders fit into this equation?

radioone
02-14-2011, 07:34 PM
Out of curiousity..............

Who is selling all the stock the Fed is buying?

Everyone.... including your sister.... the amount of funds flowing out of the market is bordering on amazing...... the only way the markets are kept stable to up are by the fed..... and everyone knows that anyone buying THAT MUCH will NEVER be able to buy at the "best price".... i.e. they are over paying....... massively.....

chartsrgood
02-14-2011, 11:39 PM
Everyone.... including your sister.... the amount of funds flowing out of the market is bordering on amazing...... the only way the markets are kept stable to up are by the fed..... and everyone knows that anyone buying THAT MUCH will NEVER be able to buy at the "best price".... i.e. they are over paying....... massively.....

http://blogs.barrons.com/focusonfunds/2011/02/14/as-us-stock-funds-post-best-inflows-since-2006-pimco-total-return-bleeds-assets/?mod=rss_BOLBlog

U.S. stock funds had an inflow of funds in January, the best since 2006.

radioone
02-14-2011, 11:47 PM
http://blogs.barrons.com/focusonfunds/2011/02/14/as-us-stock-funds-post-best-inflows-since-2006-pimco-total-return-bleeds-assets/?mod=rss_BOLBlog

U.S. stock funds had an inflow of funds in January, the best since 2006.


uh huh..... undefined category or whatever, courtesy of whom?...... ummm... hello:rolleyes:

chartsrgood
02-14-2011, 11:55 PM
uh huh..... undefined category or whatever, courtesy of whom?...... ummm... hello:rolleyes:

I have an idea......

How about if you provide a link for your data as I did......

fired
02-15-2011, 12:31 AM
I'm not convinced about money flows as an indicator at any rate. It seems there is little correlation.

http://www.cxoadvisory.com/sentiment-indicators/short-term-net-money-flow-and-stock-returns/


In summary, evidence from simple tests on a limited dataset do not support a belief that net money flow is usefully predictive of weekly or monthly stock market returns.



Any other thoughts, anyone?

chartsrgood
02-15-2011, 12:51 AM
I'm not convinced about money flows as an indicator at any rate. It seems there is little correlation.

http://www.cxoadvisory.com/sentiment-indicators/short-term-net-money-flow-and-stock-returns/



Any other thoughts, anyone?

Putting this in the context of smart money and dumb money...

There are times when the smart money is buying just as much as the dumb money is selling, or vice a versa. I would say in those instances the money flow would mean something. An example would be rising prices along with historically heavy NYSE specialist/member short selling. In that example the smart money is definitely selling.

On the topic of your thread..........

imo the market is ready to turn at any time.

One thing I find interesting...
last summer there was all kinds of talk about an imminent crash, which never happened
Not much crash talk in here compared to then. fwiw, last summer I was bullish, now I am bearish.

fired
02-15-2011, 12:55 AM
Putting this in the context of smart money and dumb money...

There are times when the smart money is buying just as much as the dumb money is selling, or vice a versa. I would say in those instances the money flow would mean something. An example would be rising prices along with historically heavy NYSE specialist/member short selling. In that example the smart money is definitely selling.

On the topic of your thread..........

imo the market is ready to turn at any time

I can't recall where I saw it but the last few weeks has seen some heavy selling by company insiders. I'm not sure if that is correlated either but I would count company management as "smart money". I might move into a small short position at or after options expiry.

chartsrgood
02-15-2011, 01:07 AM
I can't recall where I saw it but the last few weeks has seen some heavy selling by company insiders. I'm not sure if that is correlated either but I would count company management as "smart money". I might move into a small short position at or after options expiry.

fwiw...

I agree they tend to be smart money.

But.........

An insider buys for one reason, to make money
An insider can sell for a number of reasons none of which may have anything to do with market conditions.

Also when selling or buying imo insiders have some tendency to be a little early, not all the time though.

I am of the view insider buying is more of a key than insider selling.

Just to clarify...
In this post when referring to insiders I am referring specifically and only to company/management insiders

fired
02-15-2011, 09:42 AM
fwiw...

I agree they tend to be smart money.

But.........

An insider buys for one reason, to make money
An insider can sell for a number of reasons none of which may have anything to do with market conditions.

Also when selling or buying imo insiders have some tendency to be a little early, not all the time though.

I am of the view insider buying is more of a key than insider selling.

Just to clarify...
In this post when referring to insiders I am referring specifically and only to company/management insiders

I would agree on an individual basis, stock by stock, but when it's a trend something else is going on.

axxell33
02-15-2011, 02:58 PM
One thing I find interesting...
last summer there was all kinds of talk about an imminent crash, which never happened
Not much crash talk in here compared to then. fwiw, last summer I was bullish, now I am bearish.

I agree.. there was the crash that was coming, it didn't show up, and now everyone has forgotten about it. QEII comes to mind.

I am also bearish on the general markets while they continue an upward, falsely inflated trend (with an exclusion to some of the commodities and PMs sectors). The question I ask myself, is when do I go short and on what?

I believe the big blue chip, service and financial firms will take it on the nose the hardest. Thoughts?

chartsrgood
02-15-2011, 05:07 PM
I agree.. there was the crash that was coming, it didn't show up, and now everyone has forgotten about it. QEII comes to mind.

I am also bearish on the general markets while they continue an upward, falsely inflated trend (with an exclusion to some of the commodities and PMs sectors). The question I ask myself, is when do I go short and on what?

I believe the big blue chip, service and financial firms will take it on the nose the hardest. Thoughts?

I have the S&P going to 1285 give or take 5 points.... or to 1200 give or take 25 points... could be either one at this point.

I would use tza to short the general market. My view is that tza will likely be weaker than the S&P going down to some degree. I prefer to use the S&P for charting purposes.

As long as tza stays below 14.59 I have tza making one more smallish wave down. tza may be up tomorrow and or the next day...
I would buy tza under 13. It may not make it that low or it may go to 1260ish or even a bit lower. A very high probability this is the last low for tza before the correction in the general market sets in.

I bought some tza at 14.21 nearly two weeks ago.

Here are some bear etf's Plantguy posted on another thread. At the time he posted this he thought it was too early to short because the market had not turned yet. He was right.
https://www.kitcomm.com/showthread.php?p=1228085#post1228085

axxell33
02-15-2011, 05:19 PM
I have the S&P going to 1285 give or take 5 points.... or to 1200 give or take 25 points... could be either one at this point.

I would use tza to short the general market. My view is that tza will likely be weaker than the S&P going down to some degree. I prefer to use the S&P for charting purposes.

As long as tza stays below 14.59 I have tza making one more smallish wave down. tza may be up tomorrow and or the next day...
I would buy tza under 13

I bought some tza at 14.21 nearly two weeks ago.

Here are some bear etf's Plantguy posted on another thread.
https://www.kitcomm.com/showthread.php?p=1228085#post1228085

Very interesting.. and thanks for the information. If you don't mind me asking, what is your strategy or hold plan for tza?

chartsrgood
02-15-2011, 05:42 PM
Very interesting.. and thanks for the information. If you don't mind me asking, what is your strategy or hold plan for tza?

I may buy some more in the next few days

I have it going to 15.50-16 having a pull back/maybe to 14ish then up again.

If the low I am anticipating under 13 does not hold I will exit. Or I may be out before that. At this point I don't know.

If the S&P is not going to 1200ish the pullback from 15.5-16 will not be just a pullback but will be the start of another decline in tza.

theplantguy
02-15-2011, 05:53 PM
I see the market going up another 1000 or more points, maybe much more. But when the bubble pops, it's going to be ugly.

chartsrgood
02-15-2011, 07:18 PM
I see the market going up another 1000 or more points, maybe much more. But when the bubble pops, it's going to be ugly.

fwiw
I agree. I do not think the decline I've been talking about is the start of a huge/gigantic drop....more like a pause...if it materializes...before onward and upward.

theplantguy
02-15-2011, 07:41 PM
I'm not much for making predictions, but I am looking at Oct 2011 as a possible turning point and a drop through the fall of 3000-4000 points and then a spring recovery of sorts, maybe 2000 or so points, then a drop of 3000-4000 more points. This is more than just a wild guess, but way less than a prediction. I see the events as quite possible, but the date is a lot less sure.

axxell33
02-15-2011, 09:09 PM
Here are some bear etf's Plantguy posted on another thread. At the time he posted this he thought it was too early to short because the market had not turned yet. He was right.
https://www.kitcomm.com/showthread.php?p=1228085#post1228085

I found a long list of inverse etfs. Some are sector specific (gold, USD, ag, etc), however those are traded only on the TSX. I will add them at the bottom.

I like the idea of the inverse etf.. have you considered options? Perhaps buying calls out until next Jan would be quite profitable if you truly believe that a major pullback is possible. If you are considering a 3000 or 4000 point drop, then a $30 call would probably be in the money. =) Just thinking it could provide the leverage without having the capital tied up for such a long period. It also decreases the need to have perfect timing.. or expensive bad timing and it limits the downside. Thoughts on this strategy?

..one thing I do know though, is that this bull can't continue with the present economic conditions. It's only a matter of time..

I appreciate the knowledge both of you bring to this forum.. so thanks!

Some inverse ETFs are:

Direxion

* Direxion Financial Bear 3X - NYSE: FAZ
* Direxion Technology Bear 3x - NYSE: TYP
* Direxion Russell 1000 Bear 3x - NYSE: BGZ
* Direxion Russell 2000 Bear 3x - NYSE: TZA
* Direxion Russell MidCap Bear 3x - NYSE: MWN

ProShares

* ProShares Short Dow 30 - NYSE: DOG
* ProShares Short S&P 500 - NYSE: SH
* ProShares Short S&P MidCap 400 - NYSE: MYY
* ProShares Short S&P SmallCap 600 - NYSE: SBB
* ProShares Short Nasdaq 100 - NYSE: PSQ
* ProShares Short Russell 2000 - NYSE: RWM
* ProShares S&P 500 Bear 3x - NYSE: SPXU

Horizons BetaPro

* HBP S&P/TSX 60 Bear Plus ETF - TSX: HXD
* HBP S&P/TSX Capped Energy Bear Plus ETF - TSX: HED
* HBP S&P/TSX Capped Financials Bear Plus ETF - TSX: HFD
* HBP S&P/TSX Global Gold Bear Plus ETF - TSX: HGD
* HBP S&P/TSX Global Mining ETF - TSX: HMD
* HBP NYMEX Crude Oil Bear Plus ETF - TSX: HOD
* HBP NYMEX Natural Gas Bear Plus ETF - TSX: HND
* HBP COMEX Gold Bullion Bear Plus ETF - TSX: HBD
* HBP S&P500 Bear Plus ETF - TSX: HSD
* HBP NASDAQ-100 Bear Plus ETF - TSX: HQD
* HBP U.S. Dollar Bear Plus ETF - TSX: HDD
* HBP MSCI Emerging Markets Bear Plus ETF - TSX: HJD
* HBP DJ-AIG Agricultural Grains Bear Plus ETF - TSX: HAD
* HBP U.S. 30yr Bond Bear Plus ETF - TSX: HTD

fired
02-15-2011, 09:18 PM
The betapro plus ETFs are 2x. Beware that they suffer the same problems as most levered ETFs and should be held only for short periods of time (a few days to a few weeks).

chartsrgood
02-16-2011, 12:19 AM
I like the idea of the inverse etf.. have you considered options? Perhaps buying calls out until next Jan would be quite profitable if you truly believe that a major pullback is possible. If you are considering a 3000 or 4000 point drop, then a $30 call would probably be in the money. =) Just thinking it could provide the leverage without having the capital tied up for such a long period. It also decreases the need to have perfect timing.. or expensive bad timing and it limits the downside. Thoughts on this strategy?

..one thing I do know though, is that this bull can't continue with the present economic conditions. It's only a matter of time..

I avoid options. There is the exception to the rule I suppose.

The market made a huge bottom in 1932. The economy did not do much for several years after that. Livermore made 100 million in the crash of 1929 and filed for bankruptcy in 1935. Maybe he lost big being short after 1932.

The history of the 1930's shows that a decent looking economy is not needed for an up market.

axxell33
02-16-2011, 09:41 AM
The market made a huge bottom in 1932. The economy did not do much for several years after that. Livermore made 100 million in the crash of 1929 and filed for bankruptcy in 1935. Maybe he lost big being short after 1932.

The history of the 1930's shows that a decent looking economy is not needed for an up market.

Outstanding Livermore reference.. I wish more people would talk about him. The present market conditions as they come to past, will also mimic the conditions of the 1930s. Terrible economic conditions and a runaway bull. Tread lightly..

fired
02-16-2011, 02:42 PM
Took a small short position out. We shall see.

Numisgold
02-18-2011, 04:13 PM
Big POMO days next week on Tuesday, Thursday, and Friday. That will continue to be hard to fight.

Looking at the yearly charts of some short ETF's like FAZ, TZA, SRS, SKF, ZSL, UNG, etc. one definitely gets the idea that ALL of them are ultimately widow-makers.

Numisgold

fired
02-22-2011, 10:46 AM
We are on our way. Question is, how much more?

CaptainTripps
02-22-2011, 12:23 PM
Looks like now is a good time for your shorts. I would look for a 10% drop then re-evaluate the situation.

fired
02-22-2011, 01:02 PM
Looks like now is a good time for your shorts. I would look for a 10% drop then re-evaluate the situation.

I've been scaling in on the past few days. 1275 on the S&P is my first target.

fired
02-23-2011, 02:32 PM
Still looking good. May take some profit @ 50dma 1286 s&p.

DenariiForMe
02-23-2011, 03:21 PM
I'm not a trader, I'm an investor, so from that perspective, I'll say this:

Is Bernanke going to stop monetizing debt? NO, because if he did, the U.S. would default on its obligations. This is especially true now - in this little correction the U.S. dollar has fallen and treasury auctions have been crap. No more flight to safety folks. Stock market crash or not, demand for dollars/treasuries is down and Bernanke HAS to print. In the face of that, I wouldn't risk being short. Personally, I'm trying to find a way to get more long. On a related note, if it isn't obvious already, micro is dead...everything is macro now. Watch the macro trends...they all point in one direction. The only question now, IMO, is which of the inflating assets will inflate the fastest. Energy, agriculture, gold and silver...opportunity beckons...

DYODD though...as always

CaptainTripps
02-23-2011, 05:29 PM
Im neither a trader nor much of an inverstor outside of my 401k and a couple ounces of metal. I dont care how much money Uncle Ben prints off, I think stocks are way over priced. The QE money is not making it into the system. Its going around in circles amongst the big boys. They use that as bait to squeeze the little guys into thinking its safe to get back into the water. Then wham! Stocks crash and the suckers lose their life savings again.

DenariiForMe
02-24-2011, 08:24 AM
Im neither a trader nor much of an inverstor outside of my 401k and a couple ounces of metal. I dont care how much money Uncle Ben prints off, I think stocks are way over priced. The QE money is not making it into the system. Its going around in circles amongst the big boys. They use that as bait to squeeze the little guys into thinking its safe to get back into the water. Then wham! Stocks crash and the suckers lose their life savings again.

Your cynicism is perfectly justifiable, to each his own.

As for the underlined bit though, that is simply untrue. Treasuries are being monetized, which means that much of the government's annual spending is now of new money. Not to mention the fact that the banks are using their POMO windfall to speculate in the futures markets. Have you checked PPI lately? Margins can only get squeezed so much before consumer prices start rising...which they have. What's all the hullabaloo in the ME about? We are experiencing inflation, and it has to get worse. Mathematical fact - unless you assume that the Fed will allow Treasury to default.

CaptainTripps
02-24-2011, 09:48 AM
Your cynicism is perfectly justifiable, to each his own.

As for the underlined bit though, that is simply untrue. Treasuries are being monetized, which means that much of the government's annual spending is now of new money. Not to mention the fact that the banks are using their POMO windfall to speculate in the futures markets. Have you checked PPI lately? Margins can only get squeezed so much before consumer prices start rising...which they have. What's all the hullabaloo in the ME about? We are experiencing inflation, and it has to get worse. Mathematical fact - unless you assume that the Fed will allow Treasury to default.

I dont fully understand the whole inflation/deflation thing. But in order to have text book inflation dont wages have to go up too? In the last couple years a lot of average Joes lost their jobs and the few that got them back are working at a lower wage. Not to mention fewer benefits. Meanwhile those that did keep their jobs either did so with no pay increase or a 3% cost of living increase. And in that time the cost of daily necessities have out paced the wages therefore less percentage of income is available for saving/investing. The only way for the average Joe to benefit from the QEing is to out gamble the Wall Street guys by playing the markets. And we all know that isnt as easy as it sounds. Now were the programs where we got a $600 tax rebate, or the making work pay tax credit, or the $8,000 home buyers thing. But I dont think that was nearly enough to offset the cost increases. More of a slap in the face.

And yes I am cynical. I got burned on my 401k ponzi scheme and watched it get sliced in half. Its now almost recovered and I am extra protective of it. I refuse to watch it get sliced in half again.

fired
02-24-2011, 10:01 AM
Your cynicism is perfectly justifiable, to each his own.

As for the underlined bit though, that is simply untrue. Treasuries are being monetized, which means that much of the government's annual spending is now of new money. Not to mention the fact that the banks are using their POMO windfall to speculate in the futures markets. Have you checked PPI lately? Margins can only get squeezed so much before consumer prices start rising...which they have. What's all the hullabaloo in the ME about? We are experiencing inflation, and it has to get worse. Mathematical fact - unless you assume that the Fed will allow Treasury to default.

We are indeed experiencing inflation but the SM is not necessarily the place to be. The best bet for inflation is non-precious metals, IIRC. At any rate, I still see some downside to come. Maybe another percent or two at least.