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Thread: coolhand's Account Talk

  1. #1

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    Default coolhand's Account Talk

    Welcome to my thread. My primary trading tools are technical analysis and sentiment. Probably more heavily weighted on the sentiment. Here are my current observations:

    Friday's action clearly turned more people bearish. VIX is high. The Government just passed a "rescue plan" and we tested 1106 on SPX and closed below it.

    Sentiment supports a rally as does the VIX. The long term outlook still looks bearish and bear market rules apply (sell rallies, buy weakness).

    The market's reaction to the Rescue Plan was bearish, but it's a very short term reaction and consistent with market behavior. I think too many people were expecting a rally so the market dished out some pain instead. That is not unusual and I'm glad this vote is finally out of the way.

    There is still a lot of risk in this market and I don't think that will change for some time. I'm in the camp that says we will be seeing lower prices down the road, but the market does not go straight down. We had a lot of pain last week and a relief rally is a very real possibility. More so as bearish levels rise. Last Friday's action frustrated many traders and dire warnings are increasing on some sites.

    I'm looking to sell strength. If we continue to see weakness I'll have to evaluate it quickly, but I'm not going to be taken out of my position easily. I'm willing to endure some pain if it means I finally catch a rally. A rally at this point could be quite explosive with an estimated 3.5 Trillion sitting on the sidelines. Obviously not all of that would come back into the market on a rally, but that's a lot of fuel sitting out there.

    It's a very tough call in the short term though. I am down about 3.25% for the year right now (including the surprise decline on Friday). Back in in the Spring I was down as much as 10% during that big downward move, but I held out to allow the market to find its feet. I clawed my way out of that hole to a large extent. I'm always aware of the challenges the trading rules have on my account and I have to take that in to consideration with any trading strategy.

    I reentered the market at last Thursday's close going 100% C fund. I've spent most of the last two months in G. I'm expecting weakness in the overseas market's tonight and more selling in our domestic market at the opening bell. Hopefully, after an initial flight to safety most of the weak hands will be shaken loose and the parasites that control this market will finally take it back up. That's my expectation, but until breadth and volume come back to the upside we could see more pain instead.


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  3. #2

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    Default Re: coolhand's Account Talk

    Nice to have another of the old crew back to posting. Welcome and I look forward to your posts!
    Socrates: "Democracy, which is a charming form of government, full of variety and disorder, and dispensing a sort of equality to equals and unequaled alike."

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  5. #3

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    Default Re: coolhand's Account Talk

    Quote Originally Posted by Show-me View Post
    Nice to have another of the old crew back to posting. Welcome and I look forward to your posts!

    I concur with Show-me,

    Your outlook is similar to mine..

    Thanks for posting.

    Poolman

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  7. #4

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    Default Re: coolhand's Account Talk

    Hey Coolhand, can you still dance? Welcome back, we missed your input!
    Links Crude Settle $46.44 08-29-2017
    -$.13 Loss




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  9. #5

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    Default Re: coolhand's Account Talk

    Hi coolhand,

    I've been a lurker on your and Frenchie's investorshub page for well over a year (maybe two). Nice to see you here, where I've also been a lurker.

    Agree with many of your points, but I wouldn't have been suprised with any direction the market took on Friday. I think the market looked past the passage of the bill and on to "what's next?"- and the picture looking forward (as magic 8 ball might read) is "cloudy." Earnings, lift on shorts, prez campaigns and inflation/deflation lie ahead.

    Careful as she goes...

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  11. #6

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    Default Re: coolhand's Account Talk

    Quote Originally Posted by Bravo Sierra View Post
    Hi coolhand,

    I've been a lurker on your and Frenchie's investorshub page for well over a year (maybe two). Nice to see you here, where I've also been a lurker.

    Agree with many of your points, but I wouldn't have been suprised with any direction the market took on Friday. I think the market looked past the passage of the bill and on to "what's next?"- and the picture looking forward (as magic 8 ball might read) is "cloudy." Earnings, lift on shorts, prez campaigns and inflation/deflation lie ahead.

    Careful as she goes...
    BravoSierra, interesting handle. Welcome to the MB.

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  13. #7

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    Default Re: coolhand's Account Talk

    Quote Originally Posted by Bravo Sierra View Post
    Hi coolhand,

    I've been a lurker on your and Frenchie's investorshub page for well over a year (maybe two). Nice to see you here, where I've also been a lurker.

    Agree with many of your points, but I wouldn't have been suprised with any direction the market took on Friday. I think the market looked past the passage of the bill and on to "what's next?"- and the picture looking forward (as magic 8 ball might read) is "cloudy." Earnings, lift on shorts, prez campaigns and inflation/deflation lie ahead.

    Careful as she goes...
    Yes. That's the "fundamental" part of the market and I certainly agree with it, which is why I believe price will continue to move downward. But emotion is a big part of what moves the market too and often contrasts with fundamentals. Right now this market is being heavily manipulated. Shorting has been limited. The declines appeared orderly. But the bottom line right now is how much more pain will we see before we get an Intermediate Term rally. We seem to be getting close. Futures are deep in the red right now, which I expected. If we turn today after the initial decline, with breadth and volume, we could see some relief for a little while. A big if though.

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  15. #8

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    Default Re: coolhand's Account Talk

    Relative VIX is flashing a buy alert. It's at a level that's has started other rallies, but if price doesn't follow we're probably in for more pain.

    The close was relatively bullish, but folks are panicky. We could drop some more after this or just chop around until fear subsides some before we get a good rally. Then again, if volume and breadth come in quickly things could move fast. There's been talk of a half point fed cut, but I wouldn't count on that. Some good news might help though.

    From a sentiment standpoint, the Short and Intermediate Term are bullish, but not convincingly. The market may take another shot down to wash out all the bulls who took a position today. That would convince most bulls to take a seat I think. Most Day traders will be waiting for an actionable signal to jump in as the bullish signals are not enough by themselves in a manipulated market. Us TSPers aren't nearly that agile. We could see a 10% or more rally before we could get invested. That's why I got in at the close last Thursday.

    Fearless Forcasters has a weekly bearish signal this week (54%). These guys are pretty savvy and generally correct in their positioning, but is it too bearish? I would not bet on it in this market.

    100% C - 10/3
    Last edited by coolhand; 10-06-2008 at 04:40 PM. Reason: Added current position

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  17. #9

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    Default Re: coolhand's Account Talk

    The volatility will scare people, but we've got a great set-up for a rally. Any chop probably should be taken as a bottoming process. We are news driven right now and da' boyz will want to scoop all the excess premiums on these beaten down stocks before too much longer. It's still a bear market though so expect to retest yesterday's closing price at some point.


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  19. #10

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    Default Re: coolhand's Account Talk

    I can't help but think of all those "buy and holders" who wagged their collective fingers at us saying you can't time the market. Then I look at all the folks here on this web site who are still in great shape considering market conditions (I'm about 20% ahead of SPX). They must be eating their words by now.

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  21. #11

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    Default Re: coolhand's Account Talk

    Yesterday's low in the SPX needs to hold today if we're going to turn this thing in the Short Term. Severe chop should be expected, but if we break yesterday's low things could get out of hand.

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  23. #12

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    Default Re: coolhand's Account Talk

    My last post yesterday I said things could get out of hand if we closed below SPX 1106. We did close below that level and are now poised to see things get out of hand. But this morning, as I'm sure you are aware, central banks on a global scale have cut interest rates .5%. Futures are moving higher.

    This is all well and good, but a lot of damage has been done and fears are extreme. It remains to be seen whether any rally can get started before more selling kicks in. I have a hard time seeing a major bounce right now and it will take more than one trading day to assess where the market is headed in the next couple of weeks.

    The voracity of selling has caught many traders off guard, including myself. It is a rare event to see so much pain is so short a time.

    I am contemplating selling out today, but it would go against all the indicators I am following along with bear market rules (buying weakness). I need to see how things unfold this morning. But even if we rally for the morning there's no way to know if it will continue in the afternoon. My biggest fear isn't losing more money. It's getting out with no way to get back in for over three weeks and then watching SPX hit 1200 by the end of the month. I may be a little sick right now, but that would be the clincher.

    I am not suggesting that SPX will do that, but any scenario is possible with so much manipulation in the markets. Our accounts are not set-up to be nearly flexible enough to react to these kind of market conditions. Daily trades would have had me out a couple days ago, but getting caught in a waterfall forces me to look at things from an Intermediate Term perspective.

    I believe that we are currently in a recession, but it is going to get markedly worse down the road. It is not just our economy that is suffering either. In fact, we're in better shape than many other economies worldwide (Europe and Asia included). This is because our market is more resilient and we are in better shape to react to negative economic forces, but because all economies are now globally connected the pain will probably endure for some time.

    Rallies should continue to be sold until the market can prove we are close to a bottom. That could be a ways off yet.

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