The Stock Market

[HSFBfan]

4 minutes ago, DarterBlue said:

You likely did the right thing covering facing expiration. You should not buy options that are short dated on stocks that are well extended from their logical support or breakout point. They work sometime, but are just too risky. 

Lesson learned. Oh well. Got burned. 

[HSFBfan]

Well made the wrong decision. 

Stock made a big turn around. Would have made a profit 

[DarterBlue]

Just now, HSFBfan said:

Well made the wrong decision. 

Stock made a big turn around. Would have made a profit 

You need a proper selection method and a risk management system. Like I have told you before, your account will just be a yoyo if you don't have both of those things in place. Now if you are just doing this for the fun and excitement, then you are getting what you want. But if you really want to make money then you have to treat this like a business. There is just no other way. 

[HSFBfan]

1 minute ago, DarterBlue said:

You need a proper selection method and a risk management system. Like I have told you before, your account will just be a yoyo if you don't have both of those things in place. Now if you are just doing this for the fun and excitement, then you are getting what you want. But if you really want to make money then you have to treat this like a business. There is just no other way. 

Yea i know. 

If i just stood in there another hour or so. I had 2 days. 

Would have been nice. 

I dont really have the time to do the homework. Its more just fun and games until I lose interest and move on 

Now that college football is here I can take my money and bet on games 

Not that I'm not that good at that either 

[DarterBlue]

4 minutes ago, HSFBfan said:

Yea i know. 

If i just stood in there another hour or so. I had 2 days. 

Would have been nice. 

I dont really have the time to do the homework. Its more just fun and games until I lose interest and move on 

Now that college football is here I can take my money and bet on games 

Not that I'm not that good at that either 

As long as it's just for fun and you can afford to lose small amounts it's all good. For me this is a business. 

[HSFBfan]

Just now, DarterBlue said:

As long as it's just for fun and you can afford to lose small amounts it's all good. For me this is a business. 

I dont have the attention span to get deep into too many things. I dabble and leave. Things get way too repetitive and boring. 

 

[DarterBlue]

4 minutes ago, HSFBfan said:

I dont have the attention span to get deep into too many things. I dabble and leave. Things get way too repetitive and boring. 

 

I realize that. The people that make real money in this game work real hard to do so. If you look at my equity that I posted, you will see some interesting things. More importantly, despite pullbacks, you will see it goes up with time. The 31% return in two years may not look that great. But over 10 or so years, if you can compound at that rate, it becomes serious money. 

[HSFBfan]

Just now, DarterBlue said:

I realize that. The people that make real money in this game work real hard to do so. If you look at my equity that I posted, you will see some interesting things. More importantly, despite pullbacks, you will see it goes up with time. The 31% return in two years may not look that great. But over 10 or so years, if you can compound at that rate, it becomes serious money. 

Of course it become serious money 30% is a good return if not a very good return 

I just dont believe any business is worth all my time and effort unless its something that absolutely blows me away with interest which to this day I havent found. 

I will never give my entire life to some business. Its not in me to do so. My personal life is way more important than anything your business has to offer me long term. Sitting at some desk for 40+ hours a week is like torture. 

Working in the heat and such might be worse. 

The headaches businesses put you through and the misery that people face daily going to work im sorry to say but at some point you gotta get jealous of people on food stamps and such. They don't have to do shit. Just collect that pay on fridays

The only thing really stopping me for going down that road is I have some pride

[DownSouth]

18 minutes ago, HSFBfan said:

I dont have the attention span to get deep into too many things. I dabble and leave. Things get way too repetitive and boring. 

 

You sound just like Trump.

Maybe you should run for President?

[Atticus Finch]

41 minutes ago, DownSouth said:

You sound just like Trump.

Maybe you should run for President?

Shocking that an ardent Trump supporter would be so idiotic and incompetent.

[DarterBlue]

1 hour ago, GardenStateBaller said:

+200!!

 

I could literally trade off of you guys! Every time you all get bullish, the market sells off. Talk about wrong way Corrigans!

[DarterBlue]

1 minute ago, GardenStateBaller said:

Yet my summer home is worth more than your entire life savings!! LOL 

Sure, because you are a thief. Whatever I have I worked hard for. 

[DarterBlue]

Stocks closed mixed but at day lows on higher NYSE volume but lower NASDAQ volume. At the close, the range was from a loss of 1.67% on the NASDAQ 100 to a gain of .92% on the Russell 2000. Advancing stocks led by margins of 3-2 on the NYSE and 10-7 on the NASDAQ. Earlier they led by better than 4-1 on both exchanges. In the early going, stocks were broadly higher. However, the NASDAQ began laboring an hour in and went in an out between positive and negative territory. After that, there was backing and filling until the FED announcement. Stocks rallied broadly on Powell’s statement. However, this did not hold. By 3 pm all the indices were selling off and this continued into the close. So, how do I view all this? The market was strong Monday and Tuesday. So strong, that an argument could be made that the correction was over. Today’s action signaled not so fast. Still, the week has been good for the bulls so far.

On the day, I lost $1,490.82 or .24%. My big loser was SHOP which gave up about $40 or 4.76%. Partially offsetting the SHOP losses was a nice gain in DHI which was up 3.62% on a strong day for homebuilders. However, losses of 1.37% in LOW, .67% in ZM and .38% in NEM, ensured I had a negative day. SHOP’s big losses are at least partially due to the pricing of a secondary stock offering at $900 per share. With that said, it is the worst of my positions. If it cannot rally tomorrow, I will sell it before the day’s close. I will keep the other positions for now and will not look to short the market just yet. Not until more negative cards are on the table. Likewise, I will not add new positions here either; not unless I get an all clear.

[DarterBlue]

22 minutes ago, GardenStateBaller said:

If you utilized a professional wealth manager like normal people you’d be a multi-millionaire by now like the rest of us! #notahobby #daytrader

You are a total idiot! More than 85% of my trading capital represents profits from the market. 

You also have no idea what my total net worth is. But I will give you the benefit of the doubt as you seem to have an unsavory reputation on the board. So, you probably are worth more than me. But even if that is so, I can 100% guarantee you that my market returns have beaten yours by a city block over the years. 

[DarterBlue]

Stocks closed broadly lower on volume that was higher on the NASDAQ and lower on the NYSE. In doing so, the averages did close well off day lows, but significantly off day highs also. Beneath the surface, things were not as bad as they looked as the Russell, MID Cap index and NYSE composite had relatively good days. At the close, the range was from a loss of 1.48% on the NASDAQ 100 to .38% on the NYSE composite. Losing stocks led by a margin of 3-2 on the NYSE and 19-14 on the NASDAQ. So, how do I view the day? Negative. Why negative? The biggest reason is the fact that both NASDAQ indices are acting poorly. To my way of thinking, the current bull leg cannot be sustained without their participation. At today’s close, the NASDAQ was at the same level it was on Thursday last week, is again below its 50-day exponential moving average, and it also came within a whisker of taking out last Friday’s lows which would have been very bearish.

 On the day, I lost $2,078 or .34%. Four of my positions were down on the day and only one was up. The losers ranged from a 1.4% loss on DHI and NEM, to a 1.76% loss on LOW. SHOP lost 1.6%. I came very close but did not sell SHOP as it rallied strongly off its day lows set early in the trading day and closed in the higher end of its range. However, it is hanging on by a thread, and if the averages cannot recover some ground tomorrow, it will likely go. ZM, was my sole gainer as it shrugged off early losses to close up 1.2% by the close.

[DarterBlue]

A Goal Line Stand: If the current bull market is to remain intact, the two NASDAQ indices need to make a goal line defensive stand today. Should they take out the lows of last Friday, all hell will break loose on the the NASDAQ. Should the NASDAQ indices go into a bear market, the other indices will not survive. Why? Because many of them are heavily represented with NASDAQ issues and, of equal importance, the NASDAQ is largely home to most of the fast growing companies in the USA, as well as the companies best equipped to survive and thrive in an ongoing COVID-19 environment.

Make no mistake about it, until there is an effective treatment or vaccine the pandemic will continue to ravage the USA for a variety of reasons mostly surrounding our attitudes relating to our understanding of personal freedoms and our responsibility for our fellow citizens. This is exacerbated by the current political climate which I will refrain from commenting on. Suffice it to say that regardless of which party wins the elections, COVID-19 will remain a material drag on the economy for the foreseeable future whether by government action or by the fear (justifiable in my opinion) of catching it.

When combined with the likelihood that  the upcoming elections will be contested regardless of outcome, the odds are not in the bulls favor. However, I will let things play out till late afternoon before deciding on my course of action.

    

[DarterBlue]

1 hour ago, DarterBlue said:

Should they take out the lows of last Friday, all hell will break loose on the the NASDAQ. Should the NASDAQ indices go into a bear market, the other indices will not survive. Why? Because many of them are heavily represented with NASDAQ issues and, of equal importance, the NASDAQ is largely home to most of the fast growing companies in the USA, as well as the companies best equipped to survive and thrive in an ongoing COVID-19 environment.

 

As I type this, the two NASDAQ indices are literally at the lows of last Friday. It seems that at first and goal inside the one, the bears have this drive in their back pocket. Yes, we could still make a stand here, but the odds just went down a lot when the averages took out yesterday's lows. 

[DarterBlue]

6 minutes ago, DarterBlue said:

As I type this, the two NASDAQ indices are literally at the lows of last Friday. It seems that at first and goal inside the one, the bears have this drive in their back pocket. Yes, we could still make a stand here, but the odds just went down a lot when the averages took out yesterday's lows. 

I have seen enough: The lows of last Friday have been breached. Could we rally off this into the close? Of course. However, I go with the weight of the evidence. The only two positions not on the chopping block now are: ZM and NEM. I will begin my selling once I post this. Results posted later this evening.

[DarterBlue]

19 minutes ago, DarterBlue said:

I have seen enough: The lows of last Friday have been breached. Could we rally off this into the close? Of course. However, I go with the weight of the evidence. The only two positions not on the chopping block now are: ZM and NEM. I will begin my selling once I post this. Results posted later this evening.

Sales:
SHOP 38 shares for proceeds of $33,225.13. Profits on the trade $4,643.13
LOW  369 shares for proceeds of $59,280.89. Profits on the trade of $8,961.39

With the above sales, I now own: 180 shares of ZM, 668 shares of NEM and 660 shares of DHI. Current market value of these positions is $167,551.91. Current unrealized gains on them is $43,279.71. The great majority of these unrealized gains are in ZM which is up over 140%. The intention is to try and hold ZM and NEM. DHI is on a relatively short leash, but if it can hang in there, I will keep it.

With the above sales, I now have cash of $438,063.87. Expressed as a percentage of my total equity at this time of $605,606.31, I am just over 72% in cash and just under 28% invested. 

With this accomplished, I will see if I get a good entry point to short the market via QQQ puts and either IWM or MDY puts. If I do so, I will chose January 2021 as my expiration date. By that time, if all hell breaks loose as a result of a constitutional crisis relating to the election results, I will cover all my positions, long and short, and prepare to move all my money (not just my trading funds) out of dodge!  

[DarterBlue]

Stocks closed broadly lower on much higher volume across the board. However, at day lows the losses were more than double what they were at the final bell on the major indices. On the other side of the ledger, the Russell and MID Cap indices had held up well during the day, when the NASDAQ and S&P were down, but gave up the ghost in mid to late afternoon before bouncing back a bit in the final hour. Contrast this with the headline indices (NASDAQ, DOW and S&P) which made their day lows around 1:30 pm and spent the next 2.5 hours chipping away at the losses. At day close, the range of losses was from .38% on the Russell to 1.3% on the NASDAQ 100. Losing stocks led by margins of 2-1 on the NYSE and 9-8 on the NASDAQ. At day lows the DOW was down over 400 or about 1.5% and the NASDAQ had lost nearly 300 or just under 3%. How do I view all of this? The short answer is negatively. While it was encouraging to see the indices all bounce decisively off day lows, the fact of the matter is that today, both NASDAQ indices took out the day lows of Friday of last week. This, and the fact that we had a day of heavy institutional selling into the options expiration does not give me grounds for optimism. I view the purchase of any new long positions here foolhardy. The simple truth is we have not found a bottom to the selling that began two weeks and two days ago. From where I stand, the weight of the evidence points to further lows. Thus, anyone that is short to mid term oriented, should have lightened up on their exposure to stocks and for the more experienced, intrepid trader going short rather than adding to longs seems more appropriate. Is it possible we could have put in a bottom today? Anything in the markets is possible. But the question to ask is, is it probable? The answer to that is clearly no. 

Today, I sold the following positions:

Sales:
SHOP 38 shares for proceeds of $33,225.13. Profits on the trade $4,643.13
LOW  369 shares for proceeds of $59,280.89. Profits on the trade of $8,961.39

With the above sales, I now own: 180 shares of ZM, 668 shares of NEM and 660 shares of DHI. Current market value of these positions is $167,551.91. Current unrealized gains on them is $43,279.71. The great majority of these unrealized gains are in ZM which is up over 140%. The intention is to try and hold ZM and NEM. DHI is on a relatively short leash, but if it can hang in there, I will keep it.

With the above sales, I now have cash of $438,063.87. Expressed as a percentage of my total equity at this time of $605,606.31, I am just over 72% in cash and just under 28% invested. 

With this accomplished, I will see if I get a good entry point to short the market via QQQ puts and either IWM or MDY puts. If I do so, I will choose January 2021 as my expiration date. On the day ZM did very well in the face of a negative market, and after flirting with losses during the first hour and a half, righted itself and never saw negative territory again closing up $25.60 or 6.2%. That is marked strength in the face of a weak market. Of my two remaining positions, DHI had a small loss of .9% while NEM lost 2.4%. When you add it all up, on the day, I was up $2,099.92 or .35%. I closed the week up $7,900 mainly on the strength of ZM.

[DarterBlue]

Thoughts on the next three months: The complexion of stocks has changed dramatically over the last two and a half weeks. The shift has not been as dramatic as February's top. But February's drop was caused by a once in a generation situation. This most recent top has resulted from more mundane circumstances. This has the blessing of giving experienced, discerning traders time to exit without incurring significant damage. It also gives them time to identify good entry points for going short. I believe that for the first time since the late 1960s through 1981, we will end up having two bear markets in the same year. This will be my first experience trying to make money in such an environment. 

As I type this, I believe that the odds we are in a brand new bear market are in the 60-70% range. My degree of conviction is less than it was in October 2018 when I called a major top. Then I was more than 80% sure the market was going to take a big hit. That one was eventually aborted due to unprecedented FED intervention. However, before that intervention worked, the NASDAQ indices had both given up more than 20% and despite the fact I bought conservative, long dated options, I still made over 100% on the capital committed. 

This year I feel that the potential drop is at least of the magnitude of the late February through late March bear market we had this year. Why? Here are my reasons. I will save the most important one for last: 1. The March 23, 2020 bottom was made due to unprecedented FED intervention. Not until the FED announced unlimited printing of money and support for the Corporate Bond markets to the tune of trillions, did the market bottom. Thus the bull run from March 24 through September 3, was occasioned not by fundamental factors, but by FED support that has created an artificial bubble. 2. The money used to buy up stocks was concentrated into very narrow areas. This was of necessity, as the Covid-19 virus ensured that many industries would not recover until a cure or effective vaccine was found. Such a cure or vaccine, DJT's statements not withstanding, is not on the horizon. This will become apparent very soon. The narrow areas where the money was placed got exhausted. No group of stocks goes to the moon in one fell swoop. They stairstep their way higher in the best of circumstances. In the worst of circumstances, they bet overbought and overvalued and undergo a bear market before they can set up again. We are at the the overbought/overvalued stage. 3. No new stimulus money of any significance has been forthcoming. In an environment where over half the individuals that lost jobs earlier in the year are still unemployed, this will undoubtably lead to economic contraction regardless of Covid-19. The market is sniffing this out. 4. This is the most important factor in my opinion. I believe Joe Biden will win the election. Too much has come out and is yet to come out about DJT for him to win. However, his status among the Presidents I have seen is unique. For he has diehard support among about 35-40% of the electorate. Couple that with the fact Biden is a poor, flawed candidate, and I believe the margin of Biden's victory will be small. I am 100% certain that DJT will dispute the outcome and tie up the results of many states in the courts for months. I also believe he will take any other means a President may have at his disposal to hang on to power. This will lead to great uncertainty from early November through at least early January 2021 and possibly beyond. The country may end up with a full blown constitutional crisis and there is the potential for armed conflict in the streets at a level not seen since at least the 1960s. Financial markets hate "uncertainty" (in truth they are always faced with uncertainty but in most situations they choose to ignore it). This will lead to a sharp selloff possibly beginning now or in October, but most certainly in November. It will take the major indices into bear market territory. 

If I am right, then my strategy will be to look to short the market via the use of put options sometime between now and late October. I believe I will have time to pick a decent entry point, so I am not going to rush things here. I believe January or at the latest, February 2021s are good expiration dates as the chaos will be well underway long before that. For now, I will hold on to at least two of the remaining three positions I currently own. ZM because its unusual strength and business may enable it to buck even a strong bear market. NEM because in uncertain times gold sometimes has an inverse relationship with stocks (view it as a put option based on this). As for DHI, it is currently held in case my view does not play out. It is a strong stock in a strong industry, and if the group does not fold or if the overall market bounces back, it will probably continue to lead the way higher. NB - I will likely ditch DHI if more bearish cards are turned up on the table. 

The above represent my thoughts going into the weekend. Please note that as a trader, I am perpetually flexible. If it is reasonably clear I am wrong, I will revise my strategy accordingly.   

[DarterBlue]

Choice of Vehicle: As I have indicated, the weight of the evidence now points to a change in direction for the broad market. After doing my research, I have decided that the two vehicles of choice will be:

28 Contracts of the QQQ Puts, strike 261, January 2021 expiration

27 Contracts of the MDY Puts, strike 335, January 2021 expiration

Based on the current bid/ask relationship for these put contracts, the approximate cost of these options is about $100,000 in total of which about $49,500 is the estimated cost of the QQQ Puts and $50,500, the estimated cost of the MDY Puts. 

Strategy: Note carefully that the above trades will only be executed if and when I get an appropriate trigger. I anticipate this will occur over the next two weeks. If I execute these two trades, I will take my loss if the election does not play out the way I anticipate it will (if there is a clear winner in early November and no indication of dispute), or if the market fails to sell off even if the anticipated events play out as I expect. If the trade does not work and I cover at this time I anticipate losing about half of the capital committed to it.

I will take my profits thus: If the market is weak going into the election and all hell breaks out if we have a disputed result that leads to a political crisis, I will sell half of the above positions at that time. This should give me a profit of 100% or more ($100K), covering the cost of the trade. I will let the remainder ride at least through either the end of November or if we get what I consider to be a clear bottoming signal in November. If the market continues to be extremely weak in early December, I will let the remaining contracts continue their journey as long as the weakness continues unabated. 

For beginning traders, the above is an example of how to approach your trades. You have a plan covering entry and exit in both favorable and unfavorable circumstances. While flexible, the plan helps control emotions in the heat of battle. 

[DarterBlue]

To Chase or not to Chase: Based on current futures, US markets are set for another big gap down at the open. In such situations when one is bearish it always begs the question: Do I initiate my positions into this kind of weakness? Certainly, back in February, the answer would have been yes. But February heralded the realization by financial markets that we were about to deal with the effects of a rapidly spreading disease that was several times more deadly than the flu. Does the same situation apply here? Does a very abnormal set of circumstances exist that will cause markets to literally fall off the top of Everest? The answer is perhaps. Yes, everyone knows the election was coming. And yes, DJT has made it crystal clear that a loss would not be accepted with grace. And yes, it has been apparent that it was likely Biden had a very good shot. But all the way through summer the markets ignored the obvious and kept grinding their way higher. 

All of a sudden, second thoughts now seem to have set in. And suddenly rose tinted glasses have been taken off. Still, I think this time the upward momentum has not been broken the way was back in February. Thus, I think thee answer to my question is be patient. The opportunity to pick a good shorting point will present itself. The bulls (collectively) have not yet realized they are about to be slaughtered.   

[imaGoodBoyNow]

@DarterBluehttps://www.google.com/amp/s/amp.cnn.com/cnn/2020/09/21/investing/nikola-trevor-milton/index.html

 

 

wow

 

trevor Milton Resigns 

[DarterBlue]

14 minutes ago, imaGoodBoyNow said:

@DarterBluehttps://www.google.com/amp/s/amp.cnn.com/cnn/2020/09/21/investing/nikola-trevor-milton/index.html

 

 

wow

 

trevor Milton Resigns 

Too funny. I was just about to post the same link to alert you. I would say it's 99% certain that Milton is a fraud and most of his representations were false. He is going to be in a world of trouble going forward. And the stock will likely collapse unless GM can find a way to use it for their EV aspirations.

Back in the 1990s and early 2000s he would be looking at prison time. But corporate fraudsters seldom go to jail anymore. Leave that fate to the store clerk at a 7/11 who embezzles a few hundred bucks.