DarterBlue Posted March 11, 2018 Report Share Posted March 11, 2018 Exactly nine years to the day of its beginning, the NASDAQ indexes, together with the AS&P 600 small cap index recorded new all time highs Friday. This is particularly impressive as these highs were recorded exactly four weeks after a bottom was put in on the two week tailspin the averages experienced early February. The odds now favor that the other broad indexes: S&P 500, NYSE and DOW will go on to new highs themselves. So it seems pretty clear that the February pullback was just a correction and not the beginning of an actual bear market. The fact we are now nine years into a bull market is very rare. In fact, as of now, this is the second longest bull market on record, exceeded only by the late 1990 to early 2000 bull market which ended with the bursting of the DOT Com bubble. Can this bull market exceed that one? The odds seem reasonably good it can, as it is only months away from doing so. And while stocks seem very overvalued by the metrics I use, they are not in the bubble phase they entered in 1999 through early 2000. I now suspect that this bull market will end with such a bubble phase. To get there, we may well be a year or more off, which would mean we will record the longest bull market ever on record. What is especially unusual about this bull market is its ability to shrug off bad news while responding positively to good news. Normally, with the degree of political uncertainty characterized by the DJT Presidency, the market would at least pause on occasion. Aside from the brief February respite it has not. I cannot participate in this bull market. It is too late in the day to do so and I do believe it is going to end badly. But for now, I will bide my time and wait for another valid entry point. This time, rather than using inverse indexes, I will likely use LEAP PUT Options on the the indexes that I consider most vulnerable. LEAP options are similar to regular options with the exception that their life is many times that of regular options. As such, they do not suffer from the rapid time decay that normal options do during most of their life. Therefore, they are more expensive, but this is offset by the fact that your timing does not have to be as precise as it does when using regular options. 1 2 Quote Link to comment Share on other sites More sharing options...
noonereal Posted March 11, 2018 Report Share Posted March 11, 2018 I am hitting the new casino up in Monticello. Once the dealers know what they are doing, that is. 1 Quote Link to comment Share on other sites More sharing options...
TheBlockIsHot Posted March 11, 2018 Report Share Posted March 11, 2018 The crash is near. Happens with every Republican admin. Quote Link to comment Share on other sites More sharing options...
maxchoboian Posted March 11, 2018 Report Share Posted March 11, 2018 2 hours ago, Drummer61 said: Did ok yesterday in Pompano....Doubled up and walked away with 425, net... 2 hours ago, Drummer61 said: Do you know where Walton,N.Y. Is ?? You have multiple personalities, asking yourself questions? Center61 and Drummer61 are the same. Who else you got in there? Quote Link to comment Share on other sites More sharing options...
golfaddict1 Posted March 11, 2018 Report Share Posted March 11, 2018 6 minutes ago, Drummer61 said: Dick Butkus ...... Good choice... was leaning Bronco Nagurski. Quote Link to comment Share on other sites More sharing options...
DarterBlue Posted March 21, 2018 Author Report Share Posted March 21, 2018 Today I put approximately $65,500 to work on the short side of the market. The vehicles chosen were LEAP Put Options on the Russell 2000, NASDAQ 100 and S&P 500. These options expire on January 17, 2020 and have strike prices of 150, 160 and 250, respectively. They were purchased out of the money and would need market moves of negative 4% to 8% in the respective indices to have intrinsic value. I put approximately the same amount of money into each of the three positions. Using limit orders, my positions in the Russell and S&P 500 were filled shortly after the FED's announcement after 2 pm. The NASDAQ position was filled almost immediately after I placed it between 11 and 12 pm. On reflection, I should have been less aggressive on the NASDAQ bid, as I could have filled it more cheaply. At the close of the trading day, I was ahead by $1,084. It is always good to have your trade start off positively. However, unlike the end of January when I was relatively certain that the market was going to go south violently, I am less sure this time. With that said, my decision to go short again was based on last week's action, this Monday's selloff, and Tuesday's tepid bounce back. With respect to last week's action, Tuesday, March 13, was a key reversal day in the sense that the market after opening up, reversed violently to the downside. It was followed by successive stalling day on Wednesday and Thursday, with a very mild, positive bounce on Friday. Well, over the weekend, a lot went on on political front. Nothing surprising there, as the current Presidency has been characterized by unceasing drama. What was surprising was the market's response on Monday. For the first time, it appeared to react negatively to our political turmoil, as Monday was a bad market day. And Tuesday resembled Friday of last week in that the bounce back was very mild. With the FED making its decision on interest rates today, I felt initiating another short position was in order as I expected it would remain on track to continue raising rates. After all, it pretty much has no choice. Now 1/4 point hikes in of themselves would normally have little impact given how low rates are to begin with. However, this entire bull market has been predicated on easy monetary policy. Given what I consider as its extreme overvaluation, once easy money is off the table, we could easily see a 40% or more decline in the prices of financial assets. And with the weakness last week and questionable action this week, perhaps the process did indeed begin at the end of January 2018. For, despite the NASDAQ indexes hitting new highs in March, the other indices have not gotten there yet, and based on recent action, may not get there in this cycle. I chose LEAP options as my vehicle this time, as they offer more leverage and correlate better with the underlying index than the short Index Funds I used for the first trade. LEAPS have one benefit that regular options do not in that the time decay tends for follow a mild, linear slope until they have under a year to expiration. As such, if we have begun or if we do get a bear market this year, I should not suffer from much time decay on these positions while enjoying the benefits of about a 1.7-1 inverse correlation with each index. Options are not for most investors as holding naked positions represent an all or nothing proposition if held to their exercise date. I am reluctant to set a price stop on these new positions. However, if by mid June it becomes clear that my timing was off, I will be inclined to close these positions out at that time. 1 Quote Link to comment Share on other sites More sharing options...
noonereal Posted March 21, 2018 Report Share Posted March 21, 2018 Sometimes I wrong bet at the craps table so I hear you. Good post, I enjoy these. Thanks. 1 Quote Link to comment Share on other sites More sharing options...
HSFBfan Posted March 21, 2018 Report Share Posted March 21, 2018 Don't be surprised when the Dow hits 30k Quote Link to comment Share on other sites More sharing options...
Mjd33 Posted March 21, 2018 Report Share Posted March 21, 2018 On 3/11/2018 at 11:08 AM, TheBlockIsHot said: The crash is near. Happens with every Republican admin. The subprime mortgage crisis was actually Bill Clinton’s fault. He repealed glass Steagall. He than signed the commodity futures modernization act exempting credit default swaps from regulation. Finally, his community reinvestment act put a gun to the heads of Freddie and Fannie to give even lowlifes like you a House who normally didn’t qualify to buy one. Any other questions Sport? Quote Link to comment Share on other sites More sharing options...
TheBlockIsHot Posted March 21, 2018 Report Share Posted March 21, 2018 2 minutes ago, Mjd33 said: The subprime mortgage crisis was actually Bill Clinton’s fault. He repealed glass Steagall. He than signed the commodity futures modernization act exempting credit default swaps from regulation. Finally, his community reinvestment act put a gun to the heads of Freddie and Fannie to give even lowlifes like you a House who normally didn’t qualify to buy one. Any other questions Sport? So what about the trillions on dollars taken out of the economy and put on a credit card for 2 wars that still aren't over? But its Clinton's fault who left office in the 90s. Sounds legit. Fox News idiot. Quote Link to comment Share on other sites More sharing options...
Mjd33 Posted March 21, 2018 Report Share Posted March 21, 2018 22 minutes ago, TheBlockIsHot said: So what about the trillions on dollars taken out of the economy and put on a credit card for 2 wars that still aren't over? But its Clinton's fault who left office in the 90s. Sounds legit. Fox News idiot. My God you’re a moron. Let me give you a free Economics lesson.... Clinton’s actions weren't going to immediately collapse the economy ... it took time to have a domino effect. It was a decade long ticking time bomb. The subprime business (giving homes to everyone and anyone ) attracted sleazeballs like you that can make a fast buck without having to worry about how the product performed. The teaser rate loans made to people who were never able to repay them weren’t going to go bad immediately but rather when when interest rates rise. Took time, multiple years .... The various bonds you make from those loans will not go bad not as the loans go bad but much later .... after tedious foreclosures, bankruptcies, and forced sales. A long process .... The various CDOs you make from the bonds will go bad not right then but after some trustee sorts out whether there will ever be enough cash to pay them off. More time .... Did the ratings agencies Moody’s and S&P play a part? Absolutely. Big bankers blinded by greed share responsibility? Yup. But it all started with a compassionate idea that everyone should own a home that led to the complete evaporation of liquidity that crashed the world economy. Quote Link to comment Share on other sites More sharing options...
TheBlockIsHot Posted March 21, 2018 Report Share Posted March 21, 2018 2 minutes ago, Mjd33 said: My God you’re a moron. Let me give you a free Economics lesson.... Clinton’s actions weren't going to immediately collapse the economy ... it took time to have a domino effect. It was a decade long ticking time bomb. The subprime business (giving homes to everyone and anyone ) attracted sleazeballs like you that can make a fast buck without having to worry about how the product performed. The teaser rate loans made to people who were never able to repay them weren’t going to go bad immediately but rather when when interest rates rise. Took time, multiple years .... The various bonds you make from those loans will not go bad not as the loans go bad but much later .... after tedious foreclosures, bankruptcies, and forced sales. A long process .... The various CDOs you make from the bonds will go bad not right then but after some trustee sorts out whether there will ever be enough cash to pay them off. More time .... Did the ratings agencies Moody’s and S&P play a part? Absolutely. Big bankers blinded by greed share responsibility? Yup. But it all started with a compassionate idea that everyone should own a home that led to the complete evaporation of liquidity that crashed the world economy. You didn't address my issue. What about the trillions in lost money to 2 wars that are still going? That far exceeds the market crash in your instance. Address it. Quote Link to comment Share on other sites More sharing options...
Mjd33 Posted March 22, 2018 Report Share Posted March 22, 2018 1 hour ago, TheBlockIsHot said: What about the trillions in lost money to 2 wars that are still going? That far exceeds the market crash in your instance. That’s blatantly false. The global losses from the financial collapse FAR exceed that of trillions spent on war. I’m explaining to you why the market crashed. The main culprit is repealing the glass Steagall act which happened under Clinton. You incorrectly blamed bush for the 08 market crash because you know nothing about the market or economics. The market didn’t collapse because we went to Iraq or Afghanistan. Quote Link to comment Share on other sites More sharing options...
TheBlockIsHot Posted March 22, 2018 Report Share Posted March 22, 2018 12 minutes ago, Mjd33 said: That’s blatantly false. The global losses from the financial collapse FAR exceed that of trillions spent on war. I’m explaining to you why the market crashed. The main culprit is repealing the glass Steagall act which happened under Clinton. You incorrectly blamed bush for the 08 market crash because you know nothing about the market or economics. The market didn’t collapse because we went to Iraq or Afghanistan. We put trillions on a credit card that we have't paid back yet. For 2 wars that are still ONGOING. Those were started by your boys. The Clinton stuff is a deflection. Quote Link to comment Share on other sites More sharing options...
Mjd33 Posted March 22, 2018 Report Share Posted March 22, 2018 1 minute ago, TheBlockIsHot said: We put trillions on a credit card that we have't paid back yet. For 2 wars that are still ONGOING. Those were started by your boys. The Clinton stuff is a deflection. You can’t be that stupid .... https://www.usnews.com/opinion/blogs/economic-intelligence/2012/08/27/repeal-of-glass-steagall-caused-the-financial-crisis Read up son. Quote Link to comment Share on other sites More sharing options...
TheBlockIsHot Posted March 22, 2018 Report Share Posted March 22, 2018 7 minutes ago, Mjd33 said: You can’t be that stupid .... https://www.usnews.com/opinion/blogs/economic-intelligence/2012/08/27/repeal-of-glass-steagall-caused-the-financial-crisis Read up son. You still haven't addressed my issue. You are deflecting. Quote Link to comment Share on other sites More sharing options...
Mjd33 Posted March 22, 2018 Report Share Posted March 22, 2018 20 minutes ago, TheBlockIsHot said: You still haven't addressed my issue. You are deflecting. You, like most Americans, aren’t educated enough to know why the economy collapsed. Yet you want to blame Bush. Going into Iraq didn’t lead to bear stearns and Lehman brothers going bankrupt. Quote Link to comment Share on other sites More sharing options...
DarterBlue Posted March 22, 2018 Author Report Share Posted March 22, 2018 54 minutes ago, Mjd33 said: That’s blatantly false. The global losses from the financial collapse FAR exceed that of trillions spent on war. But the trillions spent on the wars help explain why our National Debt is 21 trillion and counting. 1 Quote Link to comment Share on other sites More sharing options...
TheBlockIsHot Posted March 22, 2018 Report Share Posted March 22, 2018 8 minutes ago, Mjd33 said: You, like most Americans, aren’t educated enough to know why the economy collapsed. Yet you want to blame Bush. Going into Iraq didn’t lead to bear stearns and Lehman brothers going bankrupt. So your boy Bush didnt spend trillions on wars? I am missing something? That never happened and the economy was crashed by Dems in the 90s? Idiot. Quote Link to comment Share on other sites More sharing options...
Mjd33 Posted March 22, 2018 Report Share Posted March 22, 2018 9 minutes ago, DarterBlue said: But the trillions spent on the wars help explain why our National Debt is 21 trillion and counting. National debt didn’t collapse the economy in 2008 .... you know that right ? Because thats what we are discussing.... Quote Link to comment Share on other sites More sharing options...
Mjd33 Posted March 22, 2018 Report Share Posted March 22, 2018 4 minutes ago, TheBlockIsHot said: So your boy Bush didnt spend trillions on wars? I am missing something? That never happened and the economy was crashed by Dems in the 90s? Idiot. Unfortunately, you cannot follow along with what I told you. I thoroughly explained what actions led to the economy collapsing. Quote Link to comment Share on other sites More sharing options...
TheBlockIsHot Posted March 22, 2018 Report Share Posted March 22, 2018 Just now, Mjd33 said: Unfortunately, you cannot follow along with what I told you. I thoroughly explained what actions led to the economy collapsing. You still haven't addressed your boy blowing trillions on wars. Quote Link to comment Share on other sites More sharing options...
noonereal Posted March 22, 2018 Report Share Posted March 22, 2018 13 hours ago, Mjd33 said: The subprime mortgage crisis was actually Bill Clinton’s fault. Really? The banks were innocents. God Bless. Quote Link to comment Share on other sites More sharing options...
DarterBlue Posted March 22, 2018 Author Report Share Posted March 22, 2018 11 minutes ago, noonereal said: Really? The banks were innocents. God Bless. Obviously not. Nor was the Republican Congress which almost unanimously supported the repeal of Glass Steagall. But such facts interfere with his narrative. Quote Link to comment Share on other sites More sharing options...
noonereal Posted March 22, 2018 Report Share Posted March 22, 2018 1 minute ago, DarterBlue said: Obviously not. Nor was the Republican Congress which almost unanimously supported the repeal of Glass Steagall. But such facts interfere with his narrative. let's face it, capitalism needs to be bridled or it's a disastrous system for the masses. Quote Link to comment Share on other sites More sharing options...
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