Where is the bottom?

[Grieve]

Trust your gut! 163,000! Of course the market could still give up it's gains by the end of the day...

[Vanraw]

Trust your gut! 163,000! Of course the market could still give up it's gains by the end of the day...

Yea no shit. 7.5% pop on TNA. On the positive front, I sold my TZA at the top, which is by market standards pretty lucky


So now Im back at the "what will the over all market do from here"?

Some good signs.

1. Housing prices have shown a consecutive increase (first time since 2008).

2. Employment levels are now leaving the seasonal slow downs and will show growth to the end of the year.

3. Some of the shipping data, (which is a leading indicator) looks good. (note I need to dig into this more because UPS did not look good).


Some bad signs.

1. Historically (recent) we have a 3Q correction, followed by a strong move to the end of the year, and the first couple of months. I dont think we have had the "correction" yet.

2. My gut is that the dow cap is somewhere around 13k to 14k. We are hovering at the 13k mark.

3. Employment numbers were ok, because they beat expectations but they are not great. WE will have a seasonal pick up now, but I dont think we are going to see anything earth shattering.

4. Many corporations have missed on revenue. They are making numbers, but you cant cut spending your self into growth.



So my little macro prediction is, We have not seen the 3Q correction yet (some think we have). When we do it will be a great buying opportunity.

[Breand]

I have half my portfolio on the sidelines in cash right now. Really don't know what to do here.

[Grieve]

I had half on the sidelines until last Friday, when I bought AAPL stock (rather the options i usually get) with all my outstanding cash. Up 7.63% now, so I'm pretty happy so far. Hoping it runs to $700 before the new iPhone.

[Vanraw]

My "play" account is 90% cash right now. I have kind of adopted an attitude that, if I dont know what to do, its best to do nothing

For now Im waiting on the next big drop to go bullish. However if stocks / the dow pop and hit into the mid to high 13k range, Im going to go Bearish and wait for the drop.

[Breand]

I had half on the sidelines until last Friday, when I bought AAPL stock (rather the options i usually get) with all my outstanding cash. Up 7.63% now, so I'm pretty happy so far. Hoping it runs to $700 before the new iPhone.

Yeah half of my active portfolio is AAPL. I have a cost basis of $545.

[Breand]

Soooooooo.....TZA time?

[Vanraw]

Soooooooo.....TZA time?

Yea I kinda have a dow at 13,200 as a TZA point. Its awful close. Also looking for any news that might be coming short term, and with the exception of the "who knows euor trash" /I dont know whats next.

If you look at the dow for the last 12 months 13,338 is the high point. Its like a wall.

[Vllad]

3. Some of the shipping data, (which is a leading indicator) looks good. (note I need to dig into this more because UPS did not look good).

Make sure you look at the individual portions of UPS and not the Air Express side of things. The Air Express growth is dying because people no longer have to send original documents all over the world now.

Keep in mind dying is a relative term. Seeing how UPS and FedEx do some 60 billion a piece on that business and the growth of each is non existant it impacts stock price because that business still represents the majority of their revenues.

Look at the other parts of the business however to get a feel for what impacts the US. You are better off looking at Intermodal or LTL/FTL carriers to get a feel for the US economy. FedEx and UPS are to international now to use them to feel out the US.

[Breand]

last few days have been bizarre...are there announcements coming up that everyone is waiting on? Never seen the market so dead.

[Vanraw]

last few days have been bizarre...are there announcements coming up that everyone is waiting on? Never seen the market so dead.

I think besides the job and trade deficiet stuff today, there isnt any major expectations as far as annoucements. Thats why its just sitting there.

This is a good link with the pending economic reporting calader. There is a link on top for earnings as well, which is nice.

http://biz.yahoo.com/c/ec/201232.html

It doesnt show Euro stuff. Right now, I dont get a sense that we have any shocking US based negative news comming, with the exception of inflation based on food / draught.

I agree though. Itsa like the market thinks we are at a high, so afraid of being bullish, but there isnt any shocking bearish news comming.

Im still strong cash with the exception of some november 17 BAC calls.

[Vanraw]

last few days have been bizarre...are there announcements coming up that everyone is waiting on? Never seen the market so dead.

Watched a interesting Bloomberg this morning where they were talking about how odd the market is. No trading volume, no volatility, no news and the market is going up.

http://www.bloomberg.com/news/2012-08-13...falls.html

[Grieve]

I bought TNA Sept puts today, as some insurance against a selloff. Seems about time for a correction.

[Vanraw]

Yea I get the feeling that the market is just looking for any bad news.

[Breand]

So tell me what the deal is here. This is what I get from Sharebuilder when I try and do options trading for a PUT order of $45 on TNA for Sept 22. Just doing this as an example, havent executed it. I'd really like to start dipping my toes into options trading.

So anytime before Sept 22, say TNA drops below $45. Say it drops to $40 and I sell the options. What happens? It would be $500 - 116.20?

Options:

Action Buy Put to Open
Option TNA SEP 22 2012 45.00 PUT
Deliverable
100 shares of TNA per contract
Expiration Date 9/22/2012
Number of Contracts 1
Order Type Market
Quote Last: $1.05 Bid: $1.00 Ask: $1.05 Real-time: 8/16/2012 10:54:00 AM ET
Order Costs Estimated Cost $105.00Explain calculation
Base Commission $9.95
Contract Charge $1.25 ($1.25 per contract)
Estimated Total Cost $116.20

[Grieve]

Well hopefully you waited, because they are much cheaper now.

But yes, if you have a $45 put at expiry and the stock is worth $40, a single put would be worth $500. If the stock dropped to $40 well before expiry, though (say by the end of this month) it would probably be worth more like $6-700 because of the time premium.

[Vanraw]

Just keep in mind that when the option expires, and the closer it gets the less its worth. If I were you, assuming this is your first dip into options, I would do a play / test a couple times but don't actually invest.

[Vanraw]

I'm still 100 percent cash besides a little bac option. I really really think the market going to correct. But this lack of volume from theretail side has me skidish....

[Breand]

I bought a bunch of TZA yesterday at 16.60...taking the risk.

[Vanraw]

Its odd to listen to all these analyst talk about retail investers sitting on the sidelines, as a cause for the low volume. I think its bull shit. The institutions are all waiting for the pull back. That's the only thing that makes sense. Everyone is afraid to be caught owning when a pull back happens.

The only goodness pending now is something shocking out of euro. Or, some real positive jobs data which we really won't see (if at all) until the first week of September. Housing is showing some positives, but not earth shattering. Earnings season is over.

So wtf is next?

I think with the absence of positive news, the rule of (what goes up must come down) applies. I'm buying SRTY 40.53. which is a version of tza.

[Grieve]

I'm still up 69% for the year, but I was up 85% a week ago... If the market (and AAPL in particular) tanks, that could evaporate very quickly. I know I SHOULD sell...

I hate to say it, but yes you should. It might not happen, but all bets are that there will be a significant drop between now and end of 3q, before a nice ramp up to the end of the year. At least that is the pattern for the last couple of years. .


waiting.....
waiting.....
waiting.....

Now I'm up 99.86%, just .14% short of my target. A sure sign the bottom will fall out of the market on Monday and won't stop dropping until 2013.

[Vanraw]

Nice. Congrats.

[Grieve]

Holy incoming stimulus, batman! Looks like the Fed is getting ready to stimulate away, according to the minutes. Surprised the market isn't reacting better...

[Vanraw]

You have to wonder why? I mean Qe3 willhave 2 main impacts. Lower long term interest rates, and drive commodity prices higher.

Is there a stock on money printing press parts? Seems like it will be a good business.

At this point and time there is one thing holding the economy back. Employment / housing. OK thats 2. How will this help?

[Grieve]

Housing actually seems to be doing a lot better. Stimulus should help unemployment by letting businesses borrow even more at lower rates to fund expansion.