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Oct 05
2015

Stay Long as the Daily Charts holds above the 8 EMA;s

Posted by stanmoore in Untagged 

Fellow Friends,
 
All Bullish my Friends:
 
 Euro-Area Growth Seen Slowing in Sign More Stimulus May Be Ahead (BBG)Japan's wage growth slows in August, keeping pressure on BOJ for more stimulus (Reuters)
Stocks, Copper, Emerging Markets Jump as Fed Delay on Rates Seen (BBG)
And yet... Central Banks Lose Bond-Market Credibility as Woes Mount (BBG)
World Bank cuts Asia growth forecast on China and US rates (BBC)
 
The oil patch is full of conundra currently... crude price declines globally to near 2009 lows but supertanker day-rates (demand) soaring over $100,000 for the first time since 2008. However, today's news that Saudi Arabia is slashing its price (to a $3.20 discount to the bench mark with the largest price cut since 2012) suggests in an effort to shore up tumbling reserves and capture more market share amid dwindling demand (and excess supply) - a price war has begun led by US ally Saudi Arabia... and China is hoarding crude at these low-low prices.
 
World wide recession ahead??? You saw my comments Yd. May be coming to a theater near you soon. See below
 
 
The bottom line is while I believe all trading above the 8-day EMA encourages short-term traders to lean more bullish (focusing on buying dips), I see no reason to believe the intermediate- and higher-timeframe trends are any less concerning than they were one, two or even three weeks ago. The bulls have an edge in the day timeframe, but the higher timeframe still belongs to the bears.
 
However, given where we are trading now I see resistance 1962 than 1982 the rally highs.May the force be with us
 
Good Trading,
Stan
 
Oct 01
2015

Bad news again becomes Good News for Stocks.

Posted by stanmoore in Untagged 

Fellow Friends,
 
Don't be sad. Be Happy 3rd quarter is over!!!! Worst in 4 years & We made Money Big Time!!  However,let's make sure we're approaching this market with an open mind. Be prepared for not only a resumption of the multiyear bull market, but for continued consolidation, or a potential bear market as well. Prepare for the Worst & Hope for the Best.Stan New Era Trader
 
The market's supposed technical breakdown and rising (or even extreme) negative investor sentiment have put many investors "offsides" in the last week.

As a result of the poor price action through Monday's close, many players find themselves short when long would have been the preferred course. The "Magic Ocillator" & Uni Bands continue to work after 30 years.We were "on side" in Spades with long calls.Now I will look at puts into rallies with long E's on dips

Happy to see I haven't lost my touch. I Alerted Yd (2nd alert) that if we broke through 1900 could rally 30-50 points quickly. I sold some E's against my Calls as high as 1929.50 Average near 1927. Covering most right now near 1912. Great way to start the day.
 
If you include the 14-handle rise we saw in S&P 500 pre market futures, Mr. Market was up nearly 50 handles (or 2-1/2%) above its lows from two days ago.It's fun making money the old fashion way. We Earn It !!!
 
Congress has avoided a government shutdown (for now). Congress pieced together a stopgap deal that will keep the government funded through December 11.
 
 
 
Looking ahead to Friday's employment data, I believe our area of interest should be 1921 to 1923, as that two-handle zone represents the most actively traded area since the current bear trend began on Aug. 20.

With the above in mind, let's recognize the lack of bullish excess during Wednesday's action, and begin by looking for any price extension beyond 1912 to possibly reach 1921 to 1923. A secondary, and notably more aggressive, upside target would be 1938 to 1939,through the overnight highs & the highs of 9/25.

Failure to sustain a drive beyond 1912 encourages two-way rotational trading toward 1901, with continued weakness putting a quick probe of 1894 on the table. For the time being, I'd expect the majority of traders to be focused on buying dips as low as 1885. A close under 1874  would be required to stop traders buying, and refocus their sights on fresh swing lows.
 
Good Trading,
Stan
 
Sep 30
2015

Calls should open much higher Hedge to lock in gains.

Posted by stanmoore in Untagged 

Fellow Friends,
 
Terrible economic news is wonderful news for markets, all over again, and with the worst S&P500 quarter since 2011 set to close today, some horribly "great" news is just what the window-dressing hedge funds, most of whom are deeply under performing the broader market (not to mention Dennis Gartman) ordered.
 
First Order of Business Sell Some E's to lock in the 23+ overnight point gain.That was a Huge RT/F Winner Yd. This is a big day for MM's It's the Last day of the Worst Month in some time. Global stock markets posted their worst quarter in four years.It's EOQ Markup. Should be exciting as the shorts get torched early.
 
There's a lot of Fed speak. New York Federal Reserve president William Dudley kicks things off at 8:35 a.m. ET with his speech before the Securities Industry and Financial Markets Association's Liquidity Forum. Next, Fed chair Janet Yellen and St. Louis Fed president James Bullard are scheduled to deliver opening remarks at the Fed's annual community banking conference in St. Louis at 3 p.m. ET. Federal Reserve governor Lael Brainard will speak at the conference at 8 p.m. ET.
 
When a lot of Keynesian cowbell doesn't work, the only cure for the deflationary fever must be more Keynesian cowbell which explains why Japan is about to double down on Abenomics, and why the ECB will almost invariably expand PSPP now that the deflationary boogeyman is back in Europe. Indeed, S&P is now out calling for ECB Q€ to last for nearly two years longer than originally planned and for the size of the program to be expanded to a Dr. Evil-ish €2,400,000,000,000.
 
 
Glencore Extends Rebound as Turmoil Shows Signs of Easing (BBG)
 
Could this be actual buying? Not yet but enjoy spending your call option profits this weekend. Let's not read too much into this.
 
The fact that the E's has fallen from an intra day high of 2011.75, reached shortly after the Sept. 17 FOMC announcement, to a low of 1861 during the early hours of Tuesday's Globex session makes my guess of a near-term rally anything but a gutsy call unless you are at huge buy levels,2.3 lower Unis & It's markup time. As I'm sure most would agree, any market that declines nearly 7.5% over a nine-day period should be allowed to bounce, if only for a day or two.
 
I'm going to stick with a responsive strategy. Looking for long opportunities toward 1870 and 1865, and shorts, Puts toward 1899/1900.
 
I will be selling all calls into this rally watching our 8 EMA for topping signs. I will be going long puts & Long E's going into the Friday NFP numbers.
 
Good Trading,
Stan
 
 
 
Sep 29
2015

we start praying & Hope the Force hears us.

Posted by stanmoore in Untagged 

Fellow Friends,
 
 The Reserve Bank of India cut rates more than expected. India's central bank surprised markets by cutting its repo rate 50 basis points to 6.75%.
 
Goldman Sachs lowered its S&P target. Goldman Sachs US equity strategist David Kostin lowered his S&P 500 price target to 2,000, down from his previous target of 2,100. Kostin wrote, "The impetus for these reductions is that our models now incorporate a slower pace of economic activity in the US and China and a lower oil price than we had been previously assuming." For 2016, Kostin sees S&P 500 earnings per share of $120 and a year-end target of 2,100.
 
I said the A/D's sucked big time.If we dig a bit deeper into the components of the S&P 500, we find only 31 stocks currently trading above their 20-day, 50-day and 200-day simple moving averages. Of those 31 stocks, 18 are involved in either the consumer goods or utilities sectors. Knowing a meager 6% of S&P stocks are trading above their short, intermediate and higher time-frame moving averages tells you right away which way prices, on average, are moving. Suffice it to say this is a tough time to own stocks. However, we are deeply oversold.
 
 
All trading beneath 1870/71 keeps pressure on bulls and encourages continued selling toward 1866 and 1853
.

Ideally, I'd like to see a test and rejection of 1866 (at a minimum) We Held 1861 overnight. Should that test prove successful, I'd begin looking for a drive toward 1884 and 1890. Then we can maybe H&P in front of the Jobs numbers. A more neutral posture would seem logical toward 1890.

I'll be looking to buy calls under 1880 down to 1870. Then we start praying & Hope the Force hears us.

Good Trading,

Stan

Sep 28
2015

E's lost gains after Europe opens sharply

Posted by stanmoore in Untagged 

Fellow Friends,
 
This is my biggest fear right now. This could be the next "Lehman"
 
Glencore is crashing. The commodities giant is down more than 25% on Monday, making for its biggest drop on record. The stock has come under pressure after analysts at Investec suggested shares might be worth nothing. "If major commodity prices remain at current levels, our analysis implies that, in the absence of substantial restructuring, nearly all the equity value of both Glencore and Anglo American could evaporate," Investec said. Last week, Goldman Sachs said Glencore was likely to lose its BBB credit rating, giving it junk status.
 
In a move that would make even Hewlett-Packard's Meg Whitman blush, Harbin-based Heilongjiang Longmay Mining Holding Group, or Longmay Group, the biggest met coal miner in northeast China which has been struggling to reduce massive losses in recent months as a result of the commodity collapse, just confirmed China's "hard-landing" has arrived when it announced on its website it would cut 100,000 jobs or 40% of its entire 240,000-strong labor force.The overseas recession is near.
 
Global stock markets are mostly lower. China's Shanghai Composite (+0.3%) outperformed in Asia as Hong Kong's Hang Seng was closed for holiday. France's CAC (-1.8%) leads markets lower in Europe. S&P 500 futures are lower by 11.25 points at 1,908.00.
 
Negativity vs. negatives. When are we going to be officially too negative over the same old worries: commodity collapse out of China, Fed rate hikes, and Volkswagen (VLKAY)? Not sure but I would continue to sell rallies like last night.
 
As it is, when it comes to the commodities business, credit is being cut off pretty summarily as anyone who watched the torturous Olin (OLN) deal on Friday, when the chemical company had to pay 9.75% for money to be able to buy Dow Chemical's (DOW) commodity chemical business.Big slow down in M&A coming too.
 
Between Wednesday's ADP employment report, Friday's monthly employment situation report and an onslaught of Fed speakers (five scheduled on Friday alone), we've got plenty to keep the E's rotating in a wide band during the coming week.If we get much lower we'll be long calls & short E's into Friday's Jobs numbers.
 
Moving on to Monday's E's action, I want to begin the session with a focus on 1918/20. Should prices be accepted beneath that level, all eyes would shift down toward Friday's 1910 intra day low and support. As the E's drop through 1909 one would expected a relatively quick test of 1899/1900.

A sustained trade above 1920 keeps traders shooting for 1925, but only with price above that level can the E's reverse Friday's decline and puts 1940/42 back in the trade.

Good Trading,

Stan

Sep 25
2015

JY hints of rate increase this year

Posted by stanmoore in Untagged 

Fellow Friends,
 
 
The E's rally through 1920 some time after 12:00 AM & add 25 more points.Go Figure Global stock markets are mostly higher.
 
 
Great article about have GS plans to crush a large competitor & maybe wipe out markets too. Looking for the next large bail out money train.
 
I continue to believe in two-way rotational trading but favoring selling rallies too. Bumps in the road should be expected near 1940/42. But all trading above 1925 favors a continued advance Friday.
 
I spend 3 days looking at calls & we get One crazy rally out of the Blue looking at higher rates finally. Markets didn't like no hike maybe they will like one hike.
 
I'm not sure just what to do after this overnight moves. I will look at Option prices for a clue. Stay Tuned!!
 
Good Trading,
Stan
Sep 24
2015

A Crucial market test is in progress.

Posted by stanmoore in Untagged 

Fellow Friends,
 
European equity have been weighed on by BMW after reports in German press that the Co.'s emission tests for their X3 model could show worse results than that of the Volkswagen Passat.
 
Stock markets around the globe are mostly lower. Japan's Nikkei (-2.8%) tumbled as traders returned to work after the extended holiday. In Europe, Germany's DAX (-2.0%) leads markets lower in Europe. S&P 500 futures are down 18 points at 1,909.50
 
No Magic words any more? Janet Yellen to speak. Attention will be on Federal Reserve chair Janet Yellen when she speaks at the University of Massachusetts at 5 p.m. ET on Thursday. Traders will be watching Yellen's speech, titled "Inflation Dynamics and Monetary Policy," for clues as to whether Fed lift-off will occur in 2015.Yes, we are back to Fed watch, yet again.
 
Still cutting out there.Norway's central bank surprised with a rate cute. The Norges Bank unexpectedly cut its key rate 25 basis points to a record-low 0.75%. The rate cut was the third in the past 10 months and was done in response to weaker growth and a weaker inflation outlook. Taiwan's central bank lowered its key rate as well.
 
Cramer has some serious thoughts about markets going forward:"It's time to drill down to find out why that is, using six companies that have reported this week, all of which reported incredible numbers. Let me make this very clear, when I say incredible, I mean downright outstanding.

That's right, two food companies, General Mills (GIS) and ConAgra (CAG), one restaurant chain, Darden (DRI), the largest cruise ship company, Carnival Corp. (CCL), the biggest auto parts retailer, AutoZone (AZO) and the second-largest homebuilder, Lennar (LEN), all astounded when they reported.

And what happened when they reported? How about nothing at best? How about, in a couple of cases, some of the biggest declines of the day?

This is the kind of unfathomable bear market behavior that has plagued this tape ever since it peaked back in June in conjunction with heightened calls for a Fed tightening and the collapse in the stock market of the second-largest economy, China"

Maybe we can forget 2200 for the E's this year? JY's talk can help or hurt this case tonight. We mere mortals await words from on high.

We entered Wednesday's session with an eye toward rotational trading within Tuesday's range, and that's exactly what we got.The bottom line is the bears gain strength below 1920, while the bulls find themselves on slightly firmer footing as price rises above 1940.

Using Wednesday numbers again below 1920 look for 1900 & lower. We need the get above 1940 to see 1960 again. Are we looking at a 100 point trading range between 1900 to 2000? I really would like to be long calls & short E's but the call prices are still to high.

Where's the Force when we need him? I'm still a seller of all rallies like last night until I lose $'s

Good Trading,

Stan

Sep 23
2015

I just think we need time to pass

Posted by stanmoore in Untagged 

Fellow Friends,
 
Hillary needs Congress to pass her agenda against BioTech. Ain't Happening!!
 
European Recovery Saves Markets From China Gloom as Stocks Rally (BBG)
 
Chart technicians are turning increasingly bearish. However, For what it is worth, I am monitoring the 200-DMAs of the S&P 500 and its 10 sectors more closely. There certainly is some rolling over going on, especially for the two most globally sensitive sectors, namely Energy and Materials. The interest-rate sensitive sectors are also looking a bit toppy, particularly Telecom Services and Utilities. On the other hand, the sectors with most of the market capitalization in the S&P 500 remain on 200-DMA up trends, particularly Consumer Discretionary, Consumer Staples, Health Care, and IT.Still the plain fact right now is that there is no market leadership.
 
The bottom line for us traders, in particular, is that we are far better off dedicating ourselves to our charts and not to the practice of guessing why the market rallied or declined during a given session. Charts, especially the Magic Oscillator can't give us tomorrow's closing numbers but they can help us measure whether the E's are trending or consolidating. And knowing whether something is trending or trapped in balance is a gigantic step in the right direction.
 
Moving on to Wednesday's E action, I believe our area of interest should be near 1920. A sustained break of that level has only minor support near 1913.25 and 1905 before our focus turns toward the big figure (1900) and 1889.25.

As long as price remains above 1920, traders can look for rotation within Tuesday's range. All trading above 1929 should find traders  buying the market toward 1938/39, while everything beneath that figure keeps the focus on 1920 and the bearish price extensions above.

Good Trading,
Stan
 
Sep 22
2015

The Brazilian Real is dropping like a stone

Posted by stanmoore in Untagged 

Fellow Friends,
 
While Asian trading overnight started off on the right foot, chasing US momentum higher, things rapidly shifted once Europe opened as attention moved back to global growth fears, global central banks losing credibility, as well as miners( New lows in Glencore) and the ongoing Volkswagen fiasco. Bankruptcy next for VW??? You heard it here first.
 
It started with Hillary's Biotech tweet & it continues with FED speakers talking a rate increase. For the next few weeks I just want to sell rallies.It's ugly out there. .
 
The Brazilian Real is dropping like a stone. Meanwhile, though every talking head is still talking down the US Dollar after the Fed's do nothing. It is now higher for third day in a row.This does not help right now.
 
Moving on to Tuesday's E's action, A sustained trade above 1965 opens the door to bullish continuation toward 1973 and 1982.50, while all trading beneath 1947 results in bearish price expectation and shifts our focus toward 1936, 1927 (we're here already) and 1920(lower 2.3 Uni).This time I'm looking for long calls near the lower 2.3 Unis & short E's into rallies.Sell any puts if overnight lows hold
 
Good Trading,
Stan
 
 
 
 
Sep 18
2015

Option Magic scores big with puts.. Another great Double win.

Posted by stanmoore in Untagged 

Fellow Friends,
 
The Pre alert Yd was a killer. It nailed the high with the 3 targets, it nailed the low with 2 targets. I nailed my first 4 Cha, Cha, Cha & Cha moves after a Fed meeting. I have arrived. I don't know how I could top this performance.However,We all know there are many more days like this ahead.
 
The market wanted a more definitive answer from the Fed. Didn't happen. We asked for volatility. We got it in spades. But not the kind we expected with no rate increase. 
 
Let me count the ways to win with H&P. We got our Pop Sold E's.We averaged at least a 13 point up win. We fell off hard. You could sell the puts. I hedged. E's rally huge(over 35 points). We buy more ATM puts for Pennies, not $'s this time. We retrace the whole up move. I hedge more. E's rally 13 points. Close on the lows. Overnight,Our $.44 puts should open up 8+ X's your money. I'm hedged 1954, locking the gain in.
 
Without a doubt, bullish excess was triggered above 2000( See Yd's Alert) & the shorts had a field day like us.
 
My expectation for Friday's session is a moderately bearish one, with an initial area of interest near 1975/76 ( Yd's Support). All trading beneath that level keeps pressure on bulls, and encourages day traders to sell the E's toward 1956, where we find ourselves now.
 
It appears we are going to need more dovishness. Following The Fed's admission that all-is-not-well - despite every talking head proclaiming liftoff imminent - the implicit lower-for-longer dovishness of The Fed has not been embraced by the "market." It appears a tipping point in Fed credibility may have been reached... but then again it is a quad witching.
 
From our friend Doug Kass:

Has It All Been a Fairy Tale?

"Let me end the day with a simple question:

After six years of a zero interest rate policy and quantitative easing, the global economy is still in a condition that precludes a meager 25 basis point rise by our Federal Reserve.

What does that say about the foundation of future economic growth when a zero-bound rate setting is failing to generate self-sustaining growth and escape velocity in the U.S.?"

Good Trading,

Stan

Sep 17
2015

Getting long some E's to hedge my puts here & lower.

Posted by stanmoore in Untagged 

Fellow Friends,
 
100% sure thing. The Fed will do nothing or something. Sentiment remains very bearish, which is bullish.
 
 
 
Wall Street Has Doubts About Fed Lifting Interest Rates (WSJ)
Global stocks at three-week highs as Fed decision looms (Reuters)
 
Boockvar writes: Either way, the rate-hike moves from here, whether today or another day, are not the first stage of tightening. I'll say again, that began when QE ended, and QE was much more powerful for markets than a tiny move of 25 bps in the Fed funds rate. QE ended last October, and it's no coincidence that the S&P 500 is back to where it was last October.
 
Meanwhile more M&A: Altice takes out Cablevision. The European telecommunications giant Atlice is buying Cablevision for nearly $18 billion as it looks to enter the US market, according to both The New York Times and The Wall Street Journal. A tweet by Journal reporter Anupreeta Das says the takeover will "end Jimmy Dolan's 20-year run as CEO." Dolan still owns Madison Square Garden, the New York Knicks, and the New York Rangers.
 
Today we must go into this Gun fight with a Gun.You must be long options hedged with E's. These days it is possible that you might see the market skyrocket on the Fed standing pat. You will then be attracting sellers -- traders who bought into this last two-day rally -- blow out stock and the market will get hammered in a vacuum. Then buyers will come in again, but by 3:30 if there isn't conviction the sellers will come right back.
 
This sounds like my dream trade day & it could unfold just like the above.Can I continue to be this good?? I answer yes!!!
 
The bottom line is any powerful, bullish continuation following Thursday's FOMC meeting would likely begin by targeting that 50-day SMA. As far as what kills the currently bullish short-term momentum, I'd point to a close back under the 8-day and 21-day moving averages. See Daily Chart.
 
My view, the FOMC notwithstanding, is all trading above 1975/76 favors continued buying. The three most probable upside targets, provided value remains above 1976, are 1991, 2003 and 2016.

Failure to hold the line near 1975 opens the door to a decline toward 1960. But before you get too bearish by a probe of the low-1960's, wait to see where the session closes. I'd avoid giving up on the short-term, bullish direction of this action unless we close beneath 1960.50.

May the Force be with us.

Good trading,

Stan

Sep 16
2015

Good Trading

Posted by stanmoore in Untagged 

Fellow Friends,
 
Every quarter the markets pay particular interest to the results reported by Fedex not only due to its position as the leading company in worldwide logistics but due to its status as a bellwether in global trade. And not surprisingly, following a bevy of reports here and elsewhere confirming the plunge in global trade, Fedex did not disappoint, or rather it did when it reported non-GAAP EPS of $2.42 missing already reduced consensus expectations of $2.45, but it also cut its full year 2016 EPS guidance from $10.60-$11.10 to $10.40-$10.90 (below the consensus $10.83) proving yet again that hopes for EPS growth are just as misplaced as those for multiple expansion at a time when the Fed is preparing to hike rates and as China unleashes Quantitative Tightening.
 
 
Goldman Warns Markets Unprepared for Fed as Treasuries Seesaw (BBG)
Investors Look Beyond Fed Meeting, See Low Rates (WSJ)
Volatility seen lingering no matter what the Fed does (Reuters)
What Rising Interest Rates Would Mean for You (BBG)
China Stocks Jump in Last Hour of Trading on State Support Signs (BBG)
 

The proximate cause for yesterday's broad market rally was likely the rapid buildup of negative investor sentiment, as manifested in the E's year-to-date high in non-commercial short holdings.

Shorts scrambled as a result. U.S. and foreign economic data also showed signs yesterday of further slowing, while some asset-allocation strategies moved out of bonds and into stocks as China apparently dumped more U.S. Treasuries.The switch later will help stocks too.

To me, the most important takeaway is that yesterday's gains cut into the post-Fed rally that I'd been predicting for Thursday.

I will be trying to buy puts into rallies today & try to setup a long E hedge against them.

The bottom line is That the bulls owned Tuesday's action. And while the Fed could cut their celebration short if they appear overly hawkish on Thursday, buyers do, for now, have an open door toward 1979 to 1983.  Go Baby !

Failure to hold the line near 1966/67 shouldn't be expected to put the bulls back on their heels. Only a shift in price below 1959 would have me looking for that. And in the event the rug is pulled out from under the bulls, and price does fall back beneath 1959, our intra day focus would shift back down toward 1943, Tuesday's regular session lows.

Good Trading,

Stan

Sep 15
2015

Getting a better feeling.

Posted by stanmoore in Untagged 

Fellow Friends,
 
Getting a better feeling.It's been my view for months that the Fed will most likely do a 'one and done' -- a December rate rise accompanied by dovish rhetoric -- and I'm not changing that prediction.
 
My general view is that the market could use any rate decision this Thursday as a reason to rally.'
 
If the E's rally we buy Puts & use weakness to get long E's. Lower We buy Calls & on Rallies we sell E's. KISS !!!
 
Some trading sessions hugely effect the short, intermediate and higher time-frame trend. Monday's action, however, wasn't one of them. Roughly 70% of the regular session's E's business was conducted between 1939 and 1944. And let's be frank, a five-handle area on the E's is pretty darn tight by recent standards. All in all, Monday's action was a snooze fest.  And very little, if anything, should be deduced from the session's narrow trading
 
.My initial focus during Tuesday's regular session E's is likely to center around 1946 and 1937. Continued narrow range and generally trendless chop are to be expected within that tight channel. A sustained migration in the perception of price outside that range is needed to open the door to a greater price .
 
A sustained break above 1946 gives bulls an edge, and encourages buying toward 1955 and 1963. Failure to hold the line near 1937 turns the market against buyers and shines a light on 1927. and 1919.
 
Good Trading,
Stan
 
Sep 01
2015

The overnight news was ugly every where.

Posted by stanmoore in Untagged 

Fellow Friends,
 
The overnight news was ugly every where.
 
 
I posted a 30" & Daily chart late Yd. The Daily Shows we are nearing a 60% buy retracement off last swing high. I noted when I could be in the room Yd we were going lower.
 
I haven't read much lately. I am going through the move from hell. I have to be out by Tuesday  next week May be operating out of Hotel Room. 2 House buys fell through. Sellers expect too much.
 
Not packer & no movers yet. Will get it together Room is out of the ? with Charts Etc until Thursday next week earliest
 
Good Trading,
Stan
Aug 28
2015

Scary thoughts below bad news ahead for the US Economy??

Posted by stanmoore in Untagged 

Fellow Friends,
 
The size of the epic RMB carry trade could be as high as $1.1 trillion. If China were to liquidate $1 trillion in reserves (i.e. USTs) in order to stabilize the yuan in the face of the carry unwind, it would effectively offset 60% of QE3 and put around 200 bps of upward pressure on 10Y yields. So in effect, China's UST dumping is QE in reverse - and on a massive scale.
 
Credit Suisse estimates $6.5 billion left equity funds in July as $8.4 billion was pulled from bond funds, citing weekly data from the Investment Company Institute as of Aug. 19. Those outflows were followed up in the first three weeks of August, when investors withdrew $1.6 billion from stocks and $8.1 billion from bonds, said economist Dana Saporta. I have seen even bigger numbers as of Yd.You can't blame the public either.

“Anytime you see something that hasn’t happened since the last quarter of 2008, it’s worth noting,” Saporta said in a phone interview. “It may be that this is an interesting oddity but if we continue to see this it could reflect a more broad-based nervousness on the part of household investors.”

Withdrawals from equity funds are usually accompanied by an influx of money to bonds, and an exit from both at the same time suggests investors aren’t willing to take on risk in any form. While retail investor sentiment isn’t the best predictor of market moves, their reluctance could have significance, Saporta said.

“It might suggest households are getting nervous about holding investments, and that could lead to some real economic implications including cutting back on spending,” she said. “Should the market turn lower again, it will be interesting to see if we have the traditional move back into bonds or if households move to cash.”

After reading the above I'm really pissed I didn't buy puts into that closing rally Yd. Shorted E's not the same but the $'s are there.

We were saved by those dip buyers who came in holding their noses & closing their eyes & buying that 1950 dip.We caught the down the whole way but the rally was something else.

If we hold above 1977/78 we have a shot into 2000 & higher.All trading beneath 1977 encourages continued selling toward 1964 and 1950. A notably bearish development heading into the weekend would be a sharp rejection of any rally into 2003 to 2006 and close back under 1950. That may seem like a huge move, but frankly, would a 50-handle swing really shock anyone after the week we've had? No!!

Not sure what to do with options yet. Stay tuned

Good Trading,

Stan

Aug 27
2015

Live & Learn..

Posted by stanmoore in Untagged 

Fellow Friends,
 
 
 
Margin Calls Bite Investors, Banks (WSJ)
Oil prices rise more than 4 percent as equities rally (Reuters)
Oil Industry Needs Half a Trillion Dollars to Endure Price Slump (BBG)
 
As some have suggested, the Casino formerly known as the U.S. stock market likely made a capitulation low at Tuesday's close. All of a capitulation's features fell into place Tuesday. There was fear and panic, as well as artificial selling from levered ETFs and price-momentum strategies (e.g., high-frequency trading). We also saw price drop to four or five standard deviations below the 50-day moving average,We hit the 9.7 Uni bands never seen before & not to mention Cassandra-like and downcast forecasts on business TV (which have already been quickly forgotten!).
 
Live & Learn..Recently, I attributed the crash to algorithms and unfair trading tactics used by high-frequency trading (HFT) firms rather than to panic selling by individual and institution investors. Today, I would add that ETF's  contributed to the recent debacle. There were mini flash crashes in many ETF's because liquidity dried up as market makers and broker-dealers had no idea what a fund’s holdings were really worth. This all makes Sense to me in hindsight.
 
This doesn't mean we'll go straight up from here, although the S&P is significantly higher in futures trading this morning. Technical damage has been done, and the market's mechanism has been shown to be faulty. We're getting the predicable two to three day rally after two 90%-down days.Let Mr Market tell us what to do & follow the Magic Oscillator that never broke.
 
New York Fed President William Dudley's remarks were one of the proximate causes for yesterday's fierce recovery. I personally think his comments were pathetic and revealed a toothless Federal Reserve that has no clue (and that we shouldn't have any confidence in).
 
A retest of the lows isn't likely, but some sort of test of the rebound does seem probable in September. I also expect volatility to remain elevated throughout the next few months.
 

Moving on to Thursday's E's action, let's begin by not losing sight of the potential headlines coming out of the economic symposium in Jackson Hole, Wyo. As you probably know, Fed Chair Janet Yellen is not expected to attend. That, however, doesn't mean other Fed members won't use the platform to offer their own market-moving opinions.

I want to enter the session with a heavy focus on 1948 to 1950. A sustained drive above that area would be expected to trigger bullish continuation toward 1966/68, and potentially all the way to 1979 to 1980. However, my posture will shift notably more bearish (puts) as we probe levels near 1980.

Aug 26
2015

Only Good news I saw

Posted by stanmoore in Untagged 

Fellow Friends,
 
A world watches as a stunned China watches in horror as their central bank and government leaders lose control, and everything they throws at the biggest market bubble of 2015 does absolutely nothing.  Takes these Turkeys down a peg or 2 in the world eyes. Russia must be getting wiped too
 
 
Only Good news I saw:Schlumberger is buying Cameron. The world's largest oilfield services company is buying the oilfield equipment maker Cameron for $14.8 billion. Reuters reports that Cameron shareholders will receive $66.36 — $14.44 in cash and 0.716 of a Schlumberger share — per share. The price tag represents a 56.3% premium to Tuesday's closing price. M&A may be alive & well.
 
I believe the market's mechanism is broken and that the computers and high-frequency-trading predators have taken over the game. That said, the extremes that the market has presented in recent days provide great trading opportunities for the bold, the brave and the possibly insane (like us!). It's really been great all year for us.The 3:00 selling is a dream come true for NET( price up shallow with a RT/F to boot). I do really love the smell of Napalm in the Morning.
 
We really need a Blood red opening that shakes the Perma bulls in their boots.Not happening today as we walk into another strong tape at Wednesday's open, the first thing we'll want to do is approach the market with a skeptical eye. All trading above 1867/68 keeps day traders looking over 1900. But my inclination would be to err on the side of bearishness, and focus more time looking for areas to buy puts if premium doesn't wipe us out (over 1910 & scaling for now).
 
Good Trading,
Stan
 
Aug 25
2015

China Continues lower & our markets don't care

Posted by stanmoore in Untagged 

Fellow Friends,
 
I never saw anything like it. It had to be another Flash crash at the opening. The DOW was down almost 1,100 points( Plunge Protection Team @ work after opening?) Then 15 minutes later we were up 600 points. Options were over $4.00  ATM. We can not play at these levels. It was easier trading the E's alone for huge gains. 
 
The technical and damage to both individual and institutional investors from last week's trading has been substantial..There will be the surfacing of levered funds unable to deal with the volatility in currencies, bonds, stocks and commodities. This, too, is destabilizing
 
If I had to hazard a guess -- and it's just a guess -- I'd say that this morning's lows represented a classic capitulation not seen in years.
My view it is much easier to call a capitulatory bottom than describe the manner in which the market acts after that bottom.

If I had to hazard a guess, I would say that this morning's level will not come close to being breached anytime in the near term.That said, a backing and filling after the 85-handle rally in the S&P index makes sense to me.The Oscillator is still Magic. It never skipped a beat.

We saw something else I never saw in 32 years of trading Uni bands. We had taken out the 3.7 Unis only 11 X's over 32 years & only reached 6.0 9 X's on the Down side. A new 9.7 Lower Uni band was hit on the opening & turned back prices immediately. I never included the 87' crash as the S&P was down to a 60% buy retracement that I thought was an outsized move that would never occur again. Foolish me.

My initial area of interest at Tuesday's open is expected to be 1900/1905. As long as we're trading beneath that five-handle zone, my expectation is for a downside probe of 1870 and 1856. All trading beneath 1870 should be viewed carefully by prospective buyers, as the path of least resistance will likely remain lower, toward Monday's 1831 intra day low.

A sustained trade above 1900/1905 doesn't alter the market's higher timeframe bear trend, but it does encourage day traders to buy the market with an eye toward 1936 and 1951. I shorted over night as high as 1945 toward the 1951 high next.

Good Trading,

Stan

Aug 24
2015

Prepare for the Worst, Get the Worst could make you $500,000 From $40,00...

Posted by stanmoore in Untagged 

Fellow Friends & Traders.

 

 
 
After last week,the Trader in me asked may all our dreams like last week come true.We prepared for the Worst & We got the Worst. It was NET Heaven. Normally we prepare for the worst but hope for the best. The sad part is that Most traders do not prepare at all.
 
The Week before last I noted I was looking for 40 points down over 2 days of correction. The Correction came. The E's were down over 130 points for the week. Nearly 50% of those came on Friday. Not one of you can say I did not alert to this likely event as late as last week. All the pre alerts this week further nailed the sells.( See below")
 
Short E players could have earned over $6,000 per short E. Hedged Players earned well over $10,000 per short E while the put buyers  they made well over 10 X's their money. Every Strategy NET employed minted money last week. How was yours? Probably not even close to this. Then it's time for Help. Call me!! NET grew it never rested. It will continue to grow well into the future.
 
Here's a copy of part of Thursday's Pre alert: Came out at 8:43 AM EDT "Moving on to Thursday's E's action, I expect to begin the session with a heavy focus on 2067/68. A break beneath that area, which is something I expected to occur & if it gains acceptance would immediately shift our focus down toward 2062, 2053 and into the mid-2040's."
 
Here's Friday's pre alert thoughts @ 8:06 AM EDT.
 
"I was telling you in no uncertain terms we were going much lower. At the time I only hinted at the big break out down. If you bought the 206 puts they went from $1.00 to $2.85.If you shorted the E's You made $1.000 per E, if you stayed short all day. However, as one of my newer students who goes full time trader next month when he retires said to me. It's a no brainer. You go long 10 Calls @ $.90 & Short 3 E's. You lose $700 on the calls & make $3,000 on the short E's. Them's your choices & they all work.

However, Here's the secret sauce I add into the mix. However, only If you were in the Room with me. I nailed all the E trade shorts,You could have earned well over $3,400 on the short E's alone. These shorts  earned over $9,000.The Longs easily added over another $1,000.That's over $10,000 after a $700 option loss. That's another choice. Is this worth $1,000 a month??? Yes at twice the price.

Thursday's decline clearly represents a bearish break. Moving forward over the next five to 10 trading days, my expectation is for heightened volatility and an attempt to recapture both a short-term eight-day exponential moving average, and higher time-frame 200-day simple moving average.
 
Moving on to Friday's action, I want to begin the session with a focus on 2024 to 2025 and 2038 to 2041. Any opening strength would be expected to attract responsive selling toward Thursday's regular-session 2040 area low.

A sustained trade above 2041 would open the door to continued buying toward Thursday's 2053, but once again, any earlier longs would be expected to turn into sellers.

Failure to hold above Thursday's low encourages day time-frame participants to sell the E's toward 2015 and 2002. As far as expected strength of levels is concerned, I'd be far more willing to look for longs toward 2002 and the big figure(2000) than anywhere near 2015"
 
There was no hope for a rally at all after the E's opened.Sell all Rallies. We only started to buy calls after the E's were down nearly 40 points.
 
Imagine 10 X's on Puts. But ask yourself would you have held on all week? It's very hard as the put price moves much higher Now Imagine Thursday you started to build a sizeable position(100) in calls early that day. You already had sizeable option & hedging wins by then earlier in the week.
 
You needed 2 traunches of Calls over the last 2 days. On paper it showed You lost over $15,000 on your calls as all calls expired worthless.
 
Remember my comments in Monday's Blog. It was going to be so bad when the E's broke I said go short 4 E's per 10 Calls or in this case short 40 E's Vs 100 long calls.. You made over $7,000 per short E over the last 2 days. You could have earned as much as $280,000 less $15,000 or $265,000 in 2 days.That trade pays for at least the next 10 years of my services.
 
Margin requirements $15,000 for the calls & $20,000 for the Short E's. Return almost an 8X. The difference your risk was never there. You had protection & peace of mind with the calls.
 
This Week $40 K could have made you well over $500,000.
 
Study this weeks video. Make sure you expand the screen. There were no losses on the call options. You really made money.See Friday trading. It was so obvious to us the market was going lower into the close there wasn't any reason to hold any calls long after you more than doubled your money twice.
 
Still don't get it watch the last 20 videos Here:  https://vimeo.com/channels/909500
 
Stay tuned there's more weakness still to come over the ensuing weeks. I saw the E's Stabilized for a couple of hours early last night near 1960. Hit it.
 
 It appears faith in The Fed is falling. A disastrous Empire Fed print last week (following weak Japan growth overnight) has led to a decidedly risk off move last week. The move seems to signal like a "QE4"-on trade (USD down, bonds bid,) but the equity market weakness suggests trust that the recovery hope The Fed keeps spewing just is not there... in other words - for stocks, "bad" news is no longer good news as the narrative begins to break...
 
Here's comment from one of my Favorite PM's who missed the last 3 years ride higher. But that doesn't make him any less smart.
 
"I hate to write this but, based on my contacts, the $40 trillion global equity market is being run by a dozen or so fast-money quants. 

If the market ticks down (e.g., this morning) the market is sold; if it ticks up (e.g., now) the market is bought. The market, therefore, gets too short and then too long virtually within hours.

The market has become nearly unplayable (and one big gamble), except in small amounts from a trading standpoint.

I guess making money most every day & reading the market these last 7 years,then Showing you how to make over $500,000 last week with the perfect call. This comes While riding the up wave for the last 7 years. Why can't others do this too? Maybe they went to the wrong  Schools. Read my Emails, read my blogs. It's been in there for years.

I would like to leave you with 2 thoughts I know will happen. First when the emerging Markets problem is over next month, next year the US will emerge much stronger as an Economy & Country. Two interest in the US should be going lower for at least another month but by November PM's will have to re balance their portfolios. This is they will have to sell bonds & buy stocks. Given the Bond Rally & stock declines coming this could be a huge swing of monies starting soon.

Dennis Gartman says it best"This is time for retaining what liquidity we can muster; this is not a time for courage. Get smaller; get liquid and get safe. This is getting ugly and we can only hope it does not get worse."

The only silver lining for us is that at our current rate of decline this could be over by Labor day. We can continue to sell rallies until we lose $'s. Just remember the first real rally off these lows will rip your face off. Survive & sell again.

Wish I knew where the Force was. In the future be careful what you wish for. I certainly will be.

Good Trading,

Stan Moore

Aug 21
2015

Becareful what you wish for. It just may come true Yes!!!

Posted by stanmoore in Untagged 

Fellow Friends,
 
But for us at NET we were prepared for the worst & we Tonned $'s
 
Perhaps the biggest surprise about the overnight Chinese stock rout is which followed the lowest manufacturing PMI since March 2009, is that it happened despite repeat sell side pleas for a PBOC RRR cut as soon as this weekend: usually that alone would have been sufficient to push the market back into the green, and it almost worked when in the afternoon session stocks rebounded after dropping as much as 4.7% below the "hard" floor of 3500, but then a second bout of selling just before the close took Chinese stocks right back to the lows with the Shanghai Composite closing at 3,507, down 4.3% on the day, having wiped out the entire 18% rebound from July 8 when the PBOC first threatened both sellers and shorters with arrest.
 
Chinese media are describing tonight's market action as "Judgment Day" for China, as SCMP's George Chen explains, the crusade of 'malicious short sellers' against the Communist central planners and their 'funds' is in full swing. The "manage-the-economy-by-technical-analysis" strategy appears to have failed as Shanghai Composite has broken notably below its 200-day moving average - which six times before has been defended aggressively. Chinese Stocks are back at 7-week lows, just off the crash lows in July.
 
Just to recap Thursday's regular E session, nearly 2.2 million contracts traded, over an intra day range of 40.5 points. We caught over 60 points. We lost the support of the 200-day simple moving average, closed beneath the early July lows, and are essentially sitting on the March 11-13 swing lows.
 
The E's are trading near the lower 2.3 Uni Band.This is both a rare occurrence and generally not an ideal time for short or intermediate time-frame traders to turn aggressively bearish. In the past, such declines tend to balance out and lead to several days of rotational chop, albeit with a downward bias. However,We will favor selling rallies.
 
The Put trade re entry if done into the Wed Fed notes Release hit $.86 & Could have been sold for $6.74 Thursday at the close.Nice work if you could get it & it only happens here.
 

Yd in my pre trade alert I noted as follows:

Moving on to Thursday's E's action, I expect to begin the session with a heavy focus on 2067/68. A break beneath that area, which is something I expected to occur & if it gains acceptance would immediately shift our focus down toward 2062, 2053 and into the mid-2040's.

I was telling you in no uncertain terms we were going much lower. At the time I only hinted at the big break out down. If you bought the 206 puts they went from $1.00 to $2.85.If you shorted the E's You made $1.000 per E, if you stayed short all day. However, as one of my newer students who goes full time trader next month when he retires said to me. It's a no brainer. You go long 10 Calls @ $.90 & Short 3 E's. You lose $700 on the calls & make $3,000 on the short E's. Them's your choices & they all work.

However, Here's the secret sauce I add into the mix if you were in the Room with me. I nailed all the E trade shorts,You could have earned well over $3,400 on the short E's alone. These shorts  earned over $9,000.The Longs easily added over another $1,000.That's over $10,000 after a $700 option loss. That's another choice. Is this worth $1,000 a month??? Yes at twice the price.

Thursday's decline clearly represents a bearish break. Moving forward over the next five to 10 trading days, my expectation is for heightened volatility and an attempt to recapture both a short-term eight-day exponential moving average, and higher time-frame 200-day simple moving average. A close above an eight-day EMA would be an obvious victory for currently suffering bulls, and one I'd be very cautious trying to fade (sell short).
 
Moving on to Friday's action, I want to begin the session with a focus on 2024 to 2025 and 2038 to 2041. Any opening strength would be expected to attract responsive selling toward Thursday's regular-session 2040 area low.

A sustained trade above 2041 would open the door to continued buying toward Thursday's 2053, but once again, any earlier longs would be expected to turn into sellers.

Failure to hold above Thursday's low encourages day time-frame participants to sell the E's toward 2015 and 2002. As far as expected strength of levels is concerned, I'd be far more willing to look for longs toward 2002 and the big figure(2000) than anywhere near 2015.
 
Good Trading,
Stan
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