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Author: WendyBG Big gold star, 5000 posts Top Favorite Fools Top Recommended Fools Feste Award Winner! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 458978  
Subject: Panic: are we getting there yet? Date: 10/4/2008 7:13 PM
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http://stockcharts.com/charts/candleglance.php?$INDU,$SPX,$I...,
$vix,$BPNDX|B

The VIX is incredibly high. The BPNDX and yield on the 3-month T-bill are incredibly low.

Let's see whether the bailout reverses these indicators, or whether we are getting close to a panic buying opportunity.

Wendy
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Author: tv53 Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 257717 of 458978
Subject: Re: Panic: are we getting there yet? Date: 10/5/2008 10:20 AM
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I have been looking at that also ($BPNDX, $VIX), as well as $BPSPX and $BPINDY.

They suggest a rally soon.

In addition, the SPX is over 200 points below the 200 day SMA. Stockcharts only goes back 3 yrs for non subscribers like me, but in the last 3 years this wide of a gap has only occurred 3 other times, in Jan, Mar and June of this year and on each occasion the ensuing rally took the S&P up 100-150 points.

Not saying the bear market bottom is in (I still dont think weve seen capitulation), but a very tradable rally is due soon. This might be useful for those who bet the shorter time moves. I can see a move to SP 1200-1250 before breaking south again.

A big question for me is what kind of news might initiate this upswing? Perhaps a rate cut coming soon to a country near you, or even a coordinated world wide rate cut. May ease some fears enough to initiate a short term rally of some significance. If you are the type who trades in and out soon may be an opportunity for some long bets. But we could washout further south first. Its never easy.

My choice may be call options on SSO (double S&P).

Any comments from the traders out there, or anyone?

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Author: tipiper Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 257754 of 458978
Subject: Re: Panic: are we getting there yet? Date: 10/5/2008 1:11 PM
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TV53 said... world wide rate cut. .. initiate a short term rally ... may be an opportunity for some long bets. ... call options on SSO (double S&P). ...comments ...?.

I'm looking at taking profits on my SDS position, its near its high since I bought, catch it back later at the topside.

I beleive it was Chart'n Andy AJ who said get out of SDS by Friday.

Ti Bear

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Author: miro26 Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 257770 of 458978
Subject: Re: Panic: are we getting there yet? Date: 10/5/2008 2:21 PM
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<My choice may be call options on SSO (double S&P).

Any comments from the traders out there, or anyone? >

I have been thinking the same thing this weekend. This time using call options to lever up. It seems like such an obvious trade that it makes me a little nervous.

Miro

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Author: Woolybooger1 Big red star, 1000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 257784 of 458978
Subject: Re: Panic: are we getting there yet? Date: 10/5/2008 4:34 PM
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Hey Ti Bear,

Saw you were from Albuquerque. Lived there for quite a few years as a boy. Los Colabazeas was the street we lived on. At that time it was on the edge of town. Went back about 10 years ago and the city limits was about 2 miles further away. My how time changes things. Anyways.......

you wrote,

I beleive it was Chart'n Andy AJ who said get out of SDS by Friday.

I sold out of almost all of my QID friday afternoon and after hours. Even got someone to buy 800 shares at $63.50 after hours. Only have a small portion left.

I would say that I agree with that concept that getting out before the first of this week was a safe move. If you look at SDS and QID there are quite a few candles stacked up there. Not that it won't move higher, but we all know how the market likes to make us look foolsih. A pull back and consolidation mixed with a rate cut puts things a little dicey right now.

Having said that, I cannot imagine anyone stepping in to buy much right now. Maybe some who are short covering positions in those stocks still able to be shorted. Maybe some Mutual funds that have to meet criteria, etc.... Otherwise who would dare? I greatly admire Warren buffet, but he never really buys at the bottom, and almost always buys early. He can afford to do so. He did over the last couple of years with BUD and has with others in the past. Must be nice huh?

If it moves up more in the a.m. premarket, would be tempted to fade the open with QQQQ (I like trading the NASDAQ more volatility). Still sitting on the sidelines for a Monday morning clear the haze also doesn't sound like a bad idea.

Regardless good trading and keep it simple.


Wooly

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Author: tv53 Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 257795 of 458978
Subject: Re: Panic: are we getting there yet? Date: 10/5/2008 5:22 PM
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I have been thinking the same thing this weekend. This time using call options to lever up. It seems like such an obvious trade that it makes me a little nervous.

Miro



I agree Miro, me too, however I have had pretty good luck lately trading the call options on both SSO and SDS sometimes in the same day. With the wild swings both up and down they both make nice moves. But for me the strategy needs to be taking the quick profits and not getting greedy.

I expect overall lower prices, but somehow it feels like something will instigate a rally soon, maybe tomorrow, maybe later. I know thats not a very good analysis, I'll wait until the open to see.

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Author: Adenovir Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 257825 of 458978
Subject: Re: Panic: are we getting there yet? Date: 10/5/2008 9:18 PM
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I opened a SPY calendar spread with long Nov 130 puts and short Oct 130 puts for 0.15 (per contract pair) on Friday. This trade should be profitable with SPY anywhere between 110 and 140 at October expiration. There is the risk of early assignment with the short puts but the max risk is only the cost of the trade.

I don't think I'll get to max profit which is at $130 on SPY, but if I do, the spread should be worth about $5.00 (33x return).

Adenovir

(...almost doesn't count except in horseshoes, handgrenades and calendar spreads)

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