07/09/2014 Live Update

[DellGriffith]

I hope you don't mind if I post a link.

I recently posted a chart by Tom McClellan that shows a stock market index vs the price of oil shifted forward 10 years. Well, he just gave an interview where he discusses that chart here:

http://www.financialsense.com/contribut ... -peak-2018

I thought it might be a good read.

[uempel]

Update:

[fehro]

SPX 15m.. still grinding in a bear flag towards red channel... pink ovals... fireworks targets for FOMC, etc.. should it be market moving.

[FlowerGirl]

Long XIV position will be liquidated if maroon histo remained at this level for the next hour

Upon further drop in maroon histogram a 1/3 position in UVXY will be taken.
Initial stop loss for this position will be 24-23-24.73, which will be converted to 5% trailing stop loss (from the entry point) as soon as feasible.

[daytradingES]

This reminds me of the book the Quants

"Low market volatility causes banks to “understate trading risk”

First the culprit: the Fed’s “unprecedented monetary policy easing has resulted in sharply lower interest rates, higher stock prices, and lower market volatility.” That volatility is a “key factor” in how banks compute risk measures. When volatility is very low, something happens to the Value at Risk models that banks use to measure and disclose the risk of their trading activities:

Aggregate VaR has dropped significantly since the end of the financial crisis at the five largest U.S. banking companies with trading operations. While some of the VaR decline is a result of lower client activity and reduced bank trading risk appetite, the low-volatility environment is the primary cause of lower VaR. In a more normal volatility environment, one without sustained monetary policy accommodation by the Federal Reserve, bank VaR would be meaningfully higher. Thus, current VaR calculations may understate trading risk in the banking system."

http://wolfstreet.com/2014/06/26/federa ... lames-fed/

[fehro]

On a rolling four-week average, everyone is selling stocks – hedge funds, private clients (high net worth) and institutions. This as equities have been making new all-time record highs. Except corporations, who continue to put stock away and shrink their floats – just as the Fed has incentivized them to do for years now. http://www.thereformedbroker.com/2014/0 ... ocks-left/

[MrMiyagi]

qqq5

[Cobra]

key time, watch if could make double bottom here.

[Out of Bounds]

I thought we had seen another "V" bottom and expected a big rebound.
This looks a lot weaker. Cobra, if "key time" falls to bear side, do you see a target?

[uempel]

3268.png

Miyagi, do you have any SPX P-Bars

[brucekeller]

A little more on the QQQ

[MrMiyagi]

Miyagi, do you have any SPX P-Bars

Not today, the two from yesterday still pointing up to 197.59$

[FlowerGirl]

Upon further drop in maroon histogram a 1/3 position in UVXY will be taken.
Initial stop loss for this position will be 24-23-24.73, which will be converted to 5% trailing stop loss (from the entry point) as soon as feasible.

UVXY position opened @ 25.03
Initial stop loss $24.25 (3%). Will be ignored during post FOMC statement noise.
Expectation: UVXY to trade to ~$26.90 (~6% gain)
:twisted:WARNING: Highly speculative trade

Additional position will be added if and when green histogram reaches its threshold level.

May be I have an itch to loose some money. This will a small loss compared to what I just made in XIV

[fehro]

Upon further drop in maroon histogram a 1/3 position in UVXY will be taken.
Initial stop loss for this position will be 24-23-24.73, which will be converted to 5% trailing stop loss (from the entry point) as soon as feasible.

UVXY position opened @ 25.03
Initial stop loss $24.25 (3%)

Thanks for sharing.

[cletus]

I hope you don't mind if I post a link.

I recently posted a chart by Tom McClellan that shows a stock market index vs the price of oil shifted forward 10 years. Well, he just gave an interview where he discusses that chart here:

http://www.financialsense.com/contribut ... -peak-2018

I thought it might be a good read.

McClellan could be right about a correction but the words "the market is due" should never come out of anyone's mouth. It is called the Gambler's Fallacy, in which people believe something is "due" because the streak has lasted a long time. McClellan used that very phrase.

http://en.wikipedia.org/wiki/Gambler's_fallacy

"Some researchers believe that there are actually two types of gambler's fallacy: Type I and Type II. Type I is the 'classic' gambler's fallacy, when individuals believe that a certain outcome is 'due' after a long streak of another outcome."

For example, if I flip a coin and get 5 heads in a row, one might believe I'm "due" for a tails. In fact, that's wrong. The odds of a head on the next flip is still 50/50. The odds never change on any given coin flip.

[Al_Dente]

In just two days (Mon/Tues) we retraced 61.8% of the run that started 6/26
Today we have already retraced back 50% of the Mon/Tues drop
Not sure what that means in terms of future direction, but I don’t YET have a tradeable swing long signal

[fehro]

SPX 15m ... 70 minutes .. till FOMC

[BullBear52x]

Trapped inside 5/20 MA. bearish bias until histogram turns north short term.

[BullBear52x]

/ES hourly very bearish still.

[BullBear52x]

Attn: KeiZai san.