***Official*** 2014 Stock Market Thread

[JEDI]

Well this is it. The 61.8% retracement level is just under 1944. This is where I recommend to anyone who is worried about the market get the hell out. Seriously. It is extremely rare for a market to have a sharp snapback rally that exceeds the 62% retracement level. We are almost certain to test the low 1800s again in the coming weeks. Big rallies do not start from the pattern we are in right now.

Short the Spyders/Diamonds/QQQ?

edit:
since you're using the s+p500 as the example, I guess I'm shorting SPY at 9:30am tommorow

 

[sm625]

My personal preference when shorting is to buy puts on the index that is performing the weakest. Right now that is definitely IWM, the Russell ETF. And when going long I of course do the opposite, I buy calls on the index that has performed best over the last 52 weeks. IWM 110 weeklies are already up 100% and we havent even had more than a baby selloff yet.

PS: Take a look at a chart of Boeing to get an idea of the type of selloff that could hit the broader market very quickly. (Also note my previous remarks about Boeing)

 

[FelixDeCat]

sell mortimer, sell!

 

[JEDI]

My personal preference when shorting is to buy puts on the index that is performing the weakest. Right now that is definitely IWM, the Russell ETF. And when going long I of course do the opposite, I buy calls on the index that has performed best over the last 52 weeks. IWM 110 weeklies are already up 100% and we havent even had more than a baby selloff yet.

PS: Take a look at a chart of Boeing to get an idea of the type of selloff that could hit the broader market very quickly. (Also note my previous remarks about Boeing)

wished I knew how to do puts and calls

 

[FelixDeCat]

wished I knew how to do puts and calls

no, you dont.

most, if not all people lose money on them.

unless you are seller (collect premiums), they are usually just overpriced lottery tickets

 

[JTsyo]

no, you dont.

most, if not all people lose money on them.

unless you are seller (collect premiums), they are usually just overpriced lottery tickets

I signed up for covered calls and it lost me money. NVDA wasn't moving anywhere for a while so I figured I could at least collect a little extra on it and sold $18 calls. A few weeks later it started moving up fast and even touched $20.

What makes calls and puts so profitable is the leverage but they also carry the risk. If you buy $1000 in stocks chances are it won't drop to $0 but if your options go the wrong way you can loss all $1000.

Saw this site elsewhere for looking at potential returns on options. Looking at NVDA again, it's back under $18. If you bought calls for $20 for the 22nd of Nov and the price moved up to $19.20 by the end of Oct, you can sell your options and double your money. To buy the stock and double your money you would have to wait for it to hit $36. But look towards the bottom to see all the possibilities you have to lose all your money.

 

[JEDI]

Well this is it. The 61.8% retracement level is just under 1944. This is where I recommend to anyone who is worried about the market get the hell out. Seriously. It is extremely rare for a market to have a sharp snapback rally that exceeds the 62% retracement level. We are almost certain to test the low 1800s again in the coming weeks. Big rallies do not start from the pattern we are in right now.

2days later, the S&p500 has just exceeded your 62% retracement level.
spiking past 1944... @1952 now

Now what?

 

[brianmanahan]

2days later, the S&p500 has just exceeded your 62% retracement level.
spiking past 1944... @1952 now

Now what?

the key with market predictions is to always use phrases like "almost certain" and "extremely rare". that way if your prediction is wrong, you can chalk it up to a statistical anomaly.

 

[FelixDeCat]

Market will go negative.

 

[Schfifty Five]

Market will go negative.

When, today?

 

[jagec]

the key with market predictions is to always use phrases like "almost certain" and "extremely rare". that way if your prediction is wrong, you can chalk it up to a statistical anomaly.

It always reminds me of the BS "stats" that commentators like to pull out in sports games. "Broncos have never lost a game when they were up by 7 points at the half, the outdoor temperature was above 50 degrees, and the average weight of the O-line was above 300 pounds!" Just because it happens to be true doesn't mean that it has ANY impact on the current situation.


Past Performance Is Not A Guarantee Of Future Returns! There are, perhaps, patterns of human behavior hidden in stock charts, but every cycle will be slightly different, and you can't be sure that the pattern will repeat.

 

[Imp]

the key with market predictions is to always use phrases like "almost certain" and "extremely rare". that way if your prediction is wrong, you can chalk it up to a statistical anomaly.

Are you sure it's not because it exceeded expectations but the forward guidance was negative and the CEO looked happy?

Or did the company lose $2B the last quarter but exceeded the expectation of analysts by 20% and the CEO was negative, but investors are taking a chance today?

Formula: forward guidance + expectations but [choose two(2): CEO remarks, analysts, general market, world event] = explanation for stock/market's performance today.

 

[sm625]

The 62% retrace is a very rough figure. You got each of the big trading houses working off their own models. It generally coalesces around the main fibs, but not always. After the flash crash (may 2010) we had a much larger retracement than 62%. But it still sold off and retested the intraday low set during the middle of the flash crash. That's just what markets do, most of the time. Certainly not always. Things could be different this time. Sure, we could rally all the way to new highs, and then blow those out by 10% before its done. If enough people are shorting the market, then there is all that much more money that can be turned back around on them. That's how it works. That's why most shorts usually lose money, because the guys in the big trading houses can see how much money is short, and can easily calculate how much it would take to stop them all out and wipe them all out. And they can borrow the money to go and do it. In order to have a really big selloff, we got to have most people long and bullish. It just seems with QE ending that too many people might be bearish. At any rate I personally only short using up to 20% of the profits from my last long trade. To put any more than that up is foolish because no one knows how big these snapback rallies can be. Except for the guys borrowing billions from the NY Fed at 0% interest and using that money to buy e mini futures by the boatload. And if they lose it all? Then so what. Its just a number on the balance sheet to them. If that number gets too big then they go get a bailout. That's why its foolish to bet against them most of the time. You gotta have a lot of experience and follow very specific rules, no matter what.

 

[jpiniero]

When will Wall Street realize that Amazon spends far too much money on irrelevant stuff?

 

[cirrrocco]

buy amazon today? down 11%
guessing over reaction. prolly good short term hold with 5% upside.

 

[FelixDeCat]

When, today?

Black Friday 2014, Ebola style? D:

 

[Imp]

Black Friday 2014, Ebola style? D:

Mother effer... forgot about that. Doctor couldn't keep his ass indoors...

 

[JEDI]

apparently a company can print as many shares of stock they want and screw over their shareholders with dilution.

Dryships as of yesterday:
- had 800M shares outstanding
- closed @ $2/share

this morning b4 the market open, the CEO announced they are issueing 250M shares at $1.40/share.
the CEO snapped up $80M of that.

he just printed 30% more shares and screwed over the shareholders.
how is this legal?!

Dryships share are now $1.55

 

[Hugo Drax]

apparently a company can print as many shares of stock they want and screw over their shareholders with dilution.

Dryships as of yesterday:
- had 800M shares outstanding
- closed @ $2/share

this morning b4 the market open, the CEO announced they are issueing 250M shares at $1.40/share.
the CEO snapped up $80M of that.

he just printed 30% more shares and screwed over the shareholders.
how is this legal?!

Dryships share are now $1.55

You did not know this? Its the oldest book in the trick. And this is how insiders enrich themselves.

 

[jagec]

apparently a company can print as many shares of stock they want and screw over their shareholders with dilution.

Dryships as of yesterday:
- had 800M shares outstanding
- closed @ $2/share

this morning b4 the market open, the CEO announced they are issueing 250M shares at $1.40/share.
the CEO snapped up $80M of that.

he just printed 30% more shares and screwed over the shareholders.
how is this legal?!

Dryships share are now $1.55

So if the CEO sells today, he makes over $8MM, or 10% ROI in a single day?

Huh. Good to be the king, I guess.

 

[JTsyo]

When I was looking into getting some offshore drillers. I considered OceanRig and TansOcean. Once I saw the crap the CEO of OceanRig was doing with DryShips (he's CEO of both) I knew to stay away. Too bad I didn't stay away from the industry as a whole.

 

[BoT]

@mermaidmen IBM sold their chip/fab business to globalfoundries. to me that was their bread and butter. there is going to be a lot of restructure and reinventing going on for a while. not a time where i want to be on their side.

@jpiniero the market did realize and did react. mayor correction in place. but this is double bottom for the stock. i heard people predicting it to go to $100 bucks.

i think amazon is actually not doing too bad. their numbers are actually on par where they should be if you don't count in the fire phone. imo you have to play to win and if you play there is also a good chance you lose. if the fire phone does not find a foot hold at all they will just write it off as a loss. amazon didn't get to where they are by being stagnite. they have successfully pushed a lot of products that people called them crazy for. christmas is around the corner. if they have not picked up by Q1'2015 i would probably cut my losses.

 

[Michael]

Amazon.com has been given a pass on generating profits because of growth. If they lose that aura, and there are signs that they are, then their valuation stats show them to be way over valued.

Michael

 

[BoT]

for the next few days a lot will hang in the balance for them. if you are right and large investors will turn their back on Amazon then no doubt the stock will continue to drop. how low is the question and will it bounce back when it drops low enough for people to buy again.

 

[JEDI]

money.cnn.com lists dryships yield at 50%?!
http://money.cnn.com/quote/quote.html?symb=DRYS

this cant be right?! when did they increase it from .19 to .76/share?

whens the next divendend payout?