Monday, March 05, 2007

Oingo Boingo

Just a quick (and unusual) morning post.

I think the recent sell-off may be done for now. Don't get me wrong. I'm still a doom and gloom, end-of-the-world, may-all-the-bulls-die kind of bear. But when everyone on the planet has suddenly turned bearish, it's time to reconsider.

I've also received several signals from Beelzebub - - who drove Britney to madness recently - - that something was afoot. Most notably, from a San Francisco hotel entrance.......


When the $VIX was single digits, and everyone thought the Dow was headed to 150,000 within a few weeks, that was the time to buy puts. But the VIX has exploded. Puts aren't cheap anymore. And everyone skittish as all get-out. I prefer to stab the bulls when they're not looking.


The cold fact is that there's probably a bounce in here somewhere. I closed out all my Russell puts this morning, and I have no index shorts now. I have a ton of equity puts, and all the charts look great, so even with a bounce, I'm happy to hang on.


It remains to be seen how much more downward movement will be wrung out of this spasm. I, for one, would prefer to see a nice fat bounce, have the bulls rest on their fat, stupid butts again, and then go in for the kill. Until then, let's wait, by George.

9 comments:

Lauriston said...

Tim

Another excellent post from you. Like you, I have been accused at times of being a "perma-bear", but the fact is I prefer to make money than "bear" any labels. I am glad to see your analysis/thinking agrees with mine or vice versa:). I actually went long this morning for a quick bounce and it worked well. Funnily no one is accusing me of being perma-bull now. Volatility is back so up and down is the name of the game. We may even close very green today or tomorrow...

stealthelephant said...

Go, Sulu! Warp factor 5! A great way to be making fast money right now is by selling vol. Sell puts AND calls! Won't see too many opportunities like this. Pull back is just about over (if not over) as long as Asian contagion (and I don't mean Takei's kind of flu) doesn't break out. If you are looking for ways to play shorts on a bounce, stay bearish on oils AND Russia. Oil economies are going to be great shorts/hedges this spring.

Market Speculator said...

People will label you a bear when you continue to say the market is going to sell off...who would of thought that the market was going to take off after Aug 15, 2006? What about the Dow Industrials hitting 31 new highs? The thing is, if you continue to be a trend fighter you will be labeled.

Going for a short pop isn't my game. Couldn't get filled on SDD today...but went long again on QID on this mornings pop.

I just play trends, we are now in a downtrend and will play with my QID in the sandbox until my mom calls me for dinner (when the trend changes).

Market Speculator

beanie11111 said...

You folks keep calling for a immediate term bottom yet the bottom keeps on failing. This is very ominous.

Something very ominious is about to enter our consciousness.

It really bothers me why the whole world is selling off. It can't be about subprime lending because sub prime lending is essentially within the USA. Why are the world markets selling off? I don't think it's about following the China selloff. No. In early 2000 when we sold off, i don't think the world collapsed with us.


Imo, something big is about to happen and the world already knows it, except us Americans. It's probably gonna be big and a big shock to our system, causing an even huge selloff.

beanie11111 said...

holy cow, the close is very ominous!

Every fiber of my being is telling me something very aweful (outside the markets) is about to happen.

Somebody knows something is about to happen and won't tell us.

Leisa said...

Tim

I'd be grateful for your explaining why you sold your index puts but kept your equity puts. Is it because there was more volatility in the index puts rather than your equity selections?

(I did order your book along with M. Panzer's book of doom).

After thinking long and hard (after reading your post), I closed out my QQQQ puts (DEC 43's) for a 30% gain due to the volatility spike. I have other short positions (through QID, MZZ as well as a short on KSS) so I decided to lock in the gain. I let all of my prior year's puts (as I've lamented here) expire worthless because I hung on to long (I turned a 155% gain into a 100% loss). Not this year!

Note: Both QID and MZZ were quite active into the close.

z-stock said...

HERE’S a rough draft for some entry prices.
BSC ENTER $ 141.04**** $1.00 OR $2.00 AWAY FROM TAKING OFF. (172 – 18% = 141.04) BUY BUY BUY…

$XBD ALREADY THERE. I suggest you buy the XBD April 225 call and try to double the money ….

GS enter $187.32*** ( 223 – 16% = 187.32 0 = BUY BUY BUY …
I guess you can say I’ve left Tim’s camp (temporarily), and am now looking for bargains.
z-stock

Market Speculator said...

Why are people looking for bargains in this type of environment?

The path of least resistance changed a week ago tomorrow. It is now down. Why do people constantly try to catch falling knives. It makes absolutely no sense to me.

Market Speculator

JakeGint said...

I am with you, MS, on the path of least resistance. Always listen to Jesse during market trend changes!

That goes for you too, Beanie "Ominous GOOG" 1111!