The Dog Days of August
I cant get my orders to fill, why, lack of volume. As expected, August is a slow month. I guess everyone is on vacation, maybe I should be as well. I place an order and it sits, this month for weeks before it finally fills. Some of my orders dont fill at all. It’s frustrating, so instead of bucking the trend, I’m going to chill, maybe the beach is a better option for today. Get it, option…..
Back in the Game
Okay, I could say I told you so, but I’m not going to do that. The market finally had that correction we’ve been talking about. Now it’s moving up again. What a wild couple of months it’s been.
I’ve been silent over the last month, for a number of reasons. I, like many I’ve talked to in recent weeks got caught in the unexpected (and as I’ve blogged, unsubstantiated) market rally and lost some money, but more importantly have found myself questioning my strategy in this volatile market. I’m back in the game with a different attitude and a more conservative strategy. I’m still trading the iron condor but I’ve diversified my strategy and have moved to a more conservative ROI expectation. I have found that in the current market, you can’t count on what has worked historically to continue to work now. The market is changing. Once upon a time the market reflected the performance of American based corporations and reacted accordingly. More and more the US stock market reflects global economic conditions and even more concerning is the market movements that are a result of electronic trading. Now I am not against electronic trading, I like other investors depend on it. But after the “flash crash”, you have to wonder, can that happen again. Going forward it one thing you can take to the bank, the market has changed and it would behoove you to recognize that and trade accordingly.
Happy Trading!
Why the Rally??
OMG, what a day, the market closed up over 200 points, on WHAT news? There was none, no I take that back, there was news, it was bad news, but the market shot up anyway. Whats up with that??? I thought we’d see another day of the Dow up 100 points and then give it all back in the last hour of trading, but the market did the opposite. So what is really going on? There are those that say this is a result of electronic trading, and doesn’t reflect the real opinions of investors and professional traders. I really don’t know what to think, is this a result of the belief that the global markets are settling and that the euro is stabilizing? And does this mean that tomorrow will be a profit taking day and the market will drop down 100 – 200 points? I’m hearing a lot of predictions of profit taking tomorrow. We shall see. I can’t wait..
Beware of a Bull Market
Wow, its been quite an interesting and volatile last couple of weeks. The “Flash Crash” notwithstanding, it seems that the correction we saw last week has disappeared in a wisp of smoke fueled by what I feel is false confidence. I get that people are relieved that Greece has been bailed out for now and that the European nations have bonded together to support the Euro, but the bailout is a band aid at best. As worst it has served to delay the inevitable and the inevitable is BAD. So as the market regains all it lost last week, we are back to where we were, totally ignoring basic fundamentals and basking is the belief the economy is in a V shaped recovery. Who are they kidding???? We just got through Q1 earnings announcements and they were for the most part positive. So the market screamed up, up, up. Don’t investor realize that earnings were up based on managed inventories and cost cutting and not revenue growth? The job market has not gotten significantly better, jobs are not being created, so why the optimism? I just don’t think things are getting that much better that fast. Call me a pessimist, but I just don’t get it. And let’s talk about the deficit. The IMF bailed out Greece to the tune of trillions of dollars. Okay, good to stem a catastrophic slide, we did it with TARP to keep our economy from crisis, but at the end of the day, who funds the IMF? Guess who? WE DO. the US makes up 20% of the IMF so in essence, we the US taxpayer is bailing out Greece. Where’s that money coming from? And the market screams up. I’m not an economist, and these are just my thoughts. So are we teeing up a big correction? Bigger than the flash crash of last week? A market slide based on fundamentals that makes last week look like a bump? No one knows and I do believe we are in a slow economic recovery and that the markets will be up 10% or more by the end of the year. Just beware, rocky roads are ahead.
The Power of the Mastermind
One of the most beneficial hours of my work week is spent attending a Mastermind call with my fellow traders.
What is a Mastermind Group?
The concept of the Mastermind Group was formally introduced by Napoleon Hill in the early 1900′s. In his timeless classic, “Think And Grow Rich” he wrote about the Mastermind principle as:
“The coordination of knowledge and effort of two or more people, who work toward a definite purpose, in the spirit of harmony.”
He continues …
“No two minds ever come together without thereby creating a third, invisible intangible force, which may be likened to a third mind.”
In a Mastermind group, the agenda belongs to the group, and each person’s participation is key. Your peers give you feedback, help you brainstorm new possibilities, and set up accountability structures that keep you focused and on track. You will create a community of supportive colleagues who will brainstorm together to move the group to new heights.
Futures – Can They Predict the Market?
Anything that can help us figure out which way the market is going to head is a good thing right? YES. And I use as many indicators as possible to give me helpful information, avoiding deep analytics as often as I can. I’m sure you all know or have observed, the market seems to make some of it’s most significant moves at the open and the close of the trading day. It has been said that the open of the market is determined by the amateurs and the close of the market is determined by the professional traders, and whether you subscribe to either of those ideas, the truth is, the market does move more at the open and at the close, for whatever reason.
The Truth About Buying Power
We all know about the need for buying power when we make our initial trades during the month. And we all love that our thinkorswim software recognizes that you can’t lose money on both the puts and the calls when establishing an iron condor, so in essence our second trade of the month is essentially free. The question there for needs to be asked, how my money or buying power should I hold in reserve?
Will the Market Rally EVER End? Strategies for Getting Out of Trouble
Wow, it’s been quite a remarkable March/April hasn’t it? I don’t know about you, but when the market drove up, up, up at the end of the March trading month I was caught quite unprepared. I have been expecting a sell off for a while, in fact as a precaution, I didn’t even get puts in March, but so far I’ve been really wrong. So as expiration day closed near, I had to make a move. There were two strategies that I contemplated, the butterfly up and the vertical roll.