31 January 2007

Back Into The Cave...

Bears (me among them) get just hammered as the Dow, S&P and Russell 2000 break out to new highs (record for the Russell) and the Naz rallies from early morning weakness when Ben pulls the dove out of the Bush...any coincidence that George was on the floor of the exchange today? Regardless, took some losses on my QQQQ put trade but nothing substantial as I was able to sell in the quick post report confusion...even though the price of the underlying was moving against me, I got paid just enough for the volatility...so no big deal and another day in the books...still have to say that my thinking may have to be adjusted in the aftermath of today...I might be a little more aggressive to the long side next week if we don't just reverse this move...that wouldn't surprise me too much either...but I've got to think that there will be some scars from today that may not immediately heal...exhausted...later...jfg.

Chickin Sandwich

Bonds rally and equities follow after this morning's mini trashing with a huge spike up into the the 1795-1800 resistance level in the Naz futures...Gold up $10 and oil green again with housing rallying despite just terrible residential spending numbers...have to think the shorts just started covering when a -19% number failed to bring in any new sellers.
Euro also accelerates through the $1.30 level and I am half kicking myself for not participating. Experience has shown me that playing the currencies around these economic reports can be hazardous to your health...I'm out...see you at the close...jfg.

Always Be Closing

Some pretty intense selling on the QQQQ at the open...right through Monday's swing low and within shouting distance of Friday's... Naz advance/decline 2-1 negative and up/down volume 3-1 to the red...if we just sit at these levels into the afternoon...the pressure to hit that sell button may be extreme...jfg.

Relative Strength

IWM, the ETF of the Russel 2000, rallied yesterday to within $.31 of all time highs. The small caps usually take the brunt of any market turn, so keep your eyes out for a new closing high...jfg.

Which Way The Highway?

Just a few minutes until the GDP numbers come out. Dow futures rebound on Boieng earnings that just crush analysts estimates...beating revenue projections by a cool billion...just which company were these guys looking at? Naz and S&P futures lower, a confusing number here could lead traders to dump some positions ahead of the FMOC...also lower swing highs on the NAZ just might confirm a short term trend on a break of 1770 or $43.40 on the Q's...we'll have to wait and see...back at the open...jfg.

30 January 2007

What Was I Thinking??

I'm out to dinner and one of my trader friends asks what I think the fourth quarter GDP numbers are going to be and I thought to myself holyshit...I'm holding several Euro futures contracts and I forgot the report was in the morning...how stupid can I be...I just closed them here @ 1.2985 for a small gain and will remount them after the smoke has cleared...note to self...think!!

P.S. I think the number will be 2.2%...jfg.

Let's Do The Pre Fed Boogie

Markets finish green without very much conviction...the dollar was stable and bonds bounced a bit with the energy markets the stars of the day...some big moves here with oil finishing up 5%, natural gas adds 10%+ and don't forget home heating oil firing almost 4%...big moves to be sure...and nary a glance from equities...I'm sure all the positioning in front of Wendsday afternoon's FOMC decision is keeping us range bound but I cannot reiterate enough that the markets look very shaky here...just a little more pressure to the downside and as Ross Perot once said... "You'll hear a big sucking sound"...jfg.


Markets rally and revert...coming out of lunch, GS hitting new lows while GOOG struggles to stay positive after being up $6+ in the morning...AAPL and RIMM both lower as well...the energy complex has roared back to life on news that Saudia Arabia will increase their cuts in production come Febuary...so recent market leaders having a hard time here...I expect a lot of fipping around here with a slight bias to the downside...GDP, The FED and GOOG earnings all up to bat tomorrow...so continued trepidation for the time being...jfg.

Death Of A Day Trader

Just for this week. I'm going to step off the train and concentrate on some longer term positions. I'm stepping back into a few Euro contracts here near the 1.2980 area using a mental stop somewhere in the 1.2940 area for I think we may not see that level again for a while.
I'll monitor my QQQQ put position adding on any strength over the $44 level. I'll also take the time to really delve into some charts that I haven't had the time to get to. I've done pretty well as of late with the increased volatility but it is starting to wear me down a bit. So I look forward to a little fresh air here in the Florida sun...jfg.

29 January 2007

Down Periscope

I guess the bulls will scream that we finished green but I don't find anything positive about today's action whatsoever...we rallied to Thursday's breakdown and kablam, down we go...I just don't see many catalysts for a move higher here...the rise in volatility may also keep some more players glued to the bench on the sidelines...the bond market would seem to be the key here...also keep your eye on GS MER and a slew of commercial banks...they may tip off the next move...

I dipped my toe into those March QQQQ puts...though I still have more ammunition for that trade...I just feel that there will be some towels thrown in here should we move lower...see you in the action...jfg.

Very Nice!

So entry taken on the Euro March futures @ 1.2968...keen eye on the Yen and the British Pound as the dollar starts to fall in unison...as you can see from the chart above the Euro explodes to it's 200 bma, on the 30 minute time frame, and profits taken @ 1.2995 as sharp spikes tend to revert to the mean...probably done here as my day trading goals have been exceeded...I will keep on eye on the NAZ as I will be eyeing a put purchase sometime this week.

Let's Go Euro

Going to buy a new high on the Euro here @ 1.2968...we'll see what happens...goal in the 1.3020 area if not more...we'll see how it acts...jfg.

28 January 2007

Euro Daily

Just Itching...

Wow, look at the intraday volatility here in the 1.2900 support area for the Euro...have to think this was the final shakeout before the eventual move higher...biding my time but make no mistake, I'll be watching with some capital at the ready trading the breakout on a higher opening come tomorrow morning.

I think this may be the trade of the week as US equities will probably just flop around here before heading lower some time soon...jfg.

Pay Day Moans

Anyone interested in the money-service business (think check cashing, remittances), should check out this interesting article from The Economist.

America's money-transfer business

Check for cheque-cashers

Jan 11th 2007 | NEW YORK
From The Economist print edition

Those who serve the unbanked find themselves unbanked, too

NO INNER-CITY area in America is complete without a sprinkling of cheque-cashing shops and money-transfer agents. Yet these days so-called money-service businesses (MSBs) are the unacceptable face of high-street finance. Many banks have stopped offering accounts to them, citing regulatory concerns.

Money-service firms play an important role, serving poor urban, often immigrant, customers whose access to banks is limited. For many, they are the only means of getting cash or sending remittances to family abroad. They are also a big business: in 2005, in New York State alone, money transmitters processed over 92m transactions together worth $96 billion

Since the attacks of September 11th 2001, regulators have got a lot tougher when implementing anti-money laundering provisions. The Patriot Act, passed in the wake of the atrocity, added greatly to the pressure on banks to scrutinise their customers, and their customers' customers; it became, as one banker put it, a bit like a rail company being told it had to know everyone on its trains.

The result has been that most banks have closed their doors to the industry. JPMorgan Chase, a big provider of MSB accounts, did so in 2005. Bank of America followed last year, after concluding that the profits on offer no longer matched the increased risks. A few prefer to do the job themselves: HSBC has a service called Easy-Send, popular with Mexicans, which allows clients to wire money abroad.

Though a few sizeable banks still serve MSBs, they have become much choosier about who they will touch. David Landsman of the National Money Transmitters Association (NMTA), a trade group, says his members are rejected 94% of the time when trying to open bank accounts. Regina Stone, who licenses MSBs at the New York State Banking Department, says this has led to levels of concentration that need to be watched. A single bank now serves 70% of the state's cheque cashers, for instance; they would struggle to find new banks if it, too, quit the business.

The most frustrating thing, says Kevin Neuschatz of Choice Money Transfer, a remittance firm, is the indiscriminate nature of the regulatory crackdown. To get a state licence, MSBs have to go through a gruelling vetting process. Yet the law treats all money-service firms—from public companies like Western Union and MoneyGram to dodgier single-branch outfits—as one high-risk lump.

Even the most sophisticated MSBs face legal nasties: the state of Arizona seized some of Western Union's transfers to Mexico as part of a probe into illegal immigrants, though a court ruled this week that it had no authority to do so.

Some regulators talk of a crisis for MSBs, but there is no consensus on how to make life easier for them. Diana Taylor, New York's superintendent of banks, has recommended narrowing the definition of a high-risk money firm and offering incentives to banks to serve MSBs. The NMTA is urging the introduction of a federal bill that would give more guidance to banks. Charles Rangel, the new chairman of the House Ways and Means Committee, supports the cause. But it is not clear whether he would sponsor the legislation.

Meanwhile, some MSBs, fearing that the issue will never gain political traction, are taking matters into their own hands. A dozen firms in New York have joined together to apply for a banking licence. Do-it-yourself may soon be the only option.

26 January 2007

Caught Leaning

Week ends on a somewhat sour note as I was caught in the YM (DOW) futures this morning getting washed out in the early afternoon rollover...we were pretty oversold on the daily RSI and I was expecting a bounce off an early push lower...NOT...Having taken a bit of a beating in the morning I repositioned, feeling that we would see a push into the close as the Naz was somewhat strong all day and I've witnessed a whole slew of short covering rallies on friday afternoons over the past 4+ years...Clues were continued GOOG strength and GS flipping green...so I was able to heal the wounds a bit in the mad rush to the exits...still should have taken the day off...a minus on the P & L for the day...time to get away from the markets for a few days and just chill...see you on Monday...jfg.

Friday Morning Fumble


As you may notice from the chart of the yield on the 10 Year Bond above, there is a breakout a brewing...what does that spell for equities? Who knows really but it is worth keeping an eye on...jfg.

25 January 2007

Everyone Who Lost Money On Ebay Today Put Your Hands UP!

So the markets rollover and all I caught was 25 YM (DOW) futures points on the cracking of the 12,600 support level...leaving about 50 points to the wind...well as they say a win is a win is a win...EBay gets smoked and those cheap $32.50 puts this AM also dangle in the wind...I'm out...jfg.


Not finding a whole lot to trade here other then scalping the NQ futures a little above the 5 bma (bar moving average) for a move back into the range...that worked out nicely...I'm sure most traders are frustrated in Ebay as there is no movement there as the range has tightened...a new low may bring in the sellers...that 24% headline number may just break some backs...I'll be watching.

Market internals mixed with advance/decline negative and up/down volume positive at least on the Naz...not sure which way the wind blows today...jfg.

Is This The Bull Trap?

Highs on the QQQQ were reached 16 January @ $45.40...the recent swing low of $43.50 gives us a range of $1.90 to play with...let's play with the Fibonacci retracement levels...

$45.90 100%
$44.67 61.8%
$44.45 50%
$44.23 38.2%
$43.50 0%

We sit this morning @ $44.30...I'll be looking for $44.45-$44.67 to hold back the buying here and maybe get short either via the NQ futures or those pesky March $44 puts (QQQOR) if the market internals are not mega bullish...REMEMBER:ALWAYS LET THE MARKET TELL YOU WHAT IT WANTS TO DO...see you in the action...jfg.

24 January 2007

Cramer Helps You Do It Better...

Do it better with Cramer!!
Have to own tech...can't own tech here...which is it Jim???

When I'm 64

Mom's birthday dinner on tap tonight so going to wrap things up early here and meet her for a drink before dinner...Markets refuse to even hint at rolling over after lunch as GS and GOOG at or near their respective highs. Internals still screaming bullish so I'll take the 1 point the Es futures gave me and call it a day. Over all a good day as the Naz futures trade this morning will pay the rent for the month...take it in stride...jfg.

Back To The Futures

Bought the Nasdaq futures this morning on a break of the opening range high (1803) which took us right to the first fibonacci extension off yesterday's low @ 1810.50 for a sweet and quick 7 points.

My bear trap theory has worked out quite well so far and those QQQQ Mar. 44 puts are coming back into the fold...just not quite there yet. I'm thinking we are in for a range bound type of day at least away from the NAZ, so I shorted some S&P futures @ 1441.25 looking for a test of yesterday's pivot high some where in the 1335-1338 area...a break of the highs at 1442 will stop me out but so far so good...see you in the action...jfg.

More Strangles

So we'll say we played the Yahoo (YHOO:Nasdaq) Feb. $27.50 strangle 10 times for $2500 ($1100 for the calls and $1400 for the puts) into the earnings...to simplify we'll close the position at the open and see what we get...

calls opened @ $1.45
puts @ $.55...so $2000 and another quick 20% loss...no max outs here...


Mortgage Activity Declines Again
1/24/2007 7:34 AM EST
The MBA's Weekly Mortgage Applications index declined 8.3% for the week ended Jan. 19. Applications for new purchases fell 8.4% while refinancing activity slipped 9.6%, its second consecutive week of a nearly 10% decline. The adjustable-rate mortgage (ARM) share of activity decreased to 20.3 from 21.2 percent of total applications from the previous week.

So Goldman and Citigroup bump up the whole sector yesterday and wammo just great positive numbers this morning...NOT!! Lots of crosscurrents out there in housing...let's see how they roll...more numbers thurs. and friday with new and existing home sales to come...jfg

23 January 2007

Profits And Losses

Took profits on PII as the second Fib. extension @ $45.67 acted as a magnet...so $.74 (1.65%) profit per share on PII...not too bad and no pressure on my stop...up/down volume on the exchanges kept expanding to the upside after I entered so the long side was the right side for today.

Toll Brothers TOL (NYSE) was another story as I finally bit the bullet and took the loss on the options...fortunately I was able to significantly lower my cost average on the options through flipping the stock...by the way I'd like to thank Goldman or UBS or Morgan for upgrading the sector this morning...I'm sure their traders will be unloading all their shitty housing stocks into the close...I'm out...jfg.

Bear Trap Screen

PII showed up on one of my screens...I'll call it the the bear trap/short squeeze screen...when I feel the market wants to trap over anticipatory bears, I'll look at somewhat uptrending stocks that have above normal short interest...this puppy has a short interest ratio of 26...that means it will take 26 trading sessions at average volume for all the shorts to cover...I'll look for a gap up and try to buy near the break of the 15 minute (opening range) high...this one was a little tricky and not exactly what I look for but entry was taken above the fifth bar close @ $44.93...we'll see how the rest of the day goes...may hold this one into the a.m. session.

Fib extensions are $45.39, $45.67 and $46.14...jfg.

Comcast Sucks

Comcast down all morning...so I have to resort to the local Panera Bread amid the soccer moms and the dreaded apple serial emailers...be back at the fort soon...jfg.

22 January 2007

More Tol

I have been bringing my cost basis down with two good swing trades of the stock off this $32.11 pivot as the bigger $32.68 pivot still holds Toll Brothers back into the close....we're sitting near $32.50 as I type and my risk parameters will be violated if we close above that last pivot...

Market Momentum as of Jan 22 - 15:00

Advancing Issues 1171 1055 384 514
Declining Issues 2138 1989 701 1134
Unchanged 139 132 98 336
Advancing Shares 672,122,100 304,167,100 66,919,200
Declining Shares 1,312,480,400 1,179,725,300 217,805,400
New Highs 165 62 43 16
New Lows 11 33 5 22

Internals still weak but the markets are pretty well off the lows...a rebound Tuesday in the works??

Lunchtime Lull

Markets across the board getting a good hammering again this morning...
market internals pretty negative with both the NYSE A/D 2-1 and the NAZ 2.5-1 to the red...up/down 5 - 1 on the down side in techland while the big board not even 2-1negative.

My gut instinct is telling me we are setting a little bear trap here and the markets will rally into the close even if the internals do not improve much...It will only take a few buy programs to get some short covering and the mojo running again...I'm still waiting for a short entry up near where the Q's fell out of the previous range ($45), but I'm not going to push the time frame. Be back towards the close with a TOL update.

Monday Morning Quaterback

20 January 2007

Yugo Euro

As you can see from this chart of the front month Euro/US$ dollar futures contract, whoever missed that surprise Thanksgiving Day breakout has now got their chance to hit that buy button or load up the truck per uber-maniac Jim Cramer...all the longs who didn't take profits are now even and a bit nervous so we may correct a bit into that base or at least meander at this support inflicting cost of carry on those longs.

The all time highs loom just past the $1.36 level and one has to figure they'll shoot for those sometime this year...jfg.

19 January 2007

Bowling For Columbine

Ah yes, another week over. Market internals end the day positive with A/D line and up/down volume all to the good but the market shrugs into the expiration. Quite the week with lots of crosscurrents and the blogosphere filled to the rim with talk of pins and what not. Advice to anyone out there:

Do Not Try To Game Pin Action...It May Leave You In The Gutter!!

Finally bought those damn Toll Brothers puts and got stopped into some stock for a day trade as the last swing pivot failed to hold the stock back...those profits go into my cost averaging for the options...finally the weekend...jfg.

Batter, Batter...Swing Batter

Alright, going to step in here and buy 30 @TOLOF for 85 bucks each...we'll see what happens but I'm expecting a bit of a down draft early next week for some easy change...I'll stop myself out on a close above the most recent swing high at $32.68...so I may not be in this trade for very long...jfg.

For Whom The Bell Tolls

I hate trading expirations and come into the morning flat as a teenage girl. Still interested in these March Toll puts, but biding my time here as I sense we may get a rally into lunch and someone will be giving them away.

He doesn't believe in Beatles...

This is my friend Pat reading.
He doesn't believe in politics, nevermind the market.


18 January 2007

You Snooze You Lose!!

Done for the day here...too much paperwork and personal stuff to get much done.
ZICA fell apart and never achieved entry...while NVDA makes me want to cry...I hate missing opportunities like that...
Toll options still on the want list...
Typical middle expiration week hammering, especially in tech...pretty heavy volume with the Naz on par to do 2B shares with the up/down volume a very ugly 3-15.
We'll be back at it in the AM...jfg.

On The Short Side... NVDA

Missed this today...but perfect gap extension trade Nvidia Corp (NVDA:Nasdaq)...let's detail this one.

We'll use the range of yesterday high ($35.01) to today's opening range low ($33.33).
That gives us a range of $1.68...The eleventh 15 min. bar is a narrow range bar ($32.89-$33.01) that closes just under 5bma (5 bar moving average)...entry is taken on the break of the NRB low ($32.89).

Our targets are the fibonacci extensions of that range we talked about ($1.68)
1.68 X .382 = .64
1.68 X .618 = 1.04
1.68 X 1.00 = 1.68
We'll take those values from the opening range low of $33.33 and see what we get:
33.33 - .64 = 32.69
33.33 - 1.04 = 32.29
33.33 - 1.68 = 31.65

Our entry from $32.89 gives $1240 profit on a 1000 shares entered on the full 100% fib. extension.

Good Luck out there...jfg.

ZICA 15 Minute

Not finding a whole lot of intraday setups but Zi Corp. (ZICA:Nasdaq) looks interesting here as it hugs the 5bma on consolidation volume...we'll look to buy on the break of a narrow range bar high hopefully in the $2.17-$2.19 area...Fib extensions from yesterday's low are in the $2.35 and $2.45 areas.

Still waiting on the Toll Brothers options (@TOLOF) as the offer refuses to come down so that I can buy in some size.

Apples To Apples

So just for fun we'll say we bought that Feb. AAPL strangle ten times.

@QAANS/$4.70...$4700 Total...$9800.

Remember we are hoping for a Max out on one of the positions . Either AAPL opening down 10% (around $85.50) or up 10% (well say $104).

At $85.5 the puts should be near $12 while the calls would still hold some value..the reverse would be true with a gap up.

Well AAPL opens here near $92...with @QAABS (Feb. calls) trading near$2.50
...with @QAANS (puts) trading near$5.40

So closing the position outright at the open would result in a quick 20% loss...with falling volatility, should the stock remain somewhat range bound, the loss would only widen if only somewhat and slowly.

This type of trade has been working very well this last six months...could this say something about the extended nature of this market.

Can I Please Strangle Mssr. Jobs?

Pre-market Apple (AAPL) trading down $2 at the open. Anyone playing the at the money Feb. strangle must be hurting this morning as the volatility implosion looks to crush those big move dreams.

The Feb. $95 calls (@QAABS) fetched $5.10 at the close while the Feb. $95 puts (@QAANS) were being lapped up at $4.70...should be a wild ride today.

17 January 2007

Time To Pay The Toll?

First on tap is Toll Brothers Inc. TOL (NYSE).
As you can see TOL has had a hard time staying above it's 5dma on these last few swing highs and with the 34dma starting to turn over it just may be time to start considering some March puts.

The March 30's (@TOLOF) are asking $1.05...I'd put some bids in here trying for .90 on an intraday rally...could be good for 25%.

See yo in the trenches.