31 March 2007

Settling Up

Just sitting down going through my records for March and if you followed YukTrader through this tumultuous month...drum roll please...you scored plus 92 points trading the Nasdaq futures...cheers and applause...
Didn't think we did quite that well as my account also reflects some losses taken on pesky and questionable options positions... So with that in mind I've decided no options trading in April with the exception of the open CROX put position...we will exclusively concentrate on the NQM7 for the whole month...see you Monday morning...jfg.

30 March 2007

Vote For Pedro

A little trouble posting in the last hour...closed out ill advised short at 1788 for plus 3 points (-2.5 for the day) as the market just wants to drift into the weekend and the quarter closes out on a quiet note. We had the right idea today trying to buy into weakness but our execution sucked. Sometime placing a stop after entering a trade can save you countless points and sometimes it can cost you as the market reverses right through and past you with no rhyme or reason...a tough week to be sure with all the geopolitical tensions and the "window dressing" futures jamming.
I'll look back on this week as a good one though as we had the right bias as the market kept making new lows and we were aware of that and just need to refine our approach with a little tweaking which I'll be working on this weekend. It's a long journey this kind of life and you have to take it one trade at a time...get some rest and we'll be right back at it come Monday morning...jfg.

There's Danger In Them Hills

Went ahead and sold them @ 1791...not going to use a hard stop here just keeping a keen eye on the tick levels looking for lower highs to confirm lack of real buying...could get steamrolled on this one but the market rarely plays itself out the same way for the umpteenth time...since I'm stuck here manning the guns we might as well fire off a few shots...jfg.

Straight Talk


I feel like I just got pissed on as 1785 offers no support and the futures just cave into the next pivot down at 1775...stop taken with -5.5 points to show for not going to the beach...obviously not happy...blame pointed on sanctions on China (that news is more than an hour old)...if they offer 1775 agin I am going to buy it...jfg

Beach Delayed

Choppy, Choppy

Internals bullish but not excitedly so...economic numbers all over the board this morning...so lots of conflicting information...oil stuck in limbo at $66 awaiting any headlines...I'm still expecting a push higher as sellers step out of the way but if they offer them down into the 1785 pivot I'd be an aggressive buyer there as the risk/reward looks good with a stop around 1780 and profit goals up towards 1800...probably going to close shop if we don't see 1805 or 1785 in the next hour...jfg.


Don't Fear The Reaper

Fire In The Hole

Wow, so you get the feeling somebody really needed that extra .02% boost to their 1st quarter numbers. I guess 287 on the mutual fund list is better than 291. But if everyone plays the game who is to know.
"Strong market today, Mr. Yuk."
They spiked the NQM7 23 points off the 2:15 low and considering this will be the worst quarter since Q2 2006, it should have been fully expected. Yet, I felt anyway, that global tensions and skyrocketing energy costs might matter...think again. This "strength" does matter though, as it throws our bias way off and may take several sessions to work itself out of the system.I'll be back with the overnight look and some trade recommendations...jfg

29 March 2007

YukTrader: Ahead Of The Curve

America’s ‘Seinfeld’ strategy in Iraq

By Michael Fullilove

Published: March 29 2007 17:46 | Last updated: March 29 2007 17:46

The history of US foreign policy is punctuated by a series of doctrines. The Monroe doctrine (1823) declared that European powers would not be allowed to intrude into the western hemisphere. The Truman doctrine (1947) committed Washington to assisting free peoples in the fight against communism. The Nixon doctrine (1969) warned that America’s allies would need to assume primary responsibility for their own defence.

Ask the expert

George Costanza

Does Bush’s Iraq policy satisfy the George Costanza criterion? Post a question now for Michael Fullilove

In recent times US grand strategy has been guided by a new kind of doctrine, named after not its author but its exemplar: the Costanza doctrine.

This doctrine, which had its heyday in 2002-2004 but remains influential, recalls the classic episode of the TV comedy Seinfeld, “The Opposite”, in which George Costanza temporarily improves his fortunes by rejecting all the principles according to which he has lived his life and doing the opposite of what his training indicates he should do. As Jerry tells him: “If every instinct you have is wrong, then the opposite would have to be right.”

Emboldened, he tries a counter-intuitive pick-up line on an attractive woman: “My name is George. I’m unemployed and I live with my parents.” At the end of their date, when she invites him up to her apartment, he demurs, cautioning that they do not know each other well enough. “Who are you, George Costanza?” the lady asks. Replies George: “I’m the opposite of every guy you’ve ever met.”

The Iraq policy pursued by the Bush administration satisfies the Costanza criterion: it is the opposite of every foreign policy the world has ever met.

The Costanza doctrine is most closely associated with President George W. Bush and his first-term confidants: the wild-eyed neo-cons and the dead-eyed ultra-cons. But there is a wider group, which includes most presidential candidates and many of Washington’s foreign policy elite, who are not fully paid-up subscribers to the doctrine but went along with it nonetheless. Allied governments in London, Madrid and Canberra also signed up.

In “The Opposite”, George breaches the most fundamental laws in his universe – for example, the age-old principle that “bald men with no jobs and no money, who live with their parents, don’t approach strange women”.

Similarly, in its geopolitical incarnation, adherents to the Costanza doctrine cast aside many of the fundamental tenets they learnt at staff college or graduate school. Let me name a few.

First, military and diplomatic resources are finite and should be directed towards your greatest priority. An example of the opposite approach would be for a country that has been attacked by a non-state terrorist group to retaliate by removing a state regime that had nothing to do with the attack.

Second, take care not to weaken your intimidatory powers through poor military performance. Aim for short, sharp victories (such as that in the 1991 Gulf war) that get your adversaries worrying about the extent of US power. The opposite would be to launch a war of choice involving the drawn-out occupation of an Arab country – the kind of thing that gets your allies worrying about the limits of US power.

Third, you get by with help from friends. Although the powerful are sometimes tempted to go it alone, international support helps determine the perceived legitimacy of an action, which affects its risk and costs. Building this support requires discussion and compromise. The opposite would be to spurn real negotiations, slough off your allies, bin multilateral agreements you do not like and declare that you are not bound by the rules that govern everyone else.

Fourth, state-building is hard. Few of the international efforts at state-building since the cold war’s end have succeeded. Luckily there are numberless reports identifying lessons learnt. The alternative would be to do the opposite of what those reports recommend, for example by deploying insufficient troops and dismantling any extant national institutions such as the army.

Fifth, democracy is a blessing that requires patient nurturing. The opposite approach would be to seek to impose democracy by force of arms on a population traumatised by decades of vicious and totalitarian rule.

Sixth, politics, like nature, abhors a vacuum. If two dangerous states are struggling for dominance of a strategic region, maintaining a balance between them may be the least worst option. The opposite would be to emasculate one of them, thereby greatly increasing the relative power of the other.

Finally, historians often cite the need for prudence in international relations, quoting the physician’s dictum: “First, do no harm.” The opposite would be: “Don’t think too much, just chance your arm and see what happens!”

There is a moment in “The Opposite” when George Costanza pre-empts some hooligans making a ruckus at the movie theatre: “Shut your mouths or I’ll shut ’em for ya. And if you think I’m kidding, just try me. Try me! Because I would love it!”

For a while, that kind of method worked – for both Georges. Then normal service resumed. The Costanza doctrine is all about hope, but when it comes to making your way, in New York or the world, experience is the better guide.

The Wrap

So the market fails to bail me out, stop hit @ 1779.50 for plus 1.5 points (even for the day)...not sure I'll be around to trade Friday as I've been off all week and the mark up boys will be throwing a wrench into the works...should have known better as I've seen this kind of jamming before and I let greed get in the way of sound judgement (again). I've let almost 30 points of profit slip through my hands this week but at least we've been on the right side of the bias...lower highs and lower lows and I guess it's better than losing 30 points...unless we test the extremes of the range (1810 and 1770), I may sit tomorrow out...lite posting anyway...hope you were smarter than me and snagged some points...on a brighter note, CROX acting like crap down almost $2 from the pivot high put in on Tuesday...jfg.


Ready To Run?

Setting up for a test of the lows here...oil giving back some of its' gains but looks like it wants to go higher.
Tensions with Iran seemingly just getting started as they are demanding Britain withdraw troops stationed in Iraq and refusing to release the taken sailors...it was just a matter of time before this type of "incident" occurred...
so it shouldn't be too surprising...
If the lows give here I'll be looking to take profits in the 1765-1768 level...
Equity longs face another hard decision on whether to hang around for markups on Friday or get ahead of the crowd in lightening up before a long headline watching weekend...jfg.


Crude just takes off here...over $66 and any end of quarter rally can be forgotten...jfg.


Oil surging scaring equity holders...don't think I'll get that bounce to short into so I hit them at 1781.50...internals flipping red and volume high for this time of day...let's see if we can get a good flush lower...jfg.

Nicks And Cuts

Range Expansion And A Trade

So the range expands as we make some lower lows ticking the 1785 pivot I've been looking for these last few days...that move brings my bias for selling any bounce down a few points...I'm also going to buy right here @ 1787.50 with a stop at 1784 looking for 1795 and then look to fade the 1800 pivot...so let's do some trading...jfg.

Opening Jig

New lows just printed @ 1790, I figure that to be the low for now...if you want to scalp them long I'd be a buyer here with a stop under 1787...internals positive with 1558-12112 and 2082-944 on the NYSE...u/d's 3018-1386 and 2707-712...oil stable...jfg.


So the revised, revised GDP number comes in a bit stronger than expected...futures reacted positively...Oil catching a bid here, ticking at $64.80..."It Doesn't matter, till it matters"...$65+ oil matters...jfg.

Little Fonzies

GDP numbers due out at 8:30...so that could give us some clues to today...want to stay cool for now and watch the first hour of trade go by today before acting...I have been jumping into the fray early this week getting good entries on the short side and watching the market sell off quickly only to reverse higher without a real trending move and without very much profit...so a more relaxed outlook today...probably see an early push higher into that 1805-1810 area only to see that move fail and then have the subsequent failure fail and then of course the rally back up to fail...got that? So that's up, down, up, DOWN...we'll try to get involved on the bigger DOWN ...jfg.


Two days left to one of the more stressful quarters of the last few years, if your a money manager anyway. Markets do the rope-a-dope and finish on the lows yesterday after frustrating just about everyone...dropping just below the breakdown at 1790 only to spike right back into 1810 only to reverse and fail back into 1790...couldn't have read that much worse...but that's yesterday...
Futures slightly positive today with the $5 Dow up 38, the S&P plus 3.25 and noisy Naz +4.25...the Euro boys gapped it up and have held their gains plus about .60% across the board...the Nikkei finished flat with oil and gold little changed...currencies calm with the Euro and the Pound slightly positive with the Yen giving back some of yesterday's big gains...still formulating today's trade and trying not to give into my inclination to scalp as I know once I let that demon loose the ranges are going to expand ...jfg.

28 March 2007

More AGI

Markets end on the lows in another schizophrenic trade... a somewhat tighter range with plenty of volatility...
Our Anti-George Indicator closed out its' second SPY trade at the close for a gain of $1.78 (1.2%)...way to go George.

Mark Up!

Really nothing to say...internals improving slightly...why fight the tape...see you all in the morning...jfg.

Hey, A Chart

Stubborn Ass

It just seems ludicrous to me that BB can say that "moderating energy costs are keeping inflation in check"...no matter how you clarify the statement for "recent developments".
The Plunge Protection Team must just be buying futures contracts by the tanker ship full here as I'm sure the Central Bank is flooding the overnight liquidity market. This, to me anyway, will end badly...and no matter my market positions...I believe that this is a quite dangerous game being played...our handling of the economy, our blithe foreign policy and our needless habit of never admitting any failures...but enough of the "rantrage"...
Markets pushing back towards the bottom of their respective opening ranges...internals remain unchanged from previous levels...my thought process seems a bit clouded here as an expectation for wider ranges is affecting my desire for profit taking...another 10 point scalp opp. wasted so might as well hold out and see what the afternoon brings...I placed a buy stop at 1805...if they are able to push them up there I give up...jfg.


So the bulls get run over here as "FED" statements are "released"...small caps getting treated harshest with the IWM down 1.15%...my CROX puts actually about even..I guess we'll keep them for a little while...maybe up the ante a little.
Naz futures tick right into 1789 and bouncing here a little into 1794...breadth deteriorating 2029-743 and up/down about 4 to 1 red...
Now that we have a little breathing room let's hold out for 1780 or 1775...oil selling off a bit at $64.10 as profit taking on a draw down on stocks...look for that to reverse higher...jfg.

Giving It Away

So kind of sloppy trading here off the get go but internals ugly and I don't expect prices to push much higher than the 1804.50 printed so far...still looking for 1806 to hold back any BigBenBuyers here...1790 looks to be next stop...jfg.

Sell With Both hands

I went ahead and sold them here at 1800...no stop for now...I'll eye in on prices if they hit into 1806 or so...jfg.


So durable goods ex defense comes out -.20%...not exactly what the bulls were hoping for and the futures drop accordingly with the $5 Dow -55, the S&P -7.50 and the Naz -12.25...bonds rally as well as gold (up $5+) and especially the Yen up almost 1% before pulling back some...crude oil stubborn above the $64.50 handle...let's see what happens...watch for negative breadth numbers to deteriorate...that should be a clue to sentiment...will BigBen come to the rescue?
Having problems posting my regular charts....

Are Yor Ready?

The Mortgage Bankers Association said its seasonally adjusted index of mortgage applications dipped 0.2 percent to 671.0 in the week ended March 23.
So the first data point of the day is negative...Beazer Homes investigation and oil and up at 8:30 is the durable goods number...

We were looking for that 1795 pivot to be hit yesterday but it was not be as the markets held their water until after the bell, falling into the pivot on the 6p.m. oil surge...we're trading just above/below 1800 as I type and depending on that durable goods number we could make a quick fast drop into the next level of support near 1785...below there is 1774...resistance is 1810-1812 and I'm expecting that number to hold back any buying today...
The play today would seem to be fading bounces looking for more downside as some short term traders looking for "window dressing" will be ill-positioned for a stronger drop and wanting to exit on any buying...so a drop into the 1780's that bounces toward 1795-1800 should be sold...remember BigBenBernanke on the docket today so that could lead to some stall in trade...
Could be a wild ride today...jfg.

Prop The Cazbah

So the "end of the quarter markup" has reared its' ugly head in strange ways these past two sessions. Instead of higher prices we've got an ugly news flow that has led to some sharp drops that have been bought. We have been on the right side of those drops, but I have failed to capitalize looking for wider ranges that have not come to fruition...so frustration mounts...enough on that...I hope that many of you were able to gain from some precise entries...
Back to what's ahead...Oil just shot up .75 to $65 on ever more increasing Middle East tensions...you can forget about any other themes today as the market will
be all about oil all day...Europe down more than .50% across the board...Nikkei down a little more than .60%...Bonds, gold, the Euro and the Yen all higher with our futures about that same .50% to the red...back soon with some pivots to look for...jfg.

27 March 2007

Crude Realities

The other shoe is about to drop, as you can see from the May Oil contract above that almost hit $67 a barrel around 6 p.m. on rumors that Iranians had fired upon U.S. warships. So we're all playing a dangerous game of escalation and it isn't going to take much for tensions to worsen. $75-$80 oil...$100...why not? That means $5 gasoline and recession...I'd be up early in the morning if I were long...jfg.

Hope Sinks

So another go nowhere day with a negatibe bias as the quarter starts drawing to a close...a listless market the rest of the week could be painful to watch but I don't expect this kind of action to last much longer... British P.M. Tony Blair upped the ante vis a vis Iran as he stated that their effort to free the 15 servicemen would move to a "different phase" if the issue wasn't resolved soon...Mr. Market wouldn't like that at all...jfg.

Hope Floats

Nasdaq Tick

So just like yesterday...a nice scalp wasted as I was holding out for more...a slow drip for sure but higher...the tick readings don't look as strong as Monday's trade so the possibility for some selling in the last two hours still exists and we might as well wait it out...nothing doing much nowhere no how...jfg.

Under The Hood

So far so good...with our bias for a slow drip lower proving to be the case...we are hanging just on/under that 1810 pivot and I don't think it will take much to dive down into yesterday's lows just above 1790...we'll be looking to cover there.
Internals pretty ugly with breadth still more than 2 to 1 negative and up/down volume especially bearish on the big board at 4 to 1 to the red. Volume levels still pretty pathetic so the doldrums could set in.
I'm looking at bonds here to see if they finish weak...that could lead to some sympathy selling in equities...Moving my stop down to 1818, not willing to take any significant losses today...jfg.

Ups And Downs

Itchy Trigger Finger?

High Wire Act?

Internals pretty lousy right off the open with advance-decline numbers more than 2 to 1 negative across the board...it's obviously early but still somewhat rare to see those levels especially off the get go on the Nasdaq.
I am getting ready to sell into any post consumer confidence spike even though I hope we are a bit higher (1817 as I type) so we can define the risk but, as always, you have to take what they give...so if we sell them at 1819-1820 so be it...we'll work out our stops after...I think we are prime here for another drop...maybe kiss that 1800 level goddbye for a while...jfg

Ready To Rumble

The International Council of Shopping Centers-UBS Retail Chain Store Sales Index increased by 0.2% in the week ended March 24 from the week before, on a seasonally adjusted, comparable-store basis. A week earlier, the index rose by 0.4%.
I initiated a put purchase on CROX yesterday buying some April $45's at $100 thinking that this "fad" stock may feel some pressure as retail may be the next sector to fall out of favor here.and the bears may just get this one right for once...nothing too big as my recent option plays (read NVDA) have been a fiasco. I failed to pull the trigger on CAL and those puts have almost doubled in the last few days of trade. Consumer confidence on tap for 10 a.m. Eco's pretty lite today with the rest of the week jam packed with data points. So let's be a little careful today keeping an eye on the news flow as there may be little to nothing to direct this market...light volume and wider ranges can make for tricky trade with stops being taken out on both sides of the bias...so let the trade come to you...jfg.

Raise Or Fold

We try to play the odds here...get all your money in the pot when you are ahead and make the other guy blink...just another way of defining your risk in a way that when we are wrong it is evident and not too painful...so on that thought today the bias is to get short above 1820, ideally as close to 1825 as possible with a stop in the 1830 area...any settling trade at the 1832-1835 means we are wrong and out as the bulls and the bears can fight it out up there without us...if they want to push the market higher here then we will be on the sidelines...not really interested in buying breakouts at this juncture...so we'll look for a mildly positive open to be slowly ground down through 1810 and see if we can cover there for nice 15-20 points...jfg.

Back On Track

Alright, so without much fanfare, the YukTraderTechTeam has pulled off a small piece of magic and gotten YukTraderStation fully up and running again. So no more Panera Bread and no more trips to Comcast HQ and no more excuses...and no more giving back potential 18 point gains...back to the action.
The overnights pretty stable with the Nikkei down almost 1% and the European bourses flat lining after opening higher. Light sweet crude still elevated at $62.57 and seems almost paused waiting for a reason to break through heavy resistance in the $64 area...any move through there and $70+ is almost a given. Bonds mildly under pressure as well as they to sit right above major support levels especially on the 10 year trying to push through the 4.60% yield level...currencies flattish except for some weakness in the British pound.
Not quite sure yet on today's bias...as yesterday afternoon's weak climb into the close throws cloudiness into a previously perceived forecast of a reversal of the "post FED" move that would be bought as "window dressing" into the "end of quarter markup"...jfg.

26 March 2007

Enough Is Enough

So I covered @ 1815 for a loss on a trade that I was initially up more than 15 points....yes that is 15 points..more like 18 and I let it get away. Have to give part of the credit to my brothers over at Comcast but the finger ultimately points back to me ...so congrats to anyone who actually made money today...I'm going off for an ass hat fitting...jfg.

YukTraderStation Back Up

Okay...back on line..at least I've got this laptop on line, the rest of my network is still down so no charts until after the close...fun little visit to Comcast after a hurried lunch at Panera...to turn in my fried modem for a new one...so basically a wasted day today...just a lack of sellers and volume is pathetic...NQ's ticking 1810 here...going to hold into the close to see what we can get..
obviously not too happy in letting a great snap trade this morning get away...jfg

Out To Lunch

So Comcast sucks but being more or less a monopoly...they are the only game in town...sitting here at Panera with the Apple serial e/mailers and the soccer moms...might be stuck here for hours as it seems my cable modem is shot...we'll see what happens...
Mr. market being real stubborn here as an ideal entry on the futures this morning is lagging...I'm still holding sort here and will most likely be just as stubborn waiting for the bulls to step out of the way ...jfg


Having more technical problems today with my connection flaming out every 10 minutes or so...I'd short Comcast (CMCSA:Nasdaq) if only I could get my data feed running...obviously probably should have taken the scalp into the 1795 level on the futures but I still think afternoon sell off beckons...any higher here (1805 as I type) and I will step into those QQQQ puts again.
On another note, just finished watching TYCO's former chief on 60 Minutes...worth a watch if you can find it...DVR rules...oh and by the way he's innocent...hah!

Easy Like Sunday Morning

Market rebounding a bit here as I type flirting with the 1800 handle...line in the sand is around 1810 so let them do whatever they want under that pivot...housing numbers released and as I posted I just hit the sell button with limit orders about 2 points under the bid getting a healthy fill...internals obviously flipped red quickly with A/D on the Naz now 1021-1823 and 2100-900 on the big board...up/down 2399-2693 in "techland" and 2678-1387 on the NYSE...watch for a middling trade into lunch and if my hunch is correct a push lower into the close with a spike down around 2 p.m....we'll look to close out our positions there...a higher bounce here into the 1808 area should be used to either "fatten up" your positions or use some leverage into some puts for a bigger payoff down the line into Wednesday or Thursday...jfg.

Like A Rock

Manic Monday


Off to a late start this morning...so straight to the action...Overnights kind of quiet with Asian and European markets pretty flat...bonds under a bit of pressure with gold higher by $4 and oil pushing the $63 handle...the story is geopolitical with the Iranians still holding 15 British seaman and you're getting a "Gulf of Tonkin" type feel here...where it doesn't quite matter what's really happening or more to the point how it started...it just matters that the first domino has been knocked over...and who knows where it leads...we are going to stay on the sell side today and just pick a spot just to sell them...any spikes into 1822-1824 are to be sold...keep a bit of a wider stop as I'm just feeling 1800 and lower are in the cards...new home sales numbers up at 10 a.m. so we'll wait until after that number before we take action... pretty simple directional call today...watch breadth for confirmation as it should deteriorate off the bell and let's see what happens when we hit the recent lows in the 1812-1814 area...jfg.