Nice time to short

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Subprime JD's picture
Subprime JD
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Nice time to short

Inverse funds are getting crushed. Market up 12/13 days. Nice little reversal set up.

Feb 25th, 1087 on SPX. Now at 1169. Market up 7.5% since then.

Feb 5th, 1044 on SPX. 12% gain since then.

Maybe the algos are seeing technically overbought levels. Oh well, im going in. Will cover very quickly.

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investorzzo
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Subprime JD's picture
Subprime JD
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Re: Nice time to short

Thanks for the link investorzzo. Looks like we are in general agreement. Short term pullback, intermediate term going higher. After that, only god knows!!

Erik T.'s picture
Erik T.
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Re: Nice time to short

Don't forget options and futures contracts expiring tomorrow. I've been wondering if the people writing the puts are propping the market up through expiration. A big sell-off monday would confirm...

Erik

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Mike Pilat
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Re: Nice time to short

I read this article reposted on the Market Oracle site and I thought it was pretty good. I do believe there will be a small pullback, but things look set up for a pretty strong upward push over the intermediate term. This is what a financial "recovery" as opposed to an economic recovery looks like...

One thing I'm not so sure I agree with the article on is crude oil. While I do think that metals and probably agriculture will outperform oil for a while, I do not think that oil is going to stagnate or decline much. And over the next year or two, it seems that oil will continue to push higher. Basically, as soon as spare capacity is made available by demand destruction in developed countries, China increases their consumption.

Jim Puplava (and many others) speak of the "Chinese put" in reference to the gold price, the theory being that there is a practical floor just above $1000 / oz where China or India will buy. I view a similar sort of situation with crude oil. Just the same way that an anaconda tightens its grip each time its prey exhales, so will China (and others) increase consumption each time the developed world cuts back. And this is under production plateau conditions. What Americans are soon going to realize is that a 14 mpg Suburban makes little sense at $100 / barrel, but an 80 mpg scooter would still make sense at $200 / barrel, particularly if "commuting" on the scooter did not involve long commutes over highway sprawl as is commonplace in America. The part solution to this, of course, is public transport, better infrastructure, and better planned cities / communities. These things take many decades to change significantly on a large scale. Ouch.

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Morpheus
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Re: Nice time to short
bearmarkettrader wrote:

Inverse funds are getting crushed. Market up 12/13 days. Nice little reversal set up.

Feb 25th, 1087 on SPX. Now at 1169. Market up 7.5% since then.

Feb 5th, 1044 on SPX. 12% gain since then.

Maybe the algos are seeing technically overbought levels. Oh well, im going in. Will cover very quickly.

Bear. I flipped my positions Frida from UWM to TWM, SSO to SDS. 

The RUT hasn't made a damn bit of sense the past month. It's looking like it might be reversing. Tight stop in place. 

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Morpheus
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Re: Nice time to short
Erik T. wrote:

Don't forget options and futures contracts expiring tomorrow. I've been wondering if the people writing the puts are propping the market up through expiration. A big sell-off monday would confirm...

Erik

Op-ex week has been so loony the past few months that I've been sidelining many of them. When in the game, going short-term long has worked for me. Call me cynical, but methinks Op-ex week should be renamed "Slaughter of the Shorts Week". ;)

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Erik T.
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Re: Nice time to short

Hi Morph,

Yeah, I'm wrestling what to do with my metals positions. Still long both gold and silver. Was tempted to get out on Thursday, but decided to wait to see what Friday brought. Silly me.

Feels like equities are about ready to correct and will probably pull the metals with them. Right now I'm still long gold and silver hedged by short S&P, but tempted to close or reduce the longs and buy them back lower. I have a feeling we're headed back to $16 silver and $1075 (or lower) gold...

Any thoughts?

ET

 

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Morpheus
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Re: Nice time to short
Erik T. wrote:

Hi Morph,

Yeah, I'm wrestling what to do with my metals positions. Still long both gold and silver. Was tempted to get out on Thursday, but decided to wait to see what Friday brought. Silly me.

Feels like equities are about ready to correct and will probably pull the metals with them. Right now I'm still long gold and silver hedged by short S&P, but tempted to close or reduce the longs and buy them back lower. I have a feeling we're headed back to $16 silver and $1075 (or lower) gold...

Any thoughts?

ET

 

I'm no advisor but I'll tell you what I am doing from a personal perspective. 

I'm offloading silver right now and holding cash.  My perception is an intermediate term dip as the DXY threatens to bust out above resistance. So, eBay it is, cash in hand, buy back later at a discount.  If you buy bars on eBay this week, there's a damn good chance I'm the seller. :)

Another thing is that I am seeing a significant increase in sellers on auctions, indicating to me that the window to cash out is waning. I'm also considering a put on PM's. There are just no immediate signs indicating to me a near-term rise in the PM market. It's a watch daily thingy for me. 

That's just me though. If I'm wrong I'll take an opportunity cost hit. I've begun to accept a working theory that both Mish Shedlock and John Williams are BOTH correct, as irreconcilable as that sounds. 

I'm a deflationist in the short-intermediate term, inflationist long term.  There's still a TON of debt that needs to unwind and a lot of deleveraging to go with it. PM's as assets went into the toilet in 08' during the last unwinding. One has to wonder what that link is. Also,  in the short-term I don't think the FED can print enough money to offset the M3 implosion coming up for HELOCs, Alt-A, Option-ARMs and CRE. That's a tsunami ahead. So, my big toe tells me deflationary pressures are ahead. Why hold $19 eagles now when I can dump them and buy $14 eagles later? God help me if I'm wrong though. Hee hee. 

Once deleveraging bottoms out, and the money supply is spanked, then I could see the printing reverse the trend and put potent inflationary pressures on us. Thoughts? 

*Disclaimer: I am not an investment advisor. These are my mere opinions from one internet friend to another and I could very well be wrong. So do your homework and make informed decisions. ;)

Erik T.'s picture
Erik T.
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Re: Nice time to short

Hey Morph,

While I certainly understand the physical over paper argument, if you are going to trade the ups and downs of the market it's hard for me to understand why you would deal in physical.

I'm basically of the same market view. Time to cut my silver position (mine is in futures) in half, then buy it back lower. I posted the last message before dinner, but decided not to sell anything till after dinner to see how the market digested the healthcare stuff. Silly me... $.35/oz lower when I got back from dinner. Sigh...

Looks like a bounce back toward the $16.85/16.90 level may now be underway. I'll start selling there and pare my position down to keep some powder dry.

*Disclaimer: If you're wrong, I reserve the right to persuade BMT to reconsider the legal profession and retain him to sue your ass! (Just kidding)

ET

 

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Morpheus
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Re: Nice time to short
Erik T. wrote:

Hey Morph,

While I certainly understand the physical over paper argument, if you are going to trade the ups and downs of the market it's hard for me to understand why you would deal in physical.

I'm basically of the same market view. Time to cut my silver position (mine is in futures) in half, then buy it back lower. I posted the last message before dinner, but decided not to sell anything till after dinner to see how the market digested the healthcare stuff. Silly me... $.35/oz lower when I got back from dinner. Sigh...

Looks like a bounce back toward the $16.85/16.90 level may now be underway. I'll start selling there and pare my position down to keep some powder dry.

*Disclaimer: If you're wrong, I reserve the right to persuade BMT to reconsider the legal profession and retain him to sue your ass! (Just kidding)

ET

 

Wasn't my original intent Erik. But the euro mess, and the sooner or later to come pound sterling mess are putting heavy upward pressure on the USD. So I'm making an on the fly adjustment to my investment strategy. I'm not doing a 100% offload. I'm taking profit and will probably hedge the remainder with a put. 

Erik T.'s picture
Erik T.
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Re: Nice time to short

Morph,

I don't get it... Why not keep the physical for the long term and hedge the downside with a put or futures short. I can't see the argument for selling on e-bay if you plan to buy it back. Shipping, commissions, fraud risk, etc. Much easier to go short a future or option contract... (?)

ET

 

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Morpheus
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Re: Nice time to short
Erik T. wrote:

Morph,

I don't get it... Why not keep the physical for the long term and hedge the downside with a put or futures short. I can't see the argument for selling on e-bay if you plan to buy it back. Shipping, commissions, fraud risk, etc. Much easier to go short a future or option contract... (?)

ET

 

Did the math though. The lot size is critical to keeping eBay's notoriously absurd commissions down (in cost/ounce). As is the ability to play the auction psychology. Believe it or not but I'll put $400 of silver up at 99 cents starting for 7 days. The bidding wars are amazing. People overpay there like crazy which more than compensates for the fees and shipping. PayPal protects against fraud. 

Like I said, not my original intent. But dumping 30% on an inkling that I'll be able to get it back later at reduced cost. Or better yet, get more. It's a short-term educated risk to acquire more in the short-term for a long-term haul. 

Had I had known I was going to do this up front I would have bought SLV. 

Subprime JD's picture
Subprime JD
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Re: Nice time to short

Looks like my near term bet paid off. Covered at SPX 1055. Sitting on cash. Ive got to make onion rings and beans today lol.

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