Locking in 60% gains on NVAX. Ace
(Editor’s note: Ace bought this stock a few months earlier when few traders were interested in it…and held it to near the top.)
Locking in 60% gains on NVAX. Ace
Dear sir, I’m neither Bull nor Bear, my friend…I only try to bet with the TREND. That was my point in my last blog.
I have noticed you have been very bearish of late…I know what it is to be the lone trader calling the top…I was in that very position in August 2007…and I suffered thru two months and a Dow that climbed another 1,000 pts before I was proved right.
Yeah, I called the top alright..but had to suffer a while to prove my point…(of course, I was 1000 pts early on that call–but later, I gained it all back and was 7,000 points to the correct side before the Dow bottomed in March of this year.)
This gets back into timing…yep, I see plenty of signs this market could reverse, and reverse hard…but until the events fall into place to make that happen, I think one is foolish to bet against the TREND, which is Up.
What’s the old saying? Don’t Fight the Fed! We have interest rates near zero…we have quantitative easing, which makes the effective rates below zero, really. We have govt stimulus now kicking in, thanks to Congress and the White House. The FED has the spigots wide open, as I say…we should not expect to fight that kind of power and win. Either we step aside to the sidelines and watch, or we go with the TREND…that’s how money is made in the stock markets.
Of course, I am partly hedged, as are many traders, which makes it easier to bet long…and the hedges are partly the fuel, I think, for keeping the markets propped as hedgers close down short positions everytime they are getting squeezed.
(Editor’s Note: This blog was in response to a trader who believed the market was extremely overbought…Ace tried to save them from financial suicide…the market is up another 10% from the time Ace posted this and reached another new 2009 high today. November 16, 2009.)
NGAS up to $2.49 today…up 60% from that mad dip in mid-August where they shook out the little fellas! Lol!
“Stick with Ace!”
Sir, you are correct about that push! Volume was higher than yesterday’s…just as Tuesday’s up day was on stronger volume too.
Folks, this is the hallmark of institutional trading! Anyone who thinks we have reached a top is betting against the odds! Da Boyz are gonna burn the shorts for at least a few more sessions….this current impulse should keep going for at least another 3 to 8 sesssions with perhaps only one or two brief pullback days possible. Ace
Well, if there’s a top being put in today, I wouldn’t know it by the trading action! Yesterday’s volume was higher than the previous trading day and exceeded the 13 day moving average. That’s usually a bullish sign, and it should be duly noted that most all the big money managers should be at their trading desks now from their last summer flings. This BIG MONEY is signaling to us that they are not about to sell stocks–that’s the way I’m reading it. It looks like 10,344 (Fib 50) is the next target!
….also, I came across an interesting technical article about “impulse trading.” (Source: SFO Magazine) The theory behind impulse trading is that in bull markets, the uptrends usually last from 8 to 12 sessions. The tech analyst behind the story has done extensive studies of charts to find this pattern. They do not clearly define in the article what marks the end of an uptrend, but I assume that it would be marked by two down days in a row. I have attempted to show some recent impulse trends on the Dow chart…notice that we appear to be in an impulse trend right now working on day 4–if the trend continues, then market gains could continue for another 4 to 8 sessions before she turns down.
For those of you who wonder why today’s markets seem to have no rhyme or reason, such as oil trading near all-time highs though dozens of super-tankers float full of oil in the oceans….or have you ever wondered why your bids fail to execute though you put it in barely under the ask or why your asks fail to execute though you put it in at the last trade? It’s possible you’re getting duped by systems that do us all a favor by providing liquidity! Yeah, right!
High Speed Frequency Trading
…And in one recruiting Web video (no longer online), an Optiver trader sitting before four giant trading screens is seen ogling two skimpily clad women as they sit on his thighs.
To enjoy these professional fruits, applicants need to subject themselves to three math-based tests to test facility with numbers and the ability to think clearly under pressure. For one of the tests, 80 questions must be answered in under 8 minutes. Sample questions include 0.034 times 0.2, or, if you have a cube made of 10 by 10 smaller cubes, how many are facing the outside?
Few of the applicants even get an interview: 80 to 90 percent of people who take the test fail it. People who have worked at Optiver say the average age is young — under 30 — as the company has a policy of not hiring traders from rival institutions, preferring recent university graduates who can more easily embrace the firm’s culture.
According to the Commodity Futures Trading Commission, which would not comment on the case, Optiver made about $1 million on its oil trading gambit.
While $1 million may not seem like a lot, recorded conversations reveal the extent to which the firm’s trading practices broadly have enriched its employees.
In one exchange, Christopher Dowson, head of trading in Optiver’s Chicago office and the mastermind behind the oil strategy, bragged to another employee about how he had bought a new speed boat with his share of the returns. “With these profits, might have to get a bigger one,” he said.
And in another, Mr. Dowson acknowledges that Optiver was so aggressive in conducting its proprietary trades in some smaller stocks that their activities “were as big as the volume traded on the day.”
It is precisely this — high-powered computers and the swagger of those who operate them — that is causing worries over high-frequency trading’s increasing sway. “The markets used to be about capital formation,” said Mr. Quast, the consultant. “Now 80 percent of trading is driven by some form of statistical arbitrage. We are buying into a statistical house of cards that could unravel very quickly.”