EliteTrader.com Forums

SHORT oil @$125.55 and up

Fri, 09 May 2008 10:07:09 EST

5Pillars in the Trading forum:

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I will keep trading Oil SHORT all the way up - going for the next short term pullback. Any pullback to $112.00 will be the key to watch and see if I hold for additional downside play. Had a very good CD divergence signal to get short for this last spike move in crude.

AIG thing not a big deal

Fri, 09 May 2008 10:06:15 EST

stock_trad3r in the Trading forum:

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No one cares about the fake credit crisis or immaginary recession

The AIG story isn't a big deal at all

The double bottom that formed in March still holds and the market will continue to surge in the coming months

very good buying opp

No bad headlines in the front page of Yahoo:

" Hezbollah gunmen seize control of western BeirutClashes
" Obama picks up endorsements from three superdelegatesPolls
" N.C. authorities comb through wreckage after tornado kills one
" U.S. trade deficit drops by larger-than-expected amount
" Erupting Chilean volcano forces emergency evacuations
" Report: Teen marijuana use can lead to mental illness
" Giant sinkhole swallows Texas town - Good Morning Yahoo!

NO economic doom and gloom. Infact, the trade deficit dropped. No one cares about the falling dollar. No one cares about the rising oil or rising gas prices except the elite trader bears. No subprime or mortgage stories. If there was really bad news it would be on the front page.

the dow is 30 points off lows and surging

spooz only down 9

Trade it like a soldier

Fri, 09 May 2008 09:53:35 EST

Palatine in the Trading forum:

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The way to do battle is the same whether it is a battle between one individual and another or a battle between one army and another. You should observe reflectively, with overall awareness of the large picture as well as precise attention to small details.

The large scale is easy to see; the small scale is hard to see. To be specific, it is impossible to reverse the direction of a large group of people all at once, while the small scale is hard to know because in the case of an individual there is just one will involved and changes can be made quickly. This should be given careful consideration.

Interpretation: It is easier to trade according to what is happening in the large picture other than looking at every detail as the direction of tiny price swings is unpredictable. The market moves with great force in one direction and once this direction is identified, go along with it. The influence of a large group is impossible to reverse all at once which means that the direction will persist for a long-lasting period of time. A trader constantly fighting these forces is going to have a tough time. (see attachment)

In large-scale military science, knowing the state of affairs means discerning the flourishing and decline of opponents, discerning the intentions of adversary troops and perceiving their condition, clearly seeing the state of affairs, determining how to deploy your own troops so as to gain certain victory by the principles of military science, and doing battle with knowledge of what lies ahead.

If your own power of insight is strong, the state of affairs of everything will be visible to you. Once you have attained complete independent mastery of martial arts, you will be able to figure out the minds of opponents and thus find many ways to win. This demands work.

Interpretation: Evaluate the condition of bulls and bears. Who is having the control over the market as of this moment and where is an area where things could change? Be aware of potential reversals at S&R levels as these are areas which the opponent uses to strike back and attempts to steal the oars.

Quotes from "The Book of Five Rings" by Miyamoto Musashi.

Contango!!!

Fri, 09 May 2008 09:22:02 EST

scriabinop23 in the Energy Futures forum:

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Crude front month to the following hit contango this morning... bearish sign despite all time highs?

Which Computor UPS to buy?

Fri, 09 May 2008 09:19:19 EST

fearless9 in the Hardware forum:

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I am upgrading my PC again and my thoughts turn to the UPS

Should I buy continuous or standby < 5ms
Should I buy one unit to cover the whole setup or have one for the PC and one for the screens (2) and router etc.

What about capacity for say 30 minutes.
All thoughts gratefully received.

regards
f9

US Senators Unveil Plan Curb Oil Futures Speculation

Fri, 09 May 2008 08:29:02 EST

Daal in the Wall St. News forum:

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This could get really ugly in five years

"Stop Market Price Speculation The Administrations failure to regulate the oil futures market has lead to exorbitant speculation. The Consumer-First Energy Act establishes two key limitations on speculation. First, the bill prevents traders of U.S. crude oil from routing transactions through off-shore markets to evade speculative limits and sets forth reporting requirements. The bill also requires the Commodities Futures Trading Commission to set a substantial increase in the margin requirement for all oil futures trades, contracts or transactions. Recently, one oil company executive indicated crude oil prices could be inflated due to speculation in the futures market."

http://democrats.senate.gov/newsroom/record.cfm?id=297375

Only thing worthy of long term investing

Fri, 09 May 2008 08:25:57 EST

detective in the Trading forum:

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COMMODITIES

Forget stocks, bonds, real estate. Those are all losers at these prices. Commodities were so undervalued for so long that even after a big move, they are still undervalued. The whole commodities bubble theme is why Wall Street analysis is useless. They will pump stocks forever and deride anything that diverts funds away from stocks like commodities.

Crude oil at $125 sounds like its too high until you ask someone what they need more, gas for their car or an ipod or Blackberry. Priorities are priorities. Ipods and Blackberries are not essential items. Oil is.

Anyway, we've got a long long way to go for this commodities bull run, this is no bubble. If China and India weren't pumping out cars and industrializing like mad, if people stopped driving and rode the buses or there was a lot of public transportation in the US, I would call it a bubble. But that's not the case. The Chinese can't get enough of oil, corn, beans, metals, etc. They don't want stocks. They want commodities. The marginal buyer is coming from China, not from the US. They want their oil. And they will pay much higher prices than $125 to get it.

What a shame

Fri, 09 May 2008 08:09:04 EST

nitro in the Wall St. News forum:

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"U.N. Suspends Aid to Myanmar After Government Seizes Shipments"

http://online.wsj.com/article/SB121033197923980529.html?mod=djemalertNEWS

The amount of cruelty that a few human beings can inflict on millions is, heart breaking.

nitro :(

SP500-index options

Fri, 09 May 2008 08:07:29 EST

FT79 in the Options forum:

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Hi All,

I have been told if you trade 100 lots or more using combinations (verticals, diagonals, etc) you get a spread of around .10 when trading SP500-index options. Currently Im not that big and trade the DJ EuroStoxx50-index (the SP500 of Europe) with about 30 till 50 lots per leg. In some occasions I scale out with increments of 10 lots per leg. Does any of you have experience trading SP500-index options with comparable size and what kind of execution can I expect?

Thanks,
FT79

Lampert, Wood Reveal Failings of `Concentrated' Hedge-Fund Bets

Fri, 09 May 2008 07:45:35 EST

ASusilovic in the Wall St. News forum:

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When Jon Wood opened his Monaco-based hedge fund, the former UBS AG trader told investors he'd beat the market by buying stakes in no more than 40 companies -- the same way he made $2.4 billion in six years for his old employer.

Instead, holdings such as failed U.K. bank Northern Rock Plc and Calabasas, California-based Countrywide Financial Corp., the largest U.S. mortgage lender, imploded. From its start in late 2006 with $3 billion, Wood's SRM Global Fund lost about 70 percent through March 31, said two investors, who asked not to be identified because the firm doesn't publicly disclose returns.

``These concentrated funds scare the hell out of me,'' said Brad Alford, head of Alpha Capital Management LLC, an investment consultant based in Atlanta. ``Either the manager knocks it out of the park or he strikes out.''

Other managers who follow the approach of betting big on out- of-favor stocks are also struggling as market volatility hits historic highs. Edward Lampert's ESL Investments Inc. dropped 27 percent last year and an additional 1.3 percent in the first three months of 2008, investors said. The 45-year-old Lampert, who oversees $17.5 billion, has been hurt primarily by a $6.1 billion stake in retailer Sears Holdings Corp. of Hoffman Estates, Illinois, that has fallen 48 percent in the past year.

Investors expect that Wood and Lampert, who both declined to comment, will survive their losses because clients can't pull their money for three to five years. The lock-ups leave investors no choice but to wait for a turnaround. Other funds that concentrate their wagers haven't been so lucky.

http://www.bloomberg.com/apps/news?pid=20601087&sid=azobDABpF9ZU&refer=home

Cars and sub prime mortgages

Fri, 09 May 2008 06:40:43 EST

Hook N. Sinker in the Economics forum:

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I wonder how to learn the quality of car loans. I suspect if there are lots of sub prime mortgages then there are also lots of sub prime car loans.

Futures trading in Asia?

Fri, 09 May 2008 06:03:11 EST

linusong in the Prop Firms forum:

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Hello, I am actually thinking of going to Asia and was wondering if anyone knew anything about the prop trading scene and which doors/website to check out?

I am presently a strategy analyst with a hedge fund and thinking weighing the options of going at it alone.

thanks for the help in advance.

Confusion about Tick Data used in ATS

Fri, 09 May 2008 05:17:44 EST

aonelite in the Automated Trading forum:

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Hi, ATS.
I have been confused about the tick data which is used to feed the program.
By definition, What does "Tick by Tick" really mean? Some refer to only completed Trade (Trade time, size and price) some to Bid and Ask (both price ans size).
However, In my trading strategy, I need tick data like this provided at the same time for example

Time BidPrice BidSize AskPrice AskSize LastTrade LastSize
09:30:00:01 21.01 200 21.05 400 21.02 100
09:30:00:07 21.02 300 21.05 200 21.05 200

Is there any data provider which supply the data like this? Both real time and historical.
Thanks any suggestion.

Value and Activist hedge funds hurt by making concentrated bets

Fri, 09 May 2008 04:06:58 EST

makloda in the Wall St. News forum:

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http://www.bloomberg.com/apps/news?pid=20601087&sid=azobDABpF9ZU&refer=home

May 9 (Bloomberg) -- When Jon Wood opened his Monaco-based hedge fund, the former UBS AG trader told investors he'd beat the market by buying stakes in no more than 40 companies -- the same way he made $2.4 billion in six years for his old employer.

Endeavour Liquidation

Paul Matthews, head of Endeavour Capital LLP in London, told investors last month he would liquidate what had been a $2.9 billion hedge fund after losing money on Japanese government debt. The fund lost about a third of its value in March when the spread on yields between 7-year and 20-year Japanese government bonds ballooned to their widest in nine years.

``We thought we were dispersed enough and we weren't,'' said Matthews, 47, who plans a new fund with better risk controls. ``It's a very expensive lesson to learn.''

Thomas Hudson, founder of Pirate Capital LLC, learned a similar lesson. Assets at his Norwalk, Connecticut-based firm reached a peak of almost $2 billion in August 2006, when he owned stakes in about 20 companies. Half his money was in our stocks, including Brink's Co., the Richmond, Virginia-based armored-truck provider, and mining company James River Coal Co., also of Richmond.

Investors Exit

Investors began fleeing after five of Pirate's 10 employees quit in 2006. Hudson's firm held board seats in eight companies at the time, so his ability to sell those shares was limited by securities law. Instead, he liquidated other positions to raise cash, making his biggest holdings an even larger percentage of his portfolio.

Now his only holdings are Brink's; Philadelphia-based Pep Boys - Manny, Moe & Jack, which runs automotive-parts and repair shops; and military contractor Allied Defense Group Inc. of Vienna, Virginia, which had a combined market value of $154 million as of March 31, according to a May 5 filing with the U.S. Securities and Exchange Commission. In the past several months, clients who exited his funds received stock, rather than cash, because Hudson, 42, is still a director at Brink's and Pep Boys.

Even with such well-publicized losses, investors seem willing to continue to back concentrated funds.

Whitney Tilson who runs concentrated mutual funds and hedge funds at New York-based T2 Partners LLC, said that although his T2 Accredited Fund has lost money this year, there have been only ``minor'' net redemptions because of frequent communication with his investors.

Barakett's Atticus

Lampert's ESL raised $4 billion last summer even as the Greenwich, Connecticut-based manager was losing money. Lampert has produced an average annual return of almost 30 percent since 1988.

``He's had a spectacular long-term track record by focusing his analysis and mental capability and knowing a few situations extremely well,'' said Tilson, 41.

Timothy Barakett's Atticus Capital LP, which oversees $19 billion, lost 14.8 percent in its global fund and 11.5 percent in its European fund this year through April, according to investors. The New York-based firm's returns have been dragged down by a 12 percent stake in Deutsche Boerse AG, currently valued at 2.4 billion euros ($3.7 billion). The stock of Europe's biggest exchange by market value has tumbled 25 percent this year.

Side-Pocket

While investors say clients are not asking for their money back, Barakett, 42, took the precautionary step of placing shares of Frankfurt-based Deutsche Boerse into a special account known as a side-pocket. That means that even if investors do redeem, their stake in Deutsche Boerse remains at Atticus.

Barakett's European fund has climbed an average of 30 percent a year since opening in 2001 and has never had a losing year. The global fund has returned 20 percent a year, investors said. Andy Merrill, a spokesman for the fund, declined to comment.

Atticus's lock-ups generally range from one to five years, depending on the share class, although the longest-standing clients can redeem their money quarterly. The side-pocket sends a message to Deutsche Boerse board members that the hedge fund will remain a long-term investor.

For Wood's investors, the news isn't getting any better.

In the first quarter, the fund sold off holdings in at least seven companies, according to regulatory filings.

Immediately after Wood culled those positions, the shares jumped. At the end of the year, SRM owned 4.9 million shares of Bermuda-based Nabors Industries Ltd., the world's largest onshore oil and natural-gas driller, then worth about $135 million. Since the end of March, those shares have jumped 17 percent.

Random Wisdom from time to time

Fri, 09 May 2008 02:28:15 EST

alex.samant in the Trading forum:

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An instrument, while it can actually be too expensive to buy or too cheap to sell, it can NEVER be cheap enough to buy or expensive enough to sell.

Yours dearly