How much higher can it go ? (SPY + FAS)

Discussion in 'Trading' started by Whistlingleaf, Apr 9, 2010.

  1. I read post after post and blog after blog of people saying they think the market is overbought, topped out, etc and yet day after day the market climbs higher.

    Seems everytime we have bad news the market opens up down and ends up 1% higher at the EOD.

    FAS has gone up ~36$ (from 70 to 106) in like ~36 trading days ... at this rate it will be 406$ (Figure 300 trading days)

    Most of the big bank stocks report next week so that could bring things down but I just dont know anymore ...

    I've been writing bear call spreads for awhile (with some iron condor action but my money has been made on the puts) and was doing fine but right now I'm getting whacked.
  2. It's a rigged market (more so than any time in the past). You have to play it as such. If you knew the roulette table was going to come up on red the next 50 times, statistics be damned, why on earth would you bet on black?
  3. Ooops I forgot to add "in another year" and it was too late to edit. this rate it will be 406$ "in another year" (Figure 300 trading days)
  4. 1/15 JPM reported large credit/mortgage write downs, brought financials lower. they report next wednesday 4/14.
    later in january we also had obama bank tax/prop trading limitation rhetoric and china tightening.

    If nothing fundamental comes out, it will blow through a bear call. If you can hedge with the underlying actively, might be 'easier' to switch to bull puts, just imo.
  5. stop trying to short the top

    short when we hit 52-week lows. If you did that in 2007 you wouldnt have missed even the big plunge.

    Shorting at 52-week highs is madness!
  6. TGregg


    There's no way to tell when the bubble will burst and the music will stop. Might be today, might be two years from today. But one thing is certain, the music will stop and there will be a scamble for the chairs.
  7. One option is to remove all the chairs completely, so that the participants know that they have no choice but to dance.

  8. Rigged to the upside, Indeed it is, glad to see more and more catching on to the re election efforts by the party in power.

    This is almost risk free, we may see a correction in May-June. That will be a great entry for the Nov push.
  9. It is a visual fallacy to think that it has to keep going up at the same angle or drop dramatically. Other options are a change in rate up, a flat market, etc. If you trade options, every path matters.
  10. I realize the FAS won't be 406$ next year ... I was just pointing out that it has gone up ~1$/day for over a month and it's just ridiculous IMO that it keeps going up everyday. (Sarcasm doesn't translate well on the internet ... my bad)

    I think it's only gone down 1$ once in all that time.
    #10     Apr 9, 2010