Quiet in trading room

wally_ · Jan 13, 2003

Quote from Jayford:

Hey Triple.

I've been supporting myself on futures for 15 years, and have found the following advantages to doing so:

1) cost- I pay 4.80 RT and could even go lower if I would switch firms. This is like .50 cents per share.

2) electronic market - no specialists or market makers fucking you. Trades are instantaneous.

Cheers,
Jay
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These things have been around for perhaps 5 years not 15. If you need these advantages, I wonder how you have been able to support yourself trading futures for 15 years...

Lobster · Jan 13, 2003

Quote from goldenarm:

Maybe you're trading the wrong stocks. Try FRX and GS on the NYSE and stay away from Nascrap. Good, solid moves!
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Thanks for the tip! Adding GS to my TWS page 7 ...NOW!

Anything else I should know about?

inandlong · Jan 13, 2003

Quote from lescor:

TripleD, I think you got it right in your final paragraph. Here's my take on things:

There is too much hope in the system, too many people holding on to big losses, still believing in buy and hold, still listening to their trusted advisers that the market always makes you a winner if you are patient. These people need to be washed out of the system and a new base of investors without the bad memories and the pre-bubble expectations has to replace them.

P/E's way overshot to the high side at the top, and they historically are at undervalued levels coming out of a bear market. As so many people have mentioned, p/e's are still at relatively high levels.

If you look at a weekly chart of the SP500 going back 6-8 years, a very clear head and shoulders pattern is in place. The rally off the July/October lows (on declining volume) has only brought us back to the area of the neckline. We're also still under the 200 day ma and the downtrend line from the bubble top still hangs overhead around 1000.

At some point, I think this rally fizzles out and people realize that once again, a new bull market is nowhere in sight. When the downtrend resumes and the summer lows are taken out, then you will see panic selling hit again. Probably followed by another v-bottom which will bring out the calls that the worst is over and that the greatest capital markets in the world can go nowhere but up. False hope and confidence comes back into the system, we get a bear rally, followed by new lows and so on and so on.

What will end this vicious bear market and spawn a real, sustainable bull? When no one cares anymore. When cnbc is no longer on the air, when equities are treated with disdain, when people don't want to talk about them. When people look at you like a kook for owning stock. When 5, 10, 15 years of a slow, sideways, choppy, low volume market has finally pummeled every last optimist out of the system.

I am a fan of Todd Harrison at minyanville.com and he's pretty much espousing the same views. One of my favorite sayings from him: "the opposite of love isn't hate, it's apathy". To the extent that the public loved the market at the top, they have to shun it at the bottom.

If your career depends on stock market volatility and volume, I think there will be periods of trading nirvana for you ahead. But you are going to have to capitalize on them big time, because the game is going to be 10 times harded down the road.
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Rarely do I quote an entire post. This one is deserving. Of course I think so because I happen to agree with everything said here.

Not as if me quoting an entire post is anything meaningful to others... but I just thought I would mention it.

TheCaracal · Jan 13, 2003

Lescor, excellent post. Very well put. These are my thoughts exactly, and I have written to that effect several times on this sight. No hope whatsoever has to be in place: period. No 265 point reactions to a good ISM #; No AM gaps in the futures because Cisco's gonna make an extra 100MM in revs, No this "may" be the start of a new bull, No, is this the bottom nonsense?; No "productivity gains will save the day" (they were higher in the 1960s than 1990s, No YE index price targets etc, etc.

The herd has to be thinned..there are 8000 mutual funds, and 6000 hedge funds. I was looking (just for fun!) at a 90 yr chart of the DOW the other day, based on that we have two possible outcomes for 2003: 1. A complete and total give up in equities, which could wash out all traces of the bubble, ie prices go back to roughly 1994 levels (SP 480ish), followed by a long recovery and many up years (muted though) whereas SP 1550 may take 20-30 years to reach again. (Took roughly 25 years to exceed 1929 highs, and those 4 down years (29-32) erased 90% of the previous bull gains from the 20s; we are at 50%), or 2. like you pointed out this could be the start of long, tortuous period of going nowhere for years, like 1965-82, until all the pieces fall into place again for another mega bull cycle like 1982-2000.

It's going to be interesting to see which happens; I lean towards the latter, given all the govermental interest in keeping the stock market afloat, but woud prefer the former.

Hell, look at the intraday charts after 11:00AM, there's no interest now!

Have a good night

Carlos11 · Jan 13, 2003

Triple D, I believe your initial post is a very interesting and accurate take on the current day market. Well Done.

Lescor, that was one of the most insightful and intelligent responses i have seen on this board yet. Good job.

Carlos

inandlong · Jan 14, 2003

http://cbs.marketwatch.com/news/story.asp?guid={B8551E53-8C88-4A0A-92E1-004DD09D6A0C}&siteid=myyahoo

Just another set of opinions. But always an interesting read.

Please refrain from the "opinions are like...." jokes. Or... at least come up with a new one.

daytr8r · Jan 14, 2003

Quote from lescor:

TripleD, I think you got it right in your final paragraph. Here's my take on things:

There is too much hope in the system, too many people holding on to big losses, still believing in buy and hold, still listening to their trusted advisers that the market always makes you a winner if you are patient. These people need to be washed out of the system and a new base of investors without the bad memories and the pre-bubble expectations has to replace them.

P/E's way overshot to the high side at the top, and they historically are at undervalued levels coming out of a bear market. As so many people have mentioned, p/e's are still at relatively high levels.

If you look at a weekly chart of the SP500 going back 6-8 years, a very clear head and shoulders pattern is in place. The rally off the July/October lows (on declining volume) has only brought us back to the area of the neckline. We're also still under the 200 day ma and the downtrend line from the bubble top still hangs overhead around 1000.

At some point, I think this rally fizzles out and people realize that once again, a new bull market is nowhere in sight. When the downtrend resumes and the summer lows are taken out, then you will see panic selling hit again. Probably followed by another v-bottom which will bring out the calls that the worst is over and that the greatest capital markets in the world can go nowhere but up. False hope and confidence comes back into the system, we get a bear rally, followed by new lows and so on and so on.

What will end this vicious bear market and spawn a real, sustainable bull? When no one cares anymore. When cnbc is no longer on the air, when equities are treated with disdain, when people don't want to talk about them. When people look at you like a kook for owning stock. When 5, 10, 15 years of a slow, sideways, choppy, low volume market has finally pummeled every last optimist out of the system.

I am a fan of Todd Harrison at minyanville.com and he's pretty much espousing the same views. One of my favorite sayings from him: "the opposite of love isn't hate, it's apathy". To the extent that the public loved the market at the top, they have to shun it at the bottom.

If your career depends on stock market volatility and volume, I think there will be periods of trading nirvana for you ahead. But you are going to have to capitalize on them big time, because the game is going to be 10 times harded down the road.
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this is crap! you don't think the buy and hold investors have been washed out? where have you been? why do you think the housing market is experiencing an extrordinary boom? you think people want to talk about stocks? there is an incredible amount of apathy about the stock market. what you are espousing is the exact doom and gloom attitude that currently exists. do you think that you are so smart that you are one or two steps ahead of the general investing public. why don't you ask your friends about the last time they invested in stock. it's non-existent. what you are claiming to be the future is the present. i see opportunity around the corner, not the crumbling of our financial markets.

i have one more question for you... how long have you been trading? my guess is one, maybe two years.

Frederick · Jan 14, 2003

Such a extreme opinions are everywhere of late. As far people owning or not owning stocks just look at the mutual funds cash positions. I think it is more a case of people getting hope on these rallies and averaging to the longer term losing positions. Furthermore I would suggest that stocks have become commoditised if you will. As such the extremes of up and down 200 Dow points seem to fall into that.

Also the extremely low put calls and VIX levels point to a very long or perhaps just uninterested market - time will only tell!

TheCaracal · Jan 14, 2003

Quote from daytr8r:

this is crap! you don't think the buy and hold investors have been washed out? where have you been? why do you think the housing market is experiencing an extrordinary boom? you think people want to talk about stocks? there is an incredible amount of apathy about the stock market. what you are espousing is the exact doom and gloom attitude that currently exists. do you think that you are so smart that you are one or two steps ahead of the general investing public. why don't you ask your friends about the last time they invested in stock. it's non-existent. what you are claiming to be the future is the present. i see opportunity around the corner, not the crumbling of our financial markets.

i have one more question for you... how long have you been trading? my guess is one, maybe two years.
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Crap? Check a DOW chart from 1929-32, not pretty. Then check the same chart from 1965-82, not good either, then check the chart from 1982-2000, especially 1995-2000, and tell me that people have given up hope. Hope is the only reason we are not at SP 600 or lower by now. I agree about the public not wanting to talk stocks anymore, but the apathy has yet to set in amongst the pros...but it might be starting soon.

And why do you see opportunity around the corner? What are the catalysts for higher stock prices? I can give you 10 off the top of my head for staying here or going lower.

I'd love to hear your case for opportunities around the corner.

Minime · Jan 14, 2003

Quote from daytr8r:

this is crap! you don't think the buy and hold investors have been washed out? where have you been? why do you think the housing market is experiencing an extrordinary boom?...
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My dad is still holding his retirement 100% long in the market. He's lost 75% so far. He still hopes it will pay him back. Many people can't even touch their retirements because it's administered by 3rd parties.