OFFICIAL STOCK MARKET & ECONOMY THREAD VOL. SCHOOL'S OUT

[electroki5hi]

Originally Posted by chiang2k6

sell BAC now and rebuy it a little later, it is going to continue dropping for the next month or so IMO. 

Does anyone else agree? cause I got some BAC stock myself right now.
Also, I'm probably buying some BNNY(Annie's) tomorrow. They just had their IPO, and I believe in the organic/healthier eating trend. 

 

[finnns2003]

Originally Posted by JohnnyRedStorm

What are your sentiments on Nike? Higher or lower in the near future? Was thinking about maybe picking up an out of the money call (either 115 or 120) for April 21st, although I've seen a couple of yous put a $95 price target on it.

NKE is getting stronger for sure. Raising prices on products without rising material + labor costs, and still selling out everything. Plus the NFL deal. Long term buy imo.

 

[frankmatthews]

^ I know you are an apple fan and I heard some interesting comments on cnbc today.

Apparently an analyst figured that every person in the US must spend $225 a year on apple products for them to sustain their current growth.

There will be a full segment on this analysts research on Tuesday if you care to tune in.

 

[freakydestroyer]

I was watching NKE a few weeks earlier, then it pulled back on earnings. Now NKE looks like it might have a little bounce. But I would rather be in this more explosive stock, I don't like to repeat myself. If you've been following this thread, you should know which one I'm talking about. 

 

[nocomment6]

Originally Posted by ElectroKi5hi

Originally Posted by chiang2k6

sell BAC now and rebuy it a little later, it is going to continue dropping for the next month or so IMO. 

Does anyone else agree? cause I got some BAC stock myself right now.
Also, I'm probably buying some BNNY(Annie's) tomorrow. They just had their IPO, and I believe in the organic/healthier eating trend. 

I think we shall find out today or early next week. European markets are up today, which is good news, hopefully today will be a green day in the US as well. But yeah BAC is a bit overbought and has gone up over 80 % since the beginning of the year.

What do you guys think of Good Year? It doesn't look good just yet, but the downtrend has to come to an end, company isn't bad although p/E isn't too high.

 

[freakydestroyer]

Originally Posted by nocomment6

Originally Posted by ElectroKi5hi

Originally Posted by chiang2k6

sell BAC now and rebuy it a little later, it is going to continue dropping for the next month or so IMO. 

Does anyone else agree? cause I got some BAC stock myself right now.
Also, I'm probably buying some BNNY(Annie's) tomorrow. They just had their IPO, and I believe in the organic/healthier eating trend. 

I think we shall find out today or early next week. European markets are up today, which is good news, hopefully today will be a green day in the US as well. But yeah BAC is a bit overbought and has gone up over 80 % since the beginning of the year.

What do you guys think of Good Year? It doesn't look good just yet, but the downtrend has to come to an end, company isn't bad although p/E isn't too high.

It needs to jump back up to its 50 day moving average around $13 for me to even consider it.

 

[e3lal]

for any short term/ high risk, you may want to watch SBSA
-Have been on my radar since they made a huge move a couple weeks back
-Market looks to like today's earnings

 

[johnnyredstorm]

LNKD upgraded, US Steel as well.

 

[jc08]

A chance that RIMM may be poised to breakout today after yesterdays terrible (but honest) earnings. Made a lot of structural changes at the top and the new CEO Thorsten seems like he is refocusing on business side of things and willing to partner with other firms in areas where RIMM isn't superior (I think the street is thinking takeover). Mentioned that RIMM can't be all things to all people and have to focus on core competencies. Just broke the 20DMA and implied volatility is dropping like a rock.

Anyways, it's up around 2-3% today on double the average volume less than 2 hours into trading day. Interesting to see whether institutional ownership is coming in to buy while shorts are covering, could be a short squeeze similar to SHLD earlier in year in the making. Who knows.

 

[freakydestroyer]

The party isn't over yet 

 

[freakydestroyer]

SAVE might be my next big pick.
UBNT looks interesting.

 

[freakydestroyer]

Originally Posted by JC08

A chance that RIMM may be poised to breakout today after yesterdays terrible (but honest) earnings. Made a lot of structural changes at the top and the new CEO Thorsten seems like he is refocusing on business side of things and willing to partner with other firms in areas where RIMM isn't superior (I think the street is thinking takeover). Mentioned that RIMM can't be all things to all people and have to focus on core competencies. Just broke the 20DMA and implied volatility is dropping like a rock.

Anyways, it's up around 2-3% today on double the average volume less than 2 hours into trading day. Interesting to see whether institutional ownership is coming in to buy while shorts are covering, could be a short squeeze similar to SHLD earlier in year in the making. Who knows.

I hope you went through with RIMM. I know a few guys on here including myself urged you not to.

 

[nocomment6]

RIMM needs a very fresh approach they have dropped back to like 4-5 percent market share...I hope they manage, because I do like Blackberry! And it's Canadian!

 

[jc08]

Originally Posted by freakydestroyer

Originally Posted by JC08

A chance that RIMM may be poised to breakout today after yesterdays terrible (but honest) earnings. Made a lot of structural changes at the top and the new CEO Thorsten seems like he is refocusing on business side of things and willing to partner with other firms in areas where RIMM isn't superior (I think the street is thinking takeover). Mentioned that RIMM can't be all things to all people and have to focus on core competencies. Just broke the 20DMA and implied volatility is dropping like a rock.

Anyways, it's up around 2-3% today on double the average volume less than 2 hours into trading day. Interesting to see whether institutional ownership is coming in to buy while shorts are covering, could be a short squeeze similar to SHLD earlier in year in the making. Who knows.

I hope you went through with RIMM. I know a few guys on here including myself urged you not to.

I bought some 15 jan 2013 calls a few weeks ago mostly based on short positioning and overall pessimism surrounding rimm. On almost almost all valuation metrics rimm was undeervalued imo and the likelihood of them going belly up is slim because they have a pretty strong balance sheet. The question is where is the revenue coming from going forward and I think people are right to question this because of their track record. However the new CEO seems to be willing to shake things up so we'll see I guess! Anyways I trade currency 90% of the time so this was one of my few forays into equities and got pretty lucky!

 

[freakydestroyer]

Originally Posted by JC08

Originally Posted by freakydestroyer

Originally Posted by JC08

A chance that RIMM may be poised to breakout today after yesterdays terrible (but honest) earnings. Made a lot of structural changes at the top and the new CEO Thorsten seems like he is refocusing on business side of things and willing to partner with other firms in areas where RIMM isn't superior (I think the street is thinking takeover). Mentioned that RIMM can't be all things to all people and have to focus on core competencies. Just broke the 20DMA and implied volatility is dropping like a rock.

Anyways, it's up around 2-3% today on double the average volume less than 2 hours into trading day. Interesting to see whether institutional ownership is coming in to buy while shorts are covering, could be a short squeeze similar to SHLD earlier in year in the making. Who knows.

I hope you went through with RIMM. I know a few guys on here including myself urged you not to.

I bought some 15 jan 2013 calls a few weeks ago mostly based on short positioning and overall pessimism surrounding rimm. On almost almost all valuation metrics rimm was undeervalued imo and the likelihood of them going belly up is slim because they have a pretty strong balance sheet. The question is where is the revenue coming from going forward and I think people are right to question this because of their track record. However the new CEO seems to be willing to shake things up so we'll see I guess! Anyways I trade currency 90% of the time so this was one of my few forays into equities and got pretty lucky!

Good work. How are you doing with currency trading?

 

[nocomment6]

Originally Posted by JC08

Originally Posted by freakydestroyer

Originally Posted by JC08

A chance that RIMM may be poised to breakout today after yesterdays terrible (but honest) earnings. Made a lot of structural changes at the top and the new CEO Thorsten seems like he is refocusing on business side of things and willing to partner with other firms in areas where RIMM isn't superior (I think the street is thinking takeover). Mentioned that RIMM can't be all things to all people and have to focus on core competencies. Just broke the 20DMA and implied volatility is dropping like a rock.

Anyways, it's up around 2-3% today on double the average volume less than 2 hours into trading day. Interesting to see whether institutional ownership is coming in to buy while shorts are covering, could be a short squeeze similar to SHLD earlier in year in the making. Who knows.

I hope you went through with RIMM. I know a few guys on here including myself urged you not to.

I bought some 15 jan 2013 calls a few weeks ago mostly based on short positioning and overall pessimism surrounding rimm. On almost almost all valuation metrics rimm was undeervalued imo and the likelihood of them going belly up is slim because they have a pretty strong balance sheet. The question is where is the revenue coming from going forward and I think people are right to question this because of their track record. However the new CEO seems to be willing to shake things up so we'll see I guess! Anyways I trade currency 90% of the time so this was one of my few forays into equities and got pretty lucky!

Congrats on RIMM.
Whats your take on the euro/dollar exchange? 

 

[freakydestroyer]

GRPN 

Their business is too easy to duplicate and then there's Google Offers.

 

[jc08]

Originally Posted by freakydestroyer

Originally Posted by JC08

Originally Posted by freakydestroyer

I hope you went through with RIMM. I know a few guys on here including myself urged you not to.

I bought some 15 jan 2013 calls a few weeks ago mostly based on short positioning and overall pessimism surrounding rimm. On almost almost all valuation metrics rimm was undeervalued imo and the likelihood of them going belly up is slim because they have a pretty strong balance sheet. The question is where is the revenue coming from going forward and I think people are right to question this because of their track record. However the new CEO seems to be willing to shake things up so we'll see I guess! Anyways I trade currency 90% of the time so this was one of my few forays into equities and got pretty lucky!

Good work. How are you doing with currency trading?

I'm doing alright, I feel I have a better grasp of it than equities because I do it for a career (at the moment but it's flow trading not speculative trading) and on my own. It's completely different trading with your money so I'm not where I want to be return wise (5% YTD but with a effort) but hopefully I can get there! 
It's a different dynamic from stocks and you have to understand the macroeconomic factors of a country first. Think of one country as equivalent to one company in the stock market, except that there are only 10 - 30 actively traded currency pairs. This is nice because instead of stretching yourself and trying to understand thousands and thousands of companies one can just focus on specific countries/currencies (EUR/USD, GBP/USD, AUD/USD, USD/JPY, USD/CAD, USD/CHF, etc.) and really understand there fundamentals and what drives each one (interest rate diferentials, business flows, commodities, monetary policy, fiscal policy, income growth, GDP, what option hedgers are trying to do, etc)

There are still a lot of moving parts and as a trader it is your job to identify the  main 3 - 5 factors that are driving each currency each day/shift and trade off that essentially. One thing that gets some people is that everything is relative to one another. The four most traded currencies are the USD, Euro, Japanese Yen and British Pound and every single one of those have terrible fundamentals in one way or another. If they were companies nobody would touch them! But everyday one currency has to appreciate against another. Along with fundamental analysis, technical analysis is very very important. I would say the shorter the timeframe the more weight you give to technicals. Be careful around important economic data release times, fortunes can be made and lost within minutes. Also there is no such thing as stock volume in FX, that's why having access to order books(info from big banks) is so important because market action tends to cluster around areas where there are lots of stoploss and take profit orders. This makes it a little tricky.

Even though I do it as a living doesn't mean I can trade better than someone who does it on their own. I don't care if you graduated from Harvard, if you don't have the trading instinct developed through hours and hours of practice and are willing to learn from others you're going to blow up. My philosophy is that money management (cutting losses short and have the guts to let your winners run) is the most important thing. Second most important thing is to have the mental makeup for it, you have to be able to take losses gracefully, when people revenge trade that's where I think the worst situations develop. Finally guessing the trend direction would be the third most important. Anyways apologies if you didn't want to hear the long rant haha

 

[freakydestroyer]

Originally Posted by JC08

Originally Posted by freakydestroyer

Originally Posted by JC08



I bought some 15 jan 2013 calls a few weeks ago mostly based on short positioning and overall pessimism surrounding rimm. On almost almost all valuation metrics rimm was undeervalued imo and the likelihood of them going belly up is slim because they have a pretty strong balance sheet. The question is where is the revenue coming from going forward and I think people are right to question this because of their track record. However the new CEO seems to be willing to shake things up so we'll see I guess! Anyways I trade currency 90% of the time so this was one of my few forays into equities and got pretty lucky!

Good work. How are you doing with currency trading?

I'm doing alright, I feel I have a better grasp of it than equities because I do it for a career (at the moment but it's flow trading not speculative trading) and on my own. It's completely different trading with your money so I'm not where I want to be return wise (5% YTD but with a effort) but hopefully I can get there! 
It's a different dynamic from stocks and you have to understand the macroeconomic factors of a country first. Think of one country as equivalent to one company in the stock market, except that there are only 10 - 30 actively traded currency pairs. This is nice because instead of stretching yourself and trying to understand thousands and thousands of companies one can just focus on specific countries/currencies (EUR/USD, GBP/USD, AUD/USD, USD/JPY, USD/CAD, USD/CHF, etc.) and really understand there fundamentals and what drives each one (interest rate diferentials, business flows, commodities, monetary policy, fiscal policy, income growth, GDP, what option hedgers are trying to do, etc)

There are still a lot of moving parts and as a trader it is your job to identify the  main 3 - 5 factors that are driving each currency each day/shift and trade off that essentially. One thing that gets some people is that everything is relative to one another. The four most traded currencies are the USD, Euro, Japanese Yen and British Pound and every single one of those have terrible fundamentals in one way or another. If they were companies nobody would touch them! But everyday one currency has to appreciate against another. Along with fundamental analysis, technical analysis is very very important. I would say the shorter the timeframe the more weight you give to technicals. Be careful around important economic data release times, fortunes can be made and lost within minutes. Also there is no such thing as stock volume in FX, that's why having access to order books(info from big banks) is so important because market action tends to cluster around areas where there are lots of stoploss and take profit orders. This makes it a little tricky.

Even though I do it as a living doesn't mean I can trade better than someone who does it on their own. I don't care if you graduated from Harvard, if you don't have the trading instinct developed through hours and hours of practice and are willing to learn from others you're going to blow up. My philosophy is that money management (cutting losses short and have the guts to let your winners run) is the most important thing. Second most important thing is to have the mental makeup for it, you have to be able to take losses gracefully, when people revenge trade that's where I think the worst situations develop. Finally guessing the trend direction would be the third most important. Anyways apologies if you didn't want to hear the long rant haha

Not at all, I'd like to thank you. That was very informative and I'm sure others here will find it useful as well. Most of the more successful traders I know personally are in currencies. But I've never dabbed  into it. I mean if you see my posts, you'll notice I like to look at volume. Forex will be very foreign to me just off that alone.

 

[jc08]

Originally Posted by nocomment6

Originally Posted by JC08

Originally Posted by freakydestroyer

I hope you went through with RIMM. I know a few guys on here including myself urged you not to.

I bought some 15 jan 2013 calls a few weeks ago mostly based on short positioning and overall pessimism surrounding rimm. On almost almost all valuation metrics rimm was undeervalued imo and the likelihood of them going belly up is slim because they have a pretty strong balance sheet. The question is where is the revenue coming from going forward and I think people are right to question this because of their track record. However the new CEO seems to be willing to shake things up so we'll see I guess! Anyways I trade currency 90% of the time so this was one of my few forays into equities and got pretty lucky!

Congrats on RIMM.
Whats your take on the euro/dollar exchange? 

Longer term I think EUR/USD will hit 1.20 - 1.25, but that's dependent on number of issues:
1) Debt issues which could take a few quarters to materialize. I think Spain is on the chopping block next and Italy is a dark horse

2) European Central Bank (ECB) Policy. Don't think they're going to raise rates (Euro positive) unless inflation gets crazy and they will lower interest rates (Euro negative) only if growth falters dramatically

3) I think Europe will continue going through a slowdown and potentially a recession.

4) The size of ECB balance sheet compared to US Fed balance sheet will dictate fair value. If ECB expands balance sheet more than US Fed expect EUR/USD to depreciate all else equal.

I just think the political process in Europe is so complicated and every country has to agree with everything before any action is taken that if markets get spooked by Europe again (high possibility) the response time will be too slow again.

Shorter term:

Still in wait and see, and I think currency markets are going to trade sideways for a month or so until the Fed meeting on April 25 and if they disappoints markets (equities, bond, currency, commodities) with lack of QE3 talk than we will see the EUR/USD sell off. Also, China is starting to show cracks in its growth story which is EUR negative because the Eurozone is such a huge export market for China. Range I'm looking at is based off charts below; EUR/USD resistance at 1.35 (100 week moving average) and 1.36 (200 day moving average) with support at 1.3160 (100 day moving average and 55 day moving average converge) and 1.30 because it's such a psychological number with lots of stops beneath it. 

Long term (1 year and out), I personally think being short JPY after a pullback against USD, CAD, GBP will be a good trade.

 

[freakydestroyer]

Someone I talked to told me he trades currencies almost strictly off indicators and does fairly well. What do you think about that? And what exactly does your job entail If you don't mind? Is it like prop trading? 

 

[jc08]

Originally Posted by freakydestroyer

Someone I talked to told me he trades currencies almost strictly off indicators and does fairly well. What do you think about that? And what exactly does your job entail If you don't mind? Is it like prop trading? 

Yeah I like indicators as well, I left out the RSI because it was bunching up the chart. Someone told me technical analysis is as much art as science, one chart could mean completely different things for two people. I think it just depends what works for you and if it fits your trading style. I like to analyze things from the big picture in, meaning start with a weekly chart >daily>8 hourly>4 hourly>1 hourly> 10 minutes chart and if the trend from the longer time frame is supported by shorter time frame chart it gives me more confidence to enter into a trade. Same thing with indicators if the RSI is supported by moving averages, pivot points, bollinger bands, etc then I have more confidence in entering into a trade. I also like to average into a trade (ie. if I want to buy $100,000 USD against CAD, I would split it up into 4 lots * $25,000 trades. This smooths out losses but also gains. When I exit out of this trade I like to do it in 2 lots * $50,000. Don't know why, just personal preference haha.

One of my favorite set-ups is when a moving average crossover is about to happen, because chances are if it crosses over it's going to keep running but you have to be careful of false breakouts so I like putting a trailing stop 0.0020 to 0.0050 below/above a major support/resistance level respectively to protect myself. If it breaks through cleanly and my position is in the money I like to widen out the trailing stop loss to prevent against getting stopped out prematurely. I'm willing to take small losses to particpate in a few cent move over a few days is my philosophy. I use a lot of "turtle trading" rules in my personal trading. Bit of a long read:

http://bigpicture.typepad...ts/files/turtlerules.pdf

As for my work I can't disclose that (trust me I'm not a big shot by any stretch) but I don't work for Goldman Sachs or anything really prestigous (not smart enough). It's essentially a forex brokerage for a whole variety of different types of clients. My job is to first manage risk (aka don't lose money, I shouldn't anyways because there's a bid/ask spread), second eke out a few more pips / per trade if I can and third make sure working capital is funded properly daily. Very different from personal trading because the firm is so risk averse. If there's a big loss one day and it was because of bad trade @+# hits the fan.... I also structure FX option structures and price them but it's easy with an electronic pricer. If you asked me to do it by hand I'd have a tough time. 

This is different from prop trading, those guys (Goldman, Citi, DB, Barclays, etc) do that. They can literally sit there and accumulate a position without offsetting the trade right away as long as it follows their trading strategy. They also have a huge advantage of seeing their own client's order book and trading against that. I also know that around expiry times (ie 10AM NY), weird market movements can happen because there are banks trying to protect certain option strike levels (so the client can't exercise the option the bank sold to them so it expires OTM and bank collects premium) and then there are banks that are on the other side doing the opposite; big tug of war game. The big banks usually have one person for each large currency pair. If functional currency is USD then one trader does EUR, one does GBP, another JPY, another AUD and they will have a few other traders (probably junior traders) watching the less liquid currency pairs like ZAR, BRL, CNY, Scandies etc. 

Anyways, what's your background freakydestroyer? Do you trade for yourself as your primary job?

 

[johnnyredstorm]

Don't be worried about Italy, Mario Monti has everything under control. Spain should be okay as well, but I think Portugal will prop up in the summer and we're gonna have a mini-Greece situation; should create some nice volatility.

 

[nocomment6]

Thanks for all the info! Very informative.

I pretty much agree with all points, the complexity of forex trading is amazing, yet again in so many ways it is more simple then stock trading.
I haven't done it much, only bought CHF last summer, when it had it's run and USD when it was cheap due to all the questions about the debt ceiling...but those situations were predictable.

Where'd you get your charts from? I can't find one's as complex on forexpros or yahoo finance...

Well I'm thinking of buying USD, because I'm expecting a slight drop-back from markets, after such a good QE1, yet again Europe will most likely drop into recession, except for Germany who can produce a very small growth, prediction is 0.4. In addition, well I think Italy should be ok, because debt is kept mostly within the country, but Portugal and Spain. I wouldn't be sure and of course the Greek problem isn't solved just yet...All-in-all the USD seems more stable in the long run.

Why would you play the JPY short? If I may ask, it's economy and markets have been doing pretty good.

 

[omgitswes]

I just bought The Intelligent Investor. this is a pretty tough read.
I want to learn as much as I can before I get started