Posted by DigiNomad on 18th of Jul 2023 at 03:37 pm
VIX lod. Out of the money call buying exploding to support
this parabolic rally...pushing down VIX. SPX SEP 4700 call
vol up to 6.52K...just a measly 3.064 billion in notional value
added to a single SPX strike today. Haha.
also as we discussed things really changed back in March with
the AI hype train but mostly the stealth QE from the Fed that
helped fuel the markets, and we also commented in May that likely
price would hold up throughout the summer and that's what it's
doing,
July historically one of the most bullish months, seasonality
playing out too. Also earnings easson, market almost always works
higher during that - which it is doing, funny how the market simply
following the typical seasonality. And if it continues, then you
would like see weakness in maybe Aug/September
especially.
funny that a few months back everyone was so happy with 5%
treasuries and money markets, and now many of the same people feel
they are missing out. The market is doing what it always does, will
suck all those guys back in, and once the boat is fully loaded,
then it will get a rug pull of some sort.
Markets tend to climb a wall of worry and that's
exactly what it has done. The nice thing about the KISS systems is
that if the market goes farther and higher than people think is
possible (even further than Tom Lee or Arun think is possible LOL)
the systems will stay in the trend and continually raise the stops
up keeping you with with raised stops. If the market decides to
have a rug pull, they give you the exit plan not far off the
highs
Posted by DigiNomad on 18th of Jul 2023 at 04:17 pm
This is good advice in any market, but I do think we are dealing
with a relatively new phenomenon that is moving the markets in ways
that are very difficult to predict. I was on both the CFA and CFP
track in college. Finally quit the CFA thing to focus on CFP, but,
while I was still interning at a hedge fund I hinted to them that I
might be leaving. They basically said "oh come on. Those CFP guys
are just perma bulls relying on the market to always go higher so
they can play lots of golf and bring in new clients. Do you really
want that for your career?" Well, the answer ended up being
"yes, that sounds awesome!" ...but it's still annoying when market
mechanics are gamed like this to the point where valuation,
fundamental and macro analysis are essentially
meaningless.
and I will add this: In my experience over the last 20 years
dealing with the public, you would think that people would get the
most emotional or concerned over taking large drawdowns and risks
vs missing a rally. However, in reality I've found it's the
opposite, people get more emotional when they feel that they are
missing out on a rally they are not in, not on their big losers.
They get far more emotional missing a 25% rally than the do going
through a 40% decline.
again - the markets are designed to screw with your emotion and
psychology, they do a good job of it
Posted by rmoore100 on 18th of Jul 2023 at 07:34 pm
Certainly agree with you Matt. I believe the biggest
contributing factor to what you've said is that younger investors
haven't ever experienced a real major decline.....like say 57% in
2008. If you invest in stocks, they will always go
up....guaranteed......therefore they have no fear. Any small
declines will eventually be consumed by buying......no doubt about
it in their minds. I'm thinking a major major crisis will
occur at some point taking everyone by surprise....could be a year
or years out, but massive stimulus and government debt to GDP will
eventually bring things down. It only will take some catalyst
that no one expects. When looking at a monthly chart going
back, say 30 years, all one has to do is draw a trend line to see
how parabolic things have been for the last 15 years, and in
particular the last 6 1/2 years. All in my humble
opinion.
If being short was part of a plan, then its fine. I was also
short today but its part of one of my swing trading short term
strategies and the PFs are good so I am not worried about
today.
Its being short on an uncontrolled basis which I would think is
rough. And I, just like most others have been in that boat (long
time ago). Key is to have a plan, Risk & Money Management and
strategies that work. Then I personally blank everything else out
as I trust the strategies
Posted by icecoldjones on 18th of Jul 2023 at 06:22 pm
Thanks for the advice, you and Matt! I think need to get out of
this very heavy short position at hopefully not much of a loss and
then stop trading on feelings and stick to a new plan. If I sell
now then I know that it'll quickly reverse, that's just it goes for
me but I'm working on that.
Icecoldjones - please take time to write down the reason you
went short and the exit strategy - honestly I see no reason to be
short over the past few weeks other than a scalp or hedge at times.
Please take time to review the SPY Daily chart from the
Weekend Newsletter on July 9th and the comments.
again you just have to formulate a plan and mindset that you can
live with
for me, I have my longer term investments and index holdings in
my IRA, and I also have my separate trading account. I previous
wasn't happy with my index holdings, as I tended to treat them too
short term, which is one reason why I developed those KISS systems,
to try and help me manage those better in my IRA
otherwise for my trading account: I treat it like a cash flow
machine. Kind of like a real estate guy who has rental properties
and is a cash flow machine for him. I don't need to catch
everything and I miss a lot of things and rallies on stocks etc,
but as long as I'm consistent about following my plan, taking my
setups and system trades and making cash flow over time that I can
live off, I'm happy. Worrying about missing a 100% rally in META or
something will drive you nuts - just like worrying about something
you should have done in the past or some girl you were too scared
to ask out that might have been the 'one' - don't dwell on it,
always move forward and strive to get better. Obviously you
should reflect on your past trades and things to see what you could
improve and do better in the future, but don't overly dwell on it
and beat yourself up about it.
Posted by patellee on 18th of Jul 2023 at 05:43 pm
This right here is worth the price of admission ==>
Don't dwell on it, always move forward and strive to get
better. [...] see what you could improve and do better in the
future, but don't overly dwell on it and beat yourself up about
it.
I have been tracking this closely since the ODTE players burst
on the scene in spades a few months back - but wish I would have
been earlier that's for sure
Macro players just getting torched in this backdrop - I
understand full well their arguments but it's all about
positioning
I also track liquidity followers which up until the past couple
weeks were spot on but that has diverged recently as
well.
Posted by DigiNomad on 18th of Jul 2023 at 03:52 pm
I think the SEC is so busy with crypto that they haven't picked
up on what's going on yet. Late to the party....as usual. When the
squeeze reverses, people will be crying bloody murder and demanding
SEC action (it shouldn't be so easy to goose market makers into
pushing markets higher)
VIX lod. Out of the
Posted by DigiNomad on 18th of Jul 2023 at 03:37 pm
VIX lod. Out of the money call buying exploding to support this parabolic rally...pushing down VIX. SPX SEP 4700 call vol up to 6.52K...just a measly 3.064 billion in notional value added to a single SPX strike today. Haha.
Well stated
Posted by steve on 18th of Jul 2023 at 03:38 pm
Well stated
I searched "gamma squeeze" on
Posted by DigiNomad on 18th of Jul 2023 at 03:47 pm
I searched "gamma squeeze" on twitter today. Some fascinating and in depth posts. Wish I would have searched it 6 months ago! Haha.
don't get emotional guys. also as
Posted by matt on 18th of Jul 2023 at 03:55 pm
don't get emotional guys.
also as we discussed things really changed back in March with the AI hype train but mostly the stealth QE from the Fed that helped fuel the markets, and we also commented in May that likely price would hold up throughout the summer and that's what it's doing,
July historically one of the most bullish months, seasonality playing out too. Also earnings easson, market almost always works higher during that - which it is doing, funny how the market simply following the typical seasonality. And if it continues, then you would like see weakness in maybe Aug/September especially.
funny that a few months back everyone was so happy with 5% treasuries and money markets, and now many of the same people feel they are missing out. The market is doing what it always does, will suck all those guys back in, and once the boat is fully loaded, then it will get a rug pull of some sort.
Markets tend to climb a wall of worry and that's exactly what it has done. The nice thing about the KISS systems is that if the market goes farther and higher than people think is possible (even further than Tom Lee or Arun think is possible LOL) the systems will stay in the trend and continually raise the stops up keeping you with with raised stops. If the market decides to have a rug pull, they give you the exit plan not far off the highs
This is good advice in
Posted by DigiNomad on 18th of Jul 2023 at 04:17 pm
This is good advice in any market, but I do think we are dealing with a relatively new phenomenon that is moving the markets in ways that are very difficult to predict. I was on both the CFA and CFP track in college. Finally quit the CFA thing to focus on CFP, but, while I was still interning at a hedge fund I hinted to them that I might be leaving. They basically said "oh come on. Those CFP guys are just perma bulls relying on the market to always go higher so they can play lots of golf and bring in new clients. Do you really want that for your career?" Well, the answer ended up being "yes, that sounds awesome!" ...but it's still annoying when market mechanics are gamed like this to the point where valuation, fundamental and macro analysis are essentially meaningless.
and I will add this:
Posted by matt on 18th of Jul 2023 at 04:01 pm
and I will add this: In my experience over the last 20 years dealing with the public, you would think that people would get the most emotional or concerned over taking large drawdowns and risks vs missing a rally. However, in reality I've found it's the opposite, people get more emotional when they feel that they are missing out on a rally they are not in, not on their big losers. They get far more emotional missing a 25% rally than the do going through a 40% decline.
again - the markets are designed to screw with your emotion and psychology, they do a good job of it
Certainly agree with you Matt.
Posted by rmoore100 on 18th of Jul 2023 at 07:34 pm
Certainly agree with you Matt. I believe the biggest contributing factor to what you've said is that younger investors haven't ever experienced a real major decline.....like say 57% in 2008. If you invest in stocks, they will always go up....guaranteed......therefore they have no fear. Any small declines will eventually be consumed by buying......no doubt about it in their minds. I'm thinking a major major crisis will occur at some point taking everyone by surprise....could be a year or years out, but massive stimulus and government debt to GDP will eventually bring things down. It only will take some catalyst that no one expects. When looking at a monthly chart going back, say 30 years, all one has to do is draw a trend line to see how parabolic things have been for the last 15 years, and in particular the last 6 1/2 years. All in my humble opinion.
The bad part for me
Posted by icecoldjones on 18th of Jul 2023 at 05:54 pm
The bad part for me is two-fold because I missed this YUGE rally and I was short at the same time
If being short was part
Posted by vimal on 18th of Jul 2023 at 05:58 pm
If being short was part of a plan, then its fine. I was also short today but its part of one of my swing trading short term strategies and the PFs are good so I am not worried about today.
Its being short on an uncontrolled basis which I would think is rough. And I, just like most others have been in that boat (long time ago). Key is to have a plan, Risk & Money Management and strategies that work. Then I personally blank everything else out as I trust the strategies
That's my pennies worth so hope it helps!
Thanks for the advice, you
Posted by icecoldjones on 18th of Jul 2023 at 06:22 pm
Thanks for the advice, you and Matt! I think need to get out of this very heavy short position at hopefully not much of a loss and then stop trading on feelings and stick to a new plan. If I sell now then I know that it'll quickly reverse, that's just it goes for me but I'm working on that.
Icecoldjones - please take time
Posted by steve on 18th of Jul 2023 at 07:11 pm
Icecoldjones - please take time to write down the reason you went short and the exit strategy - honestly I see no reason to be short over the past few weeks other than a scalp or hedge at times. Please take time to review the SPY Daily chart from the Weekend Newsletter on July 9th and the comments.
again you just have to
Posted by matt on 18th of Jul 2023 at 04:16 pm
again you just have to formulate a plan and mindset that you can live with
for me, I have my longer term investments and index holdings in my IRA, and I also have my separate trading account. I previous wasn't happy with my index holdings, as I tended to treat them too short term, which is one reason why I developed those KISS systems, to try and help me manage those better in my IRA
otherwise for my trading account: I treat it like a cash flow machine. Kind of like a real estate guy who has rental properties and is a cash flow machine for him. I don't need to catch everything and I miss a lot of things and rallies on stocks etc, but as long as I'm consistent about following my plan, taking my setups and system trades and making cash flow over time that I can live off, I'm happy. Worrying about missing a 100% rally in META or something will drive you nuts - just like worrying about something you should have done in the past or some girl you were too scared to ask out that might have been the 'one' - don't dwell on it, always move forward and strive to get better. Obviously you should reflect on your past trades and things to see what you could improve and do better in the future, but don't overly dwell on it and beat yourself up about it.
This right here is worth
Posted by patellee on 18th of Jul 2023 at 05:43 pm
This right here is worth the price of admission ==> Don't dwell on it, always move forward and strive to get better. [...] see what you could improve and do better in the future, but don't overly dwell on it and beat yourself up about it.
great post/comments!
Posted by kingpin15 on 18th of Jul 2023 at 03:56 pm
great post/comments!
I have been tracking this
Posted by steve on 18th of Jul 2023 at 03:48 pm
I have been tracking this closely since the ODTE players burst on the scene in spades a few months back - but wish I would have been earlier that's for sure
Macro players just getting torched in this backdrop - I understand full well their arguments but it's all about positioning
I also track liquidity followers which up until the past couple weeks were spot on but that has diverged recently as well.
I think the SEC is
Posted by DigiNomad on 18th of Jul 2023 at 03:52 pm
I think the SEC is so busy with crypto that they haven't picked up on what's going on yet. Late to the party....as usual. When the squeeze reverses, people will be crying bloody murder and demanding SEC action (it shouldn't be so easy to goose market makers into pushing markets higher)
Gary Gensler dealing with political
Posted by steve on 18th of Jul 2023 at 03:55 pm
Gary Gensler dealing with political issues now from Crypto hounds - I see it all over Twitter
this can also go the
Posted by kingpin15 on 18th of Jul 2023 at 03:52 pm
this can also go the other way one day, with put buyers.
exactly....but then it will be
Posted by DigiNomad on 18th of Jul 2023 at 03:53 pm
exactly....but then it will be called out for what it is...a problem with market mechanics.
Yes it sure can kingpin
Posted by steve on 18th of Jul 2023 at 03:53 pm
Yes it sure can kingpin