Option Millionaires

Newsletter provider, tech, event-driven, momentum
Option Millionaires
Newsletter provider, tech, event-driven, momentum
Contributor since: 2011
Company: Option Millionaires
Thanks for the comment. It would be interesting to see if that would give a different outcome. Hopefully, someone could write an article on that as well some day. The bottom line is that, like you said, absolute margin debt is a flawed metric. It's just a matter of finding what is most relevant to normalize the number.
I just see a strange relationship between many of the emerging market ETFs you mentioned. Small cap ETFs performing terribly while large cap ETFs were performing alright up until the past few months. Isn't that how bear markets start? Like I'm remembering the Russell 2000 Index rolling over long before the Dow in 2007. Good read though. In my humble opinion, we're stuck between a value play and a major downtrend, so timing seems the most important factor.
Makes me think of how people always refer to the stock market as a "discounting mechanism" Maybe the underperformance in home builders points to a significant negative development in the months ahead?
While I am still somewhat a bull on Tesla's future, the ones calling for a bubble in the stock may find this article interesting.
Oh no way would I ever short it either. Interesting comment about the CEO making very positive hype about the company and that relating to its excellent performance...
Rofl ;)
-Salutes- Wheeee! Now to see if it sustains into tomorrow.
Way to go Mr. Musk.
(Ponders for a moment)
Okay, you're right. ;)
It's because it's almost always foolhardy to be bearish in a bull market. Just wait until things start getting ugly in the overall market, then I bet you'll say the opposite about our posts =p
Oh that's right! They produce only what is sold as part of their system right now! No dealers. Thanks!
Yes yes. I think, in a different example, of Warren Buffett. While he has been long-term bullish on America for his entire life, I am sure that he would be just as discontented with buying at the top of a bull market as any other investor. Plus, if one expects a large correction in Tesla in the near term, wouldn’t it be an even more loyal action to wait for the stock to decline so an investor can buy more shares? I certainly understand what you are saying though in terms of loyalty and supporting the stock, and I will always hope that Tesla’s revolutionary products become a wild success in both a business aspect and from an environmental sustainability prospective as well.
Hmm...I think that an article with a risk analysis of inverse bond funds is overdue. Thanks for the comments everybody :) I'm sure we'll see a pretty big move in one direction in the bond ETFs around 2 PM EST this afternoon!
I agree. It's definitely an investment to pyramid into, rather than put the whole capital at risk immediately.
With regards to the sentiment argument, you might think this is interesting.
It's mutual fund cash flows into bond and stock funds. In the past two months, there have been some very, very large outflows. Much more than any in the past four years. It's really neat how it correlates to bond prices; kind of like seeing supply and demand in action.
I'm with you to a point. If there was a way to short T-Bills besides futures/eurodollar futures, it would be much easier to not lose out on your investment. A cyclical upswing in bonds from a secular downtrend could definitely knock out most of your gains. =/
I like it! I would definitely prefer a fund that isn't tied to a daily directional movement though. Know any funds that are not tied to a daily directional movement?
Certainly a cool idea for their business. Nice article!
Good heavens I agree to just about all of that. It's interesting sometimes that, by the very nature of value-weighted and price weighted indexes, the best performers become more weighted and the worst become less weighted. So, in theory, value-weighted indexes should usually outperform most of the time.
I like what you're saying about the 33% in each ETF. You get exposure to small and mid-cap stocks that you wouldn't have and then, while you need to rebalance, you get the extra boost by reducing the fees. Think I'll dig deeper with that one in a spreadsheet. Thanks!
I have not heard of that one yet! That would be great to get some exposure to tech without having to deal with Apple's high weighting. Will take a look into it, thanks!
Very funny =D Of course, as long as the money printing keeps happening QQQ at 40,000 will probably have a P/E of 12 anyway -_-
Especially given the state of the current world markets (notice how terrible emerging markets and even Canada are starting to look?), I think it will be very interesting to see when Apple becomes more correlated with the broad market. During the past couple years, it almost looks like the stock just wants to do its own thing, regardless of economic data. What if emerging markets went sour? Would the company be able to push through just fine like it has or would the impact be enough to hurt their earnings. Just a random thought =D
You might like these patterns. They're just historical probabilities of how stocks often react to positive and negative earnings surprises, as well as analysts upgrades and downgrades. Bulkowski's a statistical genius, and has a lot of different theories tested.
Yes, I don't think that the board at Apple has any intentions of turning their stock into a high yield, low growth, telecom issue. Something to definitely consider for those trying to make some short term gambles.
Would you ever consider Apple to maybe follow the same path as Microsoft in the near future and perhaps reach a "mature" point where its less of a growth play and perhaps more of a blue chip value play? Or do you think it's still way to early to be thinking about that?
Partially true. I think that one of the main reasons why is because the velocity of the US money supply, or in other words, the number of transactions in our economy, has plummeted.
That's why hearing all of these positive economic and heightened consumer confidence reports worldwide makes me think that this time may be different.
Always something interesting to think about how the fed has done what it has and controlled prices simultaneously...
Thank you for the comment! Wow, you basically got in right at the bottom then. Look's like you have some secret timing skills up your sleeves!
Absolutely, unlike a lot of seasonal patterns, like the proverbial "sell in May," this one's pretty darn intuitive. I'm really eager to see how the Chinese bounce will impact oil demand in the coming months!
Wow, really? And you came all the way here to an SA article? Very cool! At this point, it's looking slightly peaky in the short term, but 1552 is still well within reach!
Thanks for the comment!
Right, right. It is only after the zero line has been crossed that there is any positive bias. The line essentially shows the detrended position of the index relative to a yearly centered moving average. A rising slope, while below the zero axis is akin to the price series staying below that average, but becoming closer than before.
Wow! Just read your article, and very fascinating. Even though it was just a foot note, I especially enjoyed the comments about economic cycles and price levels. I think that we're on the same page with respect to the long term trend of commodities and the dollar. Deflation!
Actually my friend, if you are familiar with Elliott Wave analysis, the "triangle" formation is supposedly almost always the last consolidation before a reversal in trend. That would mean that the US dollar only have one final push downward before reversing the trend.
Dollar up, commodities down (maybe starting in 2013), and there's our deflation!
Thanks for the comment!
Good heavens yes. I will be completely honest, for the first three years trading, the most common phrase that described my trading was "I was right but I still lost money!" Tough work. Anyway, thank you for the comment, and glad you liked the article!
I LOVE these replies! Shows that the crew on Seeking Alpha are not just drinking the kool-aid. I just saw some research from John Hussman (think that's the right spelling) on the GDP effect of rising oil prices vs. rising prices in the stock market.
Result? Higher oil prices damage consumption and the economy much more than higher stock prices benefit it.
Okay, I can agree with that. Pretty interesting the differences between the ETFS and that index! And thanks for the chart, I can use that from now on too!