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miscon2
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New to this, and not afraid to say it. Still lose more than I win, and not afraid to say that either. I'm here to learn.
  • Late Hour Flight to Safety? 9 comments
    Oct 14, 2011 11:40 PM
    Just noticed this... seems like an oddity, but maybe I'm missing something obvious.

    Below are futures charts from finviz.com for today, 10/14/2011.  If you played today you know we had another generally up day for equities after several up days for equities.  We closed with S&P futures at 1220 - a 50% fibonnaci retracement from recent lows, and generally considered to be a strong resistance level.  I've also included the S&P futures chart below.

    Look at the last 5 minute bars in 30 year and 10 year bonds below.  If that's not showing a rather renewed and strong interest in safety, I'm not sure what would.

    But maybe this is common stuff for the last available 5 minutes of trading before a weekend - I don't have the data available to research.  And who knows - maybe this is just Op Twist in action?

    Any other factors aside, viewed through the lens of my standard Risk Assets vs Safe-Havens approach, those big bars on the bond side don't bode well for an equity bull come Monday morning... though of course there's an entire weekend of unknown news ahead of us.

    I thought it was interesting. 

    If anyone has thoughts or information, please add comments below.










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Comments (9)
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  • Mr. Massive
    , contributor
    Comments (125) | Send Message
     
    Very interesting. Bond markets are the mothers milk of the whole ponzi scheme we love. Currency is just behind. Stocks are related(typically inversely) but lower on the totem poll. The saying is right- either the bond or stock market is right, and usually the bond mkt... The last hour rush was peculiar to me. Running up like we did into the weekend on no volume. I think it was naive at best. If earnings seasons is dominated by goog and aapl and discounts the vast majority of stocks ( beside best in breed) I guess I will cont. to be puzzled
    15 Oct 2011, 09:40 AM Reply Like
  • Mr. Massive
    , contributor
    Comments (125) | Send Message
     
    I'm hoping for a decoupling of stocks from indices. Correlations to high. Thats why I've been playing indexes. No reason to take a 8% hit bc some no name analysts at any firm downgrades a stock for w/e reason
    15 Oct 2011, 09:42 AM Reply Like
  • talbano
    , contributor
    Comments (324) | Send Message
     
    that is a very smart way to look at it
    15 Oct 2011, 05:10 PM Reply Like
  • miscon2
    , contributor
    Comments (67) | Send Message
     
    Author’s reply » Yes Massive. One big concern I have with my RAVS approach - that if bonds and Usd is increasing then equities should be decreasing more or less equally - is that I've only been watching the system during this period of high correlation. My fear is that as time passes and the correlations chill out, RAVS will become less and less accurate.

     

    I've developed some custom indicators now and can review the true dis-correlation (contango? Divergence?) between safety and risk assets from a historic perspective, but need to spend more time analyzing the results.

     

    MM and Tal - thanks for taking the time to respond. I do appreciate it, and don't pretend to have all the answers.
    15 Oct 2011, 07:29 PM Reply Like
  • talbano
    , contributor
    Comments (324) | Send Message
     
    Which is what I love - everyone has and is entitled to an opinion but anyone that thinks they have all the answers ...well they scare me -
    Miscon- Good Job!
    15 Oct 2011, 09:25 PM Reply Like
  • R2k
    , contributor
    Comments (3) | Send Message
     
    Nice "catch" & interesting observation, Miscon. If you see it again please put it up. Also, enjoy your posts. Don't understand a lot of it, but read 'em all try to learn from them. Really appreciate your efforts. Thanks!
    16 Oct 2011, 03:35 PM Reply Like
  • miscon2
    , contributor
    Comments (67) | Send Message
     
    Author’s reply » R2k - I have been working from the basic premise that moves in equities, which I consider risk assets, should confirmed by opposing moves in 'safe havens' - bonds and the dollar.

     

    My focus is on very short intraday trends, and mostly I'm posting for folks using 3x levaraged ETFs to make fast trades - often no more than ten minutes long.

     

    So if I post stock talks like "safety not backing up this spike" it means be careful if you are long for the next ten minutes. "safety confirms eq bull" would be the opposite (eq being my shorthand for equities).

     

    Anyway, thanks for the comment, and feel free to ask questions. This approach I'm using is new, so just because I say something is going on doesn't mean its a sure thing by any stretch. Technical analysis is only an indicator of where we are, and isn't a true predictor of where we're going next.
    16 Oct 2011, 07:34 PM Reply Like
  • R2k
    , contributor
    Comments (3) | Send Message
     
    Thanks for the clarification about your posts. Ha! Fri I bot FAZ thinking the reports from Citi and Wells Fargo today and the others to follow will not be so good ... especially on the heels of Jamie Dimon's less than stellar report last week.
    I don't trade in such short time frames. But I have done a couple daily round-trips recently. So your explanation above now means quite a bit more to me. So thanks again for that!

     

    It will be interesting to see how this new IMF backstop pledge plays out. I have my doubts, but the market might run with it.

     

    17 Oct 2011, 06:03 AM Reply Like
  • miscon2
    , contributor
    Comments (67) | Send Message
     
    Author’s reply » R2k, as a general rule I personally don't hold 3x anything over night, but it's all about your risk tolerance... This market is too driven by headlines and generally irrational for me to count on any trend lasting thru the world markets. Lost a good pile of cash over the summer holding 3x's overnight.

     

    But as I say, that's just me and my level of risk tolerance. Obviously if you catch a train you can get awesome returns... Imagine if you bought upro two weeks ago and just held. The 3x relation does break down the longer you hold, but you'd still be sitting pretty.

     

    For now I'd rather have every trade win, even small, than chance it on overnight and over w/e.
    17 Oct 2011, 08:48 AM Reply Like
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  • At least one of the following statements is true: A) earnings plays are for morons, B) I am a moron.
    Nov 11, 2011
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