SeekingTruth

Options Trader: Which Way Wednesday?

Well balanced review as always.
Would appreciate more "short" advice and selections with as much justification as possible. This is not to say that I am oblivious to your current strategy, but would like to see it beefed up a little as time goes on if this is possible on a reasonable basis.
I have properly avoided taking any aggressive insurance positions so far except some selective selling into the rally, but I think some extra insurance is prudent and would appreciate any and all further suggestions.
Please continue your fine work. Thanks again.

What's in Store for December?

Always like this kind of historical data.
That said, a separate chart displayed just below the one presented (100 yrs) that showed each month's performance since 1950 would have made it even better.
And there are many more interesting ways to display the data also, such as showing each months average performance for each year of a Presidential Election Cycle, etc. would also be relevant and useful, at least to me.

Market Outlooks by Sector: Part 2

The charts plus the commentary provide a powerful combination, interesting too, Thanks.

The question relative the OIH Oil Service Holders is an interesting one and no doubt speculation plays an important part of the scenario relative to the crude element.
However, so does the intention of the Saudi Oil Minister who is determined to keep oil in the 75 to 80 dollar range at least for the near future, and until they decide on a new target price.
So far they have done a masterful job.
As long as the speculators know that they have this powerful ally, crude oil will be buoyed up unless we have another hammer blow to the economy, or the speculators get tired of storing it ,dollar gains strength, etc..
However , it does look like the service providers could suffer in spite of this and could possibly provide a decent short for those with the nerves and the time for due diligence/vigilance. Thanks for pointing this out.
Liked your article and comments a lot. Thanks again.

Weekly ETF Rewind: Volatility Reintroduced

Would be helpful to me if you would rewrite your Risk/Reward indicator glossary explanation to include an example along with some different and expanded verbiage. Thanks

Options Trader Tuesday Outlook: Big Data Day

Brilliant covering of the arcane, the profane , but never the mundane!
Easy to understand the reason for your huge following, Phil, and why you have become a must read on my daily agenda.
Please accept my complete appreciation.

The Dow at 4000? Don't Laugh, It Could Easily Happen

Jim P. Smith said it far more diplomatically before I could get here, but I was going to say that you are clearly not a student of stock market history and debt history of our country relative to political parties in charge both with and without lag time and effects being considered.

ALL spending to this point can be laid on the brow of GWB and the lack of regulations, incompetent Dept. agency heads of dubious character throughout his administration, and the crooked private and public institutions that he and they mutually supported.
Where is Christopher Cox hiding these days?
Selective ? NO - properly inclusive - YES.

Other than that, liked your interesting article and your writing style very much.

Market Volume: Still an Unanswered Question

To David Van K :
I gave you a thumbs up for your response to my response, and my answer is more complicated than I can describe here, however,
Some reasons for my own particular methods are that I am paying the freight for sending my grandchildren thru college and so I anticipate their needs and take profits to assure that they can stay in school , also, I am helping members of my family impacted by the recession ,etc. (one graduate so far).
I have a tendency to reduce risk for these and other reasons and also when things don't look or smell right to me, and this helped me to avoid the 73-74, 82, 87, and 08 set backs and so I didn't lose my willingness to invest after they occurred.
For example, I sold in Aug. 2007 in order to meet all "extra" needs , like education,assistance, etc. for the next two years even though the market held up for a while longer. My macro economic studies/recession-watch convinced me it was due for a correction even without the derivatives mess and financial meltdown.
I didn't take the chance on being distracted (emergency or death in the family, etc. or for any other reason occurring like my own or broker computer problems or whatever.)
Another reason is that I don't want to sit in front of a computer monitor all day even though this can be and is alleviated a number of ways with trailing stops, options, ,etc. which I do use to help this problem.

That said , I do have some fairly good technical and moving average sliding scale methods and metrics that are adjusted to account for a variety of changing conditions for every sector and category invested in, and I fiddle with them continuously as I learn more about the markets and the economy as they (and I) change.
This includes fiscal/monetary policy, and conditions like the anticipated "mark to market" suspension that occurred March 31, etc.
For awhile these factors have kept me almost entirely in foreign markets, and the anticipated downward pressure on the dollar, and the relative uncertainty of the American economy and debt/monetary prospects are mainly the reasons why.
So even though the domestic market is currently rising with a falling dollar (this might change suddenly), I nonetheless receive more dollars back when I do sell foreign holdings, at least for now, and protect somewhat against that possible "sudden change" in market dollar sentiment.
I try to diversify across the value/volatility scale considering and favoring the highest risk- adjusted returns first and do per centage allocations accordingly as best I can using the pyramid scheme most of the time i.e.(highest risk receives lowest per centage allocated "generally").
I violate this if I think the reward is probably there and justifies the extra risk, but this , of course , requires extra vigilence when done.
So far it has worked well overall and I endeavor to keep learning something new every day.
Your comments were and are greatly appreciated and I am putting you on my follow list as you have much to offer and consider. Thanks for your interest.

Market Volume: Still an Unanswered Question

David Van K:
For S&P 500 would have used reasonably "tight" as 7% And 200 SMA touched or breached because many use 8% now and so would have probably avoided a spike down.
In different times would have used 8% also and a time lag on the 200 SMA depending on conditions, and needs for cash on a forward basis.
As it turned out , I was not stopped out either as all my funds are invested in foreign markets that did not breach both targets, except for one domestic hybrid fund which stayed well above both sell targets (PRPFX). I have however taken some profits at points above 40% gain during the run up, and will take some more and protect what remains in, with no sell targets used or needed.

Also thought then than Alcoa coming in with better than expected earnings was overplayed by the general market., and so would have gotten out or used protection if I had any at risk in the broad domestic market. Of course investors still loved it well after that time and it has paid off well for you folks , congratulations.
I am forced to take comfort in my Intl. holdings with higher than domestic returns, but which of course due to higher than previous correlations and very strong performance are also vulnerable, hence , some more profit taking without sell signals.

Market Volume: Still an Unanswered Question

untrusting: thanks for the link to Hussman's article on volume. It confirms my intuitive grasp of bull - bear past markets combined with the actual hard core volume analysis I have done over the years. See Richard Shaw's past article's on volume also.
Reasonably tight stops would have taken most cautious and rational investor's out of the market during the June - July slide as it did the highly experienced and market savy Art Cashin.
To stay fully in meant that one had the ability to take high risk based on either faith alone or some other group of metrics that I am not aware of. So it looks like to me that the modern era market investing is based more on faith and a lucky guessing game than on fundamentals or anything else that the investor can hang his hat on.
Trend lines and moving averages, and many other technical indicators help a little , but they will stop you out and/or whip saw you if one has a reasonably strict discipline.
This suggests either a "faith or trade" choice for most market participants. No wonder volume is low.

This makes it more like Las Vegas than ever before , and we all know that there the house is allowed to win their share legally i.e. steal their share all fair and square.
And there their motto is "keep the faith baby".

Global Markets in Review: Share Prices Too Far Ahead of Economic Reality

We have gone just about as far as the
" Mark to My Magic Marker"
and sugar coated cocaine laced stimulus high can take us WITHOUT more of the same fare injected into the veins of what serves as our economic and financial systems.
It would "help" some but by no means as much as in March.

Basically have agreed with Roubini all along on domestic issues , and with some others Internationally which have told a far different story at least up until now.
Not a bad time to take some profits and/or acquire some insurance in both arenas as it is becoming easier to recognize and assess the unsustainable every day.

Options Trader Thursday Outlook: CRE Data Day

Watched the Republican questioning Tim Geithner badger Tim about Bill Clinton signing Glass Steagall Repeal.
The Repeal was TOTALLY VETO PROOF led by the Republicans.
It was foolish of Tim not to use this opportunity to remind the viewing public of this fact and instead allow the huge public misperception to persist.
Good article and reco's and I agree completely with your ambivalence in this market, it is well warranted.

Asset Allocation: Is the Old Normal Becoming the New Normal?

PS: I apologize to Graham about the wrong inference in my previous comment as his phrase "for a period" is key, although I am still not so sure about the bond allocation unless high quality, high interest bonds are already owned and bonds do not have to be newly purchased.

Asset Allocation: Is the Old Normal Becoming the New Normal?

Fascinating subject and exceptionally well done in every respect using the chosen, and most important, three asset mix . And I admired your instruction to cover the near term financial needs first before incurring high market risk of any kind.

I liked Graham comment previous until his last sentence came up. The cash/bond strategy can be done to success I am sure , but I can't think of very many investor's that would be satisfied with a 2 to 4% return year in and year out.

Adding commodities, real estate, currencies, International stocks and bonds , very limited options (careful), etc. to the mix makes things much more interesting and profitable "if" one has the time and skill (and personal interest) to monitor and manage the broader portfolio.
Good market runs often have a 2 up years 1 down (or weak) type of pattern. This caught up with the year 2005 which was much lower than a normal year ending in 5 historically, partly because of the good run in '03 and '04 ( It looks trivial, but check the history and you will see what I mean.) The four year cycle also caught up with an otherwise unexplainable Spring correction in 2006.
Four year and two year cycles , Presidential election cycles, monetary policy, economic status, real estate environment, dollar status, etc.etc. all have some bearing on how the asset mix and portfolio could be managed for highest return and lower risk.
To maximize profit and lower risk, the trick is to determine which variables are the more relevant during any given time period.
The current scenario of greater than normal chaos and uncertainty suggests a more passive asset mix (with more cash) for many folks that lack the necessary time and skills required for higher returns (or loss avoidance), and your article serves their and our needs very well indeed, and I applaud your superb efforts with this article in assisting us all in this regard.

Bubble Spotting Isn't Hard, But Whose Job Is It?

Answer to question number 3 :
The reason is that our system is "operated" to sponsor , promote, and protect the established, entrenched, diamond hardened status quo, which is that relatively few profit massively , readily, and easily at the expense and detriment of others. Change the rules , and you change the results ---- not likely.
Good and interesting article, and much to ponder, aided by the graph, etc,. Thanks.

What Does It Take to Become a Truly Competent Investor?

One can do "almost" anything with a solid grounding in college algebra that can be done with calculus, and also some much less complicated and valid algebra work- arounds are much easier to implement and remember than nebulous calculus concepts and the work-arounds are accurate enough to serve us very well.
Advanced math has its place, and serves us well in many areas, and is vital in science , but it can be a detriment and easily lead us to false conclusions in the investment arena which is both a science AND an art, and "usually" the art holds sway..

In other words , I also agree with the reader that took you to task on this subject.
Your other thoughts about "action /inaction", etc. are very well placed and I thank you for dealing with this facet of investing.