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  • The Fed Spent $23 Billion In 3 Days, But Still Had A Hard Time Pushing Up Stocks [View article]
    Great comment RS055. We now know that we are all hopelessly biased and irrational. I wake up every morning and remind myself that, despite my best efforts, I will make one or more assumptions that will prove, upon reflection, to be absurd. Despite spending many years studying neuro-science, psychiatric literature, philosophy, Amos Tversky, Richard Thaler, Dan Kahneman, etc. I remain forever biased and irrational. What I have learned, as Popper suggests, is to formulate concepts and then try to destroy my assumptions. As to markets ( which I view as a cultural sideshow and peculiar phenomenon), I have created my own game theory approaches- solely to play the quasi- casino. Within a few hours, all of this will magically disappear from short-term memory, leaving one's basic bias and irrationality intact.
    Aug 28, 2015. 02:14 PM | 1 Like Like |Link to Comment
  • The Fed Spent $23 Billion In 3 Days, But Still Had A Hard Time Pushing Up Stocks [View article]
    Yes- when the NSA approached AT&T to install spying protocols, only a handful of top executives were aware of the situation.
    Markets are now inextricably linked to a host of national security issues.
    Aug 28, 2015. 01:37 PM | 4 Likes Like |Link to Comment
  • Dead-Cat Bounce Or Continued Bull Market? How To Invest If You're Uncertain [View article]
    A collar pays for itself, and provides plenty of flexibility. Inverse ETFs represent a carry cost substantially in excess of options. Also agree that option leverage can be enormous.
    But, there are times where a shorter term use of inverse ETFs is warranted. For example, a call on SCO might work for long USO shares. Or, one might trade SCO shares. In the final analysis though, options have a degree of precision and efficiency lacking in other strategies.
    Aug 27, 2015. 08:29 PM | 1 Like Like |Link to Comment
  • The Time To Buy SVXY Is Now, And Maybe Again Later [View article]
    There are many ways to skin the cat. If you have, say, 100k to utilize for VIX strategies, just average in SVXY. Your averaging methodology will ultimately be time dependent, with the best present value accruing to the most optimal method.
    And, many of you have made a small fortune already by shorting volatility for the last several years- so why obsess about maximizing a more difficult configuration? Or, you can go all in and buy puts. You can also just buy calls with a modest portion of prior gains.
    Or buy straddles, or use spreads. Or mix and match a variety of strategies, and manage accordingly. This game is continuous- there is no final buzzer (unless you sell options). So, "time is on your side" and you are free to play by your rules. Just be sure to formulate your action plan before the bell rings.
    Aug 25, 2015. 10:39 PM | 4 Likes Like |Link to Comment
  • Having To Do 'It' Again Is All You Need To Know [View article]
    "The billows are whispering their eternal whispers,
    The wind blows on, the clouds are sailing,
    The stars keep twinkling indifferent and cold,
    And a fool waits for his answer,"

    The wildebeest has stampeded across the African plains for millions of years. What spooks them varies-except that 'fight or flight' is more impulse than randomness.
    Cause-effect? "...If we follow a particular recipe, word for word, in a cookery book, what finally emerges from the oven is a cake. We cannot now break the cake into its component crumbs and say; this crumb corresponds to the first word of the recipe, etc. With minor exceptions, such as the cherry on top, there is no one-to-one mapping from words of recipe to 'bits' of cake."
    Richard Dawkins

    Thoughtful article.
    Aug 25, 2015. 04:43 PM | 4 Likes Like |Link to Comment
  • Bringing The Zen Of The Casino Floor To Wins On The Trading Floor [View article]
    Very interesting. The one major difference with games of chance and a game theory approach to markets is the concept of the continuous game, and the principle of morphotics.
    Also, I would note that there is an analogy between how the body's immune system operates, and the type of corrective action that can transform or neutralize an invading bacterium.
    For instance, if one is long oil (XOM, SLB, XLE, etc), I don't forfeit my chips- unless I make that choice. No one is coming after me to "collect" on a "loss".
    In fact, I can implement an option rehab strategy, as I suggested to BP shareholders who were crying about the Gulf oil spill.
    In short, time and knowledge can cure a paper loss. And, basic hedging can protect a portfolio. Simple collars could adequately protect most investors, for example.
    Incidentally, one of the most charismatic gamblers and hustlers of all time was Titanic Thompson. I highly recommend that anyone wishing to make a living by assessing probabilities, and making a fortune by using their wits, study the extraordinary life of Titanic Thompson. He, like Jesse Livermore, were icons of early 20th century America.
    Aug 24, 2015. 11:59 PM | 1 Like Like |Link to Comment
  • The Mysterious Selloff [View article]
    If my program 'decides' to sell $1Trillion worth of S&P futures, based solely on an astrological event, you can bend over and kiss your rational ass goodbye.
    Aug 24, 2015. 11:20 PM | 1 Like Like |Link to Comment
  • Relax, Have A Glass Of Wine [View article]
    Well you can have a "Cask of Amontillado" but you don't want to be Fortunato.
    Aug 24, 2015. 05:00 PM | 2 Likes Like |Link to Comment
  • Is A Bear Market Starting? Prepare To Be Mauled, Down And Up [View article]
    Getting slaughtered by one's ignorance and bias is a terrible price to pay. But, I want to thank all of the eternal pollyannas for the stampede out of the market.
    "It's a beautiful noise, coming up from the's a sound that I love."
    Neil Diamond
    Aug 24, 2015. 04:48 PM | 4 Likes Like |Link to Comment
  • The Time To Hedge Is Now - Or Is It Too Late? [View article]
    With regard to puts, or any strategy that deals with "down" you first need to reflect on whether you want to play offense or defense. But, it's not a mutually exclusive proposition- just useful in assessing one's basic predilection.
    in a defensive sense, the concept of insurance is useful. How much risk do you want to cover, and what deductible fits?
    In the past couple of days, my put ratios (back spreads) have worked great. I put these in play during periods of euphoria- very little management needed. I also suggested in various comments that I sold TZA LEAP puts (when TZA was well under 10). To me, this was a no lose position, given my other holdings and strategies.
    A more complicated question relates to cashing in your downside chips. Unlike a house fire, which occurs within hours, and damage becomes known, a market event can be a slow motion fire- or a fire that was thought to be extinguished, only to smolder and flare up again.
    Aug 23, 2015. 11:29 AM | 4 Likes Like |Link to Comment
  • Why This Market Plunge Is Irrational - And What To Buy Now [View article]
    As usual, the great majority of people seek answers to the wrong questions.
    The stock market is a game which incorporates all the imperfections of the human mind. True rationality is not within our ability- it never has been and it never will be.
    Thus, to conclude that the sell- off ( if that suffices as one's perspective), is "irrational" merely begs the question; for we lack true rationality. So, if irrational moves occur- how do we profit therefrom?
    Aug 21, 2015. 09:24 PM | 4 Likes Like |Link to Comment
  • Even If Struggling Deere Delivers, History Shows Street May Shrug [View article]
    I have longer dated puts on DE which are already profitable.
    Aug 20, 2015. 11:30 PM | Likes Like |Link to Comment
  • Crude Oil: Where Is The Bottom? [View article]
    That's the strategic way to think about quasi-random events. Every comment, and most are well conceived, is an extrapolation of uncertainty. Well defined trends always have some thematic components that enhance predictability- at least for some time period, n. We also know that highly emotional moves will over- shoot, and equilibrium will only appear thereafter.
    I have both short and long positions. The short positions, as harvested, represent real profit. The long positions represent receivables ( or one might view such long positions as having an adjusted basis- offset by the short profits.)
    In the scheme of things, either short or long positions can be managed.
    Aug 20, 2015. 11:19 PM | Likes Like |Link to Comment
  • Equities On Wile E. Coyote Air Run [View article]
    Beep! Beep!
    Aug 15, 2015. 11:19 AM | Likes Like |Link to Comment
  • Oil Prices: Best And Worst Case Scenarios [View article]
    Don't chase the butterfly- it will come to rest on those that are patient.
    Aug 15, 2015. 11:16 AM | Likes Like |Link to Comment