Equity Markets (Tradable Bottom)

This will be forming shortly.

It is actually a selling exhaustion. Computer controlled institutional buying will be occurring soon. The algorithm, in the institutional software, the institutions use (not available to public), will be indicating to what the public would refer to as buy signal (It is actually selling exhaustion) in the next few days. Frankly, it is far more difficult than that. I use well over one hundred indicators and have been performing asset management of various sorts for near twenty-years.

Stay tuned, soon comes Alpha to the upside.

My wish is that you go out of your way to treat your fellow person with the highest respect and personal care. Much of the populous has been hurt badly and this will become very visible soon.
I have many more posts in the protected section.

 

Bttom? hahaha. We disagree on this one my friend. Let the freefall continue. I don't play in the equity markets, but there's no reason that the dow shouldn't be 3500 if priced in "real" money like gold.

Frankly this market needs a good thorough beating and asia is already feeling it. Loving the currency moves on the majors. lots of headfakes out there

 

Remember this post?

http://www.ferrarichat.com/forum/showpost.php?p=137835183&postcount=6

same line. july 1, djia = 11.4. today = 10.3. institutions have been and will continue to fall. institutional buying is broken at best, and amusing at worst.

 

yep, I see from Bobafett's post that Grim had made the same call previously, but I truly believe a selloff of this magnitude is what is commonly termed, "capitulation", always followed by "bottom feeders". I'm definitely in agreement on viewing this as a tradable bottom... so I'll pick up a few short term calls this morning.

Long term, I think we're fcuked. Our very own Lost Decade, just like Japan.

 

Once upon a time in a place overrun with monkeys, a man appeared and announced to the villagers that he would buy monkeys for $10 each. The villagers, seeing that there were many monkeys around, went out to the forest, and started catching them.

The man bought thousands at $10 and as supply started to diminish, they became harder to catch, so the villagers stopped their effort.

The man then announced that he would now pay $20 for each one. This renewed the efforts of the villagers and they started catching monkeys again. But soon the supply diminished even further and they were ever harder to catch, so people started going back to their farms and forgot about monkey catching.

The man increased his price to $25 each and the supply of monkeys became so sparse that it was an effort to even see a monkey, much less catch one.

The man now announced that he would buy monkeys for $50! However, since he had to go to the city on some business, his assistant would now buy on his behalf.

While the man was away the assistant told the villagers. 'Look at all these monkeys in the big cage that the man has bought. I will sell them to you at $35 each and when the man returns from the city, you can sell them to him for $50 each.'

The villagers rounded up all their savings and bought all the monkeys. They never saw the man nor his assistant again and once again there were monkeys everywhere.

Now you have a better understanding of how the stock market works.

 

Ha! I liked that.

 

Good monkey story!
If we were villagers no doubt we would fall for the bottom fishing. It is absurd to think that equity prices are hitting bottom based on some elaborate software program. The most complicated mathematical equations didn't save LTCM and they were written by nobel prize winner economists. They capitulated in their theoretical assumptions and finally agreed that no mathematical equation no matter how complex can model the human nature.

 

I will restate what I exactly said before, this was the beginning of a tradable bottom, not the bottom of the World as may have been implied by others.

The very best already know where the next top is, which I will weeks in advance pm to Jim and one other party only.

TOP
05-11-2008, 08:49 AM
http://www.ferrarichat.com/forum/showthread.php?t=214198

HALF-TIME REPORT FROM TOP
06-20-2008, 10:11 AM
http://www.ferrarichat.com/forum/showthread.php?p=137807458#post137807458

TRADABLE BOTTOM
07-01-2008, 11:09 AM
http://www.ferrarichat.com/forum/showthread.php?p=137808060#post137808060

TOP
08-08-2008, 11:35 AM
http://www.ferrarichat.com/forum/showthread.php?p=137929329#post137929329AM

HALF-TIME REPORT FROM TOP
09-05-2008, 09:53 AM
http://www.ferrarichat.com/forum/showthread.php?p=138004524#post138004524

ANOTHER CALLING A BOTTOM. PROTECTING PROFITABLE POSTIONS. IT WAS A GOOD TRADE.
09-18-2008, 07:54 AM
http://www.ferrarichat.com/forum/showthread.php?p=138040433#post138040433

OUT OF EXCERCISED POSITIONS.
09-19-2008, 07:53 AM PST
http://www.ferrarichat.com/forum/showthread.php?p=138043081#post138043081

INTERMEDIATE TOP
09-20-2008, 07:56 AM
http://www.ferrarichat.com/forum/showthread.php?p=138045552#post138045552
http://www.ferrarichat.com/forum/showthread.php?p=138070638#post138070638

TRADABLE BOTTOM
09-30-2008, 12:43 AM PST
http://www.ferrarichat.com/forum/showthread.php?t=216044

There’s the short & long of it, much less the derivatives from options and futures. I may put up the correlations at another time.

 

Fair point, but I assume with equities the trade lives are longer than with currencies generally speaking. So my perspective on tradable windows is skewed (though I do hold multi-week positions).

As for the nobel prize - it doesn't mean anything. LTCM and all fo the current quant generations are full of ****. I should know, I have the great privilege of having working directly with them and have been for a little over a year. Very smart, some of the brightest people I've ever met, but perpetuating a **** system based on vague assumptions at best. The entire field of quant is little more than voodoo.

And why is it every time I hear the word quant my mind suddenly starts playing "You can do magic" by America?

 

That was an example to highlight the severity of failure when some of the brightest (nobel prize winners) devised partial dif.eq models based on vague and unfounded assumptions...and at the end they (some of the brightest) conceded that human psychology on the trading floor cannot be modeled which can be put into an elaborate computer program for buying/selling equities in order to rig the system. The problem is and will be for a conceivable future these models don't work! Especially now that fear cannot be measured and since the short sellers have been put on the sideline some of the indicators are not conveying the real sentiment.

P.S. I'm looking for your email...if I don't find I will PM you.

 

I agree except the math is way deeper now (loads of behavioral finance) and they *haven't* learned their lesson. Bob Merton has a fund with a guy I'm working with, JWM just failed his third fund, Goldman Alpha is a classic story, etc. etc. etc.

 

9750. Mark.

 

I would wait till it hits 7500 mark.

"That new all-time high in the VIX:If only the VIX were a reliable contrarian indicator."

 

If priced in real assets (aka gold, etc) dow would be 3500

 

Real assets are relative. Gold is just what some people think holds true value. Value can be measured in other things.


Market is very irrational right now. Buy RIGHT BEFORE people start to gain their rationality, but I don't see this happening for a few months, at least.

 

Wow, any other sage advice?

 

A slightly different way to 'pick a bottom' is rather than raw price at the low(what, DOW 1001 ?), try
time-wise. Appears to me that we are close to a bottom time-wise, so maybe a good time to start buying.

After all, if the market's up 3,6, 9 months from now, does it really matter if you bought TODAY and the
Dow went down another 500 points TOMORROW, then turned right around and started up trending from there?

Only thing that really matters is your buy-in price, timeframe, and whether you picked the right direction
or not for that timeframe.

If we continue the current market frenzy, we'll be at zero by Thanksgiving.

 

It's not a matter of timing the market (or chasing after 500 points up or down) but realizing an equilibrium from the excesses built into market from cheap money. There are lots of "smart" investors who hedged their bets with derivatives. Some of those derivatives are going to be called soon. When we see failure to meet obligations on those derivatives there will be a lot more panic and further damage to the global economy. Global Derivative are bigger than anything we know, larger than all the economies in the world combined. There are hundreds of trillion dollars in derivatives that are not regulated and have been going back and forth with merely an IOU. I'd like to see how Feds can intervene and stop the hemorrhaging in those markets. Have some liquid assets available just in case!

 

Matt: did you see Buffet's annual letter in '02? Check pages 13-15. Basically he and Charlie called derivatives WMDs. Amusing. You're right - there is absolutely no way to accurately scale the derivatives "market" in any kind of meaningful manner.

Crazy times, but good times. I'm all for these drops and corrections. Markets falling faster and further makes me a happy guy

 

I don't think anyone paid any attention to it then and most are not paying attention to it now. Although there are some hints of mainstream media that vaguely cover this larger than world economy no one really understands it enough to come up with any reasonable solutions to back stop it. I am sure the losses to world economies will be back breaking for many world powers and could single handedly provide them with membership to the circle of developing countries.

P.S. I emailed you last week through Fchat but never heard back!

 

check your email. i guess FC has a very old spam address of mine

 

It begs the question.......

Why you would take such delight in a market's destruction and it taking a lot of people's nest eggs with it?? Just curious as to what your personal gain is (i.e. how you are set up to prosper as it happens)??

 

I don't play equities. I'm all for it on moral account. Of course it plays into the FX game too, so I'm happy on a personal level too. But synthesized shorts are easy to come by if you are playing equities, so there are ways to profit there too.

As for nest eggs - I'm all for accountability. Ignorance is not an excuse, so if your money is tied into the market and you expect it to do nothing but go up, well, you get what you deserve.

 

And this isn't the market's destruction, it's a very overdue correction. If this had happened a while ago, the extent would not be as severe. Out of this chaos there's light at the end of the tunnel, and good things will phoenix.

 

--------------------------------------------------------------------------------

I feel like Bill Murray.

Same Thing.

or

Dan Ackroyd in, "Trading Places," when he was on the exchange floor.

NOT YET. I hope to post it soon.

P.S. I have many postings in the business section for those that are interested.