The Sniper
Footballguy
I read somewhere "Good traders know how to make money but great traders know how to take a loss." Sounds to me like you know what you're doing. Great fun to watch and learn - keep us posted! Thanks.
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My Stock Value Strategy Starts Now (1 Viewer)
- Thread starter David Dodds
- Start date
David Dodds
Administrator
UCO looking juicy at 10.25. Hard to see that staying that low for long. But I remain on the sidelines while I enjoy my late breakfast here
The Sniper
Footballguy
David Dodds
Administrator
Thanks. It worked out for me as it allowed me to bet against oil further with those freed up funds (which turned into a nice profit) . Was fretting a lot over the weekend whether I should dump or not (and absorb such a brutal loss), but in the end I was afraid to hold. Oil is headed lower. Possibly much lower in the future contracts.
David Dodds
Administrator
SCO is an ETF that bets that oil futures will be down. It trades as a leveraged ETF (2X). It is the opposite of UCO (just like DTO is the opposite of DXO)
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David Dodds
Administrator
added 1,000 shares of FAS (3X Financial Bull) at 9.73 as it's trading at serious lows. Expect to flip this easily on heavy volume
David Dodds
Administrator
added 2000 FAS at 9.415. Hoping it starts moving north now
David Dodds
Administrator
added another 3000 FAS at 9.21....going to need to start selling some of this now
David Dodds
Administrator
I think my timing on this thing is starting to look pretty awful. It's sliding fast and hard.
David Dodds
Administrator
after watching this thing hit 8.99, I am happy that I sold 3,000 at 9.23. Waiting to add more lower or sell the rest at around 9.30
David Dodds
Administrator
and out at 9.30....well that kind of sucked.
1,000 at 9.73 sold at 9.30 (loss of $470)
2,000 at 9.415 sold at 9.30 (loss of $230)
3,000 at 9.21 sold at 9.23 (gain of $60)
Loss of $640 dabbling in the financial stuff. Was too volatile for me in a day when the banks have been crushed lower. Afraid to hold this overnight. It seems like the price is super low, but I mistimed this badly (seeing how it went to 8.99. I will continue to watch here.
1,000 at 9.73 sold at 9.30 (loss of $470)
2,000 at 9.415 sold at 9.30 (loss of $230)
3,000 at 9.21 sold at 9.23 (gain of $60)
Loss of $640 dabbling in the financial stuff. Was too volatile for me in a day when the banks have been crushed lower. Afraid to hold this overnight. It seems like the price is super low, but I mistimed this badly (seeing how it went to 8.99. I will continue to watch here.
Gamblor
Footballguy
way to be classy guy...
David Dodds
Administrator
added 3,000 shares of FAS at $8.01 - I can't believe this is sliding this far
David Dodds
Administrator
and back out at $8.17....That was fun... Profit = $0.16 x 3,000 = $480
David Dodds
Administrator
Looks like I might have had too much of a hair trigger as it bounced to 8.28
St. Louis Bob
Footballguy
I just bought 1000 DXO @ 2.50
hooter311
Footballguy
Great Thread Dodds, hopefully things will start to pick up the rest of the week with some of the uncertainites behind us.
I really admire your dedication and time you put into every project you attempt. You put in the work and usually come out on top. Chance only favors the prepared mind.
I really admire your dedication and time you put into every project you attempt. You put in the work and usually come out on top. Chance only favors the prepared mind.
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David Dodds
Administrator
I am afraid of oil until after I see Wednesday's stockpile report. I suspect oil is going lower before it eventually rebounds strongly by the summer monthsI just bought 1000 DXO @ 2.50
David Dodds
Administrator
bought 3,000 FAS at 7.98. hoping to be out by close today
David Dodds
Administrator
Sweet - Limit order executed at 8.12. 0.14 x 300 = $420 profit
David Dodds
Administrator
ok 7 minutes to go and trying again. 3,000 at 7.89 this time.
David Dodds
Administrator
added 3,000 more FAS at 7.54......getting crazy now. please bounce
David Dodds
Administrator
Holding 6,000 shares of FAS overnight at 7.715 (It closed at 7.63). Seems low, but will know more in the morning I suppose. Hoping the aftermarket pushes this a bit higher. Overall decent day after dropping my oil shares to start the day with a huge loss. I will be watching the oil report in the morning to decide where I want to go with that. Current thoughts are that oil will be heading south.
bigfishboy
Footballguy
DD, You have information about the expected price of oil being higher at the end of the year. I thought that was a major consideration for you jumping in on that market.
Is there something telling you the same thing for finincials? Or are you just looking at the incredibly low prices and expecting that they have to recover?
Is there something telling you the same thing for finincials? Or are you just looking at the incredibly low prices and expecting that they have to recover?
David Dodds
Administrator
Here is the futures price of oil:Oil Futures
These are the numbers people are trading against. The oil ETFs/ETNs (USO, UCO, OIL, DXO) are betting these prices go up while the shorts (SCO and DTO) are betting they drop. Crude priced at $48/barrel right now for June.
The financial ETF I am playing trades at 3X and index that tracks the financial / bank stocks. Those were crushed today and I am betting on some sort of recovery from these super low prices. I will admit that I know less about this, but know it's extremely volatile. Hoping I can cost avergae down and make some decent coin on the bounces.
David Dodds
Administrator
FAS aftermarket is now at 7.75 so holding looks like might work out ok here. I think this should bounce to over 8.00 sometime tomorrow as people realize this is way oversold.
David Dodds
Administrator
woohoo FAS is now at 7.85. So wish my account allowed me to do aftermarket trades. Please hold on for tomorrow..lol
David Dodds
Administrator
In a nutshell, here is why I like FAS.
Over the last 5 days, here is what the markets have done:
NASDAQ: - 6.36%
Dow: - 6.19%
S&P: - 9.56%
This 3X Financial indicator is off: 56.07%. Even if you factor in the 3X issue, this thing is way off the overall market pace. And what really has changed over the last 5 days? From my perspective the other $350 billion of TARP funds are getting released and Obama is taking office which will likely add another 1 trillion in new projects. I don't see the banks failing going forward. This seems like it should be near some sort of bottom (at least temporarily). I guess time will tell.
Over the last 5 days, here is what the markets have done:
NASDAQ: - 6.36%
Dow: - 6.19%
S&P: - 9.56%
This 3X Financial indicator is off: 56.07%. Even if you factor in the 3X issue, this thing is way off the overall market pace. And what really has changed over the last 5 days? From my perspective the other $350 billion of TARP funds are getting released and Obama is taking office which will likely add another 1 trillion in new projects. I don't see the banks failing going forward. This seems like it should be near some sort of bottom (at least temporarily). I guess time will tell.
SecondCity34
Footballguy
Bank of New York just reported a crappy quarter. Could be another poor day for financials tomorrow.
Alias
Footballguy
I am mostly banking on the bottom being around now too. It may drop to 7500 or even 7200-ish (Dow), but my gut is telling me we don't see the 6's and just in case we don't see the middle 7's I am mostly committed with only 9% in cash in my 401k.
siffoin
Footballguy
For educational purposes:
All forward contracts, whether they be in commodities or equity markets, have a premium baked into the price. Thus ALL forward contracts are priced higher than the current price of the underlying. Presently Feb Crude futs are priced around $41. While the April contracts are priced at $46.50. This means there is $5.50 of premium baked into the April contracts. Each day a little bit of that premium will burn off. As expiration day nears the premium burns at a faster rate. In regards to the April Crude futures contract a person could expect $.06 of premium burn per day till expiration.
So just because Crude futures forward contracts are trading at a significantly higher price...that DOES NOT guarantee the underlying will move to that price by expiration.
For example: back in July with Crude trading close to $150...the April 09 futures would have been significantly higher than $150...and today they trade for $46.50.
If you ever find a forward futures contract trading below the current month...that presents an arbitrage situation....essentially allowing you to pick up $1000 bills off the trading floor. And though these "mis-priced" situations do occur...by the time you can act on it the arbitrage moment will be gone.
So what I'm saying is this...there is no obvious signal using forward futures contract pricing that will allow you to determine the future direction of the underlying. On Dec 09...Crude can be trading at a price higher that $41, lower than $41, or it can trade for $41. No one knows the future(s).
All forward contracts, whether they be in commodities or equity markets, have a premium baked into the price. Thus ALL forward contracts are priced higher than the current price of the underlying. Presently Feb Crude futs are priced around $41. While the April contracts are priced at $46.50. This means there is $5.50 of premium baked into the April contracts. Each day a little bit of that premium will burn off. As expiration day nears the premium burns at a faster rate. In regards to the April Crude futures contract a person could expect $.06 of premium burn per day till expiration.
So just because Crude futures forward contracts are trading at a significantly higher price...that DOES NOT guarantee the underlying will move to that price by expiration.
For example: back in July with Crude trading close to $150...the April 09 futures would have been significantly higher than $150...and today they trade for $46.50.
If you ever find a forward futures contract trading below the current month...that presents an arbitrage situation....essentially allowing you to pick up $1000 bills off the trading floor. And though these "mis-priced" situations do occur...by the time you can act on it the arbitrage moment will be gone.
So what I'm saying is this...there is no obvious signal using forward futures contract pricing that will allow you to determine the future direction of the underlying. On Dec 09...Crude can be trading at a price higher that $41, lower than $41, or it can trade for $41. No one knows the future(s).
David Dodds
Administrator
and with my conspiracy hat on, I think the financial stocks were possibly manipulated today trying to put out a statement on how dire this economy is at the same time Obama is sworn into office.
The Sniper
Footballguy
I wouldn't touch financials with a 10 foot pole right now.
SecondCity34
Footballguy
Re: contango and the price of oil, from the street.com
"Tuesday's session narrowed the value of the front-month contango trade to less than $2. The contango's value was more than $6 just last Friday. When a contango rises above the cost of monthly crude storage, traders can reap enormous risk-free profits by simultaneously buying the spot contract and shorting the second month contract"
"Tuesday's session narrowed the value of the front-month contango trade to less than $2. The contango's value was more than $6 just last Friday. When a contango rises above the cost of monthly crude storage, traders can reap enormous risk-free profits by simultaneously buying the spot contract and shorting the second month contract"
kip stabone
Footballguy
Dodds the EIA report doesn't come out until Thursday this week. If your'e interested here is the holiday schedule.Data for the week ending Alternate Release Date Release Day Release Time Holiday January 16, 2009 January 22, 2009 Thursday 11:00 a.m. Martin Luther King Jr./ Inauguration February 13, 2009 February 19, 2009 Thursday 11:00 a.m. President's May 22, 2009 May 28, 2009 Thursday 11:00 a.m. Memorial September 4, 2009 September 10, 2009 Thursday 11:00 a.m. Labor October 9, 2009 October 15, 2009 Thursday 11:00 a.m. Columbus November 6, 2009 November 12, 2009 Thursday 11:00 a.m. Veterans
David Dodds
Administrator
Thanks for the heads up there. I would have been going crazy trying to find it in the morning.
kip stabone
Footballguy
You can always go here at 10:30 on Wednesdays (typically) for the petroleum report.http://www.eia.doe.gov/oil_gas/petroleum/d...eport/wpsr.html
Sack Boy
Footballguy
Didn't end up capitalizing on my spidey sense.I didn't know I can short an entire sector or indexes using ETFs. I'm placing a bonanza of orders tonight.
I placed a bunch of orders for index and sector Ultra Short ETFs. Then I cancelled them after doing 10 minutes of reasearch, when it looked like some ETFs could be scams except for people who day trade. I don't like doing homework on investments so I appreciate any tips about ETFs.
Sack Boy
Footballguy
Damnit. I could have made boatloads on the ETF trades I cancelled last night. 
TWM +9.31 (+13.29%)
MZZ +7.29 (+11.85%)
SKF +44.53 (+28.75% )
REW +7.99 (+10.16% )
DUG +2.52 (+9.91% )
ETA: These are all ProShare ETFs as their ETF overview came up first when I googled "short ETF". No idea if that's what people buy because some of them have low volume and I didn't find out until later that there are lots of other ETFs.
TWM +9.31 (+13.29%)
MZZ +7.29 (+11.85%)
SKF +44.53 (+28.75% )
REW +7.99 (+10.16% )
DUG +2.52 (+9.91% )
ETA: These are all ProShare ETFs as their ETF overview came up first when I googled "short ETF". No idea if that's what people buy because some of them have low volume and I didn't find out until later that there are lots of other ETFs.
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Sand
Footballguy
Taking another shot at the roulette wheel tomorrow?Damnit. I could have made boatloads on the ETF trades I cancelled last night.
David Dodds
Administrator
That's generally going to be my approach. If FAS opens higher (it was trading higher in afterhours trades), I will dump all but 1,000 shares.If FAS opens lower, I will cost average down with the goal of ending the day buying and selling and finishing with between 1,000 and 2,000 shares.I probably will day-trade the oil stocks if they fluctuate too far from what looks like their comfort zones (I expect oil to be down after the Thursday stockpile report). Comfort zone is measured as 2.47 to 2.57 for DXO for me. I think it will fluctuate between these two numbers for most of the day.So yes pretty much a roulette wheel strategy for me tomorrow....I suppose I should just stop this stock nonsense and buy a damn house, but what fun would that be?Taking another shot at the roulette wheel tomorrow?Damnit. I could have made boatloads on the ETF trades I cancelled last night.
Sack Boy
Footballguy
Could have been easy money but I don't like buying something I don't understand, especially when day trading is not an option for me.Taking another shot at the roulette wheel tomorrow?Damnit. I could have made boatloads on the ETF trades I cancelled last night.
C'mon, someone explain ETF to me.
Sack Boy
Footballguy
It does not pay to bet against spidey sense when it told you yesterday that lots of indexes and sectors will be down.
Biabreakable
Footballguy
I am not sure how much you have traded the 3X before David. I have traded them some. FAZ can get to overbought levels so if you think that is the case I would recomend shorting FAZ over going long FAS. You will have more momentum in your favor from that action than hoping for people to want to invest in a beaten down stock in a crisis level sector. I could be wrong but I think the FAZ trades on almost 2X the volume as FAS does also.FAZ has made me a lot of money (at least a lot of money to me) but it can turn south in a hurry especialy when it gets overbought it can tank a huge percentage in a very short time. If you see that coming shorting the FAZ will reward you a lot more than some volume on FAS will imho.That's generally going to be my approach. If FAS opens higher (it was trading higher in afterhours trades), I will dump all but 1,000 shares.If FAS opens lower, I will cost average down with the goal of ending the day buying and selling and finishing with between 1,000 and 2,000 shares.I probably will day-trade the oil stocks if they fluctuate too far from what looks like their comfort zones (I expect oil to be down after the Thursday stockpile report). Comfort zone is measured as 2.47 to 2.57 for DXO for me. I think it will fluctuate between these two numbers for most of the day.So yes pretty much a roulette wheel strategy for me tomorrow....I suppose I should just stop this stock nonsense and buy a damn house, but what fun would that be?Taking another shot at the roulette wheel tomorrow?Damnit. I could have made boatloads on the ETF trades I cancelled last night.
chet
Footballguy
David--
One observation. There's a saying I heard when I first started in this business that you should water your flowers and cut your weeds. I realize you're taking a more active role than I am used to, but you seem to be cutting a lot of your flowers and watering a lot of your weeds. Just a thought.
One observation. There's a saying I heard when I first started in this business that you should water your flowers and cut your weeds. I realize you're taking a more active role than I am used to, but you seem to be cutting a lot of your flowers and watering a lot of your weeds. Just a thought.
Alias
Footballguy
what did you buy? I am guessing 401k since 60% is a typical max that you are allowed to contribute.
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David Dodds
Administrator
and now out of all 6,000 FAS at 8.50. This ended up becoming a great trade seeing how I bought all of these shares with 7 minutes left last night.
Profit = 8.50-7.715 = 0.785 x 6,000 = $4,710
Profit = 8.50-7.715 = 0.785 x 6,000 = $4,710
