Tuesday, September 15, 2009

Another new high

Well the market does not seem to want to stop. High after high on lower and lower volume. Well the only positive thing from here is that it will eventually stop and we get a bit of a correction. There really is nothing more to say at this point - we have to wait until this market unfolds itself. Yes its unfolding to the upside but going long for more then a few points is not the way to go.

I am still in some longer term out of the money puts that are showing more and more signs of "well Chris what were you thinking". Since those are quite long term 3+ months out I am not getting affected as much by the decay. I will probably look for a chance to add my last chunk here again pretty soon. We have reached the GS predicted high for SPX but it seems we have a big GAP to fill first.

I will put up more sensible comments once the market behaves a bit more normal - normal in my views. Yes others can make sense of this market, I would prefer to stay away and let this move here complete first.

More comments to come of course before the open and for the first few minutes. Scenarios for today would be a nice follow through from yesterday with another 10-15 points to add in the first 90 minutes of trading before finally reversing. Lets see what the market wants to do here.


  1. Nice blog, keep it up!

    I do see topping signs and am starting to ditch all longs, this action is just too heavy for me. Hang in there and use your last chunk wisely, but im thinking you will be rewarded if your persist. What expiration are those puts? If they are all 3 months or more as you indicated I would not sweat the decay too much as once this market turns (it will guaranteed) your swing on those puts will be massive in your direction. That said stop-losses are in and emotions out in this business at least.
    Good luck

  2. what does it look like here Chris? Mortie has set the potential tops around ES 1047, 1052, 1064

  3. SC, thanks for the encouraging words. And yeap, even if I had to close out those puts now it would not hurt quite as bad. Avg on those bad boys is around 1028 or so. If I were to add my last chunk I would be down maybe 10 points or so so I am not too concerned there.

    And any further losses I would incurr I can just make it up with a few scalps via futures. The last few months have definitely taught me a lesson in emotional control. =)

    For anyone being long, all I can say congratulations, honestly, I think the hardest trade in the past few weeks and months had been the long trade. One I could not commit to =)

    Sam, as many are talking about this being a very long and drawn out topping process, I have to admit I am not quite sure how high we can go. Of course I am keeping my eyes on SPY 107.02-107.68.

    If we were to reach that at any point, especially this week, well my short exposure would be close to 80% (ok maybe not but I would go in short quite heavy at those price levels). Its within reach.

  4. FYI I just went short as a scalp. Looking for 3-4 points on the downside from 1048.75 ESZ

  5. Look at these miniature pattern. an hour ago it convex shape, which looked like topping process, and now it is concave shape.

    Chris, what do your experiance eyes see here?

  6. what I would normally expect from a topping process that sticks is one last big move higher. We have not seen that yet - by that I mean 15+ points, even if that is occurring on stronger then average volume. I really think that we are going to give it that last push maybe even this week to the SPY levels I was talking about.

    Its really difficult to try to make any calls on direction. Such low volume and such strength in price - not really much shorting you can be doing. Scalping long or short still works though if you only care about a few points - other then that - wait until we hit concrete price levels or until it traders lower again.

    Sorry to not be able to add much value here. I am very "un-short" at the moment as I had scaled out of many positions and only have my very long term position left that is still quite small.

  7. I went short at ES z 1048.25. for scalp

  8. got stopped out for one point loss