Short term trades in the stock market •$$$$$•

[CascadeFarmer]

D +322 +2.97%

N +100 +4.29%

SP +38 +3.43%

That's a statement of fact and in the overall context of things means what? Any discourse you wanna provide about this 1 day and how that fits into the general picture would be appreciated.

At the least what I'll say is today was up on higher volume than yesterday which is a positive sign of sorts. Do you think it makes a difference if a day like this happens on lower or higher volume?

Since you've said...

I totally see the possibility of the market going into a depression.

...sounds scary!

My families funds were moved to secured guaranteed and insured annuities, but that's not to say that they are cashing out, transferring all currency to gold, and moving into the mountains.

We listen to experts who do this for a living, who have been with us for years, who handles 3/4 of a billion in personal assets from everyone from CEO's to normal workers, etc.

Shit dude...and seriously...sounds like you can contribute something other than a basic market numbers recap.

 

[CascadeFarmer]

Gold cratered. Shanghai hiked margins for the second time this month.

Was really looking for a correction around here and we'll see if that happens. Madrus was saying some had the target at $1,900 and I heard more like $2,000 but looks like Madrus was more on spot. GLD sold off on huge volume today, largest down day volume wise of the chart that I can see, and a nice way to start a correction...whatever that may be here.

GLD and AUY were overextended and needed a breather anyway and some stocks were oversold or at the least had some room to run up. The background noise is always fun to listen to.

Once again here's a snapshot of gold coming out of an overbought situation...

 

[Hydrosun]

Guaranteed and insured annuities is enough to make make me shit my pants laughing.

Any historians out there want to tell us about the guaranteed annuities during world war II?

Sounds like Confederate or Nazi paper money to me.

 

[The iD]

this is getting too easy. 50% retracement in equities. i shot off half my calls today, holding the rest for thur or fri for S&P1.2K, DJI12K. might hold on to ~10% over the weekend. im laying on the shorts all up this pop. faded. reversed on PMs @ new highs as stated previously, already shot off the majority of short term puts @ ~1830$/oz AU. kept ~15% in play in case it corrects further the next couple days, but i think we retest highs relatively soon, so i layed on some more short term calls @ these lows. will double down after support or the rest of the slide. this isnt the correction im calling for, this is nothing. 60$ swing? thats nothing, just get ready. 1900 was already a big profit taking target, margin hike gives 'er an extra push. i say this bandaid holds 3 days. we shall see. JH is still market mover. yay or nay, place your bets. i bet he tries to split the difference, but once again, we shall see. im short the market, long sad clown faces.

buying bad news because it increases the odds of QE? lol, only in Loopy Land. also where it seems earthquakes are bullish. hurricanes too. i heard the south needed some rain. how 'bout @ 115mph sideways? bullish for Georgia peaches. i still think it hits Fl & possibly the bay, but im no Al Roker. bullish for frozen concentrated orange juice futures.

VXX is still above 40$. options spreads are wide as fuk. fools dont get that Bernak has to swoop in like surprise white knight while the markets are tumbling in his UFO to drop cats w/ 100$ bills glued to them, not into a +10% rally. when Ben slaps on the QE denial, all balls & eyes go to the EU's court and their impending quicksand like liquidity to QE up. that should be interesting. Germany, France, Italy; ive seen this cast before. maybe he announces ZIRP2. or maybe shit is worse than i think and he gets QE rolling.

in local news, im glad i stocked up on 6mo worth of food since the local grocery stores' unployees intend to go on strike to fight for their current wages & health benies, and last time they did so it lasted 4mos. no Walmart or crossing picket lines for me.

i certainly cant complain about the weather here tho. mid 70s everyday. glad i ditched those triple digit temps. hope relief comes for the south soon, not much else to say. thats a lot of energy beating down, getting under already agitated peoples' skin. same for wet up north. and these Haboobs just remind me of the Dust Bowl. hey, a VA earthquake, why not.

on the upside, NFL is about to start. there ya go, found one. stay frosty,

-iD

 

[headiez247]

Shit dude...and seriously...sounds like you can contribute something other than a basic market numbers recap.

sadly I can't. I only have very basic knowledge of the market, which is why our families investment guy is so important. Next time I meet with him I'll be sure to ask a bunch of questions and write it down tho.

Guaranteed and insured annuities is enough to make make me shit my pants laughing.

Any historians out there want to tell us about the guaranteed annuities during world war II?

Sounds like Confederate or Nazi paper money to me.

You can keep laughing in your alcoholically fueled stupor, I'll go a head and stick with the experts advice and keep collecting my 6%

 

[Hydrosun]

You can keep laughing in your alcoholically fueled stupor, I'll go a head and stick with the experts advice and keep collecting my 6%

Bitter much? 106% of paper money one year later if ever sounds great, you stick with those experts.

I don't really get it. You bitch about the cost of student loans yet play an arbitrage of collect 6% pay 3.5%? Don't mean to get personal on a public forum but these are all things you have been public about (similar to my drinking).

 

[DiscoBiscuit]

6% is great for long term, low risk (these days). It's not as good as 10... then again, we're not paying high interest on loans.

 

[SpasticGramps]

Once again here's a snapshot of gold coming out of an overbought situation...

Long overdue pullback. That was quite a run recently. Margin hike was background noise.

Here is what Faber has to say. He is semi-bullish on equities and long hyperinflation.

Faber on how long his view of the market is:
“I think a lot of people will say the markets formed a double low and we have some technical indicators that are going to turn positive, so we could rally around 1,250, but as I said before, for me, we reached a high on May 2, 2011. 1,370 on the S&P--that we will not go through. My view is you have a lot of people with strategies that are very bullish. They have a year-end target of around 1,400-1,450 on the S&P. Then you have the super bear. I think both camps will be disappointed."

On why the markets won’t come back down again to the lows that were hit in 2009:
"On fundamentals one could make the case that we could go lower to around March 2009 lows at 666 on the S&P. But I think we have to be realistic that if the market dropped here another 10% or 15%, there would be for sure another quantitative easing move and other measures taken to support asset prices."

On what we’ll hear from Bernanke on Friday and whether there will be a selloff of Treasures after that:
"I think what [Bernanke] will say is that they are monitoring the situation, and they will take ‘appropriate measures’ when they are required. To some extent we are in midst of QE3 already, because by announcing the Fed will keep zero interest rates until the middle of 2013, they basically encourage financial institutions to borrow short-term and to buy 10-year Treasuries."

On how uncertainty on a global level is affecting the markets:
"What I see extremely well is the stock market has traced out a major high between November of last year and June of this year and then fell sharply with very strong momentum and conviction very rapidly by close to 20%. I think that is a very important signal that we should not overlook. I think new highs are practically out of the question for the next six months to one year. We will likely move lower, but as I said, I do not think we will have a complete collapse."

On why he’s not more bearish:
"I agree with you. I am the greatest bear on earth, but if you compare Treasury bond yields and equities, equities look reasonably attractive. I think we will have zero and below zero interest rates for the next 10 years. In other words, inflation adjusted to keep money in cash. Finally, the mood is so negative right now as a contrarian, you do not take a huge short position when people are as bearish as they are right now and when insider buying has picked up as much. I am as bearish as the greatest bear is. It is just that I do not believe stocks will implode."

 

[headiez247]

Bitter much? 106% of paper money one year later if ever sounds great, you stick with those experts.

I don't really get it. You bitch about the cost of student loans yet play an arbitrage of collect 6% pay 3.5%? Don't mean to get personal on a public forum but these are all things you have been public about (similar to my drinking).

not bitter at all i just think its hilarious that you act as though you know more then someone who does this for a living.

No clue what all those numbers mean that you wrote.

The annuity is a Met Life annuity, just came out, with death benefit rider. Account is guaranteed to grow at least 6% each year. Can chose to withdraw up to that 6% at any time on a monthly basis and the principal investment balance stays the same. Death benefit raises 6% regardless of withdrawals made.

Not sure how school loans pay into this. I have 20k left in loans which started in 6 figures. the 20k remaining is locked in at 2%.

The annuity isnt mine, im just the sole beneficiary and the person who handles this family members finances.

 

[headiez247]

6% is great for long term, low risk (these days). It's not as good as 10...

I didn't know there was a 10% annuity. I'll ask my guy. If it exists there must be a reason why he had me go with this one.

For the record, our guy doesn't make money off us. Because he is a family friend he does all our stuff for free. Could never afford him if we had to pay what the millionaires pay him to handle their investments.

 

[SpasticGramps]

6% is great, BUT that's in nominal terms. You aren't accounting for inflation and please don't bring up the ridiculously manipulated CPI number which doesn't include food and energy (read real inflation).

Given the rate of currency deprecation you are getting poorer. Most people (read non-insiders) can't get yields high enough to counter Bernanke destroying the purchasing power of the money you are taking in. You can't outrun the printing presses.

As long as ZIRP, QE, and OT2 are in place you are getting poorer in real terms.

 

[headiez247]

6% is great, BUT that's in nominal terms. You aren't accounting for inflation and please don't bring up the ridiculously manipulated CPI number which doesn't include food and energy (read real inflation).

Given the rate of currency deprecation you are getting poorer. Most people (read non-insiders) can't get yields high enough to counter Bernanke destroying the purchasing power of the money you are taking in. You can't outrun the printing presses.

As long as ZIRP, QE, and OT2 are in place you are getting poorer in real terms.

The way he explained it to me, regardless of how bad the market does, we get a guaranteed 6% return on the initial investment. If the market drops 1000 points next month, it would still be 6%. It is the GMIB Max and EDB Max with protected growth. If this sounds incorrect to you I'd would really appreciate you putting it in the form of a question and I'll call him up and ask but my understanding is its a simple 6% regardless of how the market does. The only time it changes is if the market was to ever go up, in which case the return can go higher then 6%.

The other thing he has us in is a Hines Global REIT which we have had 35k in for years. pays 7%, cool little real estate thing, rock solid.

 

[CascadeFarmer]

sadly I can't. I only have very basic knowledge of the market, which is why our families investment guy is so important. Next time I meet with him I'll be sure to ask a bunch of questions and write it down tho.

Would be interested to hear what the dude has to say considering he was prepared for the '08 disaster. Was he prepared for this pullback? What did he do to prepare? Please ask him those things...thx.

 

[SpasticGramps]

He's right. You are going to get your 6% no matter what the market does, but I'm not talking about the stock market. I'm speaking to the purchasing power of you dollar. Say you are getting 6% return YTY (year to year), but inflation is 7-10% (YTY). You are still losing money.

He will probably say, "Well the CPI is only .5%" or somewhere around there. Meaning your purchasing power decreased .5% in said time span. So say you get 6% return for the year and the CPI comes in at 2%. In real terms your return was 4%.

What he may not tell you because he may not know is that the CPI was changed back in the 1980's. Food and energy was given almost an insignificant % in the makeup of the total CPI. So when Bernanke says there is no inflation he isn't looking at food and energy cost rising which makes up most of the inflation that the typical (me and you) consumer experiences day to day. Stripping out food and energy out of the CPI hides real inflation. It's why the government tells you we are experiencing deflation, but when you go to the grocery store and gas station you are paying a fuck load more (ie. propaganda).

So say "real" inflation is around 7% for the year (that's probably low balling a bit) and you made 6% return. You are down 1%.

See the difference between nominal and real returns?

 

[SpasticGramps]

Would be interested to hear what the dude has to say considering he was prepared for the '08 disaster. Was he prepared for this pullback? What did he do to prepare? Please ask him those things...thx.

From what I gather he was prepared for this pullback thus the defensive play or he could just be confused as everyone else as why the fuck this market is totally broken and getting into a defensive position.

 

[headiez247]

Would be interested to hear what the dude has to say considering he was prepared for the '08 disaster. Was he prepared for this pullback? What did he do to prepare? Please ask him those things...thx.

I can ask. In terms of this most recent one, in July he called me and said I need to rollover the family members 401k 100% into the annuity because "stuff is about to happen". My guess is that the debt ceiling bullshit had a lot to do with it. 2 weeks later all this craziness went down. When he called me a few days ago to confirm everything was in place he said by making that move we avoided taking a 18% hit on the large 401k account.

I'm not sure how he saw the 2008 crash coming, I wasn't dealing with him nearly as closely back in 2008 as I am now.

 

[CascadeFarmer]

and you made 6% return

Yeah Gramps good explanation but I'd for sure rather be making that 6% instead of what I can get in any bank these days...or for the last few years for that matter.

 

[headiez247]

He's right. You are going to get your 6% no matter what the market does, but I'm not talking about the stock market. I'm speaking to the purchasing power of you dollar. Say you are getting 6% return YTY (year to year), but inflation is 7-10% (YTY). You are still losing money.

He will probably say, "Well the CPI is only .5%" or somewhere around there. Meaning your purchasing power decreased .5% in said time span. So say you get 6% return for the year and the CPI comes in at 2%. In real terms your return was 4%.

What he may not tell you because he may not know is that the CPI was changed back in the 1980's. Food and energy was given almost an insignificant % in the makeup of the total CPI. So when Bernanke says there is no inflation he isn't looking at food and energy cost rising which makes up most of the inflation that the typical (me and you) consumer experiences day to day. Stripping out food and energy out of the CPI hides real inflation. It's why the government tells you we are experiencing deflation, but when you go to the grocery store and gas station you are paying a fuck load more (ie. propaganda).

So say "real" inflation is around 7% for the year (that's probably low balling a bit) and you made 6% return. You are down 1%.

See the difference between nominal and real returns?

Sort of, but this is beyond my knowledge yet seems like a simple enough concept as to where if it was true he would of known about it.

Would you mind if I forwarded what you wrote over to him and see what his response is?

 

[SpasticGramps]

Yeah Gramps good explanation but I'd for sure rather be making that 6% instead of what I can get in any bank these days...or for the last few years for that matter.

Without question. Absolutely without question. He's doing better than most.

Swiss banks have negative interest rates now. I believe all G-7 counties will have the same in the coming years.

 

[SpasticGramps]

Would you mind if I forwarded what you wrote over to him and see what his response is?

Not at all. Be sure to include that I'm making the assumption that wages are remaining the same during said time period.

Here is an About.com breakdown of real vs nominal return rates.

What's the Difference Between Nominal and Real?

1. Nominal Interest Rates vs. Real Interest Rates

Suppose we buy a 1 year bond for face value that pays 6% at the end of the year. We pay $100 at the beginning of the year and get $106 at the end of the year. Thus the bond pays an interest rate of 6%. This 6% is the nominal interest rate, as we have not accounted for inflation. Whenever people speak of the interest rate they're talking about the nominal interest rate, unless they state otherwise. Now suppose the inflation rate is 3% for that year. We can buy a basket of goods today and it will cost $100, or we can buy that basket next year and it will cost $103. If we buy the bond with a 6% nominal interest rate for $100, sell it after a year and get $106, buy a basket of goods for $103, we will have $3 left over. So after factoring in inflation, our $100 bond will earn us $3 in income; a real interest rate of 3%. The relationship between the nominal interest rate, inflation, and the real interest rate is described by the Fisher Equation:
Real Interest Rate = Nominal Interest Rate - Inflation

I'm sure he knows about the Fisher Equation. The important difference in perspective that is derived from this equation is, which I call the tin foil hat divergence, do you believe in the government's espoused inflation rates or is it possibly more (ie has your tank of gas and gallon of milk only gone up 1% in the past year)? Mine sure the fuck hasn't.