Tuesday, October 28, 2008

You don't know what you got till it's gone.

That's not just a lyrics from







Here's what you need to read and understand to the core, see where it's right and where it could also be wrong and in your mind give the probability of being right. If that scale is above 50% right, then you can't get what you lose (50% so far as measured by the indices) by going in even more than you already have. Deflation does not call anyone friend. Brand that word over your forehead if need be.


The game then, is to understand credit market, and use every opportunity to hammer on individual companies that get swept UP in a rally (like AXP, heheheh) and short the f* out of it EVERY single time until it's zero.


Here's something you can keep as a screensaver in case you keep forgetting/needing motivation, and enjoy the rest of the day. I know I will :)

56 comments:

Greenie said...

cough....cough.....

Greenie said...

Well Mr. Spy, I was asking your opinion about COF. Are they any better than AXP?

gtt said...

Those SPX rallies look a bit optmistic, hehe.

MTGSPY said...

COF was born and raised in the subprime unsecured. There are many layers of trenches, traps, and artilleries to assault that one in a frontal fashion.

However, one well placed sniper is enough to take down AXP, who's born with a silver spoon in its tongue.

My advice: the better the asset quality of a finance company, the MORE intense you should short the company.

D said...

The reason the market cannot crash here is because one (or more) of the firms that is against the rocks is short equities...

Once these firm(s) are squeezed we can go base jumping with MTG.

MTGSPY said...

GS wasn't short VW, they got rebuffed by Citi. On the other hands you are right there are tons of retail shorts getting crushed due to lack of attention towards FX. as touched upon yesterday :)

D said...

The squeeze is not over yet, I am thinking we need to shake out the people with USD/JPY stops above 102.

MTGSPY said...

Yes, that is a good spot to start "working" again :)

gtt said...

So.....rather than retracement levels on the indices, are you saying it's more important to watch the dollar/yen? Is 102 a real retracement target or grasping at straws? Help out a n00b.

MTGSPY said...

hold a second off the 102 JPY. Look at the recent discussion at TF. Man, was too busy today otherwise would have posted today afternoon. I got stopped out first thing in the morning in all my index shorts after oh, only about 40 SSO points?

Read that TF post about VW, man I know "legal" is negotiable issue in stock trading but this is clearly a "non".

Greenie said...

Which thread Mr. Spy? I cannot figure out :(

MTGSPY said...

http://www.tickerforum.org/cgi-ticker/akcs-www?post=69167&page=3

Greenie said...

Only thing I found out is that Mr. Genesis is on the wrong side - which means the market is on the right side hahaha :) :).

I noticed that Mr. Spy got a room and board invitation with GA's would be vice president, if SHTF.

MTGSPY said...

He said he didn't take a hit. I did but that's the stop that I wished was hit YESTERDAY so I could sleep and wait for the next train to short. Lemme guess what Greenie, you would bail after 50 pts ES would you? I saw you would bail for 20 pts in the past.

D said...

Everyone hug and be friends, we are all in this together remember...

If we can follow through all the way into the close I see no reason CONCEPTUALLY why we couldn't go straight to 1200+ by Friday's close.

We are writing a new chapter in speculation here, let's not kid ourselves. I imagine the previously unthinkable and it comes true all too frequently these days. Who has traded with VIX 80 levels? There you go...

D said...

KD is trading one ES and probably knows the margin clerk's birthday. Anyone trading real capital does not have time or energy for his variety of political banter. Mine political banter is like MTG...I favor no government. Next question!

:)

D said...

Here we go...

http://www.suntimes.com/news/24-7/1245829,jennifer-hudson-murders-possible-motive-102808.article

MTGSPY said...

Despite the shock and awe fraud from VW yesterday, I did make decent money FIRST thing in the morning. Shorted SPG @64 out at 61 and change x4000. Didn't go under 60 and that was enough to cover. Believe me, be a true bear, and by that you have the best risk management you can give yourself.

D said...

The SRS implosion was just awesome yesterday... REITs are my primary future short target again. I hate anything with debt!

:)

D said...

NYA is showing the way...

gtt said...

NYA = ??

Yen strengthening today. Bad news for longs? Or just "healthy" pullback before bullshit rally back to 1050?

D said...

NYA = NYSE Average

Let the market breath...EOD will be a more appropriate place to make a judgment call.

gtt said...

Everyone and their brother is calling for a 3 month rally now it seems. Even Marc Faber.

D said...

Yea, well MFF called me up being crazy bearish. It actually does get annoying sometimes. Today, he was particularly aggressive and was confident that I am going to lose my ass. I was so irritated by him that I actually told him his "new" nickname is money fade. He blabbered on about drill, drill, drill, strong dollar and how drilling brought down the price of oil.

:)

MTGSPY said...

What are you short D? Can't find any ZION today to short - this is very frustrating day.

D said...

I am holding long into at least Friday's close...I considered selling when we were up and buying back lower tomorrow, but elected not to. The only issue with a lot of the client stuff is t+3 settlement and I will have an issue if I want to short at the close Friday or Monday if I get too sexy with the trading here.

The last thing I need is a free-riding restriction at this time. I had that happen in march as I was turning bear-bull IT.

MTGSPY said...

I am working on an index that will tell me this quantity:

Risk aversion NET of PPT effect.

Unlike the FAKES out there I refuse to use the VIX. VIX is the effect and not the cause.

D said...

That GE news was the red-headed step-sibling of the Buffet/GE news on October 1st...

just saying!

:)

Really Lost said...

D, what are you going to do when MFF loses all his money and you don't have that indicator any longer? LOL

gtt said...

OMG 20x leverage for Mrs. Watanabe???

http://tinyurl.com/6pyblt

D said...

R-L

MFF is truly special... Fortunately, he confirms my trades rather than takes me into them. Given the record, the latter would be reason enough to put a trade on though. MFF is beyond statistical aberration, the holy grail of the markets that everyone searches a lifetime for. I like to share my fortune with everyone though.

:)

MTGSPY said...

Watch the yen crosses, KRW, and India/Indonesian/SGD. Awesome move foretells good bullish action - look, Paulson just hand out 120B to a bunch of 3rd world countries, and will give even more soon. This is pandemonium.

Do this will ya, go long via low premium calls on "safe" stocks. Thank me later.

D said...

USD/JPY 103.53 is where I think I will cover my longs first...we will see though.

:)

MTGSPY said...

Don't cover. John C. Dugan.

D said...

On a funny tangent, I had a buddy call me last week and leave me a message telling me how I was right about everything... Anyway, grabbed dinner and drinks last night and was explaining how the purchasing power of the dollar goes up in deflation and it wasn't sinking in. When I said, "imagine buying a new SL 63 for $15k cash" he got excited.

D said...

MTG - Don't get crazy bullish now that we exorcised the bear from you. Keep it cool. :)

Remember there is a pricing issue and the debt is only beginning to default. We haven't dealt with the punishment to the jobs market and economy as a consequence. My thoughts are that this could perpetuate until everyone agrees that housing is still a bust again next summer. People don't even have hope to lose yet, so the next top is certainly a ways in front of us. At 103.53 I will probably be trading a short term correction and buying a lower level...everything is tentative though.

MTGSPY said...

Oh, let's just say i got fresh new ammo just right now, tonight.

Stockfarmer said...

So Mtgspy you are off the short bus?

Is the plan to try to get the 3rd world as bloated in debt as the US?

MTGSPY said...

the swap lines are infinite. That was confirmed.

TARP $ is next to free the first 5 years. And most REFUSED initially until was told something else, and no, NOT a threat. Take that however you wish. I am not at liberty to say it or I will get nailed by cops right here and now.

MTGSPY said...

AXP and SPG are not TARP recipients. So you know something else I do. :D

Stockfarmer said...

Damn I need to sign up for some TARP. It sounds like the presses have been unleashed.

D said...

Answer one question for me then, are you bullish on US real estate?

gtt said...

"TARP $ is next to free the first 5 years."

explain??

MTGSPY said...

Why are you interested if I have morphed into a J6P, D? No. US real estate has either been a prison to its occupant or out of reach for whoever wants it.

MTGSPY said...

There is no condition for which banks participate in TARP. Most will get rates of 3-5% the first 5 years, and that counts as tier 1 capital, and who knows what else. Preferred dividend is not tax deductible but some games here will be easy I imagine. I see a very big subsidy of hard cash, very hard cash.

D said...

You are teasing me...so not nice! You just flipped from being an uber bear. You don't have to give details, those will come out in the fullness of time and it doesn't matter to my positions at this point. If real estate remains a war field, the US consumer will still toast which inevitably leads to a destruction of the employment structure and economy.

Question number 2, when in the foreseeable future do you see yourself shorting a UYM or UYG again?

:)

MTGSPY said...

Rather than UYM I will watch FSLR. I was correct in round 1 that UYM will drop more than FSLR. This time the other way around. Just keep watching Ben's cash heli dropping swaps, TARP and all kind of USD paraphernelia.

MTGSPY said...

I just got a blackberry that cash from TARP will be available Thursday. My o my, what to do, :D?

gtt said...

Noice. Thanx for the tip bro.

D said...

https://www.wellsfargo.com/mortgage/rates/

There are going to be some really nice properties at VERY cheap prices available in the next two years.

MTGSPY said...

This market is very disfunctional, got pipped twice for $200 bucks and you guys are on your own.

D said...

I haven't traded with a stop since the spring... That's your problem, volatility is WAY too high to position trade with them. Focus on a good entry and hold her with conviction...it's going to be a little rough.

:)

D said...

You think we should have 500 free points on crosses now? Before the past couple months the most volatile movements in currencies were a couple hundred and a 400 point move during the crisis in the 90's.

:)

MTGSPY said...

I look at the list of things I want to own long and I am just disgusted, the price is NOT right.

D said...

I know what you mean MTG, pinch your nose and buy... That's the hardest thing for a fundamental guy like yourself to do.

"It's time to be a brown-bag investor!"

hehehehe

D said...

TIA- This is AFRICA!!!!!