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Politics : Welcome to Slider's Dugout -- Ignore unavailable to you. Want to Upgrade?

To: nonrev who wrote (418)	8/17/2005 12:09:33 PM
From: SliderOnTheBlack	Respond to of 50671

nonrev...thanks... This has been a pretty tough market to trade. Bloomberg recently had an article concerning Multi-Billion Dollar Hedge Funds run by some of the Top Names in the Business like Paul Tudor Jones, Louis Bacon & Bruce Kovner. These absolutely brilliantly managed Funds are only up + 1.2 to 1.8% year to date... and these are the best of the best. The advantage the Individual Investor has is "speed." We can enter and exit complete positons in a single trade that can be executed within seconds - and not disturb the price. A Major Hedge Fund may often own Tens of Millions of Dollars in an individual stock and Hundreds of Millions in an single Sector and they can't enter, or exit without creating major price moves. In my opinion...this is a Market to be very Risk:Reward aware...and to keep substantial amounts of Cash on hand to be able to step in and leverage the occassional "discrepancies between Price and Risk". THAT is another advantage for the Individual Investor... we can sit in 50% + cash whenever we wish... and that's not part of the plan for most Fund Managers... in fact, I think Cash Levels in Mutual Funds recently reached a multi-year low. It's hard to take advantage of market "mistakes" - if you're already "all in"... another key advantage for the Individual Trader - as oppossed to Fund Managers. The only significant discrepancy between price and risk that I've seen this year and traded on a Portfolio Weighted basis was the max divergence between the Price of Gold and the Gold stocks at the End of April and into May. That Trade was strongly supported both Fundamentally, Technically and we had the Trifecta with a complete and total washout of Investor Sentiment. I started backing up the truck from HUI 175 down to the HUI 165 level and had posted about these types of textbook/posterchild divergences in goldstocks and the price of gold - ultimately leading to "V-Bottom Rallies" as a rule. ...that thesis, as well as backing up the Truck on that bottom formation was poo-poo'd for the most part....as was virtually the entire move up off of it. "THAT" is also the general rule - versus being an exception (vbg). Then atop the move - when I cashed in the majority of the profits off of the Trade... the Pom-Pom Waving Goldbulls came out from beneath the Porch and became more Bullish than ever. They nay-say'd and/or nicked a point, or two in an uninterrupted "V" move of +40 points in just 20 trading days... and then got hysterically bullish for the next 10 points over the next 10 weeks....and now in a difficult tape - have virtually disappeared, or are back to being bull/bear/long/short - as the tape turns day to day... I prefer to sit with the profits now safely in the Bank and hunker down in "anticipation" of the Commercials Shorting Gold heavily with yet another SMACKDOWN here... and for this move up off of the bottom - to finally get it's first retracment and find a new, higher level of support. I am open to re-loading lower on the weakness I anticipate, or on a fundamentally confirmed breakout higher. But, I am not interested in leaving 40-50 Index points of Profit in a significant Portfolio Weighting (65%) - hanging out in the wind - when there has yet to be a retracment, or retest of a breakout leg and rally. Today in the Oilpatch was a case of taking what the market gives you...and not getting greedy....and "fighting off a tough pitch". While I believe that the Price of Oil has disconnected from it's underlying fundamentals...it does not have the discrepancy of Price and Risk that the washout in the Goldstocks gave us. Now if the OSX shot up to 250 on $75 Oil...then the arguement could be made that the OSX had disconnected and a discrepancy between price and "downside" Risk had emerged. But, it hasn't - it's underperformed significantly - the move in Crude Oil and has only offered moderately attractive, interim trades atop it's major rally's. These have been good Short Trading Opps for those who think there is a disconnect in Crude Oil...but, it's important to be willing to only take - what the market give you and get in and get out. Earlier this Spring the pullback in Oilpatch Stocks offered some $15-$20 retracemts in individual names and it was a very profitable swing trade on the short-side. It's important to take what the Market gives you ...and not get greedy. This morning...in the Oilpatch; we had a very interesting scenario unfold. Early this Spring the Oilstocks would see 3, maybe 4 days of a decline - only to then see significant buying step in and buy dips. A very discernable pattern and rythym developed to the tape... I don't know about other traders; but when you really get in "synch" - there is most definitely a "rythym" to the tape and Traders get into a Zone... not unlike a Basketball Player that get's hot and literally "knows" he can't miss and everyone keeps feeding him the ball... or, in Baseball when a Hitter just goes on a Tear and goes 20 for 30 over a week... Knowing when you are in synch with a trade and knowing when you're not... and being honest with oneself about it... is a key to success. I like to use the analogy of Hitting in Baseball for Trading. A Great Hitter when facing an over-powering Pitcher (think tough market) like Roger Clemens, or Randy Johnson - when they're "on".... waits patiently for a "mistake". If Johnson throws a 95 mph Slider knee-high and on the outside corner on a 2-2 count... all you try to do is get a "piece of it" and "fight it off"...you DO NOT swing for the fences on those types of pitches. But, if Clemens makes a mistake on a 2-2 count & hangs a forkball that comes in navel-high and on the inside half of the plate....then you sit down, pivot the hips and drive it... You fight off tough markets...get your inside out bleeder base hits when you can....and when mistakes are made & they "hang one"... THEN and only then; you "turn" on them and try to drive them into the Upper Deck in Left Field... The Gold Sector "hung one" waist high and over the middle of plate earlier this spring... The Oilpatch has been tradeable...but, hasn't really "hung one" yet. This a.m. we got a huge drop in Gasoline Inventories and a less than expected build in Crude Oil. Short-sided Traders who are just trying to get their basehit's and maybe an occassional extrabase hit... imho, had to cover on the news and the intial turn of the tape. I had a couple of stocks that were flat and a few that gave up some nice $4-$5 moves here. Given the pattern earlier this Spring - one that James Cramer on Mad Money has been pounding the Table On... we often see 3,4 days down and then buying step in to buy weakness. We just had 3,4 consecutive downdays...and Shorts had to be expecting buying off of this Inventory News... I covered and locked in a couple of "base hits". Now... Oil is off and the OSX is again retracing: finance.yahoo.com The advantage is again... with the Individual Investor. We can exit RISK on a couple of clicks of the mouse... and re-enter again, with a couple fo clicks of the mouse - when the market sorts things out.. So, after fighting off a Randy Johnson Slider on the corner and covering on the intial "pop" in the tape.... it looks the Oil Market has decided that what is in actuality a positive "interim" Inventory Report is going to be dismissed and the Sector is now resuming the profit taking in both Crude Oil and Oilpatch Stocks... so it's "re-click" time and back on the short-side... Maybe we're getting a significant message from today's market reaction in Oil's...maybe not... I'll settle for the basehits for now... Adding to Shorts and leaning in heavier on the Short-the-Homebuilders Trade: WLS finally turned "red"... finance.yahoo.com ...now if the HUI would come back down to 190ish. Slider`