From 6:39 am Hawaii time:It's taken me a long, long, long time to learn that it's just fine to trade in both directions, to place bets in two entirely different places.
Example: With AAPL getting toasted lately — Fed claiming antitrust practices (app developers are restricted) and Nokia filing patent infringement (today), not to mention global contagion fear starting in Greece, Gulf oil spill, Goldman Sachs banksters, China economic slowdown/inflation threat/real estate bubble ... well, the stock got focking hammered. From 272, it got slammed in yesterday's bollsh1t meltdown and rally, and today went back down (though not as low) to 225.
What I did before today's market opened was get shares of VXX, which measures panic and fear, basically. It's an ETF, meaning it moves like it's on steroids and crack. Dangerous if used the wrong way. With all the sh1t going on globally and here in the US, the percentages are in favor of VXX.
Sure enough, VXX was up as much as 14% in the first hour today (my shares were at 27.40 from afterhours trading yesterday) as it hit 31.27 this morning. Right about that time, 10:30 am Eastern, the market was bloody red. AAPL was at its low (225). But I felt secure because A) Apple will come back no matter how frikkkking low it goes, and B) VXX was making me almost as much money as AAPL was losing.
That gave me a strange new sense of security. I'd heard about hedging before, mainly by using puts and calls (options) and fancy craap like that. But this was a simpler way to hedge. AAPL and VXX traded almost like mirror images on opposite sides of the line.
The only drawback was, me being so green when it comes to holding shares in a "doomsayer" stock/ETF like VXX, I lost track of trying to make a profit in it. Instead, I kept watching how much it was ahead, profit-wise, compared to AAPL's loss for the day. A green number that got as high as $1,400, while the red number for AAPL got as low as -$2,100. For much of the morning, though, AAPL was 'ahead' of VXX by just 200-300 bucks.
I wanted VXX to win, weird as that sounds. And as I forgot about selling VXX, it began to pull back some, from 31 to 30, then the high 29s. Then something really funny happened: Obama showed up on TV. Surprise speech to the nation. Dow Jones was -150 when he showed up. His talk was just a few minutes long, but the Dow immediately ran off its losses. AAPL rallied a bit. VXX plunged!
I felt weird. A bit torn, but more just weird. By the time Obama was done, addressing the matter of Thursday's market meltdown with just a sentence or two, the Dow was down just 75 points, and the momentum carried until it was only -50.
VXX dropped below 28 and struggled to stay above. My paper gain suddenly became a potential paper loss. Now I cared. Funny how that happens. So I kept a closer eye on it, knowing that VXX had bounced off the 27.70 level earlier. It dipped to 27.70, sure enough, and I nearly put in a stop-loss sell at 27.65. VXX ran up a bit and I waited.
Then I realized that taking a really small loss wouldn't kill me, so I decided to set my stop loss at 27.49, then 27.44, and ultimately, I put it in at 27.10. As I did that, VXX bottomed out somewhere around 27.20.
That was 10 minutes ago, and now it's back up to 28.25. The MACD and Stochastics on the 3-minute chart didn't lie. The Dow, which was in positive territory, is now -90. The post-lunch selloff has commenced. Traders will lighten up before the weekend, probably.
Now I'm convinced, it's best to weave in and out of a race car like VXX. Spending more time out than in is crucial. It has its solid re-entry points for traders. Parliament in England is at a stalemate, so nothing has been resolved there regarding the Euro crisis. Germany is still unsettled about Greece.
The chaos will resume by Monday, if not before. I don't plan to hold VXX over the weekend, but there will be a sell and another possible round trip before today is done. Learning as I go along, but the biggest lesson of today is to focus on the trade, not the ego trip of losing money in AAPL or anything else.
To hedge gains an edge.
Example: With AAPL getting toasted lately — Fed claiming antitrust practices (app developers are restricted) and Nokia filing patent infringement (today), not to mention global contagion fear starting in Greece, Gulf oil spill, Goldman Sachs banksters, China economic slowdown/inflation threat/real estate bubble ... well, the stock got focking hammered. From 272, it got slammed in yesterday's bollsh1t meltdown and rally, and today went back down (though not as low) to 225.
What I did before today's market opened was get shares of VXX, which measures panic and fear, basically. It's an ETF, meaning it moves like it's on steroids and crack. Dangerous if used the wrong way. With all the sh1t going on globally and here in the US, the percentages are in favor of VXX.
Sure enough, VXX was up as much as 14% in the first hour today (my shares were at 27.40 from afterhours trading yesterday) as it hit 31.27 this morning. Right about that time, 10:30 am Eastern, the market was bloody red. AAPL was at its low (225). But I felt secure because A) Apple will come back no matter how frikkkking low it goes, and B) VXX was making me almost as much money as AAPL was losing.
That gave me a strange new sense of security. I'd heard about hedging before, mainly by using puts and calls (options) and fancy craap like that. But this was a simpler way to hedge. AAPL and VXX traded almost like mirror images on opposite sides of the line.
The only drawback was, me being so green when it comes to holding shares in a "doomsayer" stock/ETF like VXX, I lost track of trying to make a profit in it. Instead, I kept watching how much it was ahead, profit-wise, compared to AAPL's loss for the day. A green number that got as high as $1,400, while the red number for AAPL got as low as -$2,100. For much of the morning, though, AAPL was 'ahead' of VXX by just 200-300 bucks.
I wanted VXX to win, weird as that sounds. And as I forgot about selling VXX, it began to pull back some, from 31 to 30, then the high 29s. Then something really funny happened: Obama showed up on TV. Surprise speech to the nation. Dow Jones was -150 when he showed up. His talk was just a few minutes long, but the Dow immediately ran off its losses. AAPL rallied a bit. VXX plunged!
I felt weird. A bit torn, but more just weird. By the time Obama was done, addressing the matter of Thursday's market meltdown with just a sentence or two, the Dow was down just 75 points, and the momentum carried until it was only -50.
VXX dropped below 28 and struggled to stay above. My paper gain suddenly became a potential paper loss. Now I cared. Funny how that happens. So I kept a closer eye on it, knowing that VXX had bounced off the 27.70 level earlier. It dipped to 27.70, sure enough, and I nearly put in a stop-loss sell at 27.65. VXX ran up a bit and I waited.
Then I realized that taking a really small loss wouldn't kill me, so I decided to set my stop loss at 27.49, then 27.44, and ultimately, I put it in at 27.10. As I did that, VXX bottomed out somewhere around 27.20.
That was 10 minutes ago, and now it's back up to 28.25. The MACD and Stochastics on the 3-minute chart didn't lie. The Dow, which was in positive territory, is now -90. The post-lunch selloff has commenced. Traders will lighten up before the weekend, probably.
Now I'm convinced, it's best to weave in and out of a race car like VXX. Spending more time out than in is crucial. It has its solid re-entry points for traders. Parliament in England is at a stalemate, so nothing has been resolved there regarding the Euro crisis. Germany is still unsettled about Greece.
The chaos will resume by Monday, if not before. I don't plan to hold VXX over the weekend, but there will be a sell and another possible round trip before today is done. Learning as I go along, but the biggest lesson of today is to focus on the trade, not the ego trip of losing money in AAPL or anything else.
To hedge gains an edge.
6:55 am HST
Note: Fibonacci retracement levels from yesterday's intraday low (23.45) to today's high (31.27):
28.42 (-38.2% retrace of gain)
27.46 (-50.0% retrace of gain)
26.49 (-61.8% retrace of gain)
VXX has held the 50% retrace well so far today. Odds are in favor of traders closing out long positions before today's close. Odds of traders adding positions ahead of the potential influx of hedge and mutual fund buys on Monday (a common pattern during the bull run since mid-February) are diminished due to faltering global circumstances.
Monday could be a bounce depending on the Greece bailout becoming official policy of Euro "league".
28.42 (-38.2% retrace of gain)
27.46 (-50.0% retrace of gain)
26.49 (-61.8% retrace of gain)
VXX has held the 50% retrace well so far today. Odds are in favor of traders closing out long positions before today's close. Odds of traders adding positions ahead of the potential influx of hedge and mutual fund buys on Monday (a common pattern during the bull run since mid-February) are diminished due to faltering global circumstances.
Monday could be a bounce depending on the Greece bailout becoming official policy of Euro "league".
7:00 am HST
Terranova: The sad thing is the machines are driving the direction.
Kaminsky: This is not the end. This is the beginning of much more volatility.
Love to hear that. I'm not persuaded to hold VXX over the weekend (might carry a tiny position), but looking forward to trading it with precision the next few days, weeks, maybe months.
Kaminsky: This is not the end. This is the beginning of much more volatility.
Love to hear that. I'm not persuaded to hold VXX over the weekend (might carry a tiny position), but looking forward to trading it with precision the next few days, weeks, maybe months.
7:09 am HST
Short-term may not be ideal for reading charts, but VXX has definitely begun to coil and narrow its range the past two hours. Holding steady at 28.00, well off its high of 31-plus, but a healthy gain since yesterday.
Barring a visit from Real Santa Claus, a speech to the Euro nations by the Easter Bunny Rabbit and a heartfelt admission of guilt and shame by Darth Vader, VXX is unlikely to return to 27.00 today.
Dow -116, Nas -40, S&P -13. The VXX coil could unleash like Cobraaaah...
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