I’d be patient, these things take time.
thats my point… I’m going to be patient and wait to take the trade at all. If/ when we are right… you are going to make a fortune. I will arrive late and make some. However, that is consistent with my goals. I don’t need to be rich. I just want to be a decent trader and make a living. So, meanwhile I will focus on the intraday opportunities and wait for the market to make sense again.
Is this like that burst of energy you get before you die?
Just kidding, I have no idea where the market is heading in the short-term. I will just continue to cost average monthly and rebalance quarterly. Most of my portfolio is human capital anyway (L3 shoutout)…
I’m not cruel enough to hope the Americans elect Trump, but if they do I’ll make a killing in market volatility over the coming years. 
And Brexit article 50 years are 2017-2018 , any “brinksmanship” will be good for business, put selling and dip buying. Trump vs China brinksmanship would be the jackpot! The reasonableness of Clinton + central bank market pumping, that would hurt a bit though. 
freakin ebay
In light of my vow to “wait until the party has started” to join it, I decided to go short oil today. I wanted to get confirmation that it was breaking out of it’s $45-$50 congestion phase and that it is going to actually trend lower. There has been very strong rejection at the 44.55 price line a few different times over the past week or so. Today it blew right through it and is not showing any interest in retracement. I got my exposure though SCO( long @ 98.66). Yes, I know the decay is bad, but I am expecting the move I am targeting to happen over the next month or two. Decay should not be that big a factor on that time frame. Selling a CL contract is too much exposure for me. A few shares of SCO is perfect. I will close the trade if we reverse back to $46 (in CL) and am targeting $40 (in CL) for profit taking (or just moving down my stop to lock in profit). Lets see what happens…
I’ll never sell the underyling so harvesting profits is nice
Btw +60% since I sold calls on 7/11
ProShares plans reverse splits for 2 VIX-linked ETFs
ProShares is set to carry out reverse splits on two of its exchange-traded funds that track the CBOE Volatility Index, commonly called the VIX. The fund sponsor will implement 1-for-5 reverse splits for the VIX Short-Term Futures ETF and the Ultra VIX Short-Term Futures ETF.
…and oil is already flirting with breaking the 43 handle. Probably will have to tolerate some retracement before the goal is met, but what a great start to the trade! The charts have advised me well
More oil drama would be nice. China can’t keep buying like this, and their comments at G20 seem a bit concerning.
What’s the plan if underlying keeps rallying? Your calls must be somewhat aggressive to have received the generous premium that you did.
Other than that, yes, well done sir! great trade (still not contrarian)
Oil right now…BYE FELICIA
…or, like, a week!!!
WTI in the $40 handle this morning! Is no one else short right now? Why am I over here dancing with myself
Yeah, I’ve been watching this closely. Last time I sold puts at $20-$25 range, which of course never hit. Made a few bucks, but missed out on the big bounce back to $50.
Really I like what I’m seeing out there – GDP down hard two quarters now, seven quarters of S&P500 earnings recession, oil heading back down into $30s, Brexit, Trump, US stocks at all time high, BOJ continuing desperate craziness like buying ETFs. There’s so much “nonsense to fade with derivatives”, where do we even start?
I closed my position this morning (SCO 113). I felt I was close enough to the target and the speed at which the price has come down made me nervous. I figured a pullback could be very dramatic at this point. So, I’m very happy with the trade.
I am curious to see what happens next with oil. I don’t think we will go as low as before. The fact that we have been there already and were able to weed out some of the weak makes the situation more stable this time around.
Something tells me it wasn’t the chart that caused the price to drop… or to rephrase, the chart “signal”…
Another case of fooled by randomness…
The chart did not cause the price to go down. The chart showed me picture that indicated a change in sentiment which provided the context I needed to feel there was a higher probability that prices were headed lower.
That’s why I rephrased my description to “signal”… The fact that your signal was followed by a price decline is pure randomness. You know, the whole correlation vs. causation thing. That’s how voodoo tactics like charting gain steam… people attribute price movements to inconsequential signals… Then when the signal is wrong they attribute it to factors “out of their control” or explain it away as some “anomaly”. Of course, that’s until the chart signals are wrong just as often as they are right (randomness). At which point, they resort to writing a book on all they’ve learned and the “successes” they’ve had.
^This is the issue. I have yet to see anybody actually crunch the data. For example, when the chart and volume is x, here is the expected move distribution. Just setting parameters for what would be X is difficult, much less determining the expectation. So it remains an “art”, words and folklore, in a pursuit that should be backed by incredible amounts of data that is adjusted constantly. And even then, you would have to believe the function is stable. The markets are not a set of repeating numbers like blackjack. Anyway, don’t mean to attack anyone. Just sharing why I don’t make the leap.
I have a few points I would like to make:
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Trading off of “signals” and using TA as context are two different things. With “signals” you are getting in to algorithmic non-discretionary systems. Using TA as context is discretionary. Non-discretionary signals can be eroded if too many people try to use them and try to beat each other to the punch. The context which influences discretionary trades cannot be eroded because participants apply the information at non specific points.
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With algorithmic systems you do crunch the numbers and with proper walk forward analysis you can find an edge. In this case, when the signal turns out be wrong, you expect it every now and then since you are trading a probability distribution. It is going to be wrong more or less than 50% of the time (depends on if you are working with a positive or negative skew when it comes to profit targets vs. losses).
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Using TA as context (as I did for this trade), you are just using market structure to understand how the collective consciousness is pricing in the fundamentals. It is discretionary and more of an art. However, in the short term I think it is more accurate that trying to figure out intrinsic value. Even so, traders do not always expect to always be right which is why I started right off with a stop out zone.
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a great example of trusting market action OVER fundaments in the short term would be the behavior of crude oil April 17th. Oil had been on a rip to the upside partially based on the sentiment that OPEC was going to freeze production. So when the OPEC meeting April 17 finally came and there was no agreement you would think oil would take a huge dive after that. If you were ignoring what the charts were saying in the weeks following that meeting you would have slowly been ground to a pulp as oil took a climb up to eventually break $50.
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another point is that, ironically, “signals” (while they can be tested to have an edge) are at a disadvantage because they actually ignore context. They make a lot of “dumb” trades that make no sense if you look at what else is going on in the charts. The difference between what was done in this example and a “signal” is that I was looking at a few different factors along with the support line break. There already was a mild trend downward. Also, after the break I watched for a while to see if buyers would come in. In addition, the sentiment matched the macro factors. With a signal you just obey it without any consideration.