Anybody taking advantage of Coronavirus?

[Concrete Helmet]

I added a few hundred shares of SQQQ in anticipation of a dip....and the market has gone up almost every day since I bought it! (just my luck). Anyhow, I'm down about 6% in it but I'm going to hang on and add a few shares here and there as a hedge.

Have you ever thought about STRIPS? I've used them to counter almost every dip over the last 4 months. They're high right now but there's still room for short term relief on those down days. I keep a small portion as part of my portfolio anyway because they will go up even on small gain stock days like yesterday.

 

[BMF]

Have you ever thought about STRIPS? I've used them to counter almost every dip over the last 4 months. They're high right now but there's still room for short term relief on those down days.

No, but I'll do some research. Thanks!

 

[FireFoley]

if you want to do it the easiest way, just look for index or sector short etf's, i'm not going to talk about shorting individual positions, just like i'm not going to talk about options/futures, sorry

This is probably the easiest way to short stocks is by going long one of those inverse ETF's. Shorting individual stocks can be a pain in the azz if it is a thinly traded stock. You may not be able to borrow the stock and thus can't short it or they might charge you a high rate of interest to short it. Then you can be called on the position at any time. Even tho I don;t use ETF's hardly, at least being long an inverse allows you the option of getting out when you wish.

 

[Detroitgator]

This is probably the easiest way to short stocks is by going long one of those inverse ETF's. Shorting individual stocks can be a pain in the azz if it is a thinly traded stock. You may not be able to borrow the stock and thus can't short it or they might charge you a high rate of interest to short it. Then you can be called on the position at any time. Even tho I don;t use ETF's hardly, at least being long an inverse allows you the option of getting out when you wish.

Yeah, I'll use sector/index ETFs (even ultras either way if they have enough volume, i've never had a problem getting out) for swing/momentum trading. For instance, I bought UCO (ultra oil) also on May 19th, it's up 44% since then. For my purposes, that is MUCH easier than playing with futures.

 

[Detroitgator]

Well, in the fight between greed and fear, wall street (not us peons) is no longer buying the "fear" that's been pedaled, they are buying everything, with unlimited fed funds... balance sheet to oblivion, here we go, enjoy the ride.

 

[FireFoley]

The narrowness of the move up has become frightening. I know people like to say it is somewhat broad but that is horseshyt. They may be moving up, but the banks, the transports, the Utes, the REITS, many industrials, all act like dogshyt. I am not saying they have to keep up with the market, but they at least need to have a pulse.

 

[Detroitgator]

The narrowness of the move up has become frightening. I know people like to say it is somewhat broad but that is horseshyt. They may be moving up, but the banks, the transports, the Utes, the REITS, many industrials, all act like dogshyt. I am not saying they have to keep up with the market, but they at least need to have a pulse.

Stop trying to apply logic/norms! They are irrelevant in this environment and you're still fighting it... We are in a 1000% watch the TECHNICALS environment right now, there are no fundamentals. I'm completely with you, but everything you mentioned is still in the 3 STD DEV rising channel and everything you mentioned bounced hard off the bottom of it over the last few trading days. That means they are propping up EVERYTHING. Yes, this will end badly, but there is wayyyy more upside before that happens.

Edit: but make no mistake, this whole game is likely an extinction level event for the middle class...

 

[Detroitgator]

Again, using the S&P for charting, and I did this YESTERDAY (so add in today):

• Over last few days, we have moved back inside 3 std dev channel of the rising channel formed since the March bottom.
• We are above the 8, 21, and 34 MAs.
• We are not overbought on RSI (using 2,95,5).
• 3080 was the resistance yesterday, we closed above 3100 today.
• Dow Transports is still above the 3 SD channel and only tested the bottom.
• This shows a bias to the upside potentially to the 3300 level.
• There is still a gap down that needs to be filled between
• Problem with the pullback we had: did not test the 50 SMA, which I would have liked. The Dow ALMOST did, the Invesco RSP NON weighted did test the 50 and has bounced nicely, but it is still below it's rising 3 SD channel.
• Bias is still toward bulls.
• Support is now around 3060 (futures)-70 (cash).
• 3 likely scenarios:
  • Green - We are in Wave 5 rally towards 3400 highs, then Wave 2 drop (the proverbial second chance to feed at the trough). Would have to break June high. This is probable.
  • Yellow - Rally to June highs, but not hold, then drop to June lows. (would be Wave 5 top, then Wave 2 drop).
  • Red - Least probable, break below resistance to start big Wave 2 correction.
• I think we at least test the June high.
• If we approach 3400, I'll probably go to cash and put on some shorts.

Well, we stayed above the resistance and pushed through 3165... We're going up.

 

[FireFoley]

Well, we stayed above the resistance and pushed through 3165... We're going up.

I agree for now. I saw they tried to sell off those extremely high multiple no earnings "growth: stocks in the morning and that lasted about 2 seconds. This is eerily similar to 2000 IMO, except back then there was a lot more companies/stocks to bite the dust. I am well aware that the stock market is a discounting mechanism but even on the rosiest of terms, most, if not all of these zero earnings high flying stocks, will never reach an EPS level to remotely justify even their current prices. Regardless of what products/services they provide, their current stock prices do not even warrant hardly any other company to look at them as a takeover candidate. To justify such a purchase, it would have to be a take under, and most companies will say no to an offer like that.

 

[Detroitgator]

I agree for now. I saw they tried to sell off those extremely high multiple no earnings "growth: stocks in the morning and that lasted about 2 seconds. This is eerily similar to 2000 IMO, except back then there was a lot more companies/stocks to bite the dust. I am well aware that the stock market is a discounting mechanism but even on the rosiest of terms, most, if not all of these zero earnings high flying stocks, will never reach an EPS level to remotely justify even their current prices. Regardless of what products/services they provide, their current stock prices do not even warrant hardly any other company to look at them as a takeover candidate. To justify such a purchase, it would have to be a take under, and most companies will say no to an offer like that.

Again... My GOD man, stop with you fundamentals mumbo jumbo!!!

I agree on 2000... Actually, people should analyze all the major crashes of the last 100 years for signals.

I'll update tomorrow night, but on S&P, we are now clear to 34-3500, then likely a deep, deep pullback to "second chance/bite at the apple" levels followed by big, big upside to the proverbial top.

 

[no1g8r]

Again... My GOD man, stop with you fundamentals mumbo jumbo!!!

I agree on 2000... Actually, people should analyze all the major crashes of the last 100 years for signals.

I'll update tomorrow night, but on S&P, we are now clear to 34-3500, then likely a deep, deep pullback to "second chance/bite at the apple" levels followed by big, big upside to the proverbial top.

Was awaiting your post last night before asking, but what do you consider to be a “deep, deep pullback”? 10%? 20%? 50%? More?

I agree that the S&P is relatively clear to near its all-time high of around 3400, though not so sure about the “deep, deep pullback”.

 

[Detroitgator]

Was awaiting your post last night before asking, but what do you consider to be a “deep, deep pullback”? 10%? 20%? 50%? More?

I agree that the S&P is relatively clear to near its all-time high of around 3400, though not so sure about the “deep, deep pullback”.

In rough terms, we probably go up through June highs, then leg up to 3450/all time high, then the drop could be as deep as 27-2800 level.

 

[wrpgator]

Again, using the S&P for charting, and I did this YESTERDAY (so add in today):

• Over last few days, we have moved back inside 3 std dev channel of the rising channel formed since the March bottom.
• We are above the 8, 21, and 34 MAs.
• We are not overbought on RSI (using 2,95,5).
• 3080 was the resistance yesterday, we closed above 3100 today.
• Dow Transports is still above the 3 SD channel and only tested the bottom.
• This shows a bias to the upside potentially to the 3300 level.
• There is still a gap down that needs to be filled between
• Problem with the pullback we had: did not test the 50 SMA, which I would have liked. The Dow ALMOST did, the Invesco RSP NON weighted did test the 50 and has bounced nicely, but it is still below it's rising 3 SD channel.
• Bias is still toward bulls.
• Support is now around 3060 (futures)-70 (cash).
• 3 likely scenarios:
  • Green - We are in Wave 5 rally towards 3400 highs, then Wave 2 drop (the proverbial second chance to feed at the trough). Would have to break June high. This is probable.
  • Yellow - Rally to June highs, but not hold, then drop to June lows. (would be Wave 5 top, then Wave 2 drop).
  • Red - Least probable, break below resistance to start big Wave 2 correction.
• I think we at least test the June high.
• If we approach 3400, I'll probably go to cash and put on some shorts.

Good stuff, Detroit. It's amazing how the technicals reflect human nature. It pays to study history of rallies and crashes. The spring 2020 crash was been largely news / emotion driven--not economic or earnings related--setting up a classic buying opportunity. I was largely in cash before all this and in mid March bought QQQ, AAPL & oil etf.

 

[Detroitgator]

Good stuff, Detroit. It's amazing how the technicals reflect human nature. It pays to study history of rallies and crashes. The spring 2020 crash was been largely news / emotion driven--not economic or earnings related--setting up a classic buying opportunity. I was largely in cash before all this and in mid March bought QQQ, AAPL & oil etf.

There are just flat out no rules right now regarding fundamentals that you could possible apply given the complete distortion of everything, you can really only trade the market in front of you. Look at financial sector... we know for earnings that it's going to be one of the worst quarters ever, which should mean what to stock price? But no way, it's already baked in, the news will be "it's bad, but not AS bad as we thought", and then they will rip higher 5-10%. Why try to fight that?

 

[wrpgator]

There are just flat out no rules right now regarding fundamentals that you could possible apply given the complete distortion of everything, you can really only trade the market in front of you. Look at financial sector... we know for earnings that it's going to be one of the worst quarters ever, which should mean what to stock price? But no way, it's already baked in, the news will be "it's bad, but not AS bad as we thought", and then they will rip higher 5-10%. Why try to fight that?

The Trend is your Friend.

 

[no1g8r]

In rough terms, we probably go up through June highs, then leg up to 3450/all time high, then the drop could be as deep as 27-2800 level.

So about a 50% retracement off of the March lows. I could see that.

 

[Detroitgator]

So about a 50% retracement off of the March lows. I could see that.

Correct... the proverbial second bite at the apple/second chance to get in at a "discount." So, if things keep tracking like that, and exactly like they have since the March low (and it's been spot on in the "technical" world), we could really surge above 34/3500 because "dumb money" will be piling in at the top of that wave, and I'll go largely cash like I did going into June high, then ride down with SOME shorts and ride that retracement down, then go "all in" for awhile long.

 

[FireFoley]

Correct... the proverbial second bite at the apple/second chance to get in at a "discount." So, if things keep tracking like that, and exactly like they have since the March low (and it's been spot on in the "technical" world), we could really surge above 34/3500 because "dumb money" will be piling in at the top of that wave, and I'll go largely cash like I did going into June high, then ride down with SOME shorts and ride that retracement down, then go "all in" for awhile long.

I know this all based on technicals and I look at charts also, but my time has been severely limited lately, so I appreciate your info greatly. My question and thoughts are would anything change if the gov't renews all the extra free money thru the end of the year or beyond. The charts don;t change but would that make you rethink your thesis?

 

[no1g8r]

Correct... the proverbial second bite at the apple/second chance to get in at a "discount." So, if things keep tracking like that, and exactly like they have since the March low (and it's been spot on in the "technical" world), we could really surge above 34/3500 because "dumb money" will be piling in at the top of that wave, and I'll go largely cash like I did going into June high, then ride down with SOME shorts and ride that retracement down, then go "all in" for awhile long.

Sounds like a plan. I've been selling put spreads for a credit on the way up. I've been looking at a similar top as you are, just north of 3400, before I switch to selling call spreads for a credit on the way down. It makes a few bucks while I pass the time awaiting the retracement and subsequent upswing over the 90 days or so after the bottom of the retracement, depending on the velocity of the move up.

 

[Detroitgator]

I know this all based on technicals and I look at charts also, but my time has been severely limited lately, so I appreciate your info greatly. My question and thoughts are would anything change if the gov't renews all the extra free money thru the end of the year or beyond. The charts don;t change but would that make you rethink your thesis?

You're welcome, and i'll try to post on Sunday and mid-week if I can. As for your comments, all the charting right now is based on "free money," anything extra would just push things up more, extend time lines out (in general terms).