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TranceAddict Investors Club @ Marketocracy (pg. 87)
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| mndeg |
options activity today for the front month were bullish on FNM (day before earnings)
interesting. and this on a day where it's down about 15%, people are buying calls. slightly greater volatility skew with calls than puts. however i you look past aug calls options are still bearish on FNM
(SPY) there's a daily negative MACD divergence now, as opposed to the positive macd divergence of around 7/15.
the channel we are trading in on the spy will likely break to the down side |
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| Capitalizt |
Gold and silver have had a very painful selloff and I can see no fundamental reason why it has happened. Bad news across the entire banking sector today..political tensions with Russia..all of this should be very positive for commodities but it seems someone is engineering a selloff. I think it's a great chance to buy the dip for those considering it. I scooped up a little UNG today. The price drop in natural gas has been worse than anything else.. The chart looks horrible so naturally I had to buy ;)
Shakka, surely your portfolio needs a little precious metals exposure. Better grab a little SLV and GLD while it's cheap. :) |
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| mndeg |
i think there's going (well it's going on right now) of an over correction in commodities.
the news is that global growth is over therefore demand for commodities will be down. I wouldn't start buying yet. at least wait until the olympics are over, and then a week after that.
oh, dollar rally too of course.
i'm still making easy money on WFMI puts.
easy money = best money |
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| Shakka |
| quote: | Originally posted by Capitalizt
Gold and silver have had a very painful selloff and I can see no fundamental reason why it has happened. Bad news across the entire banking sector today..political tensions with Russia..all of this should be very positive for commodities but it seems someone is engineering a selloff. I think it's a great chance to buy the dip for those considering it. I scooped up a little UNG today. The price drop in natural gas has been worse than anything else.. The chart looks horrible so naturally I had to buy ;)
Shakka, surely your portfolio needs a little precious metals exposure. Better grab a little SLV and GLD while it's cheap. :) |
It's all about this odd dollar move today. Dollar looks like it's having a major upside breakout which is helping to put pressure on all commodities, gold and silver in particular. Maybe I'm missing something, but it's strange to me that treasurys aren't having a huge selloff if this is all such good news. Fear should be coming out. I'm definitely looking at gold to see if it holds $850/oz. Everyone is getting so bulled up and trying to call a bottom--this seems eerily like March all over again. Bear markets are brutal. They're hard for everyone, bullish or bearish, to make sustained profits in. At least from my perch that seems to be the case. |
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| mndeg |
| airline index anyone? |
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| Shakka |
XAL? Check out the trendline from the December 2006 peak. Possible overhead resistance.
That's one thing that I find funny about technical analysis. I had some guy the other day tell me that if AAPL broke one particular level, it would confirm that Steve Jobs is sick again. Seriously! |
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| Dervish |
| quote: | Originally posted by Capitalizt
Gold and silver have had a very painful selloff and I can see no fundamental reason why it has happened. Bad news across the entire banking sector today.. |
Wasn't bad news at RBS. Their losses including their write downs were better than expected. The dividend is safe too. The only part of the business making losses were the ABN parts which can be realigned to be more profitable or just plain cut.
If anything people are taking their money out of (now) highly priced commodities and putting them into the (now) cheap financial markets.
I do think with banks drawing a line under their write downs and adopting more prudent policies the turn is now coming, or even here. Next year they will make more than this year, maybe not as much as last year but still profit. |
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| mndeg |
S&P 500, about 2% gain now. Amazing. I have no position in it, that is one serious rebound though.
The price is what it is some people try to out think the markets and that's why retail almost always loses. There is no such thing as too high or too low. It will turn around once it wants to.
looks like consumer cyclicals are leading the market
http://www.smartmoney.com/map-of-the-market/
surprising |
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| Krypton |
GAMMA VALUE
There is another metric I have come up with that measures a stock's valuation. It's called Gamma Value. A stock's gamma is the FS divided by the RS. The higher the gamma, the more undervalued and cheap a stock is. The chances of a higher gamma are best when the FS is high and the relative strength low. High gammas indicate a stock is trading cheaply. Low gammas indicate a stock is trading expensively.
1. Low Gamma - Below 1 ----- Indicates a stock is too expensive.
2. Fair Gamma - 1 ------------ Indicates a stock is fairly priced.
3. High Gamma - Above 1 -----Indicates a stock is cheaply priced.
Gamma can also be useful in setting a target price for a stock. Every investor should know what a stock is worth before buying. Investors using my system should believe that stock prices are not precise appraisals of a company's value. The Value Investing method seeks to buy into fundamentally excellent company's that are trading cheaply. Thus knowing a company's inherent or intrinsic value is very important.
Multiply the gamma of a company by the current stock price.
Gamma x Stock Price = Valuation of Stock
For example, stock A is trading at $20 and has a gamma of 1.3. Multiplying 1.3 by 20 would equal 26. So the share price of the stock is indicated to be $26 and not $20. This means the stock is cheap and worth more than it is trading for. The gamma does tend to exponentially inflate stock valuations the higher the gamma is. So a gamma of 3 or 4 or even 5 may result in an extremely high stock valuation. That anomaly is offset though by the gamma metric itself. Even if the gamma is very high like 4, the indication of cheapness is still there. A buyer buying on high gammas will always be buying companies that are at or close to their lows.
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71% SUCCESS RATE!
NOTE: Must be registered on CAPS to view the test, it's easy to do though...
CLICK HERE FOR TEST
All the fundamental strengths and gamma are posted in the "pitch" section.
For those not in the know, gamma is a valuation metric which tells you in the simplest most definitive terms whether a stock is under priced, over priced, or fairly priced. A gamma of less than 1 is an over priced stock, a gamma of more than 1 is under priced, and a gamma of 1 is fairly priced.
The link provides the test of my gamma, and as it turns out, it is a raging success. I left this portfolio alone since December 2007, and only now took a look at it. Most of the picks were spot on. I think it pays to not mess with it for a while, and just let it play itself out. The results will come.. |
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| Krypton |
| I honestly believe this is the bottom we've been waiting for. The oil bubble has popped, commodities prices are plummeting, including gold and silver. Interest rates are low. I think the conditions are set for the bottom. I loading up on my stocks by the end of August. |
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| Shakka |
| quote: | Originally posted by Krypton
I honestly believe this is the bottom we've been waiting for. The oil bubble has popped, commodities prices are plummeting, including gold and silver. Interest rates are low. I think the conditions are set for the bottom. I loading up on my stocks by the end of August. |
It could be. There are certainly some significant moves going on with commodities, oil, the dollar, etc. However, this has barely been a bear market and we're still in the midst of some of the worst financial issues this country has seen in nearly a century which is precisely why I am still skeptical that we've seen the last of the bear. But I could be wrong. Bear market rallies tend to pull everybody in right before they rear their ugly head again. But then again we've had so much anti-free market intervention that it's hard to be certain. My biggest concern is that if this becomes a bottom there are still too many issues that we're still only postponing the inevitable and when it does come, it will be that much worse. Call me a pessimist--I think I'm being realistic. This is the hardest market I've ever seen. |
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| Dervish |
I think it could be the bottom for some companies in some areas. But defiantly not all.
Like for example house builders could still take serious losses proit wise. (the share prices have been hit so hard initially they seem to be having a bit of amini rally over here right now) |
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