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Tag Archives: S&P 500 E-Minis

astro view—using astrology to trade

jupiter-market optimism-pessimism cycle

Well here we are ,win lose or draw——- On 2/25 at 2:51pm jupiter is square pluto, a neg astro cycle.This means that there is an expectation of a declining market.In addition, the 8 day cycle is maximum bearish. The 8day cycle is derived from the moons of Jupiter and it defines optimism-pessimism swings.you never know its just a probability game not a certainty,but over a period of time a portfolio of trades  with this or similar conditions will win.if the sp e-mini lifts overnite  ,I suggest selling retracements and overbought conditions.

a heads up for next week —- the astro view will turn positive

astro view-2/22-2/25

im writing this on 2/22 at 830 am with the benefit of the overnite and 2/21 activity.the market as measured by the sp e-mini has undergone a 62% retracement from  the 2/10 low to the 2/18 high. this is the significant swing on a 60 min chart. as i write the e-mini has lift a bit off that retracement point.

the cycles on tap this week include 2 longer term periodicities .jupiter sq pluto culminates on fri,2/25 and is negative. on sat 2/26 uranus sq nodes culminates and is also bearish. when these 2 cycles clear we will be left with neptune sextile neptune which is bullish. so the the net result of this complex cyclical picture is to expect a bearish influence to predominate especially towards fri but in the context of a persistent bull move.

the short term daily view is:

tues —-positive-a recovery

weds—-positive in am,negative after 2pm

thurs——- neg

fri—-neg—possibly very neg

4 reasons to use financial astrology

first reason is that is unique and revolutionary, suited to the times we live in.it represents a total committment to”out of the box” thinking.

second reason is that it is for the elite, and it represents the type of person who is successful in the market.

third reason is that it creates a plan when u committ to it it gets u in gear with natural forces.

fourth reason is that it works (within hi but not perfect) probability.this is the most important reason. a value that is required for market success.

see-astro-economics -david williams

A Guide To Controlling Your Profit and Loss (P&L): Lose The Ego and Find Your Self.

A Trader Confuses Their Ego With Their Self

My ego took over; I gave my entire month back in two days and then proceeded to go negative on the month. Today I began the journey back, booking $10,000 of profit. I despise my ego. I am not talking about the “ego” that is high on itself; I am talking about the ego that intentionally sabotages your self-discipline. I am talking about the ego that I am in a battle with. Until the ego is eliminated, one’s abilities trading or otherwise will forever be limited. The ego represents attachment. Attachment breeds greed and emotion. When one is attached, they fear losing that which they are attached to. Suppressing the ego as a trader is perhaps the most difficult of journeys. As a trader, one is constantly measuring self worth by a number on a screen. A trader is attached to the number on the screen. In the Yogic tradition we are taught to “be in the present”. Nowhere is that more true than in trading. The dichotomy for me is that a trader’s ego predominantly exists in the present and it is always attached to the screen. As such, the present is one long internal battle. It is the “self” that I strive to be. As the self, I will realize that the emotional swings I experience when my ego prevails are not a true reflection of me, but actually the antithesis. I lost the battle last week. That is behind me and I continue my journey. But how does a trader rationalize no attachment to the changing value on his monitor, yet at the same time the trader’s entire focus is on maximizing that value. One can only conclude that the present is about the decisions not the number. The trading decisions must always be made from an unemotional and unattached

A trader's ego is both a reflection and a number on a screen

position. The Profit or Loss will then be what it will be. While the mind may be elated by profit and distraught by loss, neither is a reflection of the self. It is not the changing P&L that is affecting a trader emotionally. It is the mind’s and the ego’s attachment and perception of that value that destabilize the individual. Control the ego and you control the emotions. Control the

A Trader Searching For His Self

emotions and you control the decisions. Discover your “self” and you are in control of your ego; you are in control of your trading. As I said before the number will be what it will be. But you certainly will improve the odds by finding your “self”. I am still looking; please let me know if you find mine. I can be reached at HedgeFundLive.com. Thanks.

Market Predictions, New Years Resolutions and The Year that was 2010…….All Employees Must Wash Hands and Read This Blog

Saad - Vintage 2010 "He is our future at Hedge Fund Live"

This will be a long year. Barring an extreme exogenous event such as a major terrorist act or an all out collapse of the European union, I expect the market to end strongly this year. I expect it to be a slow steady grind all year as opposed to a gappy volatile run. I also expect a number of records to be broken, such as most consecutive days in a row up on the S&P. As such I expect to

New Years Resolution - Spend More Time With Saad

see a near 1400 close on the cash. Let me be specific about the European Union. A difficult restructuring of sovereign debt, even a loss to some senior lenders, even a bailout of Spain does not fall into exogenous events. In-fact these events are expected. The open issue, is how orderly the Union deals with the problems.

That said, the art of investing, the sport of trading and the millions of athletes that run the race, have just finished a strong season. It is time to rest a bit. Warm up, practice, and take a few lay up games. Reassess the competition and the ever-evolving landscape of the sport. While I believe the market moves higher over the first quarter, I expect it to be a modest 3% - 6%. It may seem odd to refer to this as modest, but the times they are a changing.

I am looking forward to a consistent trading environment with ample opportunity for singles and doubles and an occasional triple. The time for home runs is behind us for now. Low concentration and high diversification. 2X to 3X leverage on any extreme move.

Saad and I make new friends

On the long side of the market I am looking for 2 types of names. Names that have been beaten up in the past 6 months due to earnings, margins and business or consumer related issues. BBY, CSCO, Bank Names, YHOO, GNW, THOR to name a few. I still believe that the fundamentals of these types of companies remain intact, and that an improving economy and a grind higher market will give you the biggest bang for your buck in these names. Secondly, I will be looking for LBO related names and Merger and Acquisitions plays. Names that should be taken out, names whose independent business models can be taken no further but can be absorbed into a broader infrastructure that can reshape the companies direction. SVU, IMAX, PLCE, STX, AONE, GAIA, TTWO, GME.

On the Short side I will be looking for names that have been on a tear, where expectation far exceed the reality of the trading levels. I will be looking to sell bubbles and high short interest names. Names trading near 52-week highs that I believe fast money will shift out of. CLF, LULU, XOM, QCOM, KSS   etc etc etc.

As I said in my previous blog, my plan is to take trading and things in general day by day for the next couple of months. Life, day by day. We have had a strong opening performance for the firm MTD, up over $150,000. The chemistry on the desk is evolving, and while it has taken a year to get here, the progress over the last month has been remarkable. Caroline remains my trusted right hand. Jeff Tynik and Zach Guterman, have truly come into their own as traders. They will have long productive careers ahead of them. Betty Lee has transcended both trading and business and is an integral part of the Business execution plan. The return of Mark Moskowitz, and addition of Jach Shuman have substantially added to the collective intelligence. Saad and Judah have built a foundation for our business and have proven to be

Saad wears a special brain cover when programming

one of the most unique pairings in entrepreneurial history. Kandace and Lamont have allowed me to see through my vision of merging media with a trading desk. They have added a touch of class to a previously raw process. Dean’s consistency and discipline anchor us all. His wisdom and broad perspective help us stay grounded and true to our discipline. Marc Schwartz’s trading prowess and leadership are cornerstones of our profitability. His grounding and calmness under volatile and difficult trading and business environments help us control losses and maximize gains. My intention is to add 2 to 3 more individuals to the collective, as well as fully fund 5 – 10 university desks and integrate their perspectives as well into the broader collective.

As we enter year 2, I am left with a number of business thoughts.

Without vision there is no business.

A business begins with an idea, but the vision takes time to come in to focus.

It needs experience to grow.

It needs failure to have clarity.

It needs success to have direction and focus.

My vision for the business while broadly consistent still changes on a daily basis. Each challenge causes reflection and reevaluation. I see a merger of media and finance, an intense website and an intense trading desk, transparency and real time investing, real time education and real time experience, and collective intelligence imbedded in a proprietary trading environment. Collective intelligence that is exposed to and thus strengthened by the website’s membership community.

Saad is making the mustache cool for kids of all ages

The first year has had many setbacks and expensive mistakes. I would not change a thing. All has been as it should have been. While at this nascent stage I am approaching the business day by day, I am significantly more confident with the future. I look forward to the challenges that are ahead of me.

S&P Technical Analysis and Charting In December = “CHART THIS MOFO”

S&P Technical Analysis - Emotionally Disturbing Process

The lines on the charts over the month of December represent emotions not technical’s. I can feel the emotion in the air. It is end of a long and difficult year as we emerge from the worst financial crisis most of us have ever seen. We have a long way to go before we find our way back to our highs, but it is time to put the emotions behind us. From the close of 12/9/2010 till the close of 12/14/2010, four trading days we gained 11-½ point in the S&P cash. Today we lost 65% of that gain. For the total five days we gained a whopping 5 points.  In the last 3 days our portfolio gave back 65% of the gains we had made for the month going in to Monday morning. My team will give me numerous answers as to why. But the bottom line is, that it has been an extremely difficult market to trade, as certain names have moved significantly while it appears the underlying market has been stable. But, alas, the names we were long, were for shit, and have crushed us these last few days. So be it. I am quite Zen about the whole thing, though Dean seems to feel differently. Schwartz, well I can never quite tell what he is thinking, but in either case I kind of feel like WTF? They both think that the market and the fluctuations in the P&L psych me out. Not true. We got into a heated debate as to my use of the word “APPROCH”. Again WTF. I will pick another word if that one doesn’t work for them. As the Buddha said  “However many holy words you read, however many you speak,

S&P Technical Analysis - Marc Schwartz and Dean Machado face me down

what good will they do you if you do not act on upon them?” Now I am not saying my words are holy, though every so often i do……..But either way the time to analyze your methodology, to reassess your strategy, to rethink your “APPROACH” meaning the way you size in to a position and how rapidly you do it, is when you have strong hands. Even a novice knows that when one is losing money it is time to reassess, but the professional knows that when they are on a run, half of it is luck, the other half is skill. But when the luck runs out, all the skill in the world will not compensate. No run lasts for too long. Luck arrives randomly and leaves unexpectedly. Reassess your “approach” or whatever other word you want to use, before your luck really runs out.

Dean and Marc, was that any better?

Ujjayi Breathing, My Self and My Ego - Wall Street Yogi: Day 2

Limit Order Trading - Breathe

Trading free of emotions is a cornerstone to a successful career as a trader. Impulsive decisions can be controlled through rigorous discipline and training. One must “Breathe Through” their trading. Predetermined trades must be thought through, entered, and patience practiced as one awaits execution of the trade. “In the moment trades” or reactive trades, still require some degree of “Pause”. The pause can be as simple as closing the eyes, deeply inhaling through the nose, hold the breath in for a 5 count, allowing fresh oxygen to flow to the brain. Exhale fully and slowly through the nose. Inhale again through the nose hold for a count of 5. Again

trade execution - a wall street yogi

exhale fully and slowly but this time through the mouth, Exhaling all emotion and negative energy. Reassess the trade. This entire process can take up to 30 seconds. Inexperienced unqualified traders might argue that by that point, by the end of the “Pause”, the trading opportunity has passed. They may be right about that particular trade, but they are definitely wrong in general. The error is on two fronts. First, more often than no, the trade will show itself again and allow one to take the opportunity again. Second, if “Breathing Through” is practiced consistently, than statistically you will have increased your odds of success. Any practice enforced on a consistent basis, any rule employed over time will, better one’s odds for success. An “Extended Breathe Through” is best suited for traders, prior to entering Limit or Algorithmic orders. During  an “Extended Breathe Through”one should take a moment to focus on the third eye. While continuously breathing through the nose (known as the Ujjayi breath), close your eyes and focus on the space between your eyes. The third eye is unique to the individual. My third eye, starts as a whirlwind of colors, as I look up into a cone with a small opening at its apex. As close to the apex I feel I am getting, it always feels out of reach. It is perhaps, vast “Emptiness” on the other side, and thus nothing awaits my efforts to make my way through. Perhaps “Everything” is just through that hole, just out of my reach. Perhaps “Everything” is actually seeing the vast “Emptiness” and understanding that everything is within you. Or perhaps “Emptiness” would be seeing that everything is out of your reach. Patience as I breathe my way through the apex. Once through though, the only thing I see is the view back to the bottom of the cone. I find myself looking inwards back at myself. Just as I made my way through the cone and expected to see “Everything”, I find it is nothing, yet I find nothing is “Everything”. I see my “Self” not my “Ego”. It was my ego that went looking for “Everything” but found nothing. It is my “Self” that looked for nothing and found “everything”. It is then that I turn to see all that is beyond the third eye as well as all that is not. I am ready for the trade. I am ready for the decision. I am ready.

Mergers, Takeovers, Acquisitions - 1 + 1 = 3

Mereger and Acquisitions, 1 + 1 = 3

Takeover Stocks , Acquisition Targets

So here we are at the end of the week. As I said at the beginning on Monday, quiet till the end of the week, then the first of what should be a real gap. Ironically, what I thought would be a quiet week has actually resulted, in a nearly 7 handle move in the S&P in the last 4 days. At that implied rate we would close somewhere around the 1256 level. As I am still a believer in 1275, I see one or two gaps coming. Each day we see a glimmer of what is to come, the market sells off and then recovers gaining small ground. This is how the Bull and Bear battle it out. CDS spreads have stabilized. Overly Short names like LULU continue to squeeze up. The M&A cycle I have been blogging about is starting. CYH has made an unsolicited bid for THC. Beckman Coulter has put itself up for sale. They have hired Goldman to help with the process. Clearly the name Goldman has not been as tarnished as many had predicted. You might recall in previous blogs I have discussed the short memory of Wall Street. KKR may raise its bid for Australian fund manager Perpetual. These are the signs that experienced investors look for to signal the start of a new bull cycle. Air products (APD) raised its bid for Airgas. I like buying the names that have been beaten up, as I see them as the “return chasing” names that managers will go after in the final weeks of the year. Names such as BA, CSCO, BAC, MSFT, EQIX and ART to name a few as well as all the home builders and many of the regional banks.  Yes, I am known to be a “perma bull” but as I am in trader rehab, I have had the opportunity to see the market with free hands and objective eyes. The Bears are running out of ammo. As I said last time we are not that far away from “Ball Ripping”.  Oh yeah, one more thing, our government has announced they have made 35billon on the Tarp. It didn’t cost the taxpayers anything and I have to say, it is a point for team Obama.

Predictions for The BULL CYCLE

Get on my Bull Cycle

Nice rally but that is not “The One”. I wouldn’t be surprised if we breathe for a bit, but oddly enough, too many people are expecting things to settle down and as such I attach I higher probability to another smaller rally today. Further gains in general, this month will be made in gaps. Yesterday’s rally was not the Neo Rally I have been blogging about. That was just a tremor foretelling of what is to come. All the signs are pointing to a Flash Dash. A move that scares the piss out of the shorts. A move that starts like today but ends with a gap up that is so dramatic that it exhausts us by the end of the day. It will occur when we least expect it. Could be tomorrow could be next week but we are within months of it. It will convince even many of the greatest bears that we are at the beginning of a bull cycle that I believe will run longer than any we have seen in history. It will no be driven by fictitious Internet company valuations but by concrete systemic shifts in our society. It will be a decade where we will relieve ourselves of much of our dependency on oil. A decade where advance in the biotech field will extend life spans well beyond historical average annual increases. More than 1/3rd of the job market will consist of industry and opportunities that did not exist 10 years ago. We have only scratched the surface of globalization. The Internet is still in its infancy stages. Face book, ITunes, and Netflix are but small steps forward in what will be a life dominated by Internet activity. Children’s homework, Family’s groceries, and Individual Banking simply scratch the surface of the power that the Internet offers. The world will make evolutionary strides exponentially over the next decade, as the Internet will manifest itself as a form of collective intelligence, a gathering of ideas and a communal process of solving problems. The European Debt crisis will actually strengthen the Union in the long run. The crisis has forced the continent to solve a systemic cultural problem that has been a century in the making. While I don’t believe Obama will see a second term, I do believe that both political parties have learned much theses last 3 years. Many Politicians will no longer take for granted the support of their constituents, or risk the end of their political career, though they will find ample opportunity to host a cable talk show. Kim Jong-Il, Castro and Osama bin Laden will die (that may have actually already happened already), Ahmadinejad will retire to his condo in Miami and convert to Judaism. Extremists will find themselves isolated as the Middle East will have to resign them selves to being significantly more integrated into the global economy as the world’s dependency on oil abates.  These are just a handful of my predictions. Most importantly though, I have spent the last few months speaking at numerous universities to the generation of doers, and I am happy to report that they are anxious to get out there and improve the world. Many of them will. I can always tell the winners at the starting gate, and I have met quite a few winners.

How To Solve The Sovereign Debt Crisis: Pass The Hot Potato….Again


A short Friday and we trade down nearly 100 points in the Dow. Is Portugal bankrupt? Is Spain Bankrupt? Probably the same way your neighbor down the block or in the next-door apartment is. If my expenses exceed my revenues for too long I will be bankrupt too. Perhaps I can get someone to bail me out….finance me. But when they take a look at my kid’s tuition bills, my utilities bills and mortgage, the potential financiers will exact such a pound of flesh that it will take decades for me too get back on my feet. But it doesn’t matter. Ultimately the Financing will be there, and statistically I will get back on my feet, it is all part of the human condition…..suffer, prevail, suffer more, prevail again.  Therefore, there will always be someone or some group that is willing to take the risk for the appropriate reward, and as history has taught us, most recently with TARP, that time heals all wounds and then in financial markets, “patience leads to profits”*. Sure enough you wake up this morning and France and Germany have come to an agreement, along with other interested parties, to bail out Ireland and create a permanent facility for dealing with these issues by 2013. Credit spreads will certainly tighten and all will be good in the kingdom of Europe again. But do not perceive this to be some fantastic altruistic act on the part of particular governments and “interested parties”. It is a trade, one in which the new creditors believe one way or another it is ultimately more profitable to them to finance then to let countries go bankrupt or currencies disintegrate. Oh, sure there will be lots of blood shed and losses for some groups but others, in time, will be rewarded handsomely. That is the nature of markets and crises. It has been for all of history and it will be for the foreseeable future, until all government can figure out how to efficiently and perhaps even profitably run their countries. But if you believe in that prayer then I have a bridge I would like to sell you in downtown N.Y. Until then “The world will keep passing around the Hot Potato known as Leverage.”** We, the leveraged ones are the world’s Hot Potatos. But at the end of the day, what does that mean for your investment portfolio?  I believe that as we finally clear this European debt crisis part 2,  that volatility will start to come out of the market. I believe that the Koreans will stand down, because neither wants war, but more importantly China and the U.S.

Hot Potato

do not want the Koreans to have another war. I believe that our country is recovering and that recovery will be exponential as new industry and leaders are born out of the wreckage that was the previous decade. I am long the market in size, not because I am a gambler looking for a big payoff, but because I am a believer in this country and the triumph of the spirit……. OK, yes I am a bit of a gambler as well, and I am looking for a big Pay Day. But I still do believe in the triumph of the spirit. Pass the Hot Potato.

*(Jeremy Frommer Nov 2010)

**(Jeremy Frommer Nov 2010)