This should be really something to see IMO. If, that is, the con men running the show don't start WW3 because of it.
Thursday, March 13, 2014
Microsoft finally forms The Owl
I have been on topping watch for Microsoft shares for some time now but it looks like the 5th wave ending diagonal peak (with small throwover) is now complete and that waves 1 down and 2 back up are now complete. That means a 3rd wave with gaps down, panic and all sorts of mayhem is upon us. I am sooooooo calling a declining double top on this pig that it is not funny. Just short it here and cover if it goes to a higher high than the black 5 wave on the chart. Even 1 penny higher is too much. That's what I love about EW. It gives you triggers to live by. It keeps you from guessing if you are right or wrong. Right now, in situations like this, we are talking asymmetrical bet city. If the stock beats the odds (which are now 95% chance of imminent crash) then you lose 1-2%. But if right, you win 20% minimum, probably at least 50%, and very possibly 80% or more given that I think the entire stock market is going to collapse in a spectacular way. Even if we only see the 20-30% pullback, you are making money while everyone else is riding down the slope of hope, hardly able to sleep at night out of fear because they have no triggers to live by.
This should be really something to see IMO. If, that is, the con men running the show don't start WW3 because of it.
This should be really something to see IMO. If, that is, the con men running the show don't start WW3 because of it.
Subscribe to:
Post Comments (Atom)
7 comments:
Oops...
Agree, it extended. The pattern was not confirmed and so it is always possible. But what is replacing it is not bullish IMO. I'll give it a day or 2 to play out. However, I will take the fact that you decided to comment anonymously in mock as a positive sign for my overall thesis. It's just the kind of thing one expects at the top. People begin to actually believe that trees will grow to the sky. Having said that, it's all about odds and trigger points, not certainties. My blog is somewhat unique on the web. I do not see anyone making these kinds of actionable model predictions. Most of the EWers out there tell you what the pattern was AFTER the horse has left the barn. They do it because they are afraid of being mocked by the herd. I'm not trying to sell anything so I don't give a crap what people think. It gives me the freedom to postulate and to be wrong without fear.
As always, all non spam comments will be posted, no matter what they say. It's all part of the fun IMO.
Didn't mean to mock, as much to say "ouch" in a way... my trade:
MICROSOFT CORP
03/20/2014 O STC MSFT Jul14 38 Put 20 $0.99 $20.00 $1,959.24
03/14/2014 O BTO MSFT Jul14 38 Put 20 $2.04 $20.00 ($4,100.72) ($2,141.48)
Total Realized Gain/Loss for MSFT ($2,141.48)
Total Realized Gain/Loss ($2,141.48)
I understand your EW analysis; I was only hoping that it had played out as we expected it to (of course).
Btw, I read your blog every day, and we're in the same tree (Lennon). I opened similar positions on GE and JPM based upon your analysis. Here's to being able to say (with apologies to Meatloaf), 2 out of 3 ain't bad!
Thank you, sir, for your thoughtful insight...
Thanks for the follow up, my feelings are not hurt! Again, it's all part of the game and if I didn't expect some kind of feedback from other folks then I would not bother posting my models ; )
Here's what I learned from the 2007-early 2009 crash: pick on the weak players first. Don't go after the big names. They are treated as cash by the market. They only go down (generally) in response to having to liquidate assets in order to pay the margin calls on the their more speculative bets. So find the players that you think don't have legs and target them first. Also, with options you are better off not to use anything except LEAPs unless you think the stock is entering a 3rd wave in the direction of the bet. 3rd waves don't silly dally around and burn the time value out of your bet. 2nd waves generally do not either (they like to be vees). But the safe bet for short term options is to wait for a 3rd of a 3rd setup.
One more thing: options are fun and exciting to gamble with and yes, people go to Vegas for the thrill so they use the stock markets for the same thrill. I get it. But if you want high leverage with low cost of making a wrong bet, I strongly suggest TVIX. You will never make (using TVIX) the 60+:1 win that I have in the past on AIG betting on deep out of the money puts but you will be able to set buy and sell trigger points without risking very much. Also, the spread on options is quite high so once you are in, you are kind of in. That's why I only bet a few hundred bucks at a time on options but many thousands on things like TVIX.
Isn't TVIX for daytrading? What is the maximum time period you would hold TVIX?
Your question deserves a post so I will do one now.
Post a Comment