Interdum stultus opportuna loquitur...

Saturday, November 08, 2008

NonRant: SPISpy...

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I mentioned on Friday that the three SPISpy e-mails from this week would be posted if poss... well, it's poss. So here they are.

A couple of things have to be borne in mind:

  1. the list that concerns the SPI - the primary futures index for the Strayan market. Hence all times are Strayan time.
  2. the 11 a.m. re-instatement of the short (referred to in the third e-mail) referred to 'tomorrow'; pretty dumb considering tomorrow was Saturday. Most folks either realised that I meant 11 a.m. on the following Strayan trading day (tomorrow).


On Mon, Nov 3, 2008 at 10:51 AM, your Beloved GT wrote:


OK - this rally is done.

There is some very small chance that the Dec 08 SPI holds a spike above 4150, but by the end of the next bear move the SPI will hit 3400. So this is NOT a scalp...

For those of an adventurous bent, have a crack at a long Euro (EC or through any of the myriad Forex providers... you can have a dip on for as little as USD$50). This is a higher risk entry, because there is a small (<20%) chance that - as with the bond from ages ago) the Euro might become unnaturally volatile in the face of likely ECB easing.

This might be a bit like the short entry in the 30year T-bond (from October 6th on the blog), which - for those who rode it longer-term - had to endure a mind-numbing bounce before resuming its rightful path.

Exit 1 (Optional)

On Mon, Nov 3, 2008 at 12:06 PM, your Beloved GT wrote:

Thus far, the short position advocated an hour ago, has been up by as much as 35 SPI points (40 if you were lucky enough to short within a couple of points of the high - but then you would have had to action the call within about forty seconds).

Anyhow - if you feel like taking the money and running, then do so - but do bear in mind that this market is heading lower. A LOT lower.

Exit II (Mandatory)

On Fri, Nov 7, 2008 at 3:27 PM, your Beloved GT wrote:
Hi All,

Several of you won't have taken off the short SPI from Nov 3rd - which is understandable given that there was no clear language which came anywhere near saying "EXIT" (see below).

Now, however, I reckon that it is worth exiting the short and seeking to re-establish it at higher levels; that is, I think a bounce is likely.

It's clear that we are still in a situation where people are trying to call a bottom - which means that bounces will be reasonably vigorous and generally trigger some short covering if they persist heading into the last half hour.

This is happening in virtually every market (notwithstanding the lack of a visible bounce in the US market last night - although if you watched the tape you saw several 50-point bounces that happened VERY quickly, but then were given back). Japan has bounced over 500 points from its low - which is just ridiculous.

Anyhow - Closing the position now pockets about 100 SPI points (for those who are still short) and tonight's US session (a likely bounce session) will permit a re-shorting of the SPI tomorrow (at about 11 a.m.). I would NOT advocate switching sides - there is absolutely no technical or fundamental merit in a long position at present. This closing of a short is purely a re-entry play, given that we were short a session too early.