Wednesday, December 3, 2008

3 PM Rules

Posted by TraderMark at 4:02 PM TweetThis
And...... another 2.4% rally in the last hour

I am contemplating starting a hedge fund named "3 PM Long Short"

Long 3PM to 4PM

Short all other hours of the day

Using these new Triple Leveraged ETFs - should be able to make a few billions in just weeks.

As I said yesterday, these 3 PM moves have jumped the shark. But they have become self reinforcing. It will continue to work. Until it does not. Any day we are not down 5%+ at 3 PM just go long and sell at 3:59:55 PM. Rinse. Wash. Repeat.

For now it has gone beyond cheesy, but it continues.

Tomorrow we have weekly unemployment claims, the UK and European central banks will be cutting rates, and then Friday the monthly jobs reports. But really... just show up at 3 PM and place your chips. The 5 hour work week is dynamic.

Posted by TraderMark at 4:02 PM Comments (5) | Edit This Post | Create A New Post

5 comments:

keithpiccirillo said...

What events, other than the volume of retail players not wanting to be trapped in an Etf overnight would cause this?
The markets have much bad news to decline.
However, the VIX continues to drop, the bank index goes higher, housing has hope, and all we need now are to keep the hubcaps intact when the CEO's depart to enter onto the Capitol steps.
I overhear Cramer talking about JNJ, and Pfizer. Now I will have to unwillingly liquidate JNJ the stock and FAIRX the fund by the end of the week.
I am only giving my EEV a little more slack. I see you had it too.
Thanks for all your writing.

December 3, 2008 6:51 PM  
TraderMark said...

It's not retail causing it; it's institutional game players.
ETFs really have changed the game in my opinion. When they are bought, the underlying issues are bought en masse and we get this monolithic trading in sectors or the entire market as the ETFs drag everything within along.

Why would you sell JNJ or FAIRX? Latter is a nice conservative fund and JNJ is one of the safest stocks out there.

The news is bad, will continue to be bad but just like last spring and summer where promises of a "recovery 6 months away" caused rallies so shall we again and again over the next year. Eventually one will be accurate but the reality is they don't have to be based on reality. As long as enough people believe in a dream the market goes up - see October 2007, see rallies throughout last winter, spring, and summer. Perception is reality. That's the most important phrase to know in stock markets.

December 3, 2008 7:13 PM  
keithpiccirillo said...

Ah, I see.
It wasn't long ago institutional investors would not have attempted such a thing.
Yup, I was reading that most new postions are via the ETF route.
I was using satire about selling those two.
Thinking to rotate/scale out of that core position of JNJ that has protected me eventually to buy something with more wallop.
I'm concerned for health care soon and don't know how that will pan out.
Berkowitz has had a good run and has held up better than Heebner for me but I like this mix of fund risk.
Thanks for your response.

December 3, 2008 10:50 PM  
seadog said...

TM,
I would like to thank you for sharing your keen insight with us.
I am 72 years young and should not be spending too much time in the Casino...but the urge to dabble is better than a trip to Las Vegas.
I have been following and using some of your thoughts and you seem to be ahead of the curve so far. Since I no longer have a real job I can devote as much time as needed to watch this market and all it's wonders. Keep sharing your thoughts. Thank you again !

December 5, 2008 12:49 PM  
TraderMark said...

Thanks sir. Just keep your position size small, keep a good amount in cash , and you can enjoy the casino without ever getting out of your casino.

One day the market shall return to normal, we just need to have our capital with us for that day.

Instead of "serial bottom calling" which seems to be a few TV channels and websites full time job. They've only been wrong for 12 months or so, so far.

December 5, 2008 1:04 PM  

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