Stock Market 2016

J

jj90

 
Banned
If you truly believe that a Trump victory equals rising VIX and hence selling off in S&P:

Buy VXX, buy VXX calls. Conversely, short SPY, buy SPY puts.
 
S

SunW

Woodpecker
SunW said:
Any of you know James Rickard's prediction on the Russian Ruble? He's been bragging about being right on the SDR and he was right. He said that his new guess about the future revolves around the Ruble. Anyone have a link or know what his guestimate is on the Ruble?
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His new book is coming out. This time it sounds more like the end than what to do.
 
H

Hell_Is_Like_Newark

Kingfisher
Gold Member
I pulled the trigger, moving funds from cash to precious metals in my IRA. Not a lot, but enough to give me a bit of a hedge in uncertainty. I was waiting for a pullback in the price of platinum and palladium, as it appears Russia has been dumping metals on the market to raise cash. The dip finally happened. I also moved cash into silver.

I am holding off on gold as there is a rumor there are funds that made a wrong bet on interest rates and gold prices in Europe. We might have a big gold dump coming soon.

The two funds I put cash into:

SPPP - Platinum & Palladium
SLV - Silver

These are not mining ETFs. They just physically hold the metal.
 
TheFinalEpic

TheFinalEpic

Pelican
Catholic
Gold Member
Started swing/day trading futures and selling out of the money call spreads, as I believe there is going to be a correction coming up. I don't want any money in indexes or equities over the next couple months. Also went long VXX call options into the election.

Buying gold is probably a solid investment for the coming months if you want your money to do something instead of sitting in cash.
 
lex the impaler

lex the impaler

Woodpecker
I'm sitting in mostly cash as well. I have a decent nest built on one stock in chemicals sector, just waiting for earnings results later this month, then I'll move to all cash. For those who have have assets in 401ks, what "cash" instruments do you buy?
 
Brodiaga

Brodiaga

Ostrich
Gold Member
I call my current portfolio "schizophrenic" - about 50% in cash, 50% mostly in stocks with a little bit in alternative assets, such as REIT. So, if the market goes up or down, part of me likes it and another part hates it. I have no idea where the market is going and where it will be say a few month from now, so I will be dollar cost averaging the cash into index funds over the next few months. This strategy is based on my belief that the stock prices will be going up in the long run even with all the recessions and market swings which will definitely be happening as well.
 
polymath

polymath

Pelican
chips said:
is it a good idea to buy VXX stocks GTC on the election day? sorry for the nooby question
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First question that comes to mind is, why would you place an order GTC on the day of your catalyst? If you want to bet that things will be more volatile than expected, you should place a day order with a limit price, or maybe even do the trade the day before. If you don't get filled at your limit by late in the day, bump up your limit price until your order gets filled.

Remember, when you buy VXX, you are not just betting that the market will move more than usual. You are betting that the market will move more than expected, or that expectations will become more volatile than they are now. Markets expect to move more than usual on special occasions. In this case, your trade won't make you money if the market moves exactly as expected after the results of the election become known.

I'm not personally a fan of VXX for a lot of reasons, and I would prefer to express my views on market volatility using options instead of stock. You can do this by buying an option straddle on SPY. Still, your idea is not a bad way to bet that the market will react more substantially to the election results than people expect.
 
J

jj90

 
Banned
@polymath: You got the theory right, but realistically VXX rises if the mkt sells off and vice versa. The thesis chips is making perhaps erroneously is that the mkt will selloff on election day.
 
polymath

polymath

Pelican
jj90 said:
@polymath: You got the theory right, but realistically VXX rises if the mkt sells off and vice versa. The thesis chips is making perhaps erroneously is that the mkt will selloff on election day.
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That's because of volatility skew. Downward moves imply a higher likelihood of future volatility than upward moves do.

chips said:
got it, so a more advisable move would be to place an order for the day before the election?
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I would do it that way, assuming that you are playing for an election-day surprise. Not to mention that you probably want to put your position on before exit polls start reporting, etc.
 
J

jj90

 
Banned
@polymath: Agreed, and I'll say that if for example in the rare event SPX opens say >5% up, VXX would open higher, only to sell off rest of the day.

That's not what chips is really asking however, or that his thesis would imply.
 
J

jj90

 
Banned
Got $50 on Trump for shits and giggles because it really looked like Brexit, that pales to portfolio losses MTM in a Trump victory.

ES -3%, Nikkei -4%, USDJPY -2.5%, Gold +2.5%
 
Invisible

Invisible

Robin
jj90 said:
Got $50 on Trump for shits and giggles because it really looked like Brexit, that pales to portfolio losses MTM in a Trump victory.

ES -3%, Nikkei -4%, USDJPY -2.5%, Gold +2.5%
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Like Brexit I think this move is way over done so I wouldn't worry to much about MTM loses. I'm trying to get filled on some ES puts at the moment, markets are super wide though.

I'm short bonds so hurting a little there but there's no way I'm getting out of that position!
 
Brodiaga

Brodiaga

Ostrich
Gold Member
I expected S&P 500 to be down at least for a few days, prepared to buy index funds on the cheap, but it's going up. Another argument against market timing. It's a random walk, you just can't predict it.
 
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