Euro Chat with Joe Ross
Chat log from: Thursday, August 9, 2007
| crosten joined. | |
| SusanL joined. | |
| JoeRoss joined. | |
| crosten | Joe |
| JoeRoss | crosten |
| crosten | Joe, can you share your wisdom, ECB injecting liquidity, Fed injecting temporary funds, also Bank of Canada? What is you view? |
| JoeRoss | As far as I know, there is currently a liquidity crisis. So they are printing more money and putting it into the system. |
| crosten | What is your understanding of liquidity crisis Joe, does it mean that there's no buyer and seller? What is the best way to take advantage of such a crisis? |
| JoeRoss | crosten: Liquidity crisis has nothing to do with buyers and sellers. It means there is very little credit out there to be had. |
| sav joined. | |
| JoeRoss | Hi sav |
| sav | Hi Joe |
| sav | And hi everyone else. |
| crosten | What is the best way to take advantage of such a liquidity crisis? |
| nathan joined. | |
| SusanL | Hi sav. |
| JoeRoss | Hi nathan. |
| nathan | Hi everyone. |
| Marco joined. | |
| JoeRoss | Hey marco, you are back? |
| marco | Hi there. |
| marco | Yes I'm back, finally. |
| marco | Still have to catch up on everything to see what happened. |
| marco | I got 1300 emails, 99% is probably spam. |
| JoeRoss | Wow! |
| sav | Joe, do you think the housing market problems in the US will cause problems in the housing market in the UK and rest of the world. |
| crosten | Joe, did you read about Goldman quant fund being down for the month? It caused quite a stir in the market yesterday. Are you laughing out loud at PhD's who are using math to trade? |
| crosten | Well I am. |
| marco | Strange market the last few days, they all look weird to me on the daily charts... |
| JoeRoss | sav: I think it may already have. Lenders are tightening up on their requirements for giving loans. |
| crosten | Joe, is this an example of helicopter Ben to the rescue? |
| JoeRoss | crosten: I agree with you. They do not know what they are doing. |
| JoeRoss | Very high volatility right now. 1515 S&P options selling for $7.00 with only 5 trading days to go and the market at 1475. |
| crosten | Lots of volatility especially in the currency market. |
| JoeRoss | crosten: Ben didn't come to the rescue. Actually, he said nothing at all. |
| nathan | In these connected markets, can it happen that markets go flat for longer times, or are that times over? |
| JoeRoss | There is a lot of fear and confusion out there now. |
| nathan | Who is Ben? |
| JoeRoss | Ben Bernanke, head of the FED. |
| nathan | Ahhh. |
| marco | Joe: That's how the charts look...going up down and nowhere with lots of movement. I can't find anything to trade so I'll do nothing until they calm down. |
| JoeRoss | I sold the 1515 e-mini S&P options last Friday. |
| crosten | Hey Joe, did you realize that the yen is highly correlated to the equities market? |
| JoeRoss | When volatility is high the best thing to do is sell options. |
| crosten | Great tip. |
| crosten | Joe, do you use a formula to calculate volatility? |
| nathan | Is Ben expected to cut interest? |
| JoeRoss | I use the Options Matrix. |
| marco | I couldn't sleep well if I'd sell options right now...nothing for me ;) |
| nathan | It's a thing of experience probably... |
| crosten | Look at the yen and equities index now. |
| crosten | So correlated. |
| JoeRoss | Yes, right now highly correlated. |
| JoeRoss | Getting back to sav's question about the housing market problem. U.S. lenders are really tightening up the requirements for borrowing money. |
| JoeRoss |
There are a lot of foreign real estate investors in the U.S. For example in the area where I live, German investors have purchased almost all of the available land. |
| nathan | How do you expect the market to deal with these issues? |
| JoeRoss | So naturally, this affects them. |
| crosten | Joe, are you currently day trading CFDs? |
| sav | Is it a too late Joe? |
| JoeRoss | crosten: Unfortunately we don't have CFDs in the U.S. |
| crosten | Why not? |
| JoeRoss | crosten: You will have to ask the government? |
| marco | Joe: do you think they're a good thing? It's a totally unregulated market, isn't it? |
| crosten | Wow the germans are rich! Joe, are you seeing prices falling in your area? |
| crosten | I think CFDs are good cause you can do a spread between 2 stocks. |
| JoeRoss | marco: Right now they are totally unregulated, like forex. But the Australian government is going to begin regulating them on an exchange. |
| JoeRoss | crosten: Prices are falling in every area, but here in Texas it is not as bad as some other areas. |
| JoeRoss | CFDs are wonderful. And when Australia opens the exchange I want to trade them there. |
| sav | I hope prices fall in the UK so i can get on the ladder. |
| crosten | Joe, are you looking at Fed funds future? it is pricing in a September rate cut? Bill Gross says the fed will cut sometime this year. |
| JoeRoss |
crosten: Bernanke gave no hint of lowering interest rates. But even if he did, all he can lower are short-term interest rates. He can do nothing about long-term rates. Those are set by the market. |
| crosten | Joe what is the smallest time frame you look at when day trading? |
| marco | I have to leave, good time and good trades everyone! |
| JoeRoss | cu marco |
| mge joined. | |
| JoeRoss | Hi mge |
| mge | Hi |
| mge | Is the chat still on? |
| JoeRoss | crosten: Lately it has been 30 minutes. In the past as little as 1 minute. |
| JoeRoss | mge: chat is still on. |
| mge | S&P looks like a Ross hook in daily... |
| JoeRoss | 32 minutes more, so if you have any questions or comments join in. Don't be bashful. |
| crosten | Joe, are you taking advantage of the liquidity crisis ? If so how? |
| JoeRoss | mge: Yes, it looks like Rh, but there are a lot of stops to run below them from 3 days of strong upward price action. |
| JoeRoss | Definitely the PPT has been in the market the past 3 days. |
| JoeRoss | crosten: I'm not even thinking about the liquidity crisis. |
| crosten | Joe, how do you know that PPT is working? Is yesterdays rally the work of PPT ? |
| mge | What is PPT? |
| mge | What is the smaller time frame you use for Rh´s? |
| JoeRoss | mge: Plunge Protection Team. An offshore conglomeration of U.S. brokers who try to keep the stock market from crashing. |
| crosten | Look at the market go! |
| JoeRoss | crosten: They were definitely in there the past 3 days. |
| crosten | How do you know, Joe? |
| JoeRoss | mge: I don't trade anything less than 30 minutes. |
| sav |
Joe, when you trade RH or 123 do you always only trade them with enough room to cover cost or sometimes when the move seems strong and there isn't enough room to cover cost but you go for it anyway. |
| JoeRoss | I know because I have friends who tell me what is going on. |
| crosten | Joe, do you use Kelter Channel for day trading? Do you still use Kelther Channel at all ? |
| JoeRoss | sav: If I'm on a very short-term chart, I don't always wait to have enough room. |
| JoeRoss | crosten: I use everything and anything that I have written in my books, or teach at the seminars. |
| mge | What is the best way to "find out" if we are leaving congestion areas? |
| crosten | You have inside connection Joe? That's why you sold snp options!!! |
| JoeRoss | mge: 1-2-3 followed by a Rh |
| JoeRoss | crosten: I don't know about inside connections, but I know traders all over the world and they feed me a lot of information. |
| mge | Did you trade today? |
| JoeRoss | For example: You told me about the central banks injecting liquidity into the markets. I did not know that before you told me. |
| JoeRoss | mge: I am in a trade today and I am looking to sell more overpriced calls. |
| crosten | Joe, do you use Kelter Channels for day trading? Are they useful for day trading? |
| mge | Could you share a bit of your, of what you made today? |
| crosten | Don't think about the money mge. |
| mge | Do you use open interest to sell overpriced calls? |
| JoeRoss | crosten: Yes they are useful for day trading. Everything is useful if you know how to use it. |
| JoeRoss | mge: So far I didn't make anything today. |
| mge | How do you evaluate overprices calls? |
| JoeRoss | mge: Yes, I use OI to sell overpriced calls, but I don't always use it. |
| crosten | Joe, do you think pit noise is useful? |
| mge | You sell the strikes where there is high OI? |
| JoeRoss | mge: The Option Matrix is able to sort out overpriced options for me. |
| mge | Do you use it? I heard you don't use OI any more.... |
| JoeRoss | crosten: Pit noise is useful if you are trading in the pits. |
| JoeRoss | mge: Yes, looking for the most OI can be important, but in the case of my current options I chose one that had a low OI. |
| JoeRoss | mge: It is not as reliable now as it used to be. |
| mge | You sell naked calls or you sell calls and buy puts? |
| JoeRoss | mge: Naked calls. |
| JoeRoss | mge: If you sell a call and buy a Put, you are synthetically short. It is a lot less expensive to just short the underlying. |
| crosten | Regarding last week's quiz about commodities index, are you referring to Goldman Sach's commodity Index and Rogers Index ? |
| mge | Would you sell now puts, like the 1410 or 1400? |
| JoeRoss | mge: I would if there is enough premium. |
| mge | I believe there is enough on the 1410.... |
| JoeRoss | mge: Well then sell it |
| crosten | Joe, answer to the quiz? |
| JoeRoss | crosten: The Commodity indexes are: CRB index. GSCI index. Rogers index: AIG index, Deutsche Bank Liquid Commodity index. |
| mge | I did but also looking for some nice calls... that's why I asked about overpriced calls. |
| sav | Joe, what has been your most consistently profitable form of trading: Daytrading, position trading, spread trading or options. |
| crosten | What is 1 moe |
| JoeRoss | mge: While I'm in the chat, I don't have time to look up the overpriced options. |
| mge | I fully understand... just wanted to know how you look for the overpriced options... |
| JoeRoss | crosten: I don't know. What is 1 moe? |
| crosten | I have looked at the the Goldman and Roger index, the Law of Charts can be applied on them !!!!! |
| JoeRoss | mge: I use the Options Matrix to find overpriced options. It is fabulous! |
| mge | Sorry to insist but I read the matrix used OI to make its calculations and you said that OI is not so reliable any more. |
| JoeRoss | crosten: You can apply the Law of Charts to anything that goes up and down and that you chart. |
| crosten | On a monthly basis what percentage are option trades Joe? |
| JoeRoss | mge: Absolutely incorrect. The matrix does not us OI to make its calculations. You couldn't be more wrong. |
| mge | That's what Alan said in the options forum. |
| JoeRoss | crosten: This month 100%. |
| crosten | eem, I must learn more about options. |
| JoeRoss | mge: You are misunderstanding. Alan uses OI to trade options. It has nothing to do with calculating the matrix. |
| mge | The matrix or the Options Choice? |
| crosten | I dislike the mathematics of options. |
| JoeRoss | OI is part of the way Alan selects the options he trades. He is using OI as a filter. |
| crosten | Joe, what is the words that you keep telling yourself when you are day trading ? |
| JoeRoss | mge: The matrix. The matrix is essentially a Black and Scholes model. It does not take OI into consideration. |
| JoeRoss | crosten: You need to learn how we trade them. We trade with complete simplicity. |
| mge | You are not talking about the options choice spreadsheet? |
| crosten | Joe do you believe that successful trading requires supreme intelligence? |
| JoeRoss | mge: The matrix is not the options choice. The matrix does the calculations. |
| JoeRoss | Then you have to choose which options you want to trade. |
| JoeRoss | crosten: Here are the words: *$%#@(*)_&^#$ |
| crosten | What? |
| crosten | A code? |
| JoeRoss | crosten: I think that trading does not require supreme intelligence. If it did I would become an electrician. |
| crosten | Tom Baldwin says you need no education, how bold is that? |
| JoeRoss | crosten: Yes a code. It spells bftlslplk. |
| JoeRoss | crosten: I agree with Tom Baldwin. |
| JoeRoss | Most people are too smart to make money trading. They make it all much too complicated. |
| crosten | Price of gold is down, I bet you are smiling Joe. |
| sav | Goodbye thanks for the chat. |
| crosten | ::dry |
| JoeRoss | crosten: I'm smiling only because you told me I was wrong. |
| crosten | 666 ouch |
| JoeRoss | It's time to let you guys get some sleep. |
| JoeRoss | Good night all, |
| crosten | I can't stop laughing at the goldman PhDs. |
| JoeRoss | Hasta la vista |
| crosten | hehe |
| JoeRoss | Tschuss |
| JoeRoss | servus |
| JoeRoss | Arrivederci |
| JoeRoss | Au revoir |
| crosten | Sayonara |
Next EURO Chat with
Joe Ross:
Thursday, August 16, 2007
Time: 8:00 - 9:00 P.M., European Central Time (Berlin, Paris, Rome)
COME BACK WITH YOUR TRADING QUESTIONS & COMMENTS!
