Chat with Joe Ross
Chat log from: Wednesday, March 12, 2008
Live Chat with Joe starts Wednesday at 8.00 PM U.S. Central Time! |
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| JoeRoss | Hi rascal |
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| JoeRoss | hi brdnc |
| brdnc | hi. I thought i'd just listen today. Just learning about spread trading |
| rascal2 | Hi Joe. Just checking in to hear your take on recent events. |
| JoeRoss | brdnc: Well if everyone just listens, it's not going to be much of a chat. |
| brdnc | fair point. |
| JoeRoss | rascal: Which events do you have in mind? |
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| JoeRoss | Hi Delph |
| delph777 | Hi |
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| zendre | Hi all! |
| JoeRoss | Hi zendre: |
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| JoeRoss | zendre, what time is it where you are? |
| JoeRoss | Hi Sherri |
| rascal2 | FED and global bankers plans. Bond markets. |
| zendre | 2AM as you told at 9PM. |
| Sherri | Hi Joe, Hi Everyone! |
| JoeRoss | zendre: I'm sleepy and I forgot. |
| zendre | :-) |
| JoeRoss |
rascal: I don't know any thing about global bankers plans. I think the rally caused by the FED move will not last very long, and I think it was the wrong thing to do. But it will probably save the banks in the short term. |
| JoeRoss | Lending money to banks that are already in trouble because of lending money doesn't make much sense to me. |
| Sherri | I've got a couple questions. First, I read somewhere that the high for the Euro this year is 1.56. Today it was 1.55 I think. What do you think, please Joe? |
| JoeRoss | Making money easy, is just inflationary. |
| JoeRoss | Sherri: I don't recall the euro being any higher than what it reached today. If the euro ever was at 1.56, I sure don't know when it was. |
| JoeRoss | Sherri: I think euro has a good chance to hit 1.60. |
| Sherri | Oops. Meant target. But, o.k. that's what I wanted to know. |
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| zendre | Euro is not old enough to see that it was above this level :-) |
| JoeRoss | If the FED cuts to 2.5% on the 18th, the euro will probably hit 1.60. |
| Sherri | How long after that do you think it will take the European Central Bank to lower rates? |
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| Sherri | They're not that much better off than we are, are they? |
| zendre | Someone said that the dollar will take over the the carry trade vehicle role from the JPY |
| Sherri | Yeah, Joe said it. |
| rascal2 | You think the FED will still cut after the recent moves? Pushing on a string? |
| JoeRoss |
Sherri: ECB has given no hint that they are unhappy with the high level of the euro. Inflation in Europe is high. Oil is cheap in terms of the euro. I don't see any rate cut by the ECB in the near future. |
| Sherri | Won't they somehow be "persuaded" to back up our Fed? |
| JoeRoss | zendre: If the FED cuts by 50 or 75 basis points, the dollar will stay down and be used as the object of the carry trade. |
| zendre | These institutions must do rate cycles. The FED will go to 2%. Europe is in a different cycle :-) |
| JoeRoss | rascal: Sure, I still think they will cut--50 to 75 basis points. |
| JoeRoss | Sherri: At some point we may see other countries jump in to support the dollar, but I see no signs of that yet. |
| rascal2 | How does a "carry trade" work? Short dollars? |
| JoeRoss | I received the following in an email from Germany to day: "Things have changed from bad to worse in Germany. High inflation, cut in social security." |
| Sherri | In the same vein, why is the bond rallying when the Fed's moves are inflationary? |
| zendre | This must be good for the USA export, thus balancing the trade deficit of the USA. The government pays back its loan with cheap money, and pays with cheap money to the US soldiers in iwand new fighter planes |
| JoeRoss | rascal: Borrow dollars at 2% and buy some other currency where the banks are paying a higher percent. |
| zendre | Joe, can we somehow do these carry trades? |
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| JoeRoss | Sherri, I think the bond market is factoring in the expected rate cut. |
| JoeRoss | zendre: That is correct. It doesn't hurt the U.S. businesses all that much. People on fixed incomes are hurting a lot. |
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| kiwidave | Hi. |
| JoeRoss | zendre: Borrow dollars from a bank in the U.S. and invest them in Norwegian Krones. You can do it, anyone can. |
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| JoeRoss | Hi kiwi: |
| JoeRoss | kiwi are you home yet? |
| kiwidave | Joe, have e-mailed Alan, will be in touch with him. Long Flight Joe, good trip though. |
| kiwidave | Joe: yes good to be in shorts and tee shirt again |
| JoeRoss | kiwi: Glad you are home safe and sound. Alan will be gone a few days this week but back by the end of the week. |
| rascal2 | Is Evergreen (??) still around to use as a resource for such a trade? |
| kiwidave | Joe:OK that will give me time on Friday to sort it out. |
| JoeRoss | kiwi: We are in shorts and tee shirts here, too. I planted lettuce today in my garden. Very nice weather. |
| sb123 | spreadtrader...anything look good to you... |
| JoeRoss | rascal: Do you mean Everbank? |
| rascal2 | Yeah, that was it. |
| JoeRoss | It so, it is still around. But better for carry trade is Jyske Bank in Denmark. |
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| JoeRoss | Hi acman |
| acman | hello everyone. |
| JoeRoss | Hi also to everyone I missed. |
| kiwidave | Joe: haha brightens up after I go huh typical. |
| sb123 | Joe...did bond blaster get you long bonds today?? |
| JoeRoss | kiwi: sorry you caught some freak cold weather. Yesterday and today were lovely. |
| JoeRoss | sb123: I had a student today, so I didn't even look at bond blaster. |
| acman | I tried the 2yr vs 5 yr due to its low amount of margin. It only uses $250 per spread! |
| JoeRoss | sb123: I'll look in a couple of minutes and let you know. |
| kiwidave | Joe, ah well can't win them all "A" will be back out again some when. |
| sb123 | I tried 5-10...good entry...just going wrong way at the moment... |
| kiwidave |
Joe, moving to a big house just like they have in TX will have to set my office up there. Going to look today but looks good so far. Have been on to IB and underway there. |
| JoeRoss | kiwi: Sounds exciting. |
| JoeRoss | sb123: I remember now what happened. Trade Navigator has the prices all screwed up. |
| JoeRoss | I can't see where the trades are supposed to be. Andy also had trouble. |
| zendre | what is the most "safe" market nowadays? Still currency? |
| JoeRoss | sb123: it looks like you would be long with a buy at 118^18, and a stop at 117^02?????? |
| sb123 | my quote vendor had bond-note prices screwed up last week...seems ok now... |
| JoeRoss | zendre: I don't know of any "most safe" market. They are all unsafe and high risk. Trading is a high risk business. |
| acman | try the 2yr vs 5 yr spread. |
| acman | It got to around 7, moved to 6.4 and that is $600 with a $250 margin. |
| JoeRoss | acman: You seem to like that spread a lot. Do they give reduced margin for it? |
| acman | It is $250 per spread! |
| JoeRoss | acman: can you do it 1:1? |
| kiwidave | Joe, I see gold is still making nice inside bars for the picking. |
| acman | That is what I have been doing. |
| acman |
1:1. I noticed that it lets you know when the money is moving out of the stocks. They seem to put the money in the 2's when they are dumping stocks. |
| JoeRoss | acman: Interesting observation. Great! |
| acman | I use it as a helping indicator when the market is near turning points. |
| Sherri | Acman, we should change your name to "acumen"! |
| acman | I keep trying. |
| JoeRoss | sb123: I just ran my Trade Navigator update. Bond Blaster had a very nice win. Entry was 117^26 exit was 118^18 |
| acman |
That UWM is a great ETF. I am looking at the weekly and it has great overlap week to week. Each week is about 10% low to high! Today I got a 8% profit on the market pop. UWM is a 50% margin et on the Russell 2000. |
| JoeRoss |
I don't think I'll trade stocks any more this year. I'm a bit disgusted with them. I have a love hate relationship with stocks. Sometimes i trade them a lot and sometimes I hate them a lot. |
| JoeRoss | I'm in one of my hate stock periods. It must be my blue period. |
| acman | That is why I use the UWM and if I want to short the TWM. I only worry about timing. |
| Sherri | Please, what are the UWM and the TWM? |
| acman |
I just cleared out a stock that Bear Stearns had in an IRA. It was Covent Energy and it was around the enron scandal. They have been sending me statements for 3 years on a $94 balance. I wanted it moved to my IRA and not get any more statements. It was worth $3000 when I bought it. That is why I like the ETF. That ETF even pays dividends due to it is 2000 stocks. |
| JoeRoss | Sherri: UWM and TWM are ETFs (Exchange Traded Funds) |
| Sherri | Thanks. |
| kiwidave | Thanks |
| Sherri | Does anyone know about the free software downloadable from Ninja Trader? That isn't real time data, is it? |
| JoeRoss |
Sherri: You can download and trade on a simulator with Ninja for as long as you want. There is no charge. But when you fund an account and trade with it you have to start paying. |
| JoeRoss | The data is real time. |
| acman | That is a nice way to get people started on software. |
| Sherri | Oh, so Andy is right - I can find my needed bars there. Super. |
| tipiring | Joe - What are your thoughts on using ratio back spreads for trading a long term trend? |
| sb123 | acman ...according to end of day quote for June 2-5yr 5 was up 16.5 2yr 5.5..so how is it going good ...i know 2 yr is 200k...5 yr 100k but still is going down?? |
| sb123 | how do you plot 5yr |
| acman | Look at the 90 minute spread. You will see it move up and down over 1/2 point the past week. |
| JoeRoss |
tipring: I have never liked complicated option strategies. In a long-term trend I simply sell options in the opposite direction to the trend and protect my short options with an open order, good till canceled stop in the futures. |
| sb123 | is it 2 yr |
| sb123 | is it 2 yr *200 5 yr *100 ?? |
| acman | SB I just take the 2yr and sub trace the 5yr or vs. Just 1:1. |
| acman | I just turned on the software. I will let you know in a few minutes what the number is right now. |
| rascal2 | Thanks Joe and acman. Learned a lot tonight. Bye. |
| JoeRoss | bye rascal |
| JoeRoss | how about you brdnc? Did you learn anything tonight? |
| acman | sb It is 6.84 now and is a 1:1 |
| brdnc | tried to follow it as best i could. |
| brdnc | it'll take me a few more of these to get comfortable. |
| brdnc | Thanks |
| JoeRoss | By the way, there will be a chat next week but no chat on March 26. I will be in Brazil giving a seminar. |
| sb123 | so acman even though different tick value ...still plot as 1:1..? |
| kiwidave |
OK Joe have to go thanks for all last week. I have a bit more sleep to catch up on. Regards to everyone. brdnc: It is hard to keep up with live chat but good to back over it in the text form when available on the site. |
| acman | Sb: I buy and sell each at market simultaneously. These things are so liquid there is is only 1 tick usually bid/ask spread. |
| JoeRoss | bye kiwi |
| brdnc | thanks Kiwi |
| kiwidave | Bye everyone |
| sb123 | ok...5 yr up 5.5 now and 2yr is up 1.5... |
| sb123 | so better to buy 5 sell 2yr?? |
| JoeRoss | I'll be trading live in Brazil, if anyone wants to come down and watch me you will be welcome. However, standing room only. We are sold out. |
| Sherri | Wow, we'd all love to come. But somebody's got to water the lettuce. |
| acman |
Right now the spread is near a peak so when stock market gets near bottom, this spread will get around 7 again. When you see these treasuries peak and start moving down, that money is going back into the stocks again. |
| zendre | any off-site-off-line possibility to watch? |
| JoeRoss | I have an automatic sprinkler for mine, Sherri |
| acman | sb: look at the spread on a daily, 90min and maybe a 20 min or so. Plot that with the ER2 and see what I mean. |
| JoeRoss | zendre: No! Only live audience. |
| JoeRoss | It's bed time. See you next week. |
| JoeRoss | Bye all. |
| sb123 | ER2?? |
| brdnc | thanks. |
| Sherri | Thanks mucho, Joe. Good night everyone! |
| acman | bye Joe: See you all next week. |
| zendre | bye, thanks |
| acman | SB good luck on analyzing it. |
| zendre | interesting this spread |
| sb123 | ok...thx |
Next Chat with
Joe Ross:
Wednesday, March 19, 2008
Time: 8:00 - 9:00 P.M., U.S. Central Time.
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