Tony Oz Calls The Stock Market Bottom
Published October 9th, 2008 in Trading Tags: bear market, bottom, Cramer, inflection point, jim cramer, market bottom, RSI, sentiment, technical analysis, tony oz.Just got word that Tony Oz is thinking along the same lines and believes the market is near a significant bottom here. He bought a bit over $500,000 worth of SPY today and will buy more if the market declines again.
His reasoning includes the market having seen capitulation, pessimistic sentiment and he also points to the RSI which has fallen below 20. Watch the 9 minute video for more:
I’m glad to see someone like Tony Oz confirm my own thinking that we are close to a bottom - otherwise, we might as well just flee to the hills and look for a nice cave to hunker down in. Unlike, Jim Cramer, Tony Oz makes infrequent public market calls, so when he does, it merits attention.
Poor Cramer, he just may come to regret his somber advice for people to get out. But then again, knowing him, he will have no problem in sweeping that under the rug, along with all his other unprofitable calls which he never revisits.
bear market, bottom, Cramer, inflection point, jim cramer, market bottom, RSI, sentiment, technical analysis, tony oz
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19 Responses to “Tony Oz Calls The Stock Market Bottom”
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I absolutely don’t disagree….BUT….the question now becomes will the recovery be V-shaped a la 2002 or L-shaped like after 1987.
Dunno the answer, but for everyone’s sake I hope it’s V-shaped and we roar off the lows.
1. Future is trading below 900 (around 880) now so market bottom? Probably, but people NEED TO STOP CALLING BOTTOM! EVEVERY ONE NEED TO LOSE HOPE BEFORE BOTTOM IN…
2. V shape recovery? Ya you wish… with ALL THESE DEBT? You are lucking to get L shape… I’m thinking huge depression (as result of credit bubble burst) and will be like Japan Style of 20 years of bear market where we go no where fast…
It’s too easy to say we are near the bottom on a week where indices loose 20%.
you might have a technical rebound just because of that. It wouldn’t mean that the bottom is there, and if it was the bottom, that a good recovery would follow. You could be see stocks depressed for several years, since there are no savings to invest in them anyway
I posted this on another blog I read and it sums up what I think.
While crashes are rare events they do happen but normal Technical Analysis does not work in crashes in my opinion unfortunately. It is a guess and maybe a good one as to what level the indexes will stop going down. Who knows? Hell this could end up being worse than 1929 and nobody is saying that yet. The Nikkei in 1990 maybe the model. It went form 38000+ to around 7000 something if memory serves.
Well I hope this Tony Oz guy is right. I’m sure he is not having a great day today.
When everyone starts talking about living in the forest in caves and the coming of the mad max world, I really think it might be time to start picking away at stuff.
Hi Babak, I was hoping that you might share your thoughts on how to scale into the market. I sold my puts Thursday, and then bought ES and NQ March calls (~10% of my account balance) on Friday’s midday pullback. If they expire worthless, so be it, but the risk/reward seems very good. If the market moves appreciably (up, or down) I’ll add to it. I’m curious if you agree with this approach. If yes, could you comment on techniques to add to existing positions? If no, could you share what we should be looking for prior to entering? Best regards, Evan
Evan,
I would really be careful about options right now. Implied volatility is at an all time high which means that options are very expensive. What could potentially happen is you could be “right” and still lose money… by which I mean, the market goes up - or stops going down - which causes volatility to collapse from 75 to say 30 … taking the value of your options down with it. Having said that, always do your own due diligence and thinking.
UPDATE: 10/11/08
If you have not figured it out about me by now, I put my money where my mouth is!
As suggested in the newsletter for 10/10/08 I made the following trades on 10/10/08:
1. In the morning I bought 8 ES (S&P 500 Index) contracts at 849.50 value: $339,800
Sold after it topped at 922 and came down to 905.50, value: $362,200
Profit: $22,400
2. I bought another 8 ES (S&P 500 Index) contracts in three stages at an average of 876.25 value: $350,500, and I sold them at 938.75 after the moonshot rally topped at 949. Value: $375,500
Profit: $25,000
Total profit for the day: $47,500
On another note, watch where I call for the time to buy to be 1:00pm or 3:00pm. (about 5:40 on the video timeline) There was a 1000 point Dow rally after 3:00pm.
Tony, I thought these were “position” trades, not short term ones?
Babak, those were the add-ons that were bought and sold on Friday. ES Trades are not position trades, lol.
I sold the “investment” SPY at the open today as I said in the newsletter: It was the fastest bull market in history…
Up 25% from the low of Friday, at one point , I had to pull the trigger.
Bulls make money, Bears make money and Pigs get ….
If the low on Friday at 840 held up 52 weeks from now, and the market was trading at 1065, then it would be called a “Bull Market” It took just TWO days to make that move..
All in cash now and waiting for the next opportunity …
yeah, I thought so, just wasn’t clear. good stuff Tony
No capitulation yet according to “lowry”. Yesterdays wopper did not get there either.
roberto, really? is this direct from the horse’s mouth? got a link? quote?
Hi Babak,
I had quite a learning experience last Monday in the market — I realized that I
had paid a HUGE amount for ES volatility the prior Thursday when I bought calls.
I never thought that such a large percentage was associated with volatility;
I mistakenly thought that option cost was mostly time value and intrinsic
value.
Your reply over the weekend made me rethink my position and try to get a
better handle on modeling accurately option pricing. I decided to sell into
strength last Monday — I had March 990 Calls and at 11 AM Man Time, they were
about $80 x $84 on IB (the Dec ES future was about 960). I set a limit sell
at $110 and hoped for a decent profit (I bought the prior Thursday for $102).
Back at work, I checked the close and saw that the ES peaked at about 1005,
a full 45 points higher than it had been earlier. Additionally, the ES had
gone 15 points past my strike price — I KNEW I had sold.
When I got home, I found that IB showed a close of $95 and I still had the
options. I saw that the VIX had dropped every bit as fast as the price had
risen.
Ultimately, I sold them after-hours through IB for $120 as the futures moved
higher. A good profit, but at what risk!
Anyway, I wanted to thank you again for your efforts with your blog; your
insight is much appreciated.
So for the late response on this. Yes - this is from the horses mouth. As of today 10/24 you can see we are not there yet.
Well this guy was dead wrong if he bought around 880… considering we reached 666. Hope he had a stop-loss and stayed disciplined.
MB, Tony traded out of that position with a profit (it was a short term call). See the comments before yours for the details.
Babak,
Monday is an interesting day. The last 30 Mondays of the October expiration week are 22-8. The last one percent down move was in 1979. Dave, looking for an up day, but a down day would be seen as a sign of weakness. Expirations are different animals. Good Luck to us.
just eked out a 23-8