Where to now after a 2 day Yellen rally in the Markets? - Rickj's Handicapping Picks

Where to now after a 2 day Yellen rally in the Markets?

11:00 Update

Thursday we went 1-1 on our 1/2 unit plays both in the NBA. Clippers -6  was an easy winner as they won by 20. But we lost on toronto under 201.5 by a half a point. It was really looking like we were going to be on a 4-0 run on our half unit plays but with 8 seconds left Atlanta Scott  hit a 27 ft 3 pointer with an assist by Hinrich  that cost us the win on the under:(

Just 4 more day until opening day in Baseball. Be sure and sign up before opening day so that you can take advantage of the 130.00 back guarantee. Once opening day is past the only people that can qualify are the subscribers on opening day. So if you have any interest in joining us for baseball its best to be on board before April 4th.

I had a great question and answer this morning that I would like to share:

“With picking ~52.4% being breakeven, I am assuming your 1/2 unit plays are probably somewhere in the theoretical neighborhood of 54% and your full unit plays somewhere around 55.5%.

With those assumptions, if I encountered a -115 for one of your plays, the breakeven point would increase to ~53.5%.

Would it still be worth a 1/2 unit play?

If I encountered a -115 line on one of your full unit plays, should I back it down to a 1/2 unit?

On the other side of the scale, if I get one of your 1/2 unit plays at -105, should I turn it into a full unit play?

Almost all of my plays are on Bovada and they tend to move the from -105 to -115 very frequently.

Thanks for any insight you can give me.”

My Response:

“I try to make it as simple as possible. I do not lay more than -110. At -110 your starting with 5% vig to overcome. Now one could argue that when books put the line out at -115 -105 or -120 even your still only giving up 5%. And that is a pretty good argument with the exception that individual books move their line with the action. And while it may be -115 on Bovada on another book it might still be -110. So the reality is your giving up 7.5% vig on -115 if the real line should be -110.
Rather than trying to compare all the books and figure this out I just do not lay more than -110. Now the exception to that(aside from money line betting ) is only in the NFL. It centers around a 3 line. If I have a choice of laying -110 and getting +3 or laying -115 and getting +3.5 then I lay the -115. But that is the only time I consider playing more than the -110.
As to increasing your bet size to one full unit on -105 lines. I do not recommend it. Just consider yourself lucky that the book you’re using allows you on this game to only have a 2.5% vig. But keep your bet size the same.
My rule is that whatever you can do to minimize the effects of variance you do it. The reason is that if you are a positive EV gambler then your only risk is variance. And the reality is variance breaks most positive EV gamblers because they do not understand it nor do they bet size to minimize its effects.
I could talk and talk about variance and yet 90% of the bettors that read it will either ignore it or think it will not happen to them. That is human nature at work.
Consider this. I started out the subscription site and before March, I was hitting almost 60% in college hoops with the NHL up around 13 units. And yet there were a few subscribers that dropped the service and not only that a few of those were angry when they dropped it. So how do you explain that when the results to the end of February were far better than expectations? It is the lesson of Human Nature.
You see it at poker all the time. No matter how good of cards a player is dealt some are going to find a way to lose. And it happens all the time. The human mind in most people is designed to react to fear and greed in a manner that assures them loses. If I were a psychotherapist I could probably give a more detailed explanation. But 35 years trying jury trials and another 15 years playing poker I can say that I am a very good student of human nature.
So finally, we get back to the theme of keeping it simple. The more complex the more you get human nature involved. Your bet sizing and betting should be rule based to minimize your mind interfering with your success!”
Well back to the markets. I will send out plays as usual shortly before game times. Looking over tonights games we might have something in the college hoop game and then a few 1/2 unit plays so far in the NBA and NHL. But its early.
Good Luck Tonight
RickJ
RickJ’s Handicapping Picks

 

 

We are 30 min before the open and the market is hovering around yesterday’s close. The markets are overbought however not in an area that I would consider a mean reversion short yet. I have tightened up my mean reversion trades in this volatility and it has worked out well for me. My short term trades have proven to be a good strategy for the time being.

One of the keys to this rally is the AAII Sentiment. They are an organization that puts out quite a bit of good information for investors. Their Sentiment survey is something every swing trade should keep an eye on.  Right now even after this run up sentiment is split about even between the bulls and bears. Typically what you want to see as a short term trader is extremes to the bull side or bear side and then consider a contrarian trade.

Now this is just one sentiment site. There are others, so what you want to do is keep track of the major ones and look at them as a contrarian. Similar to public betting in sports. It tells you where the edge might be on the long or short side of the market.

So right now we are at a point where the market is overbought technically but the sentiment is telling us something a bit different. That typically means be a short term trader:)  And be sure and manage risk.

One thing to note is that for the first time this year the Nasdaq is threatening to close above the SP500 on a weekly basis. That is one of my all clear signs of being long the markets. But we still have today and tomorrow so that could change. I will keep you updated.

Now for a ridiculous news of the day. Kasich is taking heat for eating pizza with a fork! Honestly has American politics reached this low a level? Combine that with the attacks on candidates wives and its been a disheartening political season. I keep track of politics as closely as I keep track of sports and the markets. And I have to say considering the issues facing America and the World right now you would think the focus would be on more important topics:)  And to head off any controversy I am an independent that considers the issue as opposed to any particular party. So no need for controversy there!

Back to the markets

I only have a few small positions and looking to perhaps take a day trade today as I did yesterday. You can view my closed trades by looking at my trading spreadsheet. And you can follow my trades by following @rickjswings. It’s a private twitter feed that is free for now. And might be for awhile at least until there are 48 hours in the day:)

If you enjoy reading this site please like this page. You will be doing me a favor

Good Luck Today

RickJ

RickJ’s Handicapping Picks

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