'The Outer Limits' was a great Sixties TV series that always opened with the voice-over 'There is nothing wrong with your television set.'
We're now hearing (from Urban Carmel) that the recent +15% uncorrected gain in the global markets places the current rally in the outer limits of what is realistically achievable.
That's a positive. The fact is that homo sapiens love to set new records, and I think they're ready to bid prices higher.
We're now hearing (from Urban Carmel) that the recent +15% uncorrected gain in the global markets places the current rally in the outer limits of what is realistically achievable.
That's a positive. The fact is that homo sapiens love to set new records, and I think they're ready to bid prices higher.
A great number of analysts are recommending 'caution' right now (and in fact it's a prudent recommendation!). What troubles me is that 'caution' is now the consensus take. So I think global indexes will continue to climb.
ReplyDeleteSQ (Square) off the table at the open for +5.5% 2-day gain.
ReplyDelete
ReplyDelete(a) The global markets are now closer to +16.5% straight up. I in fact believe we will continue straight up 'more or less' up to new highs. It's the 'more or less' I'm trying to play.
(b) Trump is scheduled to deliver his State of the Union address tonight. That may be the reason we're seeing a +1.4% rally in EEM (emerging markets) today - the hope that he'll include positive references to US-China trade talks. My thinking is that traders are 'buying the rumor' and will 'sell the news' (tomorrow). Of course, I could be wrong! If you're a long-term investor, then stay the course.
(c) Recall that I ended calendar year 2018 down just -1.36%. In a general sense, I'm therefore less 'engaged' in making up for losses, and more interested in protecting capital. I will probably end the day up +9% ytd for 2019 - an unusually large 5-week move for the indexes and 'good enough' for me at this point in time.
Taking all remaining trading position off here, and closing VEMAX (Vanguard Emerging Markets) end of day.
I would be remiss not to include the following thought: it's entirely possible that Trump will announce a solid deal re US/China trade tonight, in which case FXI/ EEM will gap up +5%. I just don't think that will happen.
DeleteWhen will XOP reach new highs for 2019? Is it digesting January gains?
ReplyDeleteEEM (emerging markets) have pulled back -1.4% to the level of Monday's close.
ReplyDeleteIs that good enough?
I don't know, nor does anyone else. But I'm willing to take the pitch.
Reopening VEMAX (Vanguard Emerging Markets) at the close.
Rationale:
(a) There's been strong upside momentum against the backdrop of continued skepticism. A classic example of climbing the wall of worry.
(b) RASI has further improved to +900.
(c) There are now media reports highlighting a 'Wall Street veteran' who thinks a China deal will trigger a 'sell the news' reaction:
https://www.bloomberg.com/news/articles/2019-02-06/wall-street-veteran-says-u-s-china-deal-will-be-sell-trigger
That's the kind of 'story' that leads me to believe markets will instead rally hard on the news (the exact reverse of my opinion yesterday!).
Is it a tough market to trade? Sure. But when is it ever easy?
USO has been climbing up for the past few weeks, but has pulled back in the past few days. The chances are that it will soon start climbing up again. Placed a buy stop limit for more XOP at $30.30/$30.40.
ReplyDeleteI am glad that I didn't buy XOP yesterday at the close. :)
DeleteDavid- My sixth sense is telling me that the long-overdue correction began this morning, and we should get the **** out of the way.
ReplyDeleteUnfortunately, this time I'm selling into weakness and not into strength.
Rationale:
(a) We're overdue for a correction, and have been for some time.
(b) There was no way to predict when it would begin, and the correct play for the past few weeks has been to buy the dip.
(c) A change in market character appears to be underway today. In my opinion, the correct move today is not to continue buying the dip.
I'll probably take a -1% hit today. So what? After a +9% move year-to-date (and we're only six weeks into the year), I have no reason to complain. In any case, my philosophy is to take losses immediately when I'm leaning the wrong way.
Sure, the markets may reverse on Friday - but I'm having a hard time coming up with a catalyst, sentiment-based or otherwise. My concern has shifted from being left behind to being left high and dry (what do you plan to do if the correction picks up speed and we wake up to a -3% gap down tomorrow?).
2nd_ave, I'll follow your sixth sense, as the past history shows that it is foolish to ignore it. :) Just sold my whole shitload of XOP. On its 6-month chart it has broken below the late January low of $29.80 today, so the uptrend is no longer intact. I'll jump back into XOP if it rises above that level soon, or if it makes a new bottom.
ReplyDeleteOne should always respect the break of support! XOP continues its collapse despite USO being barely down. Bought back earlier today at $27.96 1/5 of the shitload of XOP I sold yesterday.
ReplyDeleteOn Fri, Feb 8, 2019 at 7:31:
ReplyDeleteSPX support levels @ 2682, 2665, 2632. I would consider a long entry should the index breach (and then reclaim) any of the three.
Reopening VEMAX (Vanguard Emerging Markets) at the close.
DeleteRationale:
(a) SPX bounced off 2682 (2681.83 to be exact), and is about to reclaim 2700. Bullish.
(b) EEM (emerging markets) closed Tuesday @ 43.42. It's currently changing hands @ 42.10. That's not the -3% move I had in mind this morning, but it is a -3% move. Maybe it's good enough.
Placed a buy stop limit order for the remaining 4/5 of the shitload of XOP I used to own at $28.80/28.90, which is the price I sold it at.
ReplyDeleteShanghai/ Hang Seng higher overnight.
ReplyDeleteReopened trading positions in EEM (emerging markets), EWZ (Brazil), USO (US Oil) and GE (General Electric) premarket at discounts to my last exits on February 7.
Earnings reports this week in the cannabis sector will offer trading opportunities.
USO was down today but XOP was up, and in fact it triggered my buy stop limit at $28.80, for the 4/5 of my original shitload of XOP, at the same price I sold it at. So the only thing I gained with this move is a reduction in my cost basis do to 1/5 of my shitload, which I have repurchased at $27.96 last week.
ReplyDeleteToo bad that USO was down today. It is sitting right on its horizontal support level, and if it breaks, I'll have to sell my XOP again...
As I posted last Sunday, I plan to game both the long and short (in my case, short = cash out) sides of the market. I was long Monday and Tuesday, and going short at today's close.
ReplyDeleteBDI was up for the first time in a long while yesterday. It usually trends in one direction for a while. Just bought more NMM at $1.01.
ReplyDeleteRe: Asia Soars, US Closed/ Scaling In
ReplyDelete4:33 AM (2 hours ago)
As it turns out, the closure of US stock exchanges on Presidents' Day denied emerging markets traders the opportunity to cash in on Monday's rally in Asia. EEM bidding -0.71% premarket. FXI (China 'H' Shares) flat.
I am scaling into INDA (India), which is being offered at an additional -1.6% discount to Friday's -1.15% decline.
4:45 AM (1 hour ago)
Adding a starter position in FXI (China 'H' Shares). It may pull back further - but the prospect of positive news re US-China trade talks will place a floor under the index.
6:34 AM (8 minutes ago)
Adding positions in HUYA (a Chinese media company) and UGP (a Brazilian energy firm). Reopened a position in CGC (Canopy).
Will reopen VEMAX (Emerging Markets) at the close. Let's find out if the market gods are on my side:
Delete(a) EEM/ VWO (two popular emerging markets ETFs) are both up about +1%. So I'm chasing.
(b) However, trading positions opened this morning in the premarket session have already added +0.3% to the portfolio.
(c) In addition, closing prices in VEMAX often 'undershoot' the gains seen in EEM/VWO (although it's impossible to predict if/when).
Either way, it's a bet that bulls are in control for the next day or two. Fear and Greed now 69 - momentum may provide a floor until we see 80+. Furthermore, the most recent BAML (Bank of America Merrill Lynch) global asset survey shows fund manager holding the highest level of cash since 2009 (ie, there's little confidence in the current rally). My bet is on an SPX print of 2800+ before a significant pullback.
I reopened positions in VEMAX (emerging markets), but at a 25% allocation. The market gods did in fact smile, with VEMAX closing below my last exit price (on Feb 12). However, there's something about today's close I didn't like - sentiment remains too positive in my opinion, and there's a good chance we'll see additional declines in the Hang Seng and Shanghai Composite before they're ready to rip.
DeleteIn reverse chronological order (I was locked out of my account while at work):
DeleteVEMAX (Vanguard Emerging Markets) closed up +0.79% - normally not an attractive reentry scenario.
However:
(a) My last exit was Feb 12, when VEMAX closed @ 34.25. Today's reentry @ 34.45 represents a +0.58% premium to last exit.
(b) Short-term positions in the trading account returned about +0.75% to the total portfolio over the past two days.
Had I simply held all positions for the past six trading days, my portfolio would have arrived at more or less the same destination. So it's been much ado about nothing.
On Wed, Feb 20, 2019 at 12:49 PM:
NYSE Advance/Decline line printed an all-time high yesterday - fantastic.
On Wed, Feb 20, 2019 at 12:39 PM:
Closing and reopening within the same trading session - it's not unheard of.
Bears had a great shot at taking the indexes down following the release of Fed minutes - the selling was almost immediately absorbed.
This market wants to go up.
EWZ (Brazil) now trading at the day's lows. EEM (emerging markets) + FXI (China 'H' Shares) holding up, but well off the day's highs.
I'm reopening EWZ (Brazil) here.
I plan to increase my allocation to VEMAX (emerging markets) from 25% to 100% at the close.
On Wed, Feb 20, 2019 at 7:10 AM:
All positions off (apart from the +8% one-day gain in HUYA, also locking in +2% gains on FXI [China 'H' Shares], INDA [India], and CGC [Canopy] - the only loser was Brazilian energy company UGP, which closed with -0.5% loss) , . With the DJIA up just +7 points, it feels weird to say I sense exuberance. That's how it is sometimes - this morning is the kind of psychological environment I sell into.
Now +9.6% ytd, and trailing my benchmark by -1%.
On Wed, Feb 20, 2019 at 6:51:
Trimming back on HUYA on its +5% opening move.
XOP is really lagging USO over the past month, but eventually it should catch up. Just bought some more XOP on today's decline at $30.27. Placed a sell limit at $31.27.
ReplyDeleteSorry for the late posts. Basically, I reopened VEMAX (Vanguard Emerging Markets) at Wednesday's close (a +0.7% premium to last exit), and added EWZ (Brazil) @ 43.75 on Thursday. The rest is detailed below.
ReplyDelete5:19 AM (1 minute ago)
Fear and Greed has pulled back to 55-> I think it spikes back to 80 as the SPX makes a run for 2800.
On Fri, Feb 22, 2019 at 5:14AM:
Reopening positions in a few recent trading vehicles as I spot decent premarket entry points-> GE (General Electric), HUYA, BABA (Alibaba).
On Fri, Feb 22, 2019 at 4:05 AM:
Shanghai Composite +1.91%. Premarket bids for FXI (China 'H' Shares)/ EEM (emerging markets) +1.64%/ +1%.
Good chance I'll be cashing out end of day-> VEMAX sell orders in place.
ReplyDelete9:15 AM (0 minutes ago)
BABA (Alibaba) off for an intraday gain of +1.4%.
On Fri, Feb 22, 2019 at 9:06 AM:
EWZ (Brazil) off for a two-day gain of +1.3%.
On Fri, Feb 22, 2019 at 7:47 AM:
Closed out remaining shares of HUYA @ +7.4%.
On Fri, Feb 22, 2019 at 7:08 AM:
Fear and Greed now 71 (+16).
On Fri, Feb 22, 2019 at 6:43 AM:
Taking partial profits on HUYA, which has returned +5% since the extended-session open.
On Fri, Feb 22, 2019 at 5:19 AM:
Fear and Greed has pulled back to 55-> I think it spikes back to 80 as the SPX makes a run for 2800.
BDI is slowly creeping up. Just bought more NMM at 0.95 and placed a buy limit for more at 0.9.
ReplyDeleteNow +11.2% ytd, and +0.1% ahead of benchmark.
ReplyDeleteCashed out at the close for the following reasons:
(a) It's highly unusual for me to be up double-digits for the year in February.
(b) A pullback is likely (but not certain) heading into the March 1 deadline for a trade deal. I no longer expect a 'significant' pullback - fund managers have been skeptical (and thus under-invested) throughout the current rally.
(c) To be honest, cashing out was probably a mistake. Probably even odds that we gap up even further on Monday.
The Shanghai Composite lifts +5.6%. I underestimated the extent to which sentiment had already priced in a positive resolution to trade talks.
ReplyDeletePremarket: ASHR (China 'A' Shares) +5.97%, FXI (China 'H' Shares) +1.65%, HUYA +9.18%, BABA (Alibaba) +2.57%, EWZ (Brazil) +0.79%. With the exception of ASHR, all of the above were positions I closed last Friday.
But the one that ticks me off most? GE (General Electric) +15% on a deal to sell its biopharma business to Danaher for $21 billion.
I always hate to bring up the downside on days like this, but in my opinion that will be the direction of the next major move. Longer-term, I remain bullish.
ReplyDeleteIf I were to hazard a guess re this morning's action:
ReplyDelete(a) An extension on the deadline for new tariffs was in fact priced in. Thus setting up a 'sell the news' reaction.
(b) Traders (like me!) 'sold the news' ahead of time (last Friday). However, that's too easy. More adventurous traders probably shorted the markets last Friday.
(c) Smarter traders took the other side of the trade, and are now taking those 'adventurous traders' to the cleaners. I may have missed the smarter trade, but hey- smart enough not to short!
(d) Once the dust clears, I'm still pretty confident we'll see the markets pull back.
USO seems ready to break out to new highs for 2019. Soon the built up pressure will light up a rocket under XOP, which has been staying flat for weeks. Just bought more XOP at $30.47.
ReplyDeleteI recall that after the sharp oil pullback in Feb 2018, XOP was also lagging USO during the recovery, but then it fully caught up.
ReplyDeleteEEM (emerging markets) has pulled back -1.5% from Monday's high. FXI (China 'H' Shares) has pulled back -2.7% from Monday's high.
ReplyDeleteAre those declines 'good enough?' I don't know, nor does anyone else. Both are trading around last Friday's closing prices. What's happened since last Friday? Quite a bit! I think it's clear we're a few weeks away from a trade deal.
There will never be certainty in the markets. I'm reopening starter positions in FXI and BZUN (Baozun) here, and plan to reopen VEMAX (Vanguard Emerging Markets) at the close.
Yet another day of USO up and XOP down. Sold some April $30 puts on XOP at $1.46.
ReplyDeleteNice move.
DeleteI think XOP is on the cusp of an upside breakout.
The economic cycle is a funny thing. I recall hearing the economy was ‘overheated’ in 1998, and reading about Herb Greenberg (back when he was writing for the Chronicle) confidently shorting DELL. The markets subsequently roared into 2000.
ReplyDeleteThe global economy is far from overheated at this point. The 2008 recession was probably the worst I’ll see in my lifetime. US markets subsequently corrected 2011 and 2015 (at least in my opinion). Emerging markets contracted violently in 2016.
Are markets overheated? We’re actually overdue for ‘exuberance.’
XOP might be on a cusp of an upside breakout, but in order for this to happen, the broad market has to stay afloat. If it tanks, like today, it pulls XOP down with it, despite USO being up nicely...
ReplyDeleteHeads up.
ReplyDeleteI've trimmed positions in BZUN/ HUYA/ EEM/ FXI. Plan to close positions in VEMAX end of day.
The trade resolution exuberance is waning, and so is my risk tolerance.
How can XOP break out if it will be going down on the day when USO is up??? What the hell are the traders thinking?
ReplyDeleteBDI seems to have bottommed out, and so have NMM. Both have been creeping up recently. But not nearly as much as the other players in this space like GNK. These are all tail winds for NMM. Just bought more at $1.00.
ReplyDeletePlaced a sell limit order at $1.10, so as to get the money pump going if it starts oscillating there.
DeleteI followed through on closing positions yesterday.
ReplyDeleteNow +11.7% ytd, and +0.3% ahead of benchmark.
According to jesse, the NASI (Nasdaq McClellan Summation Index) has just printed its first sell signal in 2019.
ReplyDeleteSo not a good time to be in the stock market. Of course, common sense tells us the same - after a +15% to +20% gain in most indexes since December 24, it's probably time to expect a pullback. (The last NASI buy signal was early January.)
So how should I combine this info with XOP being on the cusp of an upside breakout?
DeleteI guess XOP will break out only after it drops below the previous low and people stop hoping for a breakout...
DeleteYep, this looks to be true. Maybe today's pullback is good enough. Sold some April $18 puts on XOP at $1.27. Also, bought more NMM at $1.90.
DeleteScaling back into BABA (Alibaba), IQ (iQIYI), HUYA, and BZUN (Baozun) on premarket pullbacks of -3% to -5%+.
ReplyDeleteClosing all positions in individual stocks (but will continue to hold ASHR (China 'A' Shares). Replacing stocks with a safer alternative-> IEMG (iShares Emerging Markets).
DeleteWill reopen VEMAX (Vanguard Emerging Markets) at the close.
Shanghai Composite +1.92%, Hang Seng +0.97%. Both indexes higher despite reports that China has canceled a meeting with Trump at Mar-a-Lago - stocks are climbing a wall of worry.
ReplyDeleteIn the early going: IEMG (emerging markets) +1.37%, FXI (China 'H' Shares) +1.64%, ASHR (China 'A' Shares) +3.74% (basically recovering all of Friday's losses).
If I'd had more guts on Friday, I'd still be holding HUYA +5.22%, IQ (iQIYI) +3%, and BZUN (Baozun) +1.5%.
Helping emerging markets is a turnaround in EWZ (Brazil) +2.22%.
XOP is finally outperforming USO today, which in turn is ready to break out to new 2019 highs. I already have a shitload of XOP, but I bought some more just now at $29.22 so as to start filling up a second shitload. :) Last week XOP did break below the previous low, and hopefully that shook out some weak hands, and the path to the upside breakout is finally all clear! Just in case, placed a sell limit at $30.22.
ReplyDeleteOn Tue, Mar 12, 2019 at 6:33 AM:
ReplyDeleteClosing positions in FXI (China 'H' Shares), ASHR (China 'A' Shares) and IEMG (emerging markets) on the continuation of Monday's rally.
Formidable resistance as the SPX approaches 2800 (last breached March 4). The bulls appear tired.
DeleteI plan to close all remaining positions (mainly VEMAX [Vanguard Emerging Markets]) end of day.
What a wild discrepancy: a clear uptrend in USO over the past two months and a clear downtrend in XOP. I've seen such prolonged discrepancies before (say with gold miners in 2012), and they forebode a collapse in the underlying commodity. I wonder how it will end this time... What gives me some confidence is that XOP is already at its all-time low going back to 2006, so it shouldn't get much worse than now. :)
ReplyDeleteThe sell limit I placed for the bunch of XOP I purchased a couple of days ago at $29.22 was hit today at $30.22.
ReplyDeleteIt seems like the bottom for NVDA is set and a nice uptrend is now in place. Just bought some at $170.
ReplyDeletePlaced a sell stop limit at the previous low of $165/$164.
Delete