Wednesday, August 17, 2011
08/17/11 They've lost that lovin' feeling
You never close your eyes anymore when indexes kiss the fifty
And there's no tenderness like before as prices lifted
You're trying hard not to show it, (baby).
But baby, baby I know it...
You've lost that lovin' feeling,
Whoa, that lovin' feeling,
You've lost that lovin' feeling,
Now it's gone...gone...gone...I just can't go on
I climbed the virtual Himalayas in my mind to visit the Trading Guru. This is what he said to me:
'Feel like buying? Sell.' A measured pause as he lifted his eyes to watch the setting sun. 'Feel like selling? Buy.' Then he dismissed me.
I'd say 90% of the media sound bites/printed commentaries warn of further downside and urge caution. They've lost that lovin' feeling. ---- that. It's time to buy and/or hold.
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Judging by the posts the past couple of days, I'm pretty confident in saying that this market is slowly driving us insane.
ReplyDeleteBB is correct in focusing on the longer term pc ratio. The 10 day is still 1.22 which is the highest level going back 2 years. The daily closed at 1.37 today which is the 3rd highest close of the past 2 years!
Longer term, we go much lower, but w/ 10 day pc ratios that extreme, its going to take a lot to push the market much lower in the short term.
Was just licking my chops when I saw TZOO at 36, down from 104. Chart is starting to shape up, but boy oh boy, earnings sucked last q.
BB Canada -- I have never used put-call ratio as an indicator, so I cannot comment on it. Jesse is much better with indicators. I tried using various indicators during various stages of the rally since March 09, and didn't have much success with them. So I am back to using 2nd_ave's trick -- think of what the majority of the people would have done each day and do the opposite of them. A simple price chart is sufficient for that.
ReplyDeleteIncidentally, the current futures chart looks very bearish: not only did the futures pull back from the EOD rally that put S&P barely into the green, they also have just broke down from the ascending range they set up over the past few hours.
http://www.forexpros.com/indices/us-spx-500-futures-advanced-chart
Anything can happen tomorrow, but so far the chart looks very bearish...
Futures are below 1185 already and seem determined to retest today's low at 1183. If that level breaks tonight, then watch out tomorrow...
ReplyDelete10 day put call ratio chart. Lots of negative articles and lots of $ positioned for downside. Makes me leery of getting overly bearish in the short term.
ReplyDeletehttp://stockcharts.com/c-sc/sc?s=$CPC&p=D&yr=1&mn=10&dy=0&i=p31480554912&a=155292195&r=201
Tomorrow doesn't look good, but its 100% evident that none of us on this board can judge the day to day actions of this market anymore (except for 2nd's 500 point gaps:))
'I tried using various indicators during various stages of the rally since March 09, and didn't have much success with them.'
ReplyDeleteDavid- That is EXACTly the problem I have with indicators- they don't work when everyone is watching the same indicators!
Whereas by sensing what the majority of traders are feeling/thinking, we can guess what they're DOING, or thinking of doing. Then we just do the reverse.
jesse- Actually, you called today's 50-point opening gap perfectly.
ReplyDeleteDavid - for what it's worth, the futures were at 1,186 last night and I thought to myself that maybe I could just get out alive from my SDS position...I woke to a decent gap up, then watched it rally another 10 pts, then I was able to close out at a small profit. Basically my point is the futures don't mean jack. This week is most likely going to ping pong back and forth between 1170 and 1200.
ReplyDeleteJesse - TZOO's earnings weren't THAT bad. Revenues up 33% and earnings up 50%. Per their PR on earnings day: "We also ran a television advertising test, which negatively impacted earnings per share by approximately $0.07."
I see the scumbag lawyers are on their case now:
"On July 21, 2011, defendants revealed that the Company was performing well below expectations, with revenues well below estimates, and expenses exceeding estimates. On this news, shares of Travelzoo stock declined more than 30 percent, from a closing price of $85.71 per share on July 20, 2011, to $56.00 per share the following day. "
WTF do you expect when you buy a momentum stock at 100 times PY earnings and hold through earnings? What a bunch of nitwits...they're the ones that should be sued.
A chart illustrating income inequality vs bank failures spanning 1914 to 2009, a stunning correlation:
ReplyDeletehttp://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=439x1459525
'futures don't mean jack'
ReplyDeletetof- Another incisive comment. If I were to check in with the Trading Guru re futures, he would probably remain silent. In fact, he would likely remain silent re day to day market moves altogether. Which then forces me to return to the advice he deemed worthy of passing on.
GMO - Yes David, I BELIEVE Eureka County did file a new protest against the water rights for Mt. Hope. The date of filing was supposed to be Aug. 15th, and the stock was actually up on the day EC announced their intention to file.
ReplyDeleteFunny thing is, the state engineer simply recognized the water rights, he hasn't issued permits. The permits are/were due following county acceptance of the 3M(monitoring) plan, and GMO paying the fees.
All I know is 'sometime' in the 'near future' we will all look back on the summer months of 2011 and proclaim, 'It was a buying opportunity.' It's that simple.
ReplyDeleteThe futures are retesting 1283 now -- hold onto your seats, folks!
ReplyDeleteSometimes futures don't mean much in the evening, but tonight, I believe, they DO telegraph what's going to happen tomorrow.
Just as I finished writing this sentence, futures broke down below today's intraday low at 1283 -- only a miracle will rally the market tomorrow...
If a break below today's low was to occur, it would occur after hours, so as to preclude an easy exit by the bulls.
ReplyDelete2nd_ave -- maybe the summer of 2011 will turn out a buying opportunity, but that opportunity will be at its best after S&P drops to 1000 in late August.
ReplyDeleteActually, I don't have a take on what the market will do beyond tomorrow, and I don't care -- I'll take it day by day. Tonight I am bearish, but tomorrow I may turn bullish -- who knows... I sound like 2nd_ave used to sound in his trader's cap! :)
David- 1283? Sold! All of it.
ReplyDeleteId love to see 1050 again...I think odds are strong to quite strong. At that price many of my favorite stocks will be 20% cheaper
ReplyDeleteUp, down, all around? The ADX on this chart needs to turn down to confirm a rally.
ReplyDeleteI believe we need to test 11,500 the 38.2 fib.
http://stockcharts.com/c-sc/sc?s=$indu&p=D&yr=0&mn=7&dy=0&i=p99295968853&a=217994610&r=7 736
CGR - Keep an eye on this one, could get interesting.
ReplyDeleteA battle is being waged now around the 1283 level (even though it is 1183, for some reason it feels like 1283 to me -- I guess it is a disbelief of the fact that we could drop so low) -- let's see who gets the upper hand here...
ReplyDelete2nd_ave -- if you are ready to sell all your position at 1283, then you are not insisting on selling it above your entry price. And if that is the case, then wouldn't it make THE MOST sense to sell when you see that this rebound rally runs out of steam, so as to wait out the drop in cash or SDS and then reload your original position at a lower price? And if you agree with this logic, then what makes you feel that his rebound rally HAS NOT run out of steam ALREADY?
ReplyDeleteWow, just got back from a meeting. Looking at the charts, and my sixth sense...
ReplyDeleteWhat a Fing mess. We could really unravel here boys.
Mark > I hope so man. Im confining myself to buying panic rather shorting euphoria. The returns are much greater...leading stocks like DECK can give you solid 10 to 15% gains in a wk whereas the reverse might yield you 5% or so
ReplyDeleterough open in Europe, futues looking sick again.
ReplyDeleteThat's what I've been saying all day, boys! Futures just broke below the 3-day low -- don't tell me we are gonna get a green open tomorrow with such futures!
ReplyDeleteTOF -- you don't need to confine yourself to buying the panic. If the big blue (or red) arrow is pointing down, then you can easily make money on the short side if you wait for a powerful rebound which then gets stalled. That's what I've been doing successfully for a whole year between the summer of 2007 and the summer of 2008, which got my portfolio to an all-time high by September 2008. I did surpass that high in December 2010, but that was when ECUXF was at $1.35...
ReplyDeleteSince my SPY put options position is larger that I am comfortable with, I am placing a sell limit order at $5.50 for the 1 contract I picked up at $4.95 and at $6 for 2 contracts I picked up at $4.83. If these orders get triggered, I'll have 8 more contracts left with the cost basis of $5.15...
ReplyDeleteWatching a smart fund manager on BNN (Canada's CNBC) last night and his comment I thought was right on:
ReplyDeleteStocks are cheap, no doubt about it, but markets are skittish and the macro news is not good. A lot of stocks are trading at 6 - 7 times 2012 earnings, but it doesn't matter and we are watching to see if the market will take a big tumble and we should get out.
In a year or two, stocks will almost certainly be up 20% - 30%, the question is how far do we go down first.
David- You nailed it. Hope you're up early and able to fully enjoy the experience.
ReplyDelete"New U.S. claims for unemployment benefits rose more than expected last week"
ReplyDeleteIs this good for market prices? I think maybe not....
"Bachmann: I'll bring back $2 gas"
ReplyDeleteSure, at what cost, more jobs? Her words are so powerful, I bet it happens prior to the elections.
BAC - Will we see $3 soon? The P&F says $0.0!
http://stockcharts.com/def/servlet/SC.pnf?chart=bac,PLTADANRBO[PA][D20110817][F1!3!!!2!20]&pref=G
Congrats to the guys who stayed short from yesterday - going be a money maker morning.
ReplyDeleteper my asset allocation I should be adding to my longs today. not sure I have the b*lls to do it.
ReplyDeleteDamn this investing/trading is a lot harder without an income.
Is Silver an industrial metal, or does it represent a place to store wealth?
ReplyDeletehttp://stockcharts.com/c-sc/sc?s=$silver:$copper&p=D&yr=0&mn=7&dy=0&i=p99295968853&a=217994610&r=7 736
IMO, this morning is another buying opportunity.
ReplyDeleteC about to get halted.
ReplyDeleteMark - 10% rule for C?
ReplyDeletegs first buyer of the day in the s&p pit
ReplyDeleteIMHO, that is.
ReplyDeleteJB- Yep.
ReplyDeleteSmack Water Jack
ReplyDeleteMinus -40 on the SPX. Anyone have a reading on the VIX?
ReplyDeletet3d- Now is not the time for Drinking Topics.
ReplyDeleteall selling by the commercials, locals stuck long, certain that some locals will be gone by cob
ReplyDeleteINTC, 1mm shares, 19.88, BID!
ReplyDeleteC, 500m shares, 27.45, BID!
Just channeling the old Cramer.
We're OK everyone. SODA is green.
ReplyDeleteIt's all good. This is the Market plunger clearing the dark sentiment turd in the bowl.
ReplyDeleteCNBC...Holly Cow!
ReplyDeleteMay be time to switch to Bloomberg
ReplyDeletemark - haven't had cnbullshit on, what's going on?
ReplyDeleteJB- Just a bunch of yelling. It's funny.
ReplyDeleteNow 11,075 - At least another 575 points to go on the dow, I think.
ReplyDeleteMaybe not today or this week, but that's my optimistic target.
Mama Told Me Not To Come
ReplyDeleteNadurra time, this stuff is starting to taste good.
Here goes C again.
ReplyDeleteSPY crashing here.
ReplyDeletetoday is the first day I truly understand that "cash is a position"
ReplyDeletePanic sets in.
ReplyDeleteEvery Picture Tells a Story
ReplyDeleteThe weekly inverse SDS was perfect.
bought IIH @2.71
ReplyDeleteES goes to 1120 today?
ReplyDeletezero bids in the pit, comms keep hammering away, locals being taken out in body bags
TRIN
ReplyDeleteNY .79
NASD 3.25
Something distorts NY now and think NASD is the one to look at for intel.
VIX is up 25% to near 40, guess the risk trade is taking a break
ReplyDeleteHahaha...just woke up and saw the crash. Did I really close my sds for a $1k profit yesterday? Jeez.
ReplyDeleteThe only good thing is my stocks r getting cheap
IIH- Wow, your the only one!!
ReplyDeleteGDX holding its own near flat
ReplyDeletewhich helps me, Glad I got off the 3X yesterday.
We either bounce here or got to 1120. Not sure I will make either bet.
GORO - •Gold Resource mints gold and silver coins, targets future in-kind dividend.
ReplyDelete"Stocks will almost certainly be up 20 or 30%..."
ReplyDeleteI beg to differ. The mkt has shown its hand. Worldwide debt will be a problem for a while that $ printing can't solve.
IIH - yeah, I posted on it yesterday, wish there was some vol but I like it anyway
ReplyDelete"Nadurra time, this stuff is starting to taste good."
ReplyDeleteHmm, even though it's past 09:30, no need to rush things? ;)
I'd love to pull the trigger on NTAP, down almost 20%, maybe I will scale in 100 shares at a time
ReplyDelete"Nadurra time, this stuff is starting to taste good."
ReplyDeleteHmm, even though it's past 09:30, no need to rush things? ;)
That was my memory from last night at 10 pm. Just Irish coffee this morning.
as I have said many times, God wouldn't have created both morning and beer if He hadn't meant for us to enjoy them together.
ReplyDeleteCP- At what level would you add to SVM?
ReplyDeleteStarted scaling into NTAP at 33.66, panic is here, time to start buying. Low was not violated, looks like bargain hunting is here. I feel better about this crash then the last one, feels like more buyers are out picking up the best bargains
ReplyDeleteI am looking for long setups here as well with stops on the day low.
ReplyDelete"Started scaling into NTAP at 33.66, panic is here, time to start buying. Low was not violated, looks like bargain hunting is here. I feel better about this crash then the last one, feels like more buyers are out picking up the best bargains "
ReplyDeleteThat's not a good thing if buyers are stepping in here...let's wait for the market to retest old lows and then bounce...otherwise the bottom could be 800 for all we know.
Considering capitulation on my TBT swing trade....probably a good time to buy. I've gotten killed on it.
ReplyDeleteTF - With NTAP I started scaling in. It is a longer term entry not a couple day trade. If it goes lower I will buy more, I am at about 50% of what I am potentially willing to have.
ReplyDeleteOn the other hand, we might have seen the low already. It is a good company and can go back into the 50's in short order. VMW looks like another good entry...
guys - please just wait to buy...this is NOT the time to buy. odds of a retest of last week's lows are VERY high. if it does it and bounces for at least two months, then it is probably safe to hop back in.
ReplyDeleteecon news is getting worse, not better. given that everything has been thrown at this economy, there ain't much else left to support it. so if things in europe begin to unravel, you can sure as hell expect it to hit us here. again, remember that if earnings estimates are 96 and they drop by 10% to $87 and people are only willing to pay 10 times earnings given uncertainty, then we would have another 25% to fall...
if you're looking to buy just for a quick trade that's a whole other ball of wax
ReplyDeleteSVM - Mark, I'm not planning to add until the selling stops and an upside reversal is confirmed. If that comes sooner rather than later, then I will miss the bottom.
ReplyDeleteAnticipating somewhere under $8, like $7.74 or lower. Otherwise it's not worth the additional risk.
For all I know, this one could go to $0.50... Now that would be a great place to add!!!
If anything, I learned in 2009 to never run out of dry powder. ;)
Be prepared: A powderless cannon fires no ball.
ReplyDeleteTF - today looks like we are headed back up, lots of bargain hunting. If we drop below last week lows I will put out all defenses and will start reducing equity exposure/going short.
ReplyDeleteToday it looks like we tried to go down hard but failed. It is a bullish sign since as you point out news is grim and VIX is back to 40.
What the hell happened to HPQ, it shot up like 8% in the last 30 minutes
ReplyDeletemake it more like 12%
ReplyDeleteNow that explains it:
ReplyDeleteBloomberg News is reporting a couple of blockbuster pieces of news out of Hewlett-Packard: A potential spinoff of its PC business, and a possible deal for UK business-software company Autonomy.
Shares of H-P, among the worst performers of the day, just took the opposite of a nose dive straight up. They were halted briefly, and are about 6% higher right now.
I found the next TASR.
ReplyDeleteSDS
Interesting that the 2 of 85 stocks on my screen which are in the green are both financials - a small bank and a small insurance company.
ReplyDeleteThe thing is that no ETF's of high-frequency traders touch these stocks. Both are sub-$100 million market caps and volume of a few thousand shares a day.
TOF-
ReplyDeleteWhat would your target be for the zoo? 30? Its starting to look pretty good. Did they say that they would stop their tv ad campaign? Thus a nice bump in eps going forward?
Also, only 146 new lows at 12:30 on the NYSE vs. 1292 on the 8th when we we're just a couple points lower.
ReplyDeleteGood sign that the panic selling is ending (IMO).
Jesse - Honestly it looks like TZOO wants to close all the way back to the $25 level from October. But assuming we don't go into a nasty recession I think you can buy some between here and $30 and look to sell at a 33%+ gain in 6 months.
ReplyDeleteFor what it's worth, the RSI looks to be setting up for a divergence from price...that is, the lows from last week at $40 had a RSI14 that was lower than today's RSI14.
Jess - Look at the weekly chart on TZOO...could still have a lot more room to fall...
ReplyDeletehttp://stockcharts.com/h-sc/ui
They have a good deal of cash (about $50 Million) and valuation is somewhat reasonable. I love this high margin, low cost internet businesses, which is why I'm hoping we get a big drop in the market...However, the business is quite cyclical so I would expect a good 30% hit to earnings if we go into a recession:
http://financials.morningstar.com/income-statement/is.html?t=TZOO®ion=USA&culture=en-us
David- Good call with your futures analysis last night.
ReplyDeleteMark- You were spot on. "Wow, just got back from a meeting. Looking at the charts, and my sixth sense...
What a Fing mess. We could really unravel here boys."
TNX double bottom from Dec. '08.
ReplyDeletePerfect neckline backtest for NDX and QQQ.
ReplyDeletescaling into CYD.V, ultra-spec trade
ReplyDeleteBears always seem to run out of powder just when they begin to gain some momentum... Almost like they're growing a little gun-shy.
ReplyDeleteTNA=SSO seems to limit their success, wonder how long that can last?.
"Oil companies investigate report of sheen in Gulf"
ReplyDeleteCharley the "winning" tuna?
300 BGU@49
ReplyDeletestop 48.20
I guess it's time to go lube the tractor, my grease worms are probably starving about now...
ReplyDeleteHey boys.
ReplyDeleteMoved the stop up to 49.25...let it ride into close hopefully cover there or target 50.60 area of channel
ReplyDeleteMy older son had his first day of school today (public charter school McAuliffe in Cupertino, with parent participation and no grades), and my wife took him to school while instructing our younger son (almost 4) to play quietly and not to wake Dad up. He did just that, and I woke up at 10am, because my curiosity about the market direction today was breaking through my dreams more and more. :) But then I had to spend time with him in the morning, so I am checking in only now.
ReplyDeleteThe sell limit orders I set for my puts last night were triggered this morning: sold 1 contract at $6.81 that was purchased at $4.95, sold 2 more contracts at $6.61 that were purchased at $4.83, and then, when I woke up, I decided to sell 2 more contracts at $8.67 that were purchased at $5.15. Now my put position is down to a more manageable size (my original position was the largest position I have every taken – 11 contracts worth $5K) – my remaining 6 contracts are still worth $5K...
I did expect a market pullback today, but not such a huge one! But reading the news, I found a good explanation: Morgan Stanley put out a report showing that US and Europe are on the brink of recession. The interesting question is: why did the market telegraph today's move starting at 10am EST yesterday, when the break above 1200 failed? And the futures kept telegraphing the gravity of this move for the whole of last night, as they kept making lower lows. I suppose it was inhuman for MS traders to abstain from shorting ES, knowing that they would put out such a gloomy econ report today. They must have made at least a billion dollars today...
“It's all good. This is the Market plunger clearing the dark sentiment turd in the bowl.”
ReplyDelete2nd_ave – has it occurred to you that ANY market action can be viewed as bullish for an indefinite period of time? As the market keeps going down, one can interpret it as a clearing of excessive bullishness going further and further back in time, all the way until March 2009...
I am glad to see that both gold and silver are up today. Even if all my Chinese stocks go to 0, then my ECU position single-handedly can move up my port to a multiple of my previous all-time high when ECU finally maximizes production from its current mills and starts building the 2000 tpd mill (this should happen in 2012 at the latest). So I am totally OK with waiting for this to happen, while having fun trying to guess the local mood swings of market participants. :)
ReplyDeleteTook me out at 49.36
ReplyDeletehttp://www.minyanville.com/businessmarkets/articles/stock-market-historical-charts-technical-analysis/8/18/2011/id/36416
ReplyDeleteGet a load of this crap...is this guy for real?
TOF- If you don't like that type of analysis, you'd hate my paid site.
ReplyDeleteHaven't read Jeff Cooper in awhile. He penned "Hit and Run Trading". His Cooper 1,2,3,4 pullback is a favorite of mine in bull markets.
ReplyDelete"Counting from the July 22nd high, the 55-day Fibonacci climax zone ties to September 11th.
ReplyDeleteThis September 11th will be the 10th anniversary of 9/11.
The 10-year anniversary of the 1929 high ties to the beginning of World War II on September 1st, 1939 when Hitler invaded Poland and France declared war on Germany. "
"This year's July 22nd high marked the 4th anniversary of the important July ’07 top, a Fibonacci fractal of 1440 degrees in time.
ReplyDeleteIt also was a Fibonacci 144 degrees in time from this year’s initial February 18th top and left shoulder.
It's interesting that 144 degrees forward carved out a right shoulder just as 4 years forward from July ’07 seems to be carving out a mirror image, as shown in the daily chart below. "
phew...well I'm glad that is cleared up for us.
ReplyDeleteMy take? Let's keep it simple...we're going lower. I'll take the low at 850.
SHLD 1 year head and shoulders pattern. Projects a much much lower price. I could say the same thing about hundreds of stocks though.
ReplyDeleteand that will come some time in spring/summer 2013.
ReplyDeleteOK guys- what will it be today- Cali or Oregon?
ReplyDeleteSierra Nevada/Anchor Steam or Rogue/Deschutes/Widmer?
I am looking at the 1-month S&P intraday chart on Google, and Boy, was this a nasty gap down today. It totally precluded an easy exit by the bulls who got sucked in yesterday on a break above 1200. It does pay to think about the WORST thing the market could do to the majority of participants, and it was clear yesterday that a rally today would not be nearly as disappointing as a huge gap down...
ReplyDeleteI bet many people will buy S&P EOD today, in the hopes that the 1100 support will hold. So guess what the most disappointing outcome will be for tomorrow? A drop below 1100 so as to run all stops placed at that level.
ReplyDeleteSummit EPA
ReplyDeleteDavid - Nice call man...I missed out on $26k gains today...oh well, I'm happy to have a clear head and have more resolve now than I have had in a long time that I will be able to get my favorite stocks at much lower prices. I'd like to see the following prices, Mr Market, come spring 2012:
ReplyDeleteMMYT - $15
TZOO - $20
BCPC - $27
IBKC - $35
OPEN - $39
Also, I noticed that NILE is down to $31 right now...you guys should check this company out when you get a chance. They're currently trading at about 12 times FCF and they have about $75 Million in cash and no debt. They are the leading online retailer of diamond rings and other jewelry. My friend and I both bought our engagement and wedding rings on this site. I believe TIF will buy them out.
Also, last thing, I made a list of stocks that rebounded the most in 2009 and here they are:
CBS
PIR
XL
SCSS
TPX
DFS
AXP
CAKE
LVS
WFM
CAT
WNC
WHR
CROX
GNW
F
WYN
CBG
Keep an eye on these
TOF, I'm staying positive here.
ReplyDeleteI still think a lot of the slowdown in Q2 is Japan Tsunami related and that Q3 will surprise to the upside.
I think valuations are still very good and I have faith that the politicians won't let another big bank or country fail.
Particularly, energy and mining services are having good years and holding in well and will have a good second half. I think insurance is incredibly cheap and will move back to usual valuations and provide a good return.
Plus there are a lot of special situations where the money is just there for the taking. Take a look at GRFS. This is the non-voting shares of Spanish plasma company Grifols. The A shares trade in Madrid and on the pink sheets and based on current exchange rates are worth $9.87. These non-voting shares have preferential dividend rights and conversion rights, so should be trading at a very small, if any discount, and are at a 30% discount at $6.95. To be completely safe, you should short the Madrid shares, but with a 30% gap, I think you can just go long and hold.
Also keep an eye on WHR...it looks like it's ready to make a move to $40...buying WHR at $40 would be a nice move....would give you a 5% dividend to boot.
ReplyDeleteActually Whirlpool at these prices is about as cheap as you might get...I didn't realize they're doing $8 to $9/share in EPS and generating $500 Million in free cash flow annually (8.5 times FCF valuation) and trading at book value ($4.3 Billion)
ReplyDelete'2nd_ave – has it occurred to you that ANY market action can be viewed as bullish for an indefinite period of time? As the market keeps going down, one can interpret it as a clearing of excessive bullishness going further and further back in time, all the way until March 2009...'
ReplyDeleteDavid- Right on, man! We need more optimists like you! You're absolutely right. Every 'setback' in my life has in time proven to be 'a good thing.' This summer's market 'setback' will be no exception.
David-
ReplyDeleteIf it makes 2nd feel any better I was in denial the whole way up from 666. :)
For one take how today could just part of the bottoming process in a similar manner to 1978 and 1979, take a listen to Jeff Sault at the Raymond James web site - http://www.raymondjames.com/inv_strat.htm
ReplyDelete2nd,
ReplyDeleteThe way I look at it is lower stock prices mean cheaper business and easier upside.
2nd_ave -- I hope you understand my intentions correctly, by the way. I wish you only the best in this uneasy market game. I know how important your portfolio is to you, and I am trying with all my might to steer you toward a strategy where I know you'll make money (trading) and away from a strategy that might give you no gains for years with large intermediate drawdowns (buy and hold of index funds).
ReplyDeleteI say we break 1100 tomorrow on S&P, so as to shake out everyone with stops at 1100. This might only be a brief intraday break, but the chances of it are high, IMO.
ReplyDeleteThus, I am placing a sell limit order at $10.30 for 1/3 of my remaining SPY puts (fraction of the lot I purchased at $5.15 yesterday).
Pz/David- It's all good. I decided on buy-and-hold after careful consideration, and I'm prepared to let it play out.
ReplyDeleteI believe it will outperform most of the market timing strategies, in spite of (maybe because of) days like this.
ReplyDeleteI might start legging into a little longs in a few days if 1,100 can hold...
ReplyDeleteWHR looks really interesting to me on a short term trade back up to $70 to $72. TZOO and MMYT are interesting as well to me...
Our mercuric blood levels have receded, we're in need of another pandemic virus alert.
ReplyDeleteFLIR - Seems this military contractor may be excluded from the continuing "war on terror"(known by some as the good 'ol boys' personal piggy bank)?
I maintained my ~70% long exposure today although it lost basically all that I had gained on the recent pullback below 1100 when I picked most of it up. I was tempting to cash up today....UGLY out there.
ReplyDeleteTaking the other side...if David and I are wrong then 1987 is one of the few times I could find where there was a crash and no recession.
ReplyDeleteIn that instance, it made sense to wait for a re-test of the lows from the crash to buy...in fact, it's just as David and I were talking about from July...wait for a break below the lows, then a rebound back up above the false breakdown as a sign that its ok to buy. In 1987, it took about 6 weeks for the false breakdown to occur.
Given how this market likes to make false breakouts and breakdowns, I'd say the odds are quite high that we will see a false breakdown.
Gold - Doesn't appear to be a double top, looks more like a breakout.
ReplyDeleteFrom our friend, Dougy Kass:
ReplyDeleteI know virtually no one agrees, but I still think the action over the last two days will be a successful test above the lows of a week ago.
Also, from Bespoke, it appears there is a good chance we at least bounce tomorrow, although with options expiration, it could throw a wrinkle into things:
ReplyDeleteSince March 2009, there have been 4 other 4% declines in the S&P. The next day has been +4.7%, +4.6%, +2.1%, flat.
Of roughly 200 ETFs tracked by Bespoke, 80% are trading below their 50-day moving average (and those are gold, currency, and fixed income funds). Eighteen percent are trading 15% below their 50-day. Buying these may be catching a falling knife, but in a few months, we'll scratch our heads at what screaming buys some of them were.
I posted this on SOH:
ReplyDeleteHPQ - I have sat in on hi-tech earnings calls for 15 years and this call is one of the most brutal. they are setting the bar so low an ant couldn't squeeze under it.
After the big sell off I will be a buyer, it will be worth the risk.
A majority of the stocks that I follow are making new lows. Since they generally lead the market, my guess is the overall market makes new lows going forward.
ReplyDeleteI'm eyeing 9/1-9/11 for a potential longer term bottom. There's a very small possibility that the market may be pricing in something on the 10th anniversary of Sep. 11.
Gary Shilling just on CNBC talking about the "Age of Deleveraging". Couldn't agree more.
Buy with both fists when this indicator crosses the blue line.
ReplyDeletehttp://stockcharts.com/c-sc/sc?s=$NASI&p=D&yr=12&mn=0&dy=0&i=p85651643905&a=203946350&r=348
JB- Yeah, looking at the AH action, the call must have gone swimmingly well.
ReplyDeleteLet me know, I love a dog.
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