Thursday, June 14, 2012
06/14/12 Jigsaw
Fading sentiment has always been a jigsaw, but lately more so than usual. If I had to make a one-time call right here and now (let's say to my Dad), this would be it:
(a) Hussman has earned his share of humility (anyone who claims never to have suffered stretches of being on the wrong side of the market is lying), but among the commentators I read, he stands out. If you want a reliable guide to help you navigate the market, one who has a grasp of the big picture, he's the guy I would recommend.
(b) Thus it should be obvious I think we sell off hard at some point. As Hussman might ask from a buy-and-hold perspective, how durable are any gains at this point?
(c) But it ain't never going down on cue.
(d) We probably rally hard on Friday. I won't be participating.
(e) It may rally again on Monday. At that point, I may elect to participate.
(f) There will be new opportunities every day. Especially when we're not looking.
(g) We don't live and die by the market, bro. Feel free to take a (real) vacation anytime. Should you miss a +10% rally while you're gone, so what? We learned in 2009 how quickly the market can take back a decade of gains.
We all know that we're played by the market, and not vice versa- right? Let's think about that for a moment. ---- no! Don't ever let yourself get played by someone who tells you we get played by the market. The goal is not to accept that fate. The goal is to learn to play the market, which means engaging the market on our terms.
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one reminder on natty, as I'm reading natty stuff. Storage comes out at 9:30 AM CT and the cash prices are pretty much set by then because most of the physical trading is between 7:30-9ish and 9ish is really pretty late. So the artilce says cash remained flat while nymex soared but that's because cash prices were pretty much set.
ReplyDeleteReplyDelete
tof- So the short answer would be, 'if market action is disturbing, walk.' There's no need to trade under less than ideal conditions.
ReplyDeletespot on 2nd
ReplyDeletesome day maybe you might be publishing "The Little Book of Trading Topics Memoirs"
No need for memoirs, bro. It's all here in real-time black and white.
DeleteThe global economy is in a soft patch right now. Is the right move to go all-in? Only if you think the worst is priced in. Otherwise, there is serious risk in being 'early.'
ReplyDeletetof- Didn't you once make 45% in a few weeks? Aren't you able to generate double-digit gains on a fairly consistent basis? There is no guru out there who comes close to that! If anything, you should be paying attention to your own thoughts.
ReplyDeletethanks for the comments bro. i always like hearing your take. yeah ive managed good returns every year except for 08...enough to live on it now and not have my wife work while we raise our kid for the next few years. still up 14 or 15% this yr but its been rough for 4 months mainly because i sold my nls, boil and mitk too early. i just keep getting the sense that this is a stealth bear market that will eat away everyones gains. but who knows. so like you said we dont live and die by the market. might be time to seriously consider a trading vaca until conditions are clearer.
DeleteAt some point, the student overtakes the professor.
ReplyDeleteI'll bet half the gurus out there earned their stripes making money in the 1982-2000 bull market! And couldn't trade their way out of a wet paper bag in today's environment.
ReplyDeleteI see Asia's green tonight. Asia was red the night before. And green the night before that. Red prior. Green prior to that. You'd have to be out of your freaking mind to say you 'understand' it all.
DeleteGreat comment 2nd. I know it sounds crazy, but sometimes the stress is WORSE not being in the market.
ReplyDeleteUnderstood. But that's no excuse to jump in. Patience is often most difficult when the reward for exercising it is greatest.
DeleteYou know, if we had all used Landry's playbook during the 2008 crash, we would all have been short all the way down, then been stopped out in mid-2009, then reversed to the long side for the following year and a half.
DeleteYes, great commentary tonight 2nd. I think I may take you up on your offer of....a "real vacation" sometime in the very near future.
DeleteYep, it's just easier to read it here than constantly thinking about it....and I do!
DeleteAwesome Port! My only suggestion is perhaps you should contact Dan to see if you can start your free trial later (when he starts issuing buy alerts). He's in cash at the moment.
ReplyDeleteYes, he is 100% about buying breakouts from solid bases. That's why I have been looking at sectors and stocks that are basing such as BVSN, GNK, solars etc. to see who may be the next leaders.
You'll find that he never discusses "news" as he believes it is totally irrelevant to trading and greatly sabotages one's ability to spot great patterns.
Here are a few of his tweets over the past 2 weeks:
-SP-500 H&S top pattern min target (1295) - Yes but NO BUYERS! So stand aside $$
-In time bases will be built that allow for huge rewards with low risks. That is my primary focus. I never made the BIG money day-trading"
-Rallies of this size were common in Sept/Oct of last year and so were the givebacks but this might be the start of a bottoming process $$
-The fear of missing out is an emotional pitfall that causes most to fail. 99% won't wait for their best odds of success $$
-I was just asked -How can you spot this bounce a few days ago and own nothing? Simple - Stocks need strong bases before I risk MY cash $$
-Some bases are being built from this back and forth action. Many are too short but you still always keep an eye on them $$
-Chop chop but a base building period nonetheless $$
-Yes so wait for charts to offer some clues moving forward. Very few to even consider but a few can become something
-The trap is many who failed to be profitable in an easier market will put energy into shorting for crumbs and miss the big winner $$
-Many here are so worried they will miss out on the run that they lower their standards and chase every uptick when they appear $
-Yep but most need something to do. They go crazy waiting. They think " I have to make money now" so they lose money in chop $$
-During this basing cash and high paying REITS are my holdings but when stocks are ready I will move at lightning speed into leaders $$
-Don't walk away from the market. This basing action can lead to some big winning trades. $$
-So many on this stream try to call what will happen next from a news event. How about just reacting to what actually happens. SIMPLE
-$SPX http://stks.co/e0Rb Basing over the past month is good
-I always focus on leading stocks. Big movers. High paying REITS are used for periods when leading stocks are not powering up
-Can name so many from last quarter - BIDU MGM PCLN FAS CMG ALXN PCYC SINA TNA INVN GS KORS LNKD LULU UA -Lots of opportunity
-Thanks for the predictions but my crystal ball has been in the shop and since then I have made millions. Never going to pick it up
chronological order
DeleteRight on, jesse. That's the kind of stuff we need to read more often. We're used to hearing that the Market is in charge, and the best we can hope for is to avoid getting jerked around too much. An entire population bullied by the Market until some new guy arrives to point out the emperor has no clothes.
Deletefrom what I'm reading, it sounds like zanger uses pretty tight stops AND Livermore used pretty tight stops, usually. Livermore says if a stock is just sitting there get out.
Deletei'm going to bed and i'll be dreaming about stock charts, one with the chart. that will help me retire and get my summer home in portland.
If we zoom out to YTD charts, those recent 'rallies' don't amount to a hill of beans.
ReplyDeleteWho is this guy you are talking about. I like those tweets.
ReplyDeletehttp://www.investopedia.com/articles/trading/04/082504.asp#axzz1xpeYjlAD
Deletehttp://www.marketwatch.com/story/wall-of-worry-remains-quite-strong-2012-06-15
ReplyDeleteTOF, you were asking about the Head and Shoulders pattern and where we may possible be today with it. This is a really nice example if these patterns play out the the they did in past Lehman crisis. Like you say who knows but.
ReplyDeleteTHE NINE HORSEMEN OF THE EUROCALYPSE
Submitted by ea32da32 (1844 comments) on Thu, 06/14/2012 - 13:56 #110221
http://jamesgoodeonthemoney.blogspot.co.uk/2012/06...
I've no clue what to make of this but it's interesting none the less.
Earl
"-Many here are so worried they will miss out on the run that they lower their standards and chase every uptick when they appear $
ReplyDelete-Yep but most need something to do. They go crazy waiting. They think " I have to make money now" so they lose money in chop $$"
I can attest to this. I honestly can't tell you how much of my gains I have given away over the years trading this bullshit chop. Clearly the better way to approach it from a mental standpoint is to seek out the ones that are setting up...that is, to always be on the lookout for opportunities. Maybe Landry will be proven correct and we will just continue slowly grinding lower with these insane rebound rallies.
Seriously take a look at the chart from 1973.
http://finance.yahoo.com/echarts?s=^GSPC+Interactive#symbol=^gspc;range=19721212,19731012;compare=;indicator=volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=undefined;
If we have to go through something like that how many people do you think will honestly have the fortitude to stay short? There was even a multi month basing pattern with a cup and handle and a set of higher lows/highs in late summer/early fall and the market rallied to only down 7% from highs 10 months earlier. I guarantee a lot of people were thinking bull at just the wrong time. But regardless of where we go it's smart to just stick to what we know best: seeking out short/intermediate term trades that are setting up for a big move higher. F*ck our opinion of the market. Like 2nd said "The goal is to learn to play the market, which means engaging the market on our terms. "
"It is also important to find timely market leaders by sector, industry and company. In the early 1990s during the first Gulf War it was biotechs that were huge market leaders. Later in the decade it was Internet stocks such as Amazon.com. In 2000, it was the fiber optics stocks. Find the sector that is in favor and then find the company that leads it. When the leader begins to trend down it's time to move on. Zanger is interested only in stocks that are "frisky."
ReplyDelete"You have to know what's hot and follow that group or stock … and stay with the winners. Why own a stock that is making a $2 gain per day when you can play one that makes a $5 move?"
This is EXACTLY how I play the market. I like this article. Gotta check this guy out.
High HV (historic volatility). How can you beat the market (with an HV if 12) trading stocks with an HV of 12? You can't. Landry looks at stocks in trends with HV's to over 100, some 180's. Most people don't have the nuts for a 185 HV.
Delete2nd, terrific Zigsaw opening thoughts.
ReplyDeletePlus interesting replies from the gang.
Our job is to accept that what is, IS. There are no predictions. Our job is to follow.
ReplyDeleteMany of the above tweets are exactly what Landry wrote in his book (except maybe REITS). Maybe different words or delivery, but the EXACT same message. Especially ignore the news.
I see a clear bull flag on the monthly chart for gold. Breaks out above 1710
ReplyDeleteI found a decent internet connection in Russia, so I'll be checking on the market daily (although not necessarily commenting much).
ReplyDeleteHere is a quote for you, folks, from the Cumberland Advisors, for whose free e-mail digest I signed up at some point: "Risk management is necessary. Cumberland’s US ETF accounts are in the highest cash-reserve position they have seen since the October stock market bottom."
I think they wanted to warn their clients about the high risks in the market now and suggest to them to have high cash reserves. But then, if you think one step ahead, you'll see that the fact that they also had the highest cash position at the October 4 market bottom suggests that they are regularly DEAD WRONG and should be used as a contrarian indicator.
I see UNG made a huge move yesterday -- did any of you catch it? If so, congratulations!
ReplyDeleteMy buy stop order for 2000 shares of JRCC was executed at $2.10. Let's see if JRCC can run to $3, on the back of the rally in UNG...
So, it sounds like I'm pretty much the only one left in the market!
ReplyDeleteMy time frame is longer and I don't mind holding stocks through corrections like we just went through or chop like we are in now if I believe we are higher down the road. I sold enough stocks early this year to have the cash I need for 2012 spending and now I'm trading to grow my total asset base and to set up to raise some cash for 2013.
I'm of the mindset that good things happen to cheap stocks, you never know when stocks will move, so buy them when they're down and wait. I've tried trend trading and found it didn't work for me as I was poor at picking trends which would continue. Understanding the fundamentals of stock takes away the need to get the timing so correct.
Sounds like we are all making money, so that's the important thing.
But I do think we have bottomed and are on the way up from here and will have strong results for the year.
2nd, good comment on the guru's from the last 20 years. That's why I almost never buy a recent investment book. Much better off to read the old one which are have stood the test of time.
ReplyDeleteInteresting premkt. Euro down slightly, dollar up slightly, TLT up, indices up marginally.
ReplyDeleteLooks flat with T's flashing a little caution.
"I just want to begin by saying to Roosevelt E. Roosevelt...what it is, what it shall be, what it was. Weather out there today is hot and shitty, with continued hot and shitty in the afternoon. Tomorrow, a chance of continued crappy weather, pissy weather, front coming down from the north. Basically, it's hotter than a snake's ass....."
SWC/SQNM - Still have these two, but concerned over the SQNM at the moment as it's taking too long to begin moving up.
ReplyDeleteDuring a recent conference call, the CEO made two comments I didn't care much for, one the company needs the market to support PPS and two, there mat be some issues with reimbursement, some payments aren't being received on time if at all.
BVSN - This one could be a good entry here, assuming it doesn't resume moving downward soon. OBV is in the weeds though, I don't particularly like that.
ReplyDeleteToday's quotes:
ReplyDelete"I am trying to reorient myself after a manic week of markets, mayhem and news flow.
The market up and downs have been sloppy. I find myself unconvinced of any short term move in either direction. We are bouncing around on rumors of possible future interventions and collapses in over there. None of these moves have much in the way of conviction." -Ritholtz
"I believe that risks are too high to place major trades on Fridays, especially when market changing geopolitical events have a good chance of occurring over the weekend.
I have also been discussing being patient and waiting for confirmation of market trends.
At this time, I would be lining up both buy and sell candidates with the goal of placing those trades based on confirming price action." -Geoff
"To buy when others are despondently selling and sell when others are greedily buying requires the greatest fortitude and pays the greatest reward." -Sir John Templeton
"Human psychology never changes. This creates reoccurring tradable patterns in
the charts. For instance, a market in a down trend will often have sharp
corrections against that trend as bottom fishers try to scoop up that they think is
a bargain and those short the market get squeezed out. However, this buying
often quickly exhausts itself--often on a positive news event--the market reverses,
and the trend resumes. We can use this phenomenon to get a head start on a
longer-term position or we can simply use it to make a quick intra-day profit at a
very low risk to reward." -Dave Landry
TTM - A buy if it can hold onto today's PM gains
ReplyDeleteSensex generated an RSI sell signal though, with a break down through 60 and looks like MACD might be about to roll over.
200SMA - So whatever happened to the 200SMA indicator we were using, was it thrown out the window in favor of euro-news clips?
ReplyDeleteBVSN!?!?!?
ReplyDeletepicked up small piece of bvsn at 11.4
ReplyDeleteThat be one crazy stock. GL!!
DeleteOK, I'm IN!! 1 million shares @ 12.10!! Go baby!!
DeleteCP- Those SQNM comments are pretty strange for a Co. to make. Kinda sounds like they don't know what's going on.
ReplyDeleteYeah, the CEO is 72 years old and one strange cookie. He isn't very forthcoming or convincing when it comes to their progress, very tight-chested with useful info, makes disturbing comments, and just not a positive type of guy in general.
DeleteDow Jones Hedge Fund Index out for May and the core index is up 0.88% YTD versus the S&P total return of 5.2%.
ReplyDeleteAppears most hedge funds are underperforming this year and barely breaking even in an up market.
I thought HF shorting was driving the market down, especially commodities.
Deletesold bvsn at 12.15
ReplyDeleteNice! ;)
DeletePKX - Back over $80, I guess the world isn't gonna stop turning even though Rome is smoldering.
ReplyDeleteI made a dumb moving averaging down but I added to my FAZ at $25.38 to 25.45 this morning. My thinking is simple: XLF has a recent high of $14.33. If I set a stop at $14.5 to avoid stops getting taken out, then that is 2.5% downside risk (about 7% for FAZ) whereas if the market goes down further like I think it will then XLF should underperform. We shall see.
ReplyDeleteI'm waiting for two things to happen before committing to longs in coals: (1) nat gas staying above $2.55 for at least 3 days and (2) a move in the market above 1,345 for at least 3 days or a close above 1,350. Otherwise this could all just be noise.
ReplyDeleteCrude - I recall not so long ago wondering why oil was so high, now I'm wondering why it's so low.
ReplyDeleteOkay, it could go lower and the level depends on how badly the euro disaster grenades.
I can't imagine selling here unless a waterfall event occurs, in which case it would be a once in a decade opportunity to buy.
How the hell is XLF still positive...Look at C, MS, GS, BAC all tanking.
ReplyDeleteEUFN is green...
DeleteT3D's MDW showing signs of life.
ReplyDeleteYeah, that $1.2 handle was unnerving...
DeleteETFC really nice setup. I like the financials.
ReplyDeleteThanks for the BVSN mention. I saw it up a good deal on vol this morning and decided to take a stab. I honestly think it can go up 50% today but I'm too chicken. I don't like the fundamentals of the company at all.
DeleteYep, does look good. I was thinking SCHW looks pricey, maybe TOF can weigh in?
DeleteI don't follow the brokers...ETFC is definitely interesting only because I think they still have a big housing exposure which seems to be on the mend.
DeleteSQNM - About time this pig starts moving up a little, was seriously beginning to wonder...
ReplyDeleteHmmm..VIX/Bonds/Market up.
ReplyDeleteVIX - Not a bad idea to buy some cheap insurance? Bonds - These must go up, else US Gov gets roasted?
DeleteHa! Landry confesses to being a TFM:
ReplyDelete"The market has changed direction 5 times in as many days. Up/Down/Up/Down/Up--rinse and repeat (?). This action is creating "Railroad Track" type bars. Usually, this increase in volatility combined with multiple changes in direction wears everyone down. You know me though, I try not to think too much-my nickname is the Trend Following Moron. So, with that said, so far, it looks like the market has only pulled back in a downtrend. Therefore, as a pullback player, I still think it has the potential to resume that downtrend.
So, what do we do? Again, don't get caught up too much in the day to day zigs and zags. Plan your trade and trade your plan. If you are a trend follower then you should be short by now since the trend has been down. So, again, follow your plan. Take partial profits at your initial profit targets as offered and trail your stops lower. And, honor those stops just in case one of those zags turns into a bona fide reversal. "
I'd think about shorting around 1350 or higher when we arrive there, depending on oversold indicators and MACD's, etc.
DeleteAt this point, I'd rather keep my current longs and let them run, or stop out and reload lower if I'm wrong.
The tape simply hasn't moved down in several sessions and the lows are in?
There's a difference between confessing and professing. TFM is in the book, it's in his MIM, it's in the chart shows and he has talked about t-shirts....
Deletewww.trendfollowingmoron.com/ Go ahead, click the link!
ha. good stuff!
DeleteCP - take a look at the DJIA...right at the 50 DMA. If you think there's a good chance we're heading into a global recession then if history is any guide the 50 DMA tends to be a major resistance point. Take a look at these points in time:
1937, 1946, 1966, 1969, 1973, 1977, etc
http://finance.yahoo.com/echarts?s=^DJI+Interactive#symbol=^dji;range=19351125,19370906;compare=;indicator=sma%2850,200%29+volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=undefined;
It's a low risk trade if you want to play it.
ETFC - I guess it needs to close over $8 today as interim confirmation.
ReplyDeleteCP - you mentioned oil earlier...I really think Nat Gas has impacted everything far more than people realize. With what looks like a clear bottom in place for Nat Gas, things like oil, coals, etc should all do quite well as long as the economy globally holds up. If you think like I do that we're heading into a pretty rough patch then oil could drop a good deal lower.
ReplyDeleteMy best trend following stock - ITPOF - almost quadrupled from October and could double again. Probably not enough volume for you guys though, but really solid uptrend.
ReplyDeleteThey make tapes and wraps and got sold way down and now many of their customers (housing, auto, packaging) are coming back.
Now THAT is a trend! Gotta pullback though or there is too much risk in getting in. Beautiful spike since the ma's crossed at $1.50 or so.
DeleteYeah, it's been my best stock this year. My cost on it is $1.64, but I bought back in 2010 and had to ride out the 6 month bottom phase last year.
DeleteThis is where my trading gets weak and I'll start selling parts of it to lock in my profits, even though I'm feel good we have a lot of upside still. I know you're supposed to let your winners ride, but I find it hard to do.
Wow what a stock BB. Jeez. Now the question is how the hell do we find that type of stock again? In looking at the chart, the break above the 200 DMA in April 2011 worked really well as a buy point...or if you wanted to wait for a pullback it did come close to testing the 200 DMA in October 2011. Maybe we should do a screen for stocks that are just breaking their 200 DMA but are down 25% or more over the past year. Can we do that on Finviz?
DeleteIf I had a multibagger like that and I felt it was going to maintain or go on higher I would just trail a conditional stop higher. Conditional so it isn't visible to the market. You know, the biggest red bar/correction in 6 mos is about .50 cents, so a stop outside that kind of noise (to avoid getting stopped out on noise) would be good. If you're one of those 'support' people, maybe a stop at $6 (just under that larger red bar) would keep enough profit but let it ride as long as possible. It looks like if it could get through that resistance it could easily be $12 and who knows from there? I would want to stay in it as long as possible but not give too much back if it does turn back.
DeleteI would love to be a trend following moron on this one.
SPX - Okay, the RSI(7) is 60 here, which would provide a good turning point assuming we're not going higher. RSI's often reverse at this level in a trending market and it's often smart to take at least partial gains.
ReplyDeleteThis also coincides with the 50 and oil isn't moving today(proxy UCO)... Low oil does provide an economic boost though, so low oil may actually be considered in retrospect, an event that assisted the recovery? I don;t understand exactly why oil is down, just as I don't understand why silver went to $50, except perhaps this is how the market works to confiscate wealth from the masses.
I do feel like we're at a critical level of resistance here, caution flag but no action...
OIH - Persistence above $35.63 will be the entry signal.
ReplyDeleteXLE - $64.70 for this one on ST basis, $65.17 as confirmation.
Just watching CNBC.
ReplyDelete2 weeks ago they had their "Market in Turmoil" special and that was pretty much the bottom since.
Now they are planning "A Greek Tragedy" this Sunday.
Would it be too simple and ironic to have this mark the end of Greece crisis?
We've seen this stuff before. This will play out for awhile with hope and despair along the way. I think it's way too simple to think it gets solved in a weekend because we still have Spain, Italy, Portugal, etc to go AND it's about everyone else's money so their feet will be dragging.
DeleteI've gotta say just based on how low some of the other stuff has gotten I think coal could still go down more. I don't think we have seen bottoms yet.
ReplyDeleteYeah, with nat gas still so low, going to be hard for coal to move up. Most mines don't shut down or start up quickly and I imagine coal is the same. You need to have some supply cuts to offset the demand destruction that's ongoing.
DeleteIf I was going to buy a coal stock though, I'd want to get one that sold outside the U.S. as the last I read (a couple of weeks ago), coal prices were holding up better.
President of Anglo-American Thermal Coal said a few days ago the thermal coal picture looks bearish short-term, but attractive medium-long term (but is he really going to say things loko bad long term even if they do?)
http://www.marketwatch.com/story/anglo-american-thermal-coal-outlook-bright-2012-06-14
ITPOF had a .26 52 wk low and a 42.84 52 wk high.
ReplyDeleteGood God. It could conceivably be a six bagger from here. BB could be a very wealthy person.
I think those are all-time numbers, but it should still have a lot of upside still. It's a pretty good business that got hurt by the housing drop-off and also 3M deciding to go after a bunch of their business by pricing aggressively. Fortunately, 3M decided it wasn't worth their while and cut back on that market enabling ITPOF to raise prices and get their margins back up - the bottom pretty much corresponded to 3M's decision and their numbers have been better since.
DeleteDon't think we'll see $40 anytime soon, but no reason they couldn't make $1.50 per share, so that should be good for at least a $15 stock or maybe they get some excitement as their earnings grow and even get to $25.
Maybe I'm just being hopeful CC, but I am so over the top sick of turning the TV on every morning and hearing about Greece this or that.
ReplyDeleteThe only thing I want to read about Greece for the next year is how they got topless pictures of Megan Fox on a beach there!
I'm sick of Europe in general, but I wouldn't refuse topless photos of Megan Fox on a Greek beach.
Delete"The market has changed direction 5 times in as many days. Up/Down/Up/Down/Up--rinse and repeat (?). This action is creating "Railroad Track" type bars. Usually, this increase in volatility combined with multiple changes in direction wears everyone down."
Yep.
This is where we were in November/December.
BB - It definitely is funny that everyone is fixated on Greece. It doesn't matter one bit what happens there. They're bankrupt. It's just hiding what is going on with Spain, Italy, India, China, and Japan.
DeleteNail on the head, I still keep in mind there may be ulterior reasons for the unrelenting focus on Europe(up/down/up/down -> GET OUT! -> BANG/ZOOM!). I wonder if JPM's "losses" were related, realized, and if maybe the trade won't begin moving in their favor soon? I can just imagine the blindsiding headlines leaving everyone bewildered.
DeleteIt's a racket in normal times and this is no exception today, probably even more so given the circumstances and considering the relentless greed of Wall Street. Noise at best.
BVSN 32%
ReplyDeleteHSOL 12%
Dream of a market for stockpickers
CP - Yet another reason why it is a low risk trade to short the market right here:
ReplyDeleteTake a look at that down channel we're in since the April highs. If you draw a line through the lows from early April and duplicate it and draw the line from the highs in late April we're right at the top of the channel. So we're at the top of the channel, right near the 50 DMA, we have had a technical "breakout" above the highs from May 29 and we have a potential high volatility week that no one wants to be short right here. Shit they've squeezed a ton of people out of the market. If you don't believe that shorts are being squeezed, take this post from Tim Knight as an example...clearly he's frustrated as hell and if it were for his emotions he would be in cash:
"The week ahead brings more risk than most weeks. I won't even go over what the risk events are; you've heard them all countless times. Suffice it to say that it's going to be wild, dangerous, and - at times - scary.
I've mentioned in the hallowed halls of Slope that I'm inclined to going completely flat ahead of next week. 0615-screwyouguys But I've thought long and hard about this, and although I'm not going to have a single large position, I have decided not to shut down all my shorts simply because we have an especially risky week ahead.
In the words of Captain Kirk: "Risk.........risk is our business!" And, as usual, Tiberius is correct. I have worked very, very hard analyzing charts and crafting a portfolio of positions which I believe offer me and my partners a superior risk-to-reward ratio.
I have selected these positions with the utmost care, and to blithely throw all of them under the proverbial bus just because I'm scared of what might happen with events that are totally out of my control is illogical. The trades were based on logic. Killing the trades would be based on emotion. That's incongruent."
News will usually trump charts....
DeleteThey're defending the low 13's in FSLR.
ReplyDeleteMITK making another run. Same with MMYT. REDF is gonna make a massive move here soon.
ReplyDeleteDECK - Still under $50 here, does this shoe fit?
ReplyDeleteI was looking at that last week. I think I need to take a closer look. Insider buying at $51...hmm
DeleteIt looks like the Indian stock market is actually trying to push above it's 200 DMA...
ReplyDeletehttp://finance.yahoo.com/echarts?s=^BSESN+Interactive#symbol=^bsesn;range=2y;compare=;indicator=sma%2850,200%29+volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=undefined;
If it can hold above it for a few days then it's probably wise to go long Indian stocks no?
Reasons to be bullish:
ReplyDeletehttp://finance.yahoo.com/news/10-reasons-bull-stock-market-153614011.html
I think that there is a pretty reasonable chance of a very strong move to the upside next week regardless of what happens on the weekend.
ReplyDeleteGreek votes the pro-austerity party in and that issue is taken off the table and markets rise.
Greek votes the anti-austerity party in and the world's central banks flood the market with liquidity and markets rise.
Very few people seem to be positioned to take advantage of a strong market, so we could get some performance chasing as the market rises giving a big lift.
Maybe this won't happen, but I think it is more likely than Greece votes for whatever and the world falls apart - people way too prepared for that.
"Very few people seem to be positioned to take advantage of a strong market"
DeleteThat's what I thought and was amazed to discover yesterday, everyone's long like me... Go figure, I never seem to nail which side of the trade the crowd is leaning!
Big blue arrow is down, right? Just ignore the price action and avoid posting your entry's/exits while pretending none of it ever happened. Then when it's all over, simply make a post claiming you made a bundle playing the market! ;)
Succinct summation of week’s events:
ReplyDeletePositives:
1) Athens stock market rallies almost 14% on week on hopes New Democracy party squeezes out win.
2) Unconfirmed story but likely central banks stand ready for coordinated action to deal with potential bank runs depending on election outcome.
3) Historically low mortgage rates finally get many off their arse as refi apps jump 19.2% to most since April ’09 and purchase apps rise 1.28% to 6 month high.
4) Headline US CPI slows to 1.7% y/o/y, slowest since Jan ’11 and PPI up just .7% y/o/y due mostly to drop in energy prices.
5) CPI and PPI in China moderate further, loan growth, exports and imports gain more than expected.
6) April machinery orders in Japan rise more than forecasted.
Negatives:
1) Spanish bond yields spike on heels of 100b euro of extra borrowing to finance bank bailout. Italian yields also get dragged up.
2) US retail sales in May soft as drop in gasoline prices offset by iffy labor market and modest income growth.
3) Initial Jobless Claims total 386k, 11k more than expected and the 9th week in a row above 370k.
4) UoM confidence in June falls to lowest of the yr as both current conditions and the outlook fall.
5) IP unexpectedly falls .1% m/o/m.
6) June NY mfr’g survey falls 14.8 pts to weakest since Nov ’11..
7) Core CPI growth remains sticky at 2.3% y/o/y, matching the fastest pace since Sept ’08, PPI core up 2.7% y/o/y
8) Chinese retail sales and IP grow less than expected in May.
9) India’s wholesale inflation up 7.55% y/o/y, more than estimated ahead of RBI rate meeting Monday. IP up just .1%. Will slowest growth in 10 yrs offset still high inflation?
AUMN the 50dma is capping this
ReplyDeleteYes Mark MDW, for most of the last month the daily range has been say 1.17 to 1.26 but then close on the lows everyday. MDW seems to be being accumulated during this 2 month sideways base. It is also breaking above its 50dma for the first time since Dec 11. Seriously considering adding which is something I rarely do with positions that are going against me.
Hard to deny that the SP action is not strong, surprising to me, still prefer safe but I have been making for the last three days with MSFT, NM, MDW 10% of port long.
Also
ReplyDelete10 day vol is 540K
90 day vol is 385K
so vol has picked up, positive
basically on vacation here
some of this board's picks mentions
ReplyDeleteMITK 0.17 2.91 + 2.92 6.24%
GRVY -0.06 1.74 - 1.76 -3.33%
MMYT 1.08 15.59 + 15.67 7.40%
CTCT 0.78 18.83 - 18.84 4.32%
BVSN 2.50 12.36 - 12.40 25.23%
FSLR 0.37 13.81 - 13.82 2.75%
NBG 0.14 1.74 + 1.75 8.70%
EWP 0.03 23.87 + 23.88 0.13%
EWZ 0.56 52.37 - 52.38 1.08%
RSX 0.80 26.00 - 26.01 3.17%
INP 0.81 49.96 - 49.99 1.65%
I coulda sworn I heard Cramer ranting a few days ago about how everyone should stay out of the market because of Spain, so this must be a headfake rally.
ReplyDeleteDow and S+P tested their declining 13wma 2 or 3 times over the past week or so and failed They will close nicely above them today. Remember how it feels to be in a bear market. HUGE GIGANTIC rallies w/ everyone yelling "It's all clear!"
ReplyDeleteSlow and steady to allow solid patterns to emerge.....
yep i think the best trade is short here but not willing to commit more money until next week provides confirmation of where we're going.
Delete/ES just hit the top of the down channel from April highs and poked above it. DJIA right at 50 DMA. I still think it's too early to say the big blue arrow is wrong but it's getting close! full disclosure i'm in 70% cash and 30% FAZ which isn't working out so I'm biased.
ReplyDeleteWhat's the unexpected?
ReplyDeleteFlat open on Monday.
What is Greece's GDP? .03% of Global GDP? Will anything that could ever happen in your wildest dreams in Greece affect GE's earnings 6 months from now?
That is very true.
DeleteGNK up 7%. Lots of great movement out of nice bases. TAN, BVSN, and even coals have a nice small rounded bottom base to work out of for the foreseeable future.
ReplyDeleteThe theme starting next week and into the following week will be the busting of the treasury bubble. TLT to at least 115 w/in 2 weeks.
DeleteAnd that's all she wrote for me. I'm going to take 2nd's advice and take a needed vacation. I'll book a flight this weekend to somewhere in Asia (Mongolia?) and spend a few months there working on side projects and paying zero attention to markets. However, I will continue to keep my eyes peeled for more fat pitches as they seem to be emerging left and right.
ReplyDeleteBest of luck to everybody in the interim and feel free to contact me via email.
Enjoy the weekend.